<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>4
<FILENAME>file004.txt
<DESCRIPTION>EX A-3 ARTICLES OF ORGANIZATION OF BHE
<TEXT>

Exhibit A-3

                                 STATE OF MAINE

                               CHANGE OF CLERK or
                            REGISTERED OFFICE or BOTH



                  Pursuant to 13-A MRSA ss.304 the undersigned
               corporation advises you of the following change(s):


FIRST: The name and  registered  office of the clerk  appearing on the record in
       Secretary of State's office

                                FREDERICK S. SAMP

                        33 STATE STREET, BANGOR ME 04401
                       (street, city, state and zip code)


SECOND: The name and physical location of the registered office of the successor
        (new) clerk, who must be a Maine resident, are:

                                  ANDREW LANDRY
                                     (name)

         33 STATE STREET, BANGOR ME 04401 (street address (not PO Box),
                            city, state and zip code)

                (mailing address if different from above)


THIRD: Upon a change in clerk this must be completed:

                  (X)      Such change was  authorized  by the directors and the
                           power to make  such  change  is not  reserved  to the
                           shareholders by the articles or the bylaws.

                  ( )      Such change was authorized by the shareholders.
                          (Complete the following)

                    I certify  that I have  custody of the  minutes  showing the
                    above action by the shareholders.

                                      (signature of new clerk, secretary or
                                       assistant secretary)


Dated:  OCTOBER 13, 1995               BANGOR HYDRO-ELECTRIC COMPANY
                                           (Name of Corporation)


<PAGE>

                                       By
                                                (signature)



                                          ANDREW LANDRY, CLERK
                                   (type or print name and capacity)



                                       By
                                                (signature)
                                   (type or print name and capacity)




This  document  MUST be  signed  by (1) the  Clerk  or (2)  the  President  or a
vice-president  AND the Secretary,  an assistant  secretary or other officer the
bylaws  designate as second  certifying  officer OR (3) if no such  officers,  a
majority  of the  directors  or  such  directors  designated  by a  majority  of
directors  then in office OR (4) if no directors,  the holders,  or such of them
designated  by the holders,  of record of a majority of all  outstanding  shares
entitled to vote thereon OR (5) the holders of all outstanding shares.

FORM NO. MBCA-3 Rev. 90
SUBMIT COMPLETED FORMS TO:  Secretary of State, Station 101,
                            Augusta, Maine  04333

<PAGE>

                                 STATE OF MAINE

                  CERTIFICATE OF ORGANIZATION OF A CORPORATION

                              UNDER THE GENERAL LAW

     The undersigned,  officers of a corporation organized at Bangor, Maine at a
meeting of the signers of the  articles of agreement  therefor,  duly called and
held at the office of the Bangor Railway and Electric Company,  Bangor, Maine on
Monday the ninth day of June A.D. 1924 hereby certify as follows:

The name of said corporation is BANGOR HYDRO-ELECTRIC COMPANY.

The purposes of said corporation are:

     (a) The acquisition with the consent of the Public Utilities  Commission of
the State of Maine and the operation of the properties,  rights,  privileges and
franchises  now or  heretofore  owned and  operated  by the Bangor  Railway  and
Electric Company, Bar Harbor and Union River Power Company, Bangor Power Company
and Lincoln  Light and Power  Company,  including the  distribution  systems and
other properties acquired or about to be acquired by the Lincoln Light and Power
Company  from  Montague-Howland  Electric  Company,  Penobscot  Light  and Power
Company, Edward M. Graham, doing business as the Eastern Development Company and
Edward M. Graham, and extensions, enlargements and additions to said properties,
rights, privileges and franchises to be hereafter purchased or acquired.

     (b)  The  construction,   purchase  acquisition,   ownership,  improvement,
maintenance,  use  or  operation  of  plants  and  properties  for  the  making,
generating,  selling,  distribution or supplying gas or electricity or both, for
lighting, heating, manufacturing or mechanical purposes in the Cities of Bangor,
Brewer,  and Old Town and the  Towns of  Milford,  Charleston,  Corinth,  Orono,
Bradley,  Eddington,  Veazie, Lincoln, Winn,  Mattawamkeag,  Glenburn,  Enfield,
Howland, Passadumkeag, Orrington, Hermon and Hampden in the County of Penobscot,
the  City of  Ellsworth  and the  Towns of Bar  Harbor,  Blue  Hill,  Brookline,
Bucksport,  Dedham, Mount Desert, Segdwick,  Southwest Harbor, Surry and Trenton
in the County of Hancock, and the Towns of Machias, East Machias and Machiasport
in the County of  Washington  and any other Cities or Towns of said  Counties of
Penobscot, Hancock and Washington, in the State of Maine.

     (c) In  connection  with the  foregoing the company shall have and exercise
all of the rights,  privileges and franchises of the  corporation  whose rights,
privileges  and  franchises it acquires and all powers  conferred by the Laws of
the  State of Maine on  public  utility  corporations  of the  character  of the
corporations whose properties are acquired.


<PAGE>


     (d) The buying or  otherwise  obtaining  and selling or leasing real estate
and the  manufacturing,  buying or  otherwise  obtaining  and selling or leasing
personal  property  necessary or convenient in the  prosecution of the foregoing
purposes and  generally the doing of all things  necessary or convenient  for or
incident to said purposes,  including the carrying on of any Mercantile Business
in connection  with any of said  purposes and the taking,  holding and owning by
purchase,  contract or otherwise of stocks,  bonds, script or other corporations
of other  corporations  and  disposing  of the same in any manner,  such taking,
holding, owning and disposing to be with all the incidents of ownership.

The amount of capital stock is ten million dollars ($10,000,000).

The amount of common stock is five million dollars ($5,000,000).

The amount of preferred stock is five million dollars ($5,000,000).

The amount of capital stock already paid in is Nothing.

The par value of the shares is one hundred dollars ($100).

The names and residences of the owners of said shares are as follows:

--------------------------------------------------------------
                                                 NO. OF SHARES
NAMES                       REFERENCES       COMMON       PREFERRED
--------------------------------------------------------------
Edward M. Graham           Bangor, Maine     1 share

Albert E. Bass                  "            1 "

Charles D. Stanford             "            1 "

J. Norman Towle                 "            1 "

A. Langdon Freese               "            1 "

Howard Corning                  "            1 "

Frank Silliman, 3rd             "            1 "
                                      --------------
                                             7 shares

Total number of shares remaining
           in Treasury                  99,993
                                      ---------------

         Total number of shares        100,000 shares
                                      ===============


<PAGE>



Said corporation is located at Bangor, in the County of Penobscot.

The number of Directors is seven and their names are:

Edward M. Graham,  Albert E. Bass,  Charles D.  Stanford,  J. Norman  Towle,  A.
Langdon Freese, Howard Corning and Frank Silliman, 3rd.

The name of the Clerk is Howard Corning and his residence is Bangor.

The undersigned,  Edward M. Graham is President;  the undersigned Howard Corning
is Treasurer;  and the undersigned Edward M. Graham,  Albert E. Bass, Charles D.
Stanford, J. Norman Towle, A. Langdon Freese, Howard Corning and Frank Silliman,
3rd are a majority of the Directors of said corporation.

         Witness our hands this ninth day of June A.D. 1924.

                           Edward M. Graham,     President

                           Howard Corning,       Treasurer

                           Edward M. Graham,     Director
                           J. Norman Towle,      Director
                           Howard Corning,       Director
                           Albert E. Bass,       Director
                           Charles D. Stanford,  Director
                           A. Langdon Freese,    Director
                           Frank Silliman 3rd,   Director

PENOBSCOT          ss.          June 9, A.D. 1924

Then personally appeared Edward M. Graham,  Albert E. Bass, Charles D. Stanford,
J. Norman Towle, A. Langdon Freese,  Howard Corning and Frank Silliman,  3rd and
severally made oath to the foregoing certificate, that the same is true.

                  Before me,
                                      E.C. Ryder        Justice of the Peace
                                 --------------------

                                 STATE OF MAINE

     I hereby  certify that I have  examined the foregoing  certificate  and the
same is property drawn and signed,  and is conformable to the  constitution  and
laws of the State.

                                    Clement F. Robinson, Deputy Attorney General


<PAGE>



                                      COPY

(Name of Corporation.)

                          BANGOR HYDRO-ELECTRIC COMPANY

                                  Penobscot ss.

                                                              Registry of Deeds.

                       Received June 11, 1924 at 9:15 a.m.
                           Recorded in Vol: 4 Page 424

         ATTEST:  \ss\ Warren E. Craig, Registrar.

A true copy of record.

         ATTEST:  \ss\ Warren E. Craig, Registrar.

                                 STATE OF MAINE

                        Office of the Secretary of State

                             Augusta, August 1, 1924

Received and filed this day.

         ATTEST:  \ss\ DEPUTY, Secretary of State

Recorded in Vol. 103  Page 240.


<PAGE>



TO FRANK W. BALL, SECRETARY OF THE STATE OF MAINE:

         I hereby certify that at a special  meeting of the  stockholders of the
Bangor  Hydro-Electric  Company, a corporation  organized and existing under the
laws of the State of Maine,  held at the offices of said Company,  in Bangor, in
the County of Penobscot and State of Maine,  on the fifteenth day of June,  A.D.
1926, pursuant to a notice duly given, it was voted, unanimously,  by a majority
of the  entire  stock of said  Company to  increase  the  capital  stock of said
Company from ten million  (10,000,000)  dollars to eleven  million  (11,000,000)
dollars by the  issuance  of ten  thousand  (10,000)  shares of six (6) per cent
cumulative  preferred  stock,  so that the capital  stock of said Company at the
present time consists of fifty thousand  (50,0000)  shares of seven (7) per cent
preferred  stock,  ten  thousand  (10,000)  shares of six (6) percent  preferred
stock, and fifty thousand  (50,000) shares of common stock, all of the par value
of one hundred  (100)  dollars each and the  aggregate  value of eleven  million
(11,000,000) dollars.

     Witness my hand and the seal of said  Company this  fifteenth  day of June,
A.D. 1926.


                                                 \ss\ Eugene M. Dole

                                                 Clerk of Bangor Hydro-
                                                 Electric Company


<PAGE>






                          Bangor Hydro-Electric Company

                               Increase of Capital

                                     103-240

                                 STATE OF MAINE

                          Office of Secretary of State

                         Augusta, June 14, 1926 Received
                           and filed this day.

                           ATTEST:

                                       \ss\ DEPUTY, Secretary of State

                          Recorded in Vol. 17 Page 320.


<PAGE>



                                 STATE OF MAINE
                           PUBLIC UTILITIES COMMISSION
                    Certificate of increase of capital stock
                        of Bangor Hydro-Electric Company.
                                   -----------

     For  reasons  set forth in our  decree of July 14,  1926,  entitled  Bangor
Hydro-Electric  Company: Re application for approval of issue of securities,  U.
865, it is

     CERTIFIED that the Bangor Hydro-Electric  Company has been authorized under
Section 39 of Chapter 55 of the Revised  Statutes,  as amended,  to increase its
capital stock by the amount of one million dollars ($1,000,0000) of 6% preferred
capital stock, so that the capitalization of said company is -

                              No.                           Aggregate
Kind of Stock              of shares      Par value          Amount
---------------------------------------------------------------------
Common stock                50,000          $100             $5,000,000
Preferred stock 7%          50,000          $100             $5,000,000
Preferred stock 6%          10,000          $100             $1,000,000
                                                             -----------
                                               Total        $11,000,000
                                                             ===========
It is further

     CERTIFIED  that the Bangor  Hydro-Electric  Company has  complied  with the
requirements of Section 42 of Chapter 51 of the Revised Statutes,  as amended by
Chapter 196 of the Public Laws of 1925, by payment of the prescribed fees to the
State of Maine, and it is further

     CERTIFIED  that said  increase of stock was duly  authorized by vote of the
stockholders at a meeting  properly called and held for said purpose,  and it is
further

     CERTIFIED   that  within   fifteen  (15)  days  after  said  vote  of  said
stockholders, notice of the proposed increase was filed with this Commission.

     Given the hand and seal of the Public Utilities Commission at Augusta, this
14th day of July, A.D. 1926.

                  Charles E. Gurney         PUBLIC UTILITIES
                  Herbert W. Trafton        COMMISSION
                  Albert Greenlaw           OF MAINE

                  A true copy.

                  ATTEST:  \ss\



<PAGE>





                          Bangor Hydro-Electric Company

                               Increase of Capital

                                 STATE OF MAINE

                          Office of Secretary of State

                         Augusta, July 17, 1926 Received
                           and filed this day.

                           ATTEST:

                                       \ss\ DEPUTY, Secretary of State

                           Recorded in Vol. 6  Page 266.


<PAGE>



                                 STATE OF MAINE
                           PUBLIC UTILITIES COMMISSION
                    Certificate of increase of capital stock
                      of the Bangor Hydro-Electric Company.
                                   ----------

     For  reasons  set  forth  in our  decree  of even  date,  entitled  "Bangor
Hydro-Electric  Company,  re: application for increase of capital stock, U #968"
it is

     CERTIFIED that the Bangor Hydro-Electric  Company has been authorized under
Section 39 of Chapter 55 of the Revised  Statutes,  as amended,  to increase its
capital stock from Eleven  Million  Dollars  ($11,000,000)  to Thirteen  Million
Dollars  ($13,000,000),  said  increase to consist of twenty  thousand  (20,000)
shares  of Six Per  Cent  Cumulative  Preferred  Stock  of the par  value of One
Hundred Dollars ($100) each. It is further

     CERTIFIED  that the Bangor  Hydro-Electric  Company has  complied  with the
requirements of Section 42 of Chapter 51 of the Revised Statutes, as amended, by
payment of the prescribed fees to the State of Maine; and it is further

     CERTIFIED  that the said  increase of stock was duly  authorized by vote of
the stockholders at a meeting properly called and held for said purposes; and it
is further

     CERTIFIED  that within  fifteen days after said vote of said  stockholders,
notice of the proposed increase was filed with this Commission.

     Given  under  the hand  and  seal of the  Public  Utilities  Commission  at
Augusta, this 19th day of November, A.D. 1927.


                                    Charles E. Gurney         PUBLIC UTILITIES
                                    Herbert W. Trafton        COMMISSION
                                    Albert Greenlaw           OF MAINE
                                    A true copy,
                                            ATTEST:  \ss\ Clerk


<PAGE>



                          Bangor Hydro-Electric Company

                                     103-240

                                 STATE OF MAINE

                          Office of Secretary of State

                       Augusta, December 3, 1927 Received
                           and filed this day.

                           ATTEST:

                                     \ss\ Secretary of State

                           Recorded in Vol. 6  Page 321.


<PAGE>



TO THE STOCKHOLDERS OF THE BANGOR HYDRO-ELECTRIC COMPANY

     Notice is hereby given that a Special  Meeting of the  Stockholders  of the
Bangor  Hydro-Electric  Company  will  be held at the  principal  office  of the
Company,  No. 84 Harlow  Street,  in the City of Bangor,  Maine on Tuesday,  the
eighth day of  November,  A.D.  1927,  at ten o'clock  A.M.,  for the purpose of
considering and voting on the following matters:

          1.   The increase of the capital stock of the Company from $11,000,000
               to $13,000,000, by the issuance of 20,000 shares of 6% cumulative
               preferred stock.

          2.   The  approval  and  ratification  of the  votes  of the  Board of
               Directors authorizing such issue.

          3.   The transaction of such other business as may be presented to the
               meeting.

     If you cannot attend the meeting, please sign the enclosed proxy, have your
signature witnessed and return the same in the enclosed stamped envelope.

         By order of the Board of Directors.

                              Eugene M. Dole, Clerk

October 21st, 1927.

                                 State of Maine

County of Penobscot, s.s.                   October 21st, 1927.

     I have this day deposited  notices whereof the above is a true copy, signed
by me as Clerk of the Bangor  Hydro-Electric  Company,  and  addressed,  postage
paid, to the several  stockholders at their respective last known addresses,  as
the same appear on the stock books of the Company, in the Post Office at Bangor,
said County and State.

                              Eugene M. Dole, Clerk

     A true copy of the  original  notice  and of the  certificate  of return of
service thereof.

                              Eugene M. Dole, Clerk

     In  accordance  with the By-Laws of the Bangor  Hydro-Electric  Company and
with notice  duly  issued as above  recorded,  the  stockholders  of said Bangor
Hydro-Electric  Company met in special  meeting at the principal  office of said
Company,  No. 84 Harlow Street,  Bangor,  Maine,  on Tuesday,  the eighth day of
November, 1927, at ten o'clock in the forenoon.

<PAGE>


     The President called the meeting to order and presided throughout.

     The notice of the meeting and the  certificate of return of service thereof
were read by Eugene M. Dole, Clerk of this Company.

     On motion duly made and seconded, it was

     VOTED,  unanimously,  that the capital  stock of the Bangor  Hydro-Electric
Company be increased from $11,000,000 to $13,000,000,  by the issuance of 20,000
shares of 6% cumulative  preferred stock to be sold from time to time to pay for
extensions  and  improvements  of the  property  of the  Company  and for  other
corporate  purposes which may arise from time to time, as the necessities of the
Company and the increase of business require, at a price not less than the price
fixed by the Public Utilities Commission.

     VOTED  FURTHER,  that the vote of the  Board of  Directors  of the  Company
passed  at a  meeting  of the  Board  held on the  13th  day of  October,  1927,
authorizing such issue be and it is hereby approved, ratified and confirmed.

     VOTED FURTHER,  that the Clerk of the Company be and he is hereby  directed
to file with the Public Utilities  Commission of the State of Maine, as provided
by law within fifteen days from the date of this meeting, a certificate verified
by  his  affidavit  that a vote  increasing  the  capital  stock  of the  Bangor
Hydro-Electric  Company from  $11,000,000 to  $13,000,000  was on the 8th day of
November,  1927, duly passed by the Stockholders of that Company  representing a
majority of the stock  issued,  voting at a meeting duly called and held for the
purpose of such increase,---

     I,  Eugene M. Dole,  Clerk of the  Bangor  Hydro-Electric  Company,  hereby
certify  that the  foregoing  is a true copy of a portion  of the  minutes  of a
special meting of the stockholders, held at the principal office of the Company,
No. 84 Harlow Street,  Bangor, Maine, on Tuesday,  November 1927, at ten o'clock
in the forenoon.

                           \ss\ Eugene M. Dole, Clerk


<PAGE>




                          Bangor Hydro-Electric Company

                                     103-240

                                 STATE OF MAINE

                          Office of Secretary of State

                       Augusta, December 3, 1927 Received
                           and filed this day.

                           ATTEST:

                             \ss\ Secretary of State

                       Recorded in Vol. 18 Pages 188 &189.


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                    AMENDMENT TO CERTIFICATE OF ORGANIZATION

     I, EUGENE M. DOLE, Clerk of Bangor Hydro-Electric  Company,  hereby certify
that at a  meeting  of the  stockholders  of said  Company  duly  and  regularly
convened and held  according to the By-Laws of the Company and according to law,
at the principal office of the Company, No. 33 State Street,  Bangor,  Maine, on
the twelfth day of February, 1929, at 10 o'clock A.m., the following Resolutions
were duly  adopted by the  affirmative  vote of the holders of a majority of the
Capital Stock issued and outstanding of the Company:

               On motion, duly made and seconded, the following resolutions were
          adopted  by the  unanimous  vote of all of the  stockholders  present,
          constituting more than a majority of all of the stock issued:

               "VOTED,  that the par value of the shares of the Common  Stock of
          this Company be and the same hereby is changed from $100. per share to
          $25.  per  share,  and that the  number  of  shares to be issued to be
          correspondingly increased from 50,000 to 200,000 shares; and

               VOTED  FURTHER,  that  four  shares of the  Common  Stock of this
          Company of the par value of $25.  each shall be issued in exchange for
          each outstanding share of Common Stock of the par value of $100.

               VOTED,  that the capital  stock of the Company be increased  from
          $13,000,000 to $15,500,000 by the  authorization  of 100,000 shares of
          its Common Capital Stock of the par value of $25. each, the said stock
          to be used for the  corporate  purposes of the Company which may arise
          from time to time, the stock to be issued at a price not less than the
          price  fixed by the  Public  Utilities  Commission;  so that after the
          increase the  authorized  Capital  Stock of this  Company  shall be as
          follows:

                  7% Preferred Stock, par value
                       $100. per share                     $5,000,000.
                  6% Preferred Stock, par value
                       $100. per share                      3,000,000.
                  Common Stock, par value
                       $25. per share                       7,500,000.
                                                          ------------
                  Total Authorized Capital                $15,500,000.
                                                          ============

     VOTED, that the President or Clerk of this Company, either of whom may act,
be and they  hereby  are  requested  and  directed  to file in the office of the
Secretary  of State a  certificate  setting  forth the changes in the Charter or
Certificate  of  Organization  of this  Company  provided  for by the  foregoing
resolutions."

<PAGE>


         WITNESS my hand and seal the 12th day of February,  one  thousand  none
hundred and twenty-nine.

                                                   \ss\ Eugene M. Dole
{SEAL}
                                                   Clerk of Bangor Hydro-
                                                   Electric Company


                                 STATE OF MAINE

Penobscot, ss.                                              February 12th, 1929.

         Then  personally  appeared the above named EUGENE M. DOLE and made oath
that the above statement by him subscribed is true.

                                        \ss\ Sherman N. Shumway
                                                 Notary Public    {SEAL}


<PAGE>



                          Bangor Hydro-Electric Company

                              Decrease in Par Value

                                     103-240








                                 STATE OF MAINE

                          Office of Secretary of State

                       Augusta, February 11, 1929 Received
                               and filed this day.

                           ATTEST:

                                      \ss\ Secretary of State

                           Recorded in Vol. 18  Page 522.


<PAGE>



                                 STATE OF MAINE

                           PUBLIC UTILITIES COMMISSION

Bangor  Hydro-Electric  Company,  Re:  Application  for  approval of increase of
capital stock.
                                     U.#1071

STEARNS, Chairman; TRAFTON and GREENLAW, Commissioners;

APPEARANCES:  Sherman N. Shumway, Esq., for Petitioner.

     The  Bangor  Hydro-Electric  Company,  a  public  utility,  filed  with the
Commission an application  seeking  authority to increase its capital stock from
Thirteen Million Dollars ($13,000,000) to Fifteen Million, Five Hundred Thousand
Dollars ($15,500,000).

     The  petitioner  at a meeting of its  stockholders  held February 12, 1929,
attended  by a quorum of the  capital  stock  issued and  outstanding,  voted to
increase  its capital  stock from  Thirteen  Million  Dollars  ($13,000,000)  to
Fifteen   Million,   Five  Hundred   Thousand   Dollars   ($15,500,000)  by  the
authorization of one hundred  thousand  (100,000) shares of common capital stock
of the par value of Twenty-five Dollars ($25) each.

     Within  fifteen  days  after  the vote of its  stockholders  aftersaid  the
petitioner  filed  notice  of  said  increase  of its  capital  stock  with  the
Commission.

     The fees  prescribed  by statute  having  been paid a  certificate  will be
issued certifying our approval of the increase. The Clerk of this Commission is

                                    DIRECTED

to cause to be filed a  certificate  in the  office  of the  Secretary  of State
certifying to such increase. It is accordingly

                          ORDERED, ADJUDGED AND DECREED

     1. That the Commission  approve the increase of capital stock of the Bangor
Hydro-Electric  Company from Thirteen  Million Dollars  ($13,000,000) to Fifteen
Million, Five Hundred Thousand Dollars ($15,500,000) said increase to consist of
one hundred  thousand  (100,000) shares of common capital stock of the par value
of Twenty-five  Dollars ($25) each,  aggregating Two Million,  Two Hundred Fifty
Thousand  Dollars  ($2,250,000)  and the fees  prescribed by statute having been
paid, certificate of this Commission will be issued approving said increase.

     The Clerk of this Commission is hereby

                                    DIRECTED


<PAGE>


to cause  to be filed in the  office  of the  Secretary  of State a  certificate
attested  by him,  certifying  to such  increase.  The Clerk  will also make his
return, evidencing his compliance with this order.

     Given  under  the hand  and seal of the  Public  Utilities  Commission,  at
Augusta, this nineteenth day of February, A.D., 1929.


                                    Albert J. Stearns         PUBLIC UTILITIES
                                    Herbert W. Trafton        COMMISSION
                                    Albert Greenlaw           OF MAINE

                                    A true copy,

                                            ATTEST:
                                                     \ss\ Clerk


<PAGE>



                                 STATE OF MAINE

                           PUBLIC UTILITIES COMMISSION

                       Certificate of increase of capital
                   stock of the Bangor Hydro-Electric Company

     For  reasons  set  forth  in our  decree  of even  date,  entitled  "Bangor
Hydro-Electric  Company,  Re:  Application  for  increase of capital  stock,  U.
#1071", it is

     CERTIFIED that the Bangor Hydro-Electric  Company has been authorized under
Section 39 of Chapter 55 of the Revised  Statutes,  as amended,  to increase its
capital stock from Thirteen  Million Dollars  ($13,000,000)  to Fifteen Million,
Five Hundred  Thousand  Dollars  ($15,500,000)  said  increase to consist of one
hundred  thousand  (100,000)  shares of common capital stock of the par value of
Twenty-five Dollars ($25) each. It is further

     CERTIFIED  that the Bangor  Hydro-Electric  Company has  complied  with the
requirements of Section 42 of Chapter 51 of the Revised Statutes, as amended, by
payment of the prescribed fees to the State of Maine; and it is further

     CERTIFIED  that said  increase of stock was duly  authorized by vote of the
stockholders at a meeting properly called and held for said purposes;  and it is
further

     CERTIFIED  that within  fifteen days after said vote of said  stockholders,
notice of the proposed increase was filed with this Commission.

     Given  under  the hand  and seal of the  Public  Utilities  Commission,  at
Augusta, this 19th day of February, A.D., 1929.


                                    ALBERT J. STEARNS         PUBLIC UTILITIES
                                    HERBERT W. TRAFTON        COMMISSION
                                    ALBERT GREENLAW           OF MAINE

                                    ATTEST:

                                            A true copy,
                                                      \ss\ Clerk


<PAGE>



                          Bangor Hydro-Electric Company

                               Increase of Capital

                                     103-240






                                 STATE OF MAINE

                          Office of Secretary of State

                       Augusta, February 22, 1929 Received
                               and filed this day.

                           ATTEST:

                                            \ss\ DEPUTY, Secretary of State

                           Recorded in Vol. 6  Pages 361 & 362.


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                    CERTIFICATE OF INCREASE OF CAPITAL STOCK

     I, EUGENE M. DOLE, Clerk of Bangor Hydro-Electric  Company,  hereby certify
that at a  meeting  of the  stockholders  of said  Company  duly  and  regularly
convened and held  according to the By-Laws of the Company and according to law,
at the principal office of the Company,  No. 33 State Street,  Bangor,  Maine of
the  twelfth  day  of  February,  1929,  at  ten  o'clock  A.M.,  the  following
Resolutions,  among  others,  were duly adopted by the  affirmative  vote of the
holders  of a majority  of the  Capital  Stock  issued  and  outstanding  of the
Company:

               VOTED,  that the capital  stock of the Company be increased  from
          $13,000,000 to $15,500,000 by the  authorization  of 100,000 shares of
          its Common Capital Stock of the par value of $25. each, the said stock
          to be used for the  corporate  purposes of the Company which may arise
          from time to time, the stock to be issued at a price not less than the
          price  fixed by the  Public  Utilities  Commission;  so that after the
          increase the  authorized  Capital  Stock of this  Company  shall be as
          follows:

                  7% Preferred Stock, par value
                        $100. per share                     $5,000,000.
                  6% Preferred Stock, par value
                        $100 per share                       3,000,000.
                  Common Stock, par value
                        $25. per share                       7,500,000.
                                                           -----------
                  Total Authorized Capital                 $15,500,000.
                                                           ===========
                               *******************

     VOTED FURTHER,  that the officers and Directors of this Company be and they
hereby  are  authorized,  empowered  and  directed  to take such steps as may be
necessary and proper to secure the consent of the Public Utilities Commission to
the  increase  of the  Common  Capital  Stock,  ********  and they  are  further
authorized to do all such other acts, matters and things as may be necessary and
proper to carry the foregoing resolutions into effect.

     WITNESS my hand and seal this eighteenth day of February, one thousand nine
hundred and twenty-nine.

                                                      \ss\ Eugene M. Dole

                                                      Clerk of Bangor Hydro-
                                                      Electric Company


<PAGE>



                                 STATE OF MAINE

Penobscot, ss.                                              February 18th, 1929.

     Then personally  appeared the above named EUGENE M. DOLE and made oath that
the above statement by him subscribed is true.

                                          \ss\ Sherman N. Shumway
                                                   Notary Public    {SEAL}


<PAGE>



                          Bangor Hydro-Electric Company

                               Increase in Capital

                                     103-240






                                 STATE OF MAINE

                          Office of Secretary of State

                           Augusta, February 22, 1929
                          Received and filed this day.

                           ATTEST:

                                  \ss\ DEPUTY, Secretary of State

                          Recorded in Vol. 18 Page 532.


<PAGE>



     I, Eugene M. Dole, Clerk of Bangor Hydro-Electric  Company,  hereby certify
that each of the following  resolutions  were adopted by  stockholders of record
representing a majority of the voting power  (including a majority of the voting
power of the Common Stock) of the Company's  authorized and issued capital stock
on each of said  resolutions at the Annual Meeting of the  stockholders  of said
Company  which was duly and regularly  convened and held in accordance  with the
By-Laws of the Company and according to the law at the  principal  office of the
Company at No. 33 State Street, Bangor, Maine on February 8, 1944 at ten o'clock
in the forenoon.

     I further  certify that notice of the proposed  reduction of the  Company's
capital stock was given in the call for said meeting.

               RESOLVED,  that the  authorized  capital stock of this Company be
          changed from  $15,500,000 now consisting of $5,000,000 in 7% Preferred
          Stock  divided  into  50,000  shares  of the par  value of $100  each,
          $3,000,000 in 6% Preferred Stock divided into 30,000 shares of the par
          value of $100  each,  and  $7,500,000  in Common  Stock  divided  into
          300,000  shares  of the par  value  of  $25.00  each,  to  $12,500,000
          consisting of $8,000,000 in Preferred Stock  represented by the shares
          now authorized and $4,500,000  represented by 300,000 shares of Common
          Stock of the par value of $15.00 each, without change, however, in the
          existing  preferences,  priories and voting  rights of the  respective
          classes of stock.

               FURTHER RESOLVED, that the Clerk file a certificate of the action
          of this meeting  with the  Secretary of State upon receipt of a decree
          from the Public Utilities  Commission  granting consent to the changes
          aforesaid  and  obtain a  certificate  from  such  Secretary  of State
          showing said changes.

     IN  WITNESS  WHEREOF,  I have  hereunto  set my hand  as  Clerk  of  Bangor
Hydro-Electric Company this 8th day of February, 1944.

                                          \ss\  Eugene M. Dole
                                 Clerk of Bangor Hydro-Electric Company
                                    ---------



<PAGE>



                                 STATE OF MAINE

Penobscot, ss:                                                  February 8, 1944

     Personally  appeared the above-named  Eugene M. Dole and made oath that the
statement by him subscribed is true. Before me,

                                                     \ss\  Albert C. Blanchard
                                                              Notary Public


<PAGE>



                            CERTIFICATE OF REDUCTION

                                OF CAPITAL STOCK

                          BANGOR HYDRO-ELECTRIC COMPANY



                                February 8, 1944



                               FROM THE OFFICE OF

                               ALBERT C. BLANCHARD

                                 45 STATE STREET

                                  BANGOR, MAINE


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                            Decrease in Capital Stock

                                     103-240






                                 STATE OF MAINE

                          Office of Secretary of State

                            Augusta, February 8, 1944

                           Received and Filed this day.

                             \ss\ SECRETARY OF STATE

                           Recorded: Vol. 26, Page 2.


<PAGE>



            CERTIFICATE RELATING TO RECLASSIFICATION OF CAPITAL STOCK
                        OF BANGOR HYDRO-ELECTRIC COMPANY

     Bangor  Hydro-Electric  Company, a corporation organized and existing under
the laws of the State of Maine,  and having its  principal  place of business at
Bangor, County of Penobscot, State of Maine, does hereby certify:

     (1) That a duly  called  and  legally  convened  meeting  of the  Company's
stockholders  was held at the Company's  offices at Bangor,  Maine,  on June 11,
1946, at which meeting the holders of a majority of the Company's  capital stock
entitled to vote, to-wit, holders of 55,746-1/4 votes, out of a total of 101,103
authorized votes, were present in person or represented by proxy.

     (2) That at said meeting the Company's  stockholders,  present in person or
represented by proxy, unanimously voted as follows:

               "VOTED to reduce the  authorized  7% Preferred  Stock from 50,000
          shares to 25,000  shares and to reduce  the  authorized  6%  Preferred
          Stock from 30,000 shares to 21,799 shares  leaving a balance of 33,201
          authorize shares of Preferred Stock unclassified pending action by the
          stockholders  or by the  Board of  Directors  acting  under  authority
          conferred by the stockholders.

               "VOTED  FURTHER to  authorize  the issue of not more than  21,799
          shares of 4% Preferred Stock, Series A, carrying dividends at the rate
          of 4% per annum on the par value thereof in exchange for shares of the
          6%  Preferred  Stock,  at the option of the holders  thereof  prior to
          redemption, on a share for share basis.

               "VOTED  FURTHER  to  authorize  the  Board  of  Directors  in its
          discretion to issue and sell shares of 4% Preferred  Stock,  Series B,
          not  exceeding in number the shares of the 6% Preferred  Stock retired
          by redemption.

               "VOTED  FURTHER  that the  holders  of the  capital  stock of the
          Company of all classes  hereby waive their right to subscribe  for any
          part of not  exceeding  21,799  shares  of  Preferred  Stock  carrying
          dividends  of not more than $4.00 per share per year,  to be issued in
          exchange  for  shares of the 6%  Preferred  Stock at the option of the
          holders  thereof,  and to reimburse the treasury of the Company in the
          discretion  of the Board of Directors for all or any part of the funds
          used for the  redemption  of the 6%  Preferred  Stock in an amount not
          exceeding the par value of the shares retired by redemption.

               "VOTED  FURTHER  to  authorize  the  Board  of  Directors  in its
          discretion from time to time to issue shares of Preferred Stock in one

<PAGE>

          or more series with such  provisions  for dividends and  redemption as
          they may determine, subject to the right of the holders of the capital
          stock of the Company to subscribe  therefor and provided that not more
          than 80,000 shares of Preferred  Stock of all classes and series shall
          be outstanding at any time."


<PAGE>



                   CERTIFICATE RELATING TO RECLASSIFICATION OF
                 CAPITAL STOCK OF BANGOR HYDRO-ELECTRIC COMPANY

     Bangor  Hydro-Electric  Company, a corporation organized and existing under
the laws of the State of Maine,  and having its  principal  place of business at
Bangor, County of Penobscot, State of Maine, does hereby certify:

     (1) That a duly  called  and  legally  convened  meeting  of the  Company's
stockholders  was held at the  Company's  offices at  Bangor,  Maine on June 11,
1946, at which meeting the holders of a majority of the Company's  capital stock
entitled to vote, to-wit, holders of 55,746-1/4 votes, out of a total of 101,103
authorized votes, were present in person or represented by proxy.

     (2) That at said meeting the Company's  stockholders,  present in person or
represented by proxy, unanimously voted as follows:

               "VOTED to reduce the  authorized  7% Preferred  Stock from 50,000
          shares to 25,000  shares and to reduce  the  authorized  6%  Preferred
          Stock from 30,000 shares to 21,799 shares  leaving a balance of 33,201
          authorized  shares of Preferred Stock  unclassified  pending action by
          the  stockholders or by the Board of Directors  acting under authority
          conferred by the stockholders.

               "VOTED  FURTHER to  authorize  the issue of not more than  21,799
          shares of 4% Preferred Stock, Series A, carrying dividends at the rate
          of 4% per annum on the par value thereof in exchange for shares of the
          6%  Preferred  Stock,  at the option of the holders  thereof  prior to
          redemption, on a share for share basis.

               "VOTED  FURTHER  to  authorize  the  Board  of  Directors  in its
          discretion to issue and sell shares of 4% Preferred  Stock,  Series B,
          not  exceeding in number the shares of the 6% Preferred  Stock retired
          by redemption.

               "VOTED  FURTHER  that the  holders  of the  capital  stock of the
          Company of all classes  hereby waive their right to subscribe  for any
          part of not  exceeding  21,799  shares  of  Preferred  Stock  carrying
          dividends  of not more than $4.00 per share per year,  to be issued in
          exchange  for  shares of the 6%  Preferred  Stock at the option of the
          holders  thereof,  and to reimburse the treasury of the Company in the
          discretion  of the Board of Directors for all or any part of the funds
          used for the  redemption  of the 6%  Preferred  Stock in an amount not
          exceeding the par value of the shares retired by redemption.

               "VOTED  FURTHER  to  authorize  the  Board  of  Directors  in its
          discretion from time to time to issue shares of Preferred Stock in one
          or more series with such  provisions  for dividends and  redemption as

<PAGE>

          they may determine, subject to the right of the holders of the capital
          stock of the Company to subscribe  therefor and provided that not more
          than 80,000 shares of Preferred  Stock of all classes and series shall
          be outstanding at any time."

     (3) That the authorized capital stock of said Bangor Hydro-Electric Company
is  neither  increased  nor  decreased  by the  aforesaid  votes  adopted by the
Company's stockholders in the manner hereinbefore set forth.

     IN  WITNESS  WHEREOF  said  Bangor  Hydro-Electric  Company  has caused its
corporate  seal to be hereunto  affixed and this  certificate  to be executed by
Edward M. Graham, its President, duly authorized hereunto this 17th day of June,
1946.

                                            BANGOR HYDRO-ELECTRIC COMPANY



                                            By \ss\ Edward M. Graham
                                                      President


                                 STATE OF MAINE

Penobscot, ss.                                                     June 17, 1946

     I, Eugene M. Dole, Clerk of Bangor Hydro-Electric  Company,  hereby certify
that the  statements  contained  in the  foregoing  certificate  of said Company
executed by Edward M. Graham, its President, are true.

                                              \ss\ Eugene M. Dole, Clerk {SEAL}


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                        Reclassification of capital stock

                                    103--240






                                 STATE OF MAINE

                          Office of Secretary of State

                             Augusta, June 20, 1946

                          Received and filed this day.

                           ATTEST:

                               SECRETARY OF STATE

                        Recorded Vol. 27, Pages 101 & 102


<PAGE>



     I,  EUGENE  M.  DOLE,  Clerk  of  Bangor  Hydro-Electric  Company,  a Maine
corporation  having its  principal  place of business at Bangor,  Maine,  hereby
certify  that the Annual  Meeting of the  Stockholders  of said Company was duly
called,  legally  convened  and held on February  14, 1950 at ten o'clock in the
forenoon,  at the  principal  offices of said  Company  at No. 33 State  Street,
Bangor,  Maine, in accordance with said Company's By-Laws and in accordance with
the laws of the State of Maine;  that at said meeting,  by a vote representing a
majority of the voting power of said Company's outstanding capital stock, it was
among other  matters,  voted to increase the  authorized  capital  stock of said
Company by  $5,000,000,  such  increase to be  represented  by 20,000  shares of
Preferred  Stock of the par value of $100  each,  and  200,000  shares of Common
Stock of the par value of $15  each,  so that the  total  amount  of  authorized
capital stock of said Company will be $17,500,000, represented by 100,000 shares
of  Preferred  Stock of the par value of $100 each and 500,000  shares of Common
Stock  of the  par  value  of $15  each;  that  at  said  meeting  and by a vote
representing  a  majority  of the  voting  power of said  Company's  outstanding
Capital Stock, it was further voted that subject to  reclassification  hereafter
upon retirement by redemption or otherwise,  the Company's "4% Preferred  Stock,
Series A," shall  presently  consist  of 17,500  such  shares,  being the number
thereof now outstanding,  and that the "4% Preferred Stock, Series B," be and it
is hereby eliminated as a class of authorized but unissued Preferred Stock.

     I further  certify  that notice of the proposed  increase in the  Company's
authorized  capital stock and changes in capital structure was duly given in the
call  for  said  meeting;  that  the  text of the  resolutions  relating  to the
aforesaid  increase and changes in capital structure,  affirmatively  acted upon
and adopted at said meeting by stockholders' on record,  representing a majority
of the voting power of the Company's outstanding capital stock is as follows:

               RESOLVED,   that  the  Company's   authorized  capital  stock  be
          increased by  $5,000,000,  such increase to be  represented  by 20,000
          shares of  Preferred  Stock of the par value of $100 each and  200,000
          shares of Common Stock of the par value of $15 each, so that the total
          amount of authorized capital stock of this Company will be $17,500,000
          represented by 100,000  shares of Preferred  Stock of the par value of
          $100 each and 500,000  shares of Common  Stock of the par value of $15
          each.

               RESOLVED,   that  subject  to  reclassification   hereafter  upon
          retirement  by  redemption  or  otherwise,  the Company's 4% Preferred
          Stock, Series A, shall presently consist of 17,500 such shares,  being
          the number thereof now outstanding,  and that the "4% Preferred Stock,
          Series B," be and it is hereby eliminated as a class of authorized but
          unissued preferred stock.

<PAGE>

               RESOLVED,  that the officers of this Company,  or any one or more
          of them, be and they hereby are authorized and directed to make, sign,
          verify  and  acknowledge  in behalf  of this  Company,  a  certificate
          setting  forth the  foregoing  changes with respect to the increase of
          the  authorized  capital  stock  of  this  Company  and to  file  such
          certificate  within the time and in the manner required by statute and
          to do all other acts and  things  that may be  necessary  or proper to
          carry  into  effect  the  foregoing  resolutions,  or any of them,  in
          compliance with the laws of the State of Maine.

     IN WITNESS WHEREOF,  I have hereunto executed the foregoing  certificate in
my capacity as Clerk of Bangor Hydro-Electric  Company, this twenty-first day of
February, 1950.

                               \ss\ Eugene M. Dole
                               Clerk of Bangor Hydro-Electric Company



                                 STATE OF MAINE

Penobscot, ss.                                                February 21, 1950.

     Personally  appeared the above named Eugene M. Dole, and made oath that the
statements contained in the above certificate by him subscribed are true.

         Before me,
                                 \ss\ Albert C. Blanchard  {SEAL}
                                                   Notary Public


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                            Increase in Capital Stock

                                     103-240







                                 STATE OF MAINE

                          Office of Secretary of State

                           Augusta, February 28, 1950

                          Received and Filed this day.

                                      \ss\
                               SECRETARY OF STATE

                       Recorded: Vol. 29, Pages 349 & 350.


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

               Certificate of decrease in par value of authorized  Common Stock,
               increase  in  authorized  number of shares of Common  Stock,  and
               By-Law amendments relating thereto and to preemptive rights.

     I, Albert C. Blanchard,  Clerk of Bangor  Hydro-Electric  Company,  a Maine
corporation  duly  organized  and  existing  according  to law  and  having  its
principal  place of business  at Bangor,  County of  Penobscot,  State of Maine,
hereby certify as follows:

     1. That the Annual Meeting of the Stockholders of said Company was duly and
regularly  convened and held in accordance  with the By-Laws of said Company and
according  to law at the  principal  office of said  Company at 31 Main  Street,
Bangor,  Maine of May 9, 1961 at ten o'clock in the forenoon,  Eastern  Daylight
Time, at which meeting stockholders  representing a majority of the voting power
of the Company's capital stock entitled to be voted thereat,  to wit, holders of
117,462 1/4 votes, out of a total of 139,732 1/2 authorized  votes, were present
in person or represented by proxy.

     2. That at said  meeting  117,391  votes,  representing  a majority  of the
voting power of said Company's authorized and issued capital stock, were cast in
favor of the adoption of the  following  resolution by  stockholders  present in
person or represented by proxy, viz:

         RESOLVED:

               (a) That the  authorized  Common  Stock of Bangor  Hydro-Electric
          Company,  now  consisting of 500,000 shares of the par value of $15.00
          each,  be  increased  to  1,500,000  shares of Common Stock of the par
          value of $5.00 each.

               (b) That the 369,570 shares of the Company's  Common Stock of the
          par value of $15.00 each, presently issued and outstanding, be changed
          into 1,108,710  shares of Common Stock of the par value of $5.00 each,
          on the basis of the issuance of two additional  shares of Common Stock
          of the par  value  of $5.00  each in  respect  of each of the  369,570
          shares of Common Stock presently issued and outstanding.

               (c) That  Section 1 of Article XI of the  Company's  By-Laws,  as
          amended, be and the same is hereby further amended to read as follows:

               Section 1. The  authorized  capital stock of the Company shall be
          $17,500,000  represented by 100,000  shares of Preferred  Stock of the
          par value of $100.00 each and 1,500,000  shares of Common Stock of the
          par value of $5.00 each.

<PAGE>


               (d) That Section 5 of Article III of the  Company's  By-Laws,  as
          amended, be and the same is hereby further amended to read as follows:

               Section  5.  Stockholders  entitled  to  vote at any  meeting  of
          stockholders  may vote  either in person or by proxy  granted not more
          than sixty days before the  meeting,  the date of which shall be named
          therein, and said proxies shall not be valid after a final adjournment
          thereof.  Stockholders  may also be  represented by a general power of
          attorney produced at the meeting and valid until it is revoked. At any
          meeting of stockholders,  each holder of Common Stock entitled to vote
          thereat shall be entitled to cast one-twelfth of a vote for each share
          of Common Stock held,  and each holder of Preferred  Stock entitled to
          vote thereat shall be entitled to cast one vote for each share of such
          Preferred  Stock held.  Except as the Board of Directors may otherwise
          fix and  determine  in the By-Laws with respect to any class or series
          of Preferred  Stock having special  voting  powers,  a majority of the
          total votes cast at any meeting of  stockholders  shall be  sufficient
          for the  adoption  or  rejection  of any  question  presented,  unless
          otherwise provided by law.

     3. That the authorized  capital stock of Bangor  Hydro-Electric  Company is
neither increased nor decreased by the adoption of the foregoing resolution.

     4. That notice of the proposed  action upon and with respect to each of the
matters  set forth in the  foregoing  resolution  was duly given in the call for
said meeting.

     5. That at said meeting the  following  resolution  relating to  preemptive
rights was adopted by  stockholders  having a right to vote  thereat,  by a vote
representing 99.9% of the shares present of represented at the meeting,  to wit,
by 117,338 1/4 votes, out of 117,462 1/2 votes authorized to be cast:

          RESOLVED:

               That  Section  7 of  Article  XI of  the  Company's  By-Laws,  as
          amended, be and the same is hereby repealed, and the following enacted
          in place thereof:

               Section 7. The Board of Directors, by resolution adopted prior to
          the issue of any stock having voting rights,  shall determine  whether
          the  holders of any of the  classes or series of the  Preferred  Stock
          and/or the  holders  of the Common  Stock may have or may not have the
          preemptive  right to subscribe for and take shares of such stock so to
          be  issued.  Such  resolution  shall  be  set  forth  in  full  in the
          Prospectus  relating to such issue, and, except to the extent that the
          Board of  Directors  shall  determine as above  provided,  no right to

<PAGE>


          subscribe for or to take any stock,  whether  Preferred or Common,  at
          any time issued by the Company shall  appertain to any of the stock of
          this Company.

     6. That notice of the proposed action  relating to said  preemptive  rights
was duly given in the call for said meeting.

     7. That at said  meeting,  upon motion duly made and seconded it was VOTED,
that the Clerk of this  Company or any one or more of its  officers  be and they
hereby are  authorized  and directed to make,  sign and verify in behalf of this
Company,  a certificate  setting forth the action taken by the  stockholders  of
Bangor  Hydro-Electric  Company upon and with respect to each of the matters set
forth in the foregoing resolutions and to file such certificate in the office of
the Secretary of State within the time and in the manner required by statute and
to do all other acts and things  that may be  necessary  or proper to carry into
effect the foregoing  resolutions or either of them, in compliance with the laws
of the State of Maine.

     IN WITNESS WHEREOF,  I have hereunto executed the foregoing  certificate in
my capacity as Clerk of Bangor  Hydro-Electric  Company and in its behalf,  this
ninth day of May, 1961.

                                         \ss\ Albert C. Blanchard
                                Clerk of Bangor Hydro-Electric Company



                                 STATE OF MAINE

Penobscot, ss.                                                       May 9, 1961

     Personally  appeared the above named Albert C.  Blanchard,  Clerk of Bangor
Hydro-Electric Company, and made oath that the statements contained in the above
certificate by him subscribed in my presence are true.

                                    Before me,

                                                     \ss\ Earle R. Webster
                                                     Justice of the Peace


<PAGE>





                          BANGOR HYDRO-ELECTRIC COMPANY

                             Change in Capital Stock

                                     103-240






                                 STATE OF MAINE

                          Office of Secretary of State

                              Augusta, May 28, 1961

                           Received and Filed this day.

            \ss\
            SECRETARY OF STATE

                          Recorded: Vol. 43, Pages 1-4.


<PAGE>



                  CERTIFICATE RELATING TO CHANGE OF PURPOSES OF

                          BANGOR HYDRO-ELECTRIC COMPANY

                                    ---------

     Bangor  Hydro-Electric  Company, a corporation organized and existing under
the laws of the State of Maine,  and having its  principal  place of business at
Bangor, County of Penobscot, State of Maine, does hereby certify:

     (1) That a duly  called  and  legally  convened  meeting  of the  Company's
stockholders  was held at the  Company's  offices at Bangor,  Maine,  on May 11,
1971, at which meeting the holders of a majority of the company's  capital stock
entitled to vote, to wit,  holders of 110,903  votes,  out of a total of 139,732
6/12ths, authorized votes, were present in person or represented by proxy.

     (2) That at said meeting the  Company's  stockholders  present in person or
represented by proxy unanimously voted as follows:

     "VOTED,  That  the  following  words  be  added  to  Paragraph  (b)  of the
     Certificate  of  Organization,  'and at such other location or locations as
     are from time to time authorized under the Laws of the State of Maine',  so
     that said Paragraph will read as follows:

     '(b)  The  construction,  purchase,  acquisition,  ownership,  improvement,
     maintenance,  use or  operation  of plants and  properties  for the making,
     generating,  selling, distribution or supplying gas or electricity or both,
     for lighting,  heating,  manufacturing or mechanical purposes in the Cities
     of  Bangor,  Brewer  and Old Town and the  Towns  of  Milford,  Charleston,
     Corinth, Orono, Bradley,  Eddington,  Veazie, Lincoln, Winn,  Mattawamkeag,
     Glenburn, Enfield, Howland, Passadumkeag,  Orrington, Hermon and Hampden in
     the County of Penobscot, the City of Ellsworth and the Towns of Bar Harbor,
     Blue Hill, Brooklin,  Bucksport,  Dedham, Mount Desert, Sedgwick, Southwest
     Harbor,  Surry  and  Trenton  in the  County of  Hancock,  and the Towns of
     Machias,  East Machias and  Machiasport in the County of Washington and any
     other  Cities  or  Towns  in  said  Counties  of  Penobscot,  Hancock,  and
     Washington,  in the State of Maine, and at such other location or locations
     as from time to time authorized under the Laws of the State of Maine..."

     "Further  VOTED,  That the  present  paragraph  (c) of the  Certificate  of
     Organization which reads as follows:

     '(c) In  connection  with the foregoing the Company shall have and exercise
     all of the rights,  privileges  and  franchises  of the  corporation  whose
     rights,  privileges and franchises it acquires and all powers  conferred by
     the  Laws of the  State  of Maine on  public  utility  corporations  of the
     character of the corporations whose properties are acquired.'

<PAGE>


     Be repealed and the following paragraph be substituted therefor:

     '(c) In addition to the foregoing,  the Company shall have and exercise all
     of the rights,  privileges and  franchises it has  heretofore  acquired and
     shall hereafter acquire and all powers and authority conferred upon gas/and
     or electric public utility corporations by the Laws of the State of Maine."

     IN WITNESS  WHEREOF,  said  Bangor  Hydro-Electric  Company  has caused its
corporate  seal to be hereunto  affixed and this  Certificate  to be executed by
R.N.  Haskell,  its President,  duly  authorized  hereunto this 18th day of May,
1971.

                                        BANGOR HYDRO-ELECTRIC COMPANY

                                        By \ss\ R.N. Haskell, President




                                 STATE OF MAINE

Penobscot, ss:                                                     May 18, 1971.

     I, Albert Chick Blanchard,  Clerk of Bangor Hydro-Electric  Company, hereby
certify that the  statements  contained  in the  foregoing  Certificate  of said
Company executed by R.N. Haskell, its President, are true.

                                             \ss\ Albert Chick Blanchard, Clerk

                                 STATE OF MAINE

Attorney General's Office                                          May 21, 1971

     I hereby certify that I have examined the foregoing  certificate,  the same
is properly drawn and signed, and is conformable to the constitution and laws of
the State,  and I am satisfied  that such changes are made in good faith and not
for the purpose of avoiding payment of fees or taxes to the State.

                                      \ss\
                                       Deputy Attorney General


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                               Change of Purposes

                                     103-240





                                 STATE OF MAINE

                          Office of Secretary of State

                              Augusta, May 28, 1971

                          Received and Filed this day.

         \ss\
          DEPUTY, SECRETARY OF STATE

                        Recorded: Vol. 68, Pages 104-106.


<PAGE>



For use by the
Secretary of State

                       STATE OF MAINE                           MAINE
File No. 103-240      CHANGE OF CLERK or                 SECRETARY OF STATE
Fee Paid $5.00        REGISTERED OFFICE                         FILED
C.B.     76C18           OR BOTH OF                          July 3, 1975
Date:    7-7-75  BANGOR HYDRO-ELECTRIC COMPANY           Doris Hayes, Agent


     Pursuant to 13-A MRSA 304 the  undersigned  corporation  advises you of the
following change(s):

     FIRST:  The name and business address of its present Clerk are Albert Chick
Blanchard, Esq., 27 State Street, Bangor, Maine 04401.

     SECOND: The name and business address of its successor Clerk* are Robert S.
Briggs, Esq., One Merchants Plaza, Bangor, Maine 04401.

     THIRD: Upon a change in Clerk this must be completed:

         (X)      Such change was  authorized by the Board of Directors
                  and the power to make such change is not  reserved to
                  the shareholders by the articles or the bylaws.

         ( )      Such change was authorized by the shareholders.
                 (Complete the following)

                        I certify that I have custody of the minutes
                        showing    the    above    action   by   the
                        shareholders.

                             ---------------------------------------
                             Clerk, secretary or assistant secretary


<PAGE>



Dated:  July 1, 1975

         Legibly print or       Bangor Hydro-Electric Company
         type name and
         capacity of all        By \ss\ Robert S. Briggs
         signers                     *Robert S. Briggs, Clerk
         13-A MRSA 104          (type or print name and capacity)
---------------------------------
         *The  Clerk of a  domestic  corporation  must be a person  resident  in
Maine.  The  business  address of the Clerk and the  registered  office  must be
identical.

    **The name of the  corporation  should be typed,  and the  document  must be
signed by (1) the Clerk or (2) by the  President  or  vice-president  and by the
Secretary  or an  assistant  secretary  or such other  officer as the bylaws may
designate as a second  certifying  officer of (3) if there are no such officers,
then by a majority of the Directors or by such Directors as may be designated by
a majority  of  Directors  then in office or (4) if there are no such  Directors
then by the holders,  or such of them as may be  designated  by the holders,  of
record of a majority of all  outstanding  shares entitled to vote thereon or (5)
by the holders of all of the outstanding shares of the corporation.

FORM NO. MBCA-3


<PAGE>



For use by the
Secretary of State

                              STATE OF MAINE                   MAINE
File No. 103-240               STATEMENT OF              SECRETARY OF STATE
Fee Paid $5.00           RESOLUTION ESTABLISHING               FILED
C.B.     442               SERIES OF SHARES OF             January 8, 1976
Date:   1-12-76      BANGOR HYDRO-ELECTRIC COMPANY        Doris Hayes, Agent

Pursuant to 13-A MRSA 503, the undersigned corporation submits the following for
the purpose of  establishing  and  designating a series of shares and fixing and
determining the relative rights and preferences thereof:

     FIRST: The attached resolution  establishing and designating the series and
fixing and  determining  the relative  rights and  preferences  thereof was duly
adopted by the Board of Directors on December 15, 1975.

     SECOND: The By-Laws expressly grant to the Board of Directors the authority
to make such a  resolution.  This  provision of the By-Laws was in effect on and
prior to December 31, 1971,  has not been  amended or  repealed,  and  therefore
continues to be effective pursuant to 13-A MRSA 103 (7).

     THIRD: The address of the registered office of the corporation is:

                     1 Merchants Plaza, Bangor, Maine 04401

Dated:  January 6, 1976

         Legibly print or         BANGOR HYDRO-ELECTRIC COMPANY
         type name and
         capacity of all          By \ss\ Robert S. Briggs
         signers                       Robert S. Briggs, Esq.
         13-A MRSA 104                        Clerk

---------------------------------
* The name of the corporation  should be typed,  and the document must be signed
by  (1)  the  Clerk  or  (2) by the  President  or a  vice-president  and by the
Secretary  or an  assistant  secretary  or such other  officer as the bylaws may
designate as a second  certifying  officer or (3) if there are no such officers,
then by a  majority  of  Directors  then in  office  or (4) if there are no such
Directors,  then by the  holders,  or such of them as may be  designated  by the
holders,  of record of a majority  of all  outstanding  shares  entitled to vote
thereon  or  (5) by  the  holders  of  all  of  the  outstanding  shares  of the
corporation.

FORM NO. MBCA-7


<PAGE>



     Upon motion duly made and seconded, the following preambles and resolutions
were unanimously adopted:

     WHEREAS  the  Company  desires to secure  additional  funds for its general
corporate purposes; and

     WHEREAS 52,660 of the 100,000 shares of the Company's  authorized Preferred
Stock, $100 Par Value, are presently unissued,  and may be issued in one or more
classes or series  with such  dividends,  designations,  terms,  conditions  and
restrictions  as  may be  determined  in  their  discretion  by  this  Board  of
Directors, and

     WHEREAS in the  judgement  of this Board of  Directors  it is  advisable to
secure such  additional  funds by authorizing  the issue of 10,000 shares of the
Company's authorized but unissued shares of Preferred Stock, $100 Par Value, and

     WHEREAS the officers of the Company have consulted with Smith, Barney & Co.
Incorporated of New York  concerning the most desirable  method of offering such
additional  Preferred  Stock,  and have  determined  that it  should  be sold at
private sale to a limited number of institutional investors;

     NOW THEREFORE BE IT RESOLVED that the Company  hereby  creates a new series
of Preferred Stock to be designated as the 10 1/2% Preferred  Stock,  consisting
of 10,000 shares of the authorized but unissued Preferred Stock, $100 Par Value,
of the Company; and

     FURTHER  RESOLVED that the 10 1/2% Preferred Stock be sold at not less than
par value, plus accrued dividends if any, at private sale to a limited number of
institutional investors, the exact number and the more particular identification
of such  investors to be determined  by the President or the Vice  President and
Treasurer of the Company, or either of them, and

     FURTHER RESOLVED that pursuant to Article XI of the By-Laws of the Company,
said By-Laws be amended in order to set forth the dividend,  designation, terms,
conditions and restrictions relative to the 10 1/2% Preferred Stock, as follows:

     (a) The first  paragraph of Article XI, Section 2 is hereby amended to read
     as follows:

          The  100,000  shares  of  Preferred   Stock  shall  be  available  for
          classification  and  reclassification  in different  classes or series
          from time to time.  Subject to  reclassification  upon  retirement  by
          redemption  or otherwise,  25,000 shares shall be 7% Preferred  Stock,
          17,500  shares  shall be 4%  Preferred  Stock,  Series A, 4,840 shares
          shall be 4 1/4%  Preferred  Stock and 10,000  shares  shall be 10 1/2%
          Preferred Stock.

     (b) The first line of the second paragraph of Article XI,

<PAGE>

     Section 2, is hereby amended to read as follows:

          The remaining shares, 42,660 in number, plus additional shares....

     (c)  Article  XI,  Section 5, is hereby  amended by  deleting  the same and
     substituting therefore the following:

          Section 5. In case of liquidation  or dissolution of the Company,  the
          assets,  irrespective  of whether they shall consist of capital assets
          or accumulated earnings,  shall be distributed as follows: All holders
          of  Preferred  Stock shall be entitled to be paid in full both the par
          amount of their  shares and an amount  equal to the  unpaid  dividends
          accumulated  and accrued thereon and, in case of the 10 1/2% Preferred
          Stock,  if such  liquidation or  dissolution  is voluntary,  an amount
          equal to the  premium  specified  in Section  6(a),  before any amount
          shall be paid to the  holders  of the  Common  Stock,  and in case the
          assets  shall not be  sufficient  to pay in full all of the  Preferred
          Stock  and  dividends   accumulated  and  accrued  thereon,  then  the
          principal  thereof shall first be paid and a pro rata  distribution of
          any  excess  shall be made on account  of the  accumulated  dividends,
          based on the total amount of unpaid dividends  accumulated and accrued
          thereon, but after such payment to the holders of the Preferred Stock,
          the  remaining  assets and funds  shall be paid to the  holders of the
          Common Stock, according to their respective shares.

     (d)  Article  XI,  Section 4, is hereby  amended by  deleting  the same and
     substituting therefor the following:

          Section 4(a). If any dividend is declared on the Preferred  Stock at a
          rate less than  sufficient to pay the full dividend  called for by all
          the Preferred  Stock  outstanding,  the  distribution of the dividends
          shall be pro  rata,  so that all  holders  of  Preferred  Stock  shall
          receive the same  proportion of the full dividend  called for by their
          stock.

               (b) If at any time dividends payable on the Preferred Stock shall
          be in  default  in an  amount  equal to or  exceeding  four  quarterly
          dividend  payments,  then, until all dividends so in default have been
          paid or declared and set apart for  payment,  the holders of shares of
          Preferred Stock of each and every class or series,  voting as a single
          class, shall be entitled, at any annual meeting during which dividends
          are so in default, to elect two Directors.

     (e)  Article  XI.  Section  6  is  hereby  amended  by  deleting  same  and
     substituting therefor the following:

<PAGE>


          Section 6. (a) The 7% Preferred Stock shall bear dividends at the rate
          of 7% per annum and shall not be redeemable.  The 4% Preferred  Stock,
          Series A, shall bear  dividends  at the rate of 4% per annum and shall
          be  redeemable  at 112% if called on or prior to October  1, 1950;  at
          111% thereafter  through October 1, 1951; and after October 1, 1951 at
          110%, plus accrued dividends in every case. The 4 1/4% Preferred Stock
          shall  bear  dividends  at the rate of 4 1/4% per  annum  and shall be
          redeemable  at 102% if  called on or prior to April 1,  1954;  at 101%
          thereafter  through  April 1, 1959;  and after  April 1, 1959 at 100%,
          plus accrued  dividends  in every case.  The 10 1/2%  Preferred  Stock
          shall bear dividends at the rate of 10 1/2% Preferred Stock shall bear
          dividends at the rate of 10 1/2% per annum and shall be  redeemable at
          the option of the Company as follows:

                At 110.5% if called on or prior to
                December  31,  1976;  at  109.8%  thereafter  through
                December  31,  1977;  at  109.1%  thereafter  through
                December  31,  1978;  at  108.4%  thereafter  through
                December  31,  1979;  at  107.7%  thereafter  through
                December  31,  1980;  at  107.0%  thereafter  through
                December  31,  1981;  at  106.3%  thereafter  through
                December  31,  1982;  at  105.6%  thereafter  through
                December  31,  1983;  at  104.9%  thereafter  through
                December  31,  1984;  at  104.2%  thereafter  through
                December  31,  1985;  at  103.5%  thereafter  through
                December  31,  1986;  at  102.8%  thereafter  through
                December  31,  1987;  at  102.1%  thereafter  through
                December  31,  1988;  at  101.4%  thereafter  through
                December  31,  1989;  at  100.7%  thereafter  through
                December  31,  1990;  and after  December 31, 1990 at
                100%, plus accrued dividends in every case;

          provided, however, that except as provided in Section 6 (b) below, the
          Company  may not redeem any of the 10 1/2%  Preferred  Stock  prior to
          December 31, 1985, as a part of, or in anticipation  of, any refunding
          operation involving the application,  directly or indirectly, of money
          borrowed  by the  Company  having  an  interest  cost  (calculated  in
          accordance with generally accepted financial practice), or through the
          issuance of preferred  stock  ranking  equally with or prior to the 10
          1/2% Preferred Stock having a dividend cost  (calculated as aforesaid)
          of less than 10 1/2% per annum.  Preferred Stock, which is the subject
          of  redemption,  may be called  in whole or in part upon any  dividend
          date by  appropriate  resolution  adopted by the Board of Directors at
          any  regular or  special  meeting  upon 60 days'  notice to the owners
          thereof  of record  to be given by  mailing  copies  of the  notice of

<PAGE>


          redemption,  postage  prepaid,  addressed  to  such  owners  at  their
          addresses  as shown on the books of the  Company.  If less than all of
          the outstanding shares of any class or series of Preferred Stock shall
          be  redeemed  at any  time,  the  stock  to be so  redeemed  shall  be
          determined  by lot,  in such  manner  as the  Board of  Directors  may
          determine  and  prescribe,  except  that  the  shares  of the 10  1/2%
          Preferred Stock to be redeemed may be determined by lot or pro rata or
          in such  other  manner as the Board of  Directors  may  determine  and
          prescribe.

               (b)  The 10  1/2%  Preferred  Stock  shall  also  be  subject  to
          redemption  through the operation of a sinking fund (herein called the
          Sinking  Fund) at the  redemption  price (the Sinking Fund  Redemption
          Price) of $100 per share plus an amount equal to the dividends accrued
          and unpaid  thereon to the redemption  date,  whether or not earned or
          declared.  For the purposes of the Sinking Fund, out of any net assets
          of  the  Company  legally  available  therefor  remaining  after  full
          cumulative  dividends upon all Preferred Stock then outstanding to the
          end of the current  dividend  period  therefor shall have been paid or
          declared and set apart for payment the Company shall set aside in cash
          annually on  December 31 in each year  commencing  with  December  31,
          1981, an amount  sufficient  to redeem at the Sinking Fund  Redemption
          Price,  500 shares of the 10 1/2%  Preferred  Stock.  The Sinking Fund
          shall be  cumulative so that if on any such December 31 the net assets
          of the Company  legally  available  therefor shall be  insufficient to
          permit  any such  amount to be set aside in full,  or if for any other
          reason such amount  shall not have been set aside in full,  the amount
          of the deficiency shall be set aside, but without interest, before any
          dividend shall be paid or declared,  or any distribution  made, on any
          junior  shares or any junior  shares shall be  purchased,  redeemed or
          otherwise  acquired by the Company,  or any monies shall be paid to or
          set aside or made  available  for a sinking  fund for the  purchase or
          redemption of any junior shares.  Notwithstanding  the foregoing,  the
          Company  may at any time (1) pay  dividends  in  junior  shares or (2)
          purchase,  redeem or otherwise  acquire junior shares in exchange for,
          or out of the net cash  proceeds  from the  concurrent  sale of, other
          junior  shares.  As used herein,  the term "junior  shares" shall mean
          Common  Stock  or any  other  shares  ranking  junior  to the 10  1/2%
          Preferred   Stock  either  as  to   dividends  or  upon   liquidation,
          dissolution or winding up. Monies in the Sinking Fund shall be applied
          on  such  December  31 to the  redemption  of  shares  of the 10  1/2%
          Preferred  Stock.  The Company shall,  prior to each such Sinking Fund
          redemption,  give notice of redemption of such number of shares of the
          10 1/2%  Preferred  Stock as may be  required  to satisfy  the Sinking
          Fund.

<PAGE>

               (c) In addition, the Company shall have the right, at its option,
          to redeem at the Sinking  Fund  Redemption  Price on December 31, 1981
          and on any December 31 thereafter  an  additional  number of shares of
          the 10 1/2% Preferred  Stock up to but not exceeding 500 shares.  This
          right  shall not be  cumulative  and shall be lost to the  extent  not
          exercised on any such December 31. Any  redemption of shares of the 10
          1/2% Preferred  Stock pursuant to this Section 6 (c) shall not operate
          to reduce  the number of shares  which the  Company  is  obligated  to
          redeem pursuant to Section 6 (b).

A true copy.

         Attest:  \ss\ Robert S. Briggs
                  Robert S. Briggs, Clerk

EXHIBIT A


<PAGE>



For use by the
Secretary of State

                           STATE OF MAINE                    MAINE
File No. 103-240            STATEMENT OF               SECRETARY OF STATE
Fee Paid $5.00         RESOLUTION REVOKING THE               FILED
C.B.     619      ESTABLISHMENT OF SERIES OF             March 31, 1976
Date:   X-X-76               SERIES OF                 Doris Hayes, Agent
                  BANGOR HYDRO-ELECTRIC COMPANY

Pursuant to 13-A MRSA 503, the undersigned corporation submits the following for
the purpose of revoking the establishment and designation of a series of shares.

     FIRST: The attached  resolution  revoking the establishment and designation
of the Bangor Hydro-Electric Company 10 1/2% Preferred Stock was duly adopted by
the Board of Directors on February 2, 1976.

     SECOND:  Authority  is  vested  in the  Board of  Directors  to make such a
resolution  by virtue of their  authority to establish  and designate the series
from the authorized but unissued  preferred stock of the Company,  and by virtue
of the fact that said 10 1/2% preferred stock has not and will not be issued.

     THIRD:  the  address  of the  registered  office  of the  Company  is:

                    One Merchants Plaza, Bangor, Maine 04401

Dated:  March 24, 1976

         Legibly print or              Bangor Hydro-Electric Company
         type name and
         capacity of all               By \ss\ Robert S. Briggs
         signers                            *Robert S. Briggs, Clerk
         13-A MRSA 104
---------------------------------
* The name of the corporation  should be typed,  and the document must be signed
by  (1)  the  Clerk  or  (2) by the  President  of a  vice-president  and by the
Secretary  or an assistant  secretary  or such other  officer as the by-laws may
designate as a second  certifying  officer or (3) if there are no such officers,
then by a  majority  of  Directors  then in  office  or (4) if there are no such
Directors,  then by the  holders,  or such of them as may be  designated  by the
holders,  of record of a majority  of all  outstanding  shares  entitled to vote
thereon  or  (5) by  the  holders  of  all  of  the  outstanding  shares  of the
corporation.

FORM NO. MBCA-7


<PAGE>



     Upon motion duly made and seconded, the following preambles and resolutions
were unanimously adopted:

     WHEREAS the Board of  Directors  by its actions on November 17 and December
15,  1975,   adopted   resolutions  and  took  other  actions  relevant  to  the
establishment  of a new series of Preferred Stock from the Company's  authorized
but unissued shares, which series is known as the 10 1/2% Preferred Stock, and

     WHEREAS  said  shares  of the 10 1/2%  Preferred  Stock  were to be sold at
private sale to a limited number of institutional investors, and

     WHEREAS the Company  had taken all steps  necessary  in order to effect the
issuance of said shares,  including  the  obtaining  of approval  from the Maine
Public Utilities  Commission by its Order dated January 15, 1976, and the filing
with the Secretary of State of Maine of a Statement of  Resolution  Establishing
Series of Shares, on January 8, 1976, and

     WHEREAS  a  final   agreement   between  the   Company  and  the   proposed
institutional  purchasers was not reached and therefore no shares of the 10 1/2%
Preferred Stock were issued, and

     WHEREAS the Company has accordingly  withdrawn its offer to sell the shares
of the 10 1/2%  Preferred  Stock to any party,  and has received  from the Maine
Public  Utilities  Commission its  Supplemental  Decree revoking its prior order
approving the issuance of shares of the 10 1/2% Preferred Stock, and

     WHEREAS  the  Company  desires  to  return  said  shares  to the  status of
undesignated authorized by unissued shares of Preferred Stock of the Company;

     NOW THEREFORE BE IT RESOLVED that the Company hereby revokes,  rescinds and
declares  of no effect so much of those  resolutions  adopted  by this  Board of
Directors at its meetings  held on November 17 and December 15, 1975 as respects
the  creation  of a new  series of  Preferred  Stock  designated  as the 10 1/2%
Preferred Stock, and the  establishment of the terms,  conditions,  restrictions
and dividends relative to said 10 1/2% Preferred Stock; and

     FURTHER  RESOLVED  that the  officers  of the Company  are  authorized  and
instructed  to execute all  documents  and reports and take such other action as
may be necessary to rescind the  establishment  of said 10 1/2% Preferred Stock,
with the same effect and to the same extent as if said 10 1/2%  Preferred  Stock
and never been established.

         A true copy.

                  Attest:  \ss\ Robert S. Briggs, Clerk


<PAGE>



For use by the
Secretary of State

                         STATE OF MAINE                       MAINE
File No. 103-240          STATEMENT OF                 SECRETARY OF STATE
Fee Paid $5.00             RESOLUTION                         FILED
C.B.     717           ESTABLISHING SERIES                 May 12, 1976
Date:   X-X-76            OF SHARES OF                  Doris Hayes, Agent
                  BANGOR HYDRO-ELECTRIC COMPANY

Pursuant to 13-A MRSA 503, the undersigned corporation submits the following for
the purpose of  establishing  and  designating a series of shares and fixing and
determining the relative rights and preferences thereof:

     FIRST: The attached resolution  establishing and designating the series and
fixing and  determining  the relative  rights and  preferences  thereof was duly
adopted by the Board of Directors on May 11, 1976.

     SECOND: The By-Laws expressly grant to the Board of Directors the authority
to make such a  resolution.  This  provision of the By-Laws was in effect on and
prior to December 31, 1971,  has not been  amended or  repealed,  and  therefore
continues to be effective pursuant to 13-A MRSA 103 (7).

     THIRD: The address of the registered office of the corporation is:

                     1 Merchants Plaza, Bangor, Maine 04401

Dated:  May 11, 1976

         Legibly print or  Bangor Hydro-Electric Company
         type name and
         capacity of all   By \ss\ Robert S. Briggs
         signers                Robert S. Briggs, Clerk
         13-A MRSA 104
---------------------------------
* The name of the corporation  should be typed,  and the document must be signed
by  (1)  the  Clerk  or  (2) by the  President  of a  vice-president  and by the
Secretary  or an assistant  secretary  or such other  officer as the by-laws may
designate as a second  certifying  officer or (3) if there are no such officers,
then by a  majority  of  Directors  then in  office  or (4) if there are no such
Directors,  then by the  holders,  or such of them as may be  designated  by the
holders,  of record of a majority  of all  outstanding  shares  entitled to vote
thereon  or  (5) by  the  holders  of  all  of  the  outstanding  shares  of the
corporation.

FORM NO. MBCA-7


<PAGE>



     WHEREAS  the  Company  desires to secure  additional  funds for its general
corporate purposes, including, among other things, capital expenditures, and

     WHEREAS 52,660 of the 100,000 shares of the Company's  authorized Preferred
Stock $100 par value, are presently  unissued,  and may be issued in one or more
classes or series  with such  dividends,  designations,  terms,  conditions  and
restrictions  as  may be  determined  in  their  discretion  by  this  Board  of
Directors, and

     WHEREAS in the  judgment  of this Board of  Directors  it is  advisable  to
secure such  additional  funds by authorizing  the issue of 20,000 shares of the
Company's authorized but unissued shares of Preferred Stock, $100 par value, and

     WHEREAS the  officers  of the Company  have  consulted  with Smith  Barney,
Harris Upham & Co. Incorporated of New York concerning the most desirable method
of offering such additional  Preferred Stock, and have determined that it should
be sold at private sale to a limited number of institutional investors;

     NOW THEREFORE BE IT RESOLVED that the Company  hereby  creates a new series
of Preferred Stock to be designated as the 9 1/4% Preferred Stock, consisting of
20,000 shares of the authorized but unissued Preferred Stock, $100 par value, of
the Company; and

     FURTHER  RESOLVED that the 9 1/4% Preferred  Stock be sold at not less than
par value, plus accrued dividends if any, at private sale to a limited number of
institutional investors, the exact number and the more particular identification
of such  investors  to be  determined  by the  Chairman  of the  Board and Chief
Executive officer or the President of the Company, or either of them,

     FURTHER  RESOLVED  that the  pursuant  to Article XI of the  By-Laws of the
Company,   said  By-Laws  be  amended  in  order  to  set  forth  the  dividend,
designation, terms, conditions and restrictions relative to the 9 1/4% Preferred
Stock, as follows:

     (a) The first  paragraph of Article XI, Section 2 is hereby amended to read
     as follows:

               Section  2.  The  100,000  shares  of  Preferred  Stock  shall be
          available for classification and reclassification in different classes
          or  series  from  time  to  time.  Subject  to  reclassification  upon
          retirement  by  redemption  or  otherwise,  25,000  shares shall be 7%
          Preferred Stock,  17,500 shares shall be 4% Preferred Stock, Series A,
          4,840 shares shall be 4 1/4%  Preferred  Stock and 20,000 shares shall
          be 9 1/4% Preferred Stock.

     (b) The first line of the second  paragraph  of Article  XI,  Section 2, is
     hereby amended to read as follows:


<PAGE>

               The  remaining   shares,   32,660  in  number,   plus  additional
          shares....

     (c)  Article  XI,  Section 4 is hereby  amended  by  deleting  the same and
     substituting therefor the following:

               Section 4. (a) If any dividend is declared on the Preferred Stock
          at a rate less than  sufficient to pay the full dividend called for by
          all the Preferred Stock outstanding,  the distribution of the dividend
          shall be pro  rata,  so that all  holders  of  Preferred  Stock  shall
          receive the same  proportion of the full dividend  called for by their
          stock.

               (b) If at any time dividends payable on the Preferred Stock shall
          be in  default  in an  amount  equal to or  exceeding  four  quarterly
          dividend  payments,  or if the Company shall fail to make any required
          sinking fund payment on the Preferred Stock, then, until all dividends
          or sinking fund  payments so in default have been paid or declared and
          set apart for  payment,  the holders of shares of  Preferred  Stock of
          each and every  class or series,  voting as a single  class,  shall be
          entitled,  at any annual  meeting  during  which  dividends  are so in
          default, to elect two Directors.

               (c) Notwithstanding the provisions of Section 5 of Article III of
          these By-Laws,  except as provided in paragraph (b) of this Section 4,
          the  holders of the 9 1/4%  Preferred  Stock  shall not be entitled to
          vote at any meeting of stockholders.

               (d) Article XI,  Section 5 is hereby amended by deleting the same
          and substituting therefore the following:

               Section 5. In case of  liquidation or dissolution of the Company,
          the  assets,  irrespective  of whether  they shall  consist of capital
          assets or accumulated  earnings,  shall be distributed as follows: All
          holders of Preferred  Stock shall be entitled to paid in full both the
          par amount of their shares and an amount equal to the unpaid dividends
          accumulated  and  accrued  thereon  and,  in  the  case  of the 9 1/4%
          Preferred stock, if such  liquidation or dissolution is voluntary,  an
          amount equal to the premium specified in Section 6(a) below before any
          amount shall be paid to the holders of the Common  Stock,  and in case
          the assets shall not be sufficient to pay in full all of the Preferred
          Stock  and  dividends   accumulated  and  accrued  thereon,  then  the
          principal  thereof shall first be paid and a pro rata  distribution of
          any  excess  shall be made on account  of the  accumulated  dividends,
          based on the total amount of unpaid dividends  accumulated and accrued
          thereon, but after such payment to the holders of the Preferred Stock,
          the  remaining  assets and funds  shall be paid to the  holders of the
          Common Stock, according to their respective shares.


<PAGE>

               (e) Article XI,  Section 6 is hereby amended by deleting the same
          and substituting therefor the following:

               Section 6. (a) The 7% Preferred Stock shall bear dividends at the
          rate of 7% per annum and shall  not be  redeemable.  The 4%  Preferred
          Stock,  Series A, shall bear dividends at the rate of 4% per annum and
          shall be  redeemable at 112% if called on or prior to October 1, 1950;
          at 111% thereafter  through October 1, 1951; and after October 1, 1951
          at 110%,  plus accrued  dividends in every case.  The 4 1/4% Preferred
          Stock shall bear  dividends  at the rate of 4 1/4% per annum and shall
          be  redeemable at 102% if called on or prior to April 1, 1954; at 101%
          thereafter  through  April 1, 1959;  and after  April 1, 1959 at 100%,
          plus accrued dividends in every case. The 9 1/4% Preferred Stock shall
          bear dividends at the rate of 9 1/4% per annum and shall be redeemable
          at the option of the Company as follows:

               At 109.25% if called on or prior to December 1, 1976;
               at 108.63% thereafter through December 1, 1977;
               at 108.01% thereafter through December 1, 1978;
               at 107.39% thereafter through December 1, 1979;
               at 106.77% thereafter through December 1, 1980;
               at 106.15% thereafter through December 1, 1981;
               at 105.53% thereafter through December 1, 1982;
               at 104.91% thereafter through December 1, 1983;
               at 104.29% thereafter through December 1, 1984;
               at 103.67% thereafter through December 1, 1985;
               at 103.05% thereafter through December 1, 1986;
               at 102.43% thereafter through December 1, 1987;
               at  101.81%  thereafter  through  December  1,  1988;
               at 101.19% thereafter through December 1, 1989;
               at 100.57% thereafter through December 1, 1990;
               and after  December  1, 1990 at 100% plus  accrued  dividends  in
               every case;

          provided,  however, that except as provided in Section 6(b) below, the
          Company  may not redeem  any of the 9 1/4%  Preferred  Stock  prior to
          December 1, 1986, as a part of, or in  anticipation  of, any refunding
          operation involving the application,  directly or indirectly, of money
          borrowed  by the  Company  having  an  interest  cost  (calculated  in
          accordance with generally accepted financial practice), or through the
          issuance of  preferred  stock  ranking  equally with or prior to the 9
          1/4% Preferred Stock having a dividend cost  (calculated as aforesaid)
          of less than 9 1/4% per annum.  Preferred Stock,  which is the subject
          of  redemption,  may be called  in whole or in part upon any  dividend
          date by  appropriate  resolution  adopted by the Board of Directors at
          any  regular or  special  meeting  upon 60 days'  notice to the owners
          thereof  of record  to be given by  mailing  copies  of the  notice of

<PAGE>


          redemption,  postage  prepaid,  addressed  to  such  owners  at  their
          addresses  as shown on the books of the  Company.  If less than all of
          the outstanding shares of any class or series of Preferred Stock shall
          be  redeemed  at any  time,  the  stock  to be so  redeemed  shall  be
          determined  by lot,  in such  manner  as the  Board of  Directors  may
          determine  and  prescribe,  except  that  the  shares  of  the 9  1/4%
          Preferred Stock to be redeemed may be determined by lot or pro rata or
          in such  other  manner as the Board of  Directors  may  determine  and
          prescribe.

     (b) The 9 1/4% Preferred Stock shall also be subject to redemption  through
the  operation  of a  sinking  fund  (herein  called  the  Sinking  Fund) at the
redemption  price (the Sinking Fund Redemption  Price) of $100 per share plus an
amount equal to the dividends accrued and unpaid thereon to the redemption date,
whether or not earned or declared.  For the purposes of the Sinking Fund, out of
any net assets of the Company legally  available  therefor  remaining after full
cumulative dividends upon all Preferred Stock then outstanding to the end of the
current  dividend period therefor shall have been paid or declared and set apart
for payment the Company  shall set aside in cash  annually on December 1 in each
year  commencing with December 1, 1982, an amount  sufficient to redeem,  at the
Sinking Fund Redemption  Price,  1,000 shares of the 9 1/4% Preferred Stock. The
Sinking  Fund  shall be  cumulative  so that if on any such  December  1 the net
assets of the Company legally available therefor shall be insufficient to permit
any such amount to be set aside in full,  or if for any other reason such amount
shall not have been set aside in full,  the  amount of  deficiency  shall be set
aside, but without interest,  before any dividend shall be paid or declared,  or
any  distribution  made,  on any  junior  shares or any junior  shares  shall be
purchased,  redeemed,  or otherwise acquired by the Company, or any monies shall
be paid to or set aside or made available for a sinking fund for the purchase or
redemption of any junior shares.  Notwithstanding the foregoing, the Company may
at any time (1) pay  dividends  in  junior  shares  or (2)  purchase,  redeem or
otherwise acquire junior shares in exchange for, or out of the net cash proceeds
from the  concurrent  sale of, other  junior  shares.  As used herein,  the term
"junior  shares" shall mean Common Stock or any other shares  ranking  junior to
the  9  1/4%  Preferred  Stock  either  as to  dividends  or  upon  liquidation,
dissolution  or winding up.  Monies in the Sinking Fund shall be applied on such
December  1 to the  redemption  of shares  of the 9 1/4%  Preferred  Stock.  The
Company  shall,  prior to each such  Sinking  Fund  redemption,  give  notice of
redemption  of such  number of shares  of the 9 1/4%  Preferred  Stock as may be
required to satisfy the Sinking Fund.

     (c) In addition, the Company shall have the right, at its option, to redeem
at the Sinking Fund  Redemption  Price on December 1, 1982 and on any December 1
thereafter an additional  number of shares of the 9 1/4%  Preferred  Stock up to
but not exceeding 1,000 shares.  This right shall not be cumulative and shall be

<PAGE>


lost to the extent not  exercised  on any such  December  1. Any  redemption  of
shares of the 9 1/4%  Preferred  Stock  pursuant to this  Section 6(c) shall not
operate to reduce the number of shares  which the Company is obligated to redeem
pursuant to Section 6(b).

         A true copy.

                  Attest: \ss\ Robert S. Briggs

                             Robert S. Briggs, Esq.
                                   Clerk


<PAGE>



For use by the
Secretary of State

                          STATE OF MAINE                 MAINE
File No. 103-240      ARTICLES OF AMENDMENT        SECRETARY OF STATE
Fee Paid $3750 - 10.  (Amendment by Share-               FILED
C.B.     664           holders Voting as              May 12, 1977
Date:    5-18-77       Separate Class) OF          Doris Hayes, Agent
                         BANGOR HYDRO-
                        ELECTRIC COMPANY
                    a Quasi-Public Corporation

Pursuant to 13-A MRSA 805 and 807,  the  undersigned  corporation  adopts  these
Articles of Amendment.

     FIRST:  As set out in detail in "THIRD",  one or more  classes of shares of
the corporation  were entitled to vote on the following  amendment as a separate
class.

     SECOND:  The amendment to the Articles of  Incorporation of the corporation
set out in Exhibit A attached hereto was adopted by the shareholders  thereof at
a meeting legally called and held on April 26, 1977.

     THIRD:  On said date,  the number of shares of each class  outstanding  and
entitled  to  vote on  such  amendment  (whether  or not  entitled  to vote as a
separate  class),  the  manner in which  each such  class was  entitled  to vote
(whether  or not as a separate  class),  and the number of shares  voted for and
against said amendment, respectively, were as follows:

Designation of       Manner        No. of Shares
Each Class           In Which      Outstanding
However Entitled     Entitled      And Entitled        Voted       Voted
   to vote           To Vote       To Vote             For         Against
-----------------    ---------     -------------       ------      --------
Common              as a separate   1,233,710          920,772     35,608
                         class

Preferred                N/A           47,340           34,436      1,003
                                    ---------          -------    -------
         Total of All Classes       1,281,050          955,208     36,611
                                    =========         ========    =======

     FOURTH:  If such  amendment  provides  for  exchange,  reclassification  or
cancellation  of issued shares the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.

     *FIFTH:  If such amendment  effects a change in the number or par values of
authorized shares the number of shares which the


<PAGE>



corporation  has authority to issue after giving effect to such  amendment is as
follows:

                   Series            Number                   Par Value
Class             (If any)          of Shares                  (If any)
-----             --------          ---------                 ---------

Common              N/A             2,500,000                    $  5

Preferred                             100,000                     100


         The  aggregate par value of all such shares (of all classes and series)
having par value is $22,500,000.

         The total number of all such shares (of all classes and series) without
par value is N/A shares.

     SIXTH: The address of the registered office of the corporation in the State
of Maine is One Merchants Plaza, Bangor, Maine 04401.

         Dated:  April 28, 1977


         Legibly print or          Bangor Hydro-Electric Company
         type name and                (name of corporation)
         capacity of all          By \ss\ Robert S. Briggs
         signers                       Robert S. Briggs, Clerk


I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Robert S. Briggs
Robert S. Briggs, Clerk

EXHIBIT A.

         RESOLVED that the Certificate of Organization of the Company as amended
         to date,  be further  amended too  increase  the  Company's  authorized
         capital  stock  by  $5,000,000,  such  increase  to be  represented  by
         1,000,000  shares of Common Stock of the par value of $5 each,  so that
         the total amount of  authorized  capital  stock of this Company will be
         $22,500,000 represented by 100,000 shares of Preferred Stock of the par
         value of $100 each and  2,500,000  shares  of  Common  Stock of the par
         value of $5 each.


<PAGE>



NOTE:     Shares  may be  entitled  to vote as a  separate  class for any of the
          reasons  stated in 806, or if so provided  in the  Articles.  For vote
          necessary for adoption, see 805.

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

*    To  be  completed  only  if  Exhibit  A or  B do  not  give  this  required
     information.

**   The name of the  corporation  should be  typed,  and the  document  must be
     signed by (1) Clerk or (2) by the President of a vice-president  and by the
     Secretary or an assistant secretary or such other officer as the bylaws may
     designate  as a  second  certifying  officer  or (3) if  there  are no such
     officers,  then by a majority of the Directors or by such  Directors as may
     be designated  by majority of Directors  then in office or (4) if there are
     not  such  Directors,  then  by the  holders,  or  such  of  them as may be
     designated  by the  holders,  of record of a  majority  of all  outstanding
     shares  entitled  to  vote  thereon  or (5) by  the  holders  of all of the
     outstanding shares of the corporation.

FORM NO. MBCA-9A


<PAGE>



For use by the
Secretary of State

                           STATE OF MAINE                 MAINE
File No. 103-240       NOTIFICATION BY CLERK       SECRETARY OF STATE
Fee Paid $5.00             OF CHANGE IN                   FILED
C.B.     80C176          REGISTERED OFFICE           August 14, 1979
Date:    8-16-79                                          Agent

Pursuant to 13-A MRSA 304(6),  the  undersigned  Clerk for one or more  domestic
corporations  give notice of the following  change of business  address which is
the registered office of each corporation listed:

          FIRST:  Name of Clerk*   Robert S. Briggs, Esq.

         SECOND:  Address of former registered office:

                  One Merchants Plaza
                  Bangor, Maine 04401

          THIRD:  Address of new registered office:

                  33 State Street; PO Box 932
                  Bangor, Maine 04401

     FOURTH:  Notice of the above change in  registered  office has been sent to
each of the following corporations by the undersigned as Clerk of each:

                  Bangor Hydro-Electric Company
                  East Branch Improvement Company

                    Sawtelle Brook Dam and Improvement Company
                  Godfrey's Falls Dam Company
                  Sebois Dam Company
                  Pleasant River Gulf Improvement Company

         Dated: August 13, 1979                      \ss\ Robert S. Briggs
                                                          Robert S. Briggs
                                                         (type or print name)

--------------------------------
*The Clerk of a domestic  corporation  must be a person  resident in Maine.  The
business address of the Clerk and the registered office must be identical.

FORM NO. MBCA-3B


<PAGE>



For use by the
Secretary of State

                             STATE OF MAINE               MAINE
File No. 103-240        STATEMENT OF RESOLUTION    SECRETARY OF STATE
Fee Paid $5.00           ESTABLISHING SERIES OF           FILED
C.B.     115             SHARES OF BANGOR HYDRO-    August 23, 1979
Date:    8-23-79             ELECTRIC COMPANY             Agent
                        (9 1/2% Preferred Stock)

Pursuant to 13-A MRSA 503, the undersigned corporation submits the following for
the purpose of  establishing  and  designating a series of shares and fixing and
determining the relative rights and preferences thereof:

     FIRST: The attached resolutions establishing and designating the series and
fixing and determining  the relative  rights and  preferences  thereof were duly
adopted by the Board of Directors on July 24, 1979 and August 14, 1979.

     SECOND: The By-Laws expressly grant to the Board of Directors the authority
to make such  resolutions.  This  provision  of the By-Laws was in effect on and
prior to December 31, 1971,  has not been  amended or  repealed,  and  therefore
continues to be effective pursuant to 13-A MRSA 103(7).

     THIRD: The address of the registered office of the corporation is: 33 State
Street, PO Box 932, Bangor, Maine 04401

         Dated:  August 20, 1979

         Legibly print or          Bangor Hydro-Electric Company
         type name and                (name of corporation)
         capacity of all           By \ss\ Robert S. Briggs
         signers                        Robert S. Briggs, Clerk
-------------------------------
*The name of the corporation should be typed, and the document must be signed by
(1) the Clerk or (2) by the President or a  vice-president  and by the Secretary
or an assistant  secretary of such other officer as the by-laws may designate as
a second  certifying  officer  or (3) if there are no such  officers,  then by a
majority  of  Directors  then in office or (4) if there are not such  Directors,
then by the holders,  or such of them as may be  designated  by the holders,  of
record of a majority of all  outstanding  shares entitled to vote thereon or (5)
by the holders of all of the outstanding shares of the corporation.

FORM NO. MBCA-7


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                  RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS

                                  JULY 24, 1979

     WHEREAS  the  Company  desires to secure  additional  funds for its general
corporate purposes, including, among other things, capital expenditures; and

     WHEREAS 32,660 of the 100,000 shares of the Company's  authorized Preferred
Stock $100 par value, are presently  unissued,  and may be issued in one or more
classes or series  with such  dividends,  designations,  terms,  conditions  and
restrictions  as  may be  determined  in  their  discretion  by  this  Board  of
Directors; and

     WHEREAS in the  judgment  of this Board of  Directors  it is  advisable  to
secure a portion of such  additional  funds by  authorizing  the issue of 30,000
shares of the Company's  authorized but unissued shares of Preferred Stock, $100
par value; and

     WHEREAS the  officers  of the Company  have  consulted  with Smith  Barney,
Harris  Upham & Co.,  Incorporated  of New York  concerning  the most  desirable
method of offering such additional  Preferred Stock, and have determined that it
should be sold at private sale to a limited number of institutional investors;

     NOW THEREFORE BE IT RESOLVED that the Company  hereby  creates a new series
of Preferred Stock to be designated as the 9 1/2% Preferred Stock, consisting of
30,000 shares of the  authorized  but unissued  Preferred  Stock,  consisting of
30,000 shares of the authorized but unissued  Preferred Stock, $100 par value of
the Company; and

     FURTHER  RESOLVED that the 9 1/2% Preferred  Stock be sold at not less than
par value at private  sale to limited  number of  institutional  investors,  the
exact  number and the more  particular  identification  of such  investors to be
determined  by the Chairman of the Board or the  President  of the  Company,  or
either of them; and

     FURTHER  RESOLVED  that none of the holders of any of the classes or series
of the  Preferred  Stock,  and none of the holders of the Common  Stock,  of the
Company shall have the preemptive  right to subscribe for and take shares of the
9 1/2% Preferred Stock; and

     FURTHER  RESOLVED that the Company does hereby appoint and designate  Smith
Barney,  Harris Upham & Co.  Incorporated of New York as its  representative  in
this sale of the 9 1/2% Preferred  Stock,  and does hereby  authorize said Smith
Barney,  Harris  Upham & Co.  Incorporated  to dispose of said 9 1/2%  Preferred
Stock at private sale at par value plus accrued dividends, if any; and

<PAGE>


     FURTHER RESOLVED that the appropriate  officers of the Company be, and they
hereby are  authorized  and  directed  to file with the Maine  Public  Utilities
Commission an  application  for approval of the issuance of the 9 1/2% Preferred
Stock,  including  any and all  amendments  thereto,  and to do all  other  acts
necessary  or  desirable  in order to secure the  approval of said Maine  Public
Utilities Commission; and

     FURTHER  RESOLVED  that  upon  receipt  of the Order of said  Maine  Public
Utilities  Commission  relative to the issuance and sale of the 9 1/2% Preferred
Stock,  said Order to be recorded  upon the books of the Company by its Clerk or
Assistant Clerk; and

     FURTHER  RESOLVED that the appropriate  officers of the Company and each of
them be and they hereby are  authorized  and  directed to make,  sign,  execute,
verify,  acknowledge  and  deliver,  or  cause  to be  made,  signed,  executed,
verified,  acknowledged and delivered, any and all of such orders, certificates,
directions,  requests and other appropriate  instruments and to do all such acts
and things as may be  reasonably  required  from time to time  hereafter to give
effect to the  foregoing  votes,  or any of them,  or to  otherwise  effect  the
issuance and sale of the 9 1/2% Preferred Stock.

         A true copy.

                  Attest: \ss\ Robert S. Briggs, Clerk


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                  RESOLUTIONS ADOPTED BY THE BOARD OF DIRECTORS

                                 AUGUST 14, 1979

     RESOLVED  that  pursuant to Article XI of the By-Laws of the Company,  said
By-Laws  be  amended  in order to set forth the  dividend,  designation,  terms,
conditions and restrictions relative to the 9 1/2% Preferred Stock, as follows:

     (a) The first  paragraph of Article XI, Section 2 is hereby amended to read
     as follows:

               "Section  2. The  100,000  shares  of  Preferred  Stock  shall be
               available for  classification and  reclassification  in different
               classes or series from time to time. Subject to  reclassification
               upon  retirement by redemption or otherwise,  25,000 shares shall
               be 7% Preferred Stock, 17,500 shares shall be 4% Preferred Stock,
               Series A, 4,840 shares shall be 4 1/4%  Preferred  Stock,  20,000
               shares shall be 9 1/4% Preferred Stock and 30,000 shares shall be
               9 1/2% Preferred Stock."

     (b) The first line of the second  paragraph  of Article  XI,  Section 2, is
     hereby amended to read as follows:

               "The  remaining   shares,   2,660  in  number,   plus  additional
               shares...."

     (c) The first sentence of the third  paragraph of Article XI, Section 2, is
     hereby amended to read as follows:

               "In fixing and determining the special voting powers of any class
               or  series  of  Preferred   Stock,  the  Board  of  Directors  is
               specifically  authorized to provide that if at any time dividends
               or required  sinking fund payments payable on the Preferred Stock
               shall be in default in any amount to be specified in the By-Laws,
               then, until all dividends or required sinking fund payments so in
               default  shall  have  been  paid or  declared  and set  apart for
               payment,  the  holders of shares of  Preferred  Stock of each and
               every class or series,  voting as single class, shall be entitled
               to elect in such manner as the Board of  Directors  may  provide,
               the  smallest  number of  Directors  necessary  to  constitute  a
               majority  of the full  Board of  Directors,  the  balance  of the
               Directors to be elected by the holders of shares  having  general
               voting powers."

     (d) The third and fourth  sentences  of Article  XI,  Section 3, are hereby
     amended to read as follows:

               "Except as provided in paragraph (b) of Section 6, the Board

<PAGE>


               of  Directors  may  declare  dividends  upon  the  Common  Stock,
               provided  the  dividends  upon  the  Preferred  Stock,  with  all
               accumulations, including accrued dividends to the date of payment
               of the Common Stock dividends, shall have been paid in full, or a
               sum sufficient for the payment  thereof shall have been set apart
               for the  purpose,  but  not  otherwise.  Except  as  provided  in
               paragraph  (b) of Section 6, the holders of the Common  Stock are
               entitled to receive all  additional  surplus or net profits which
               the  Directors  may order  distributed  in  dividends,  after the
               dividends above provided for shall have been paid or set apart."

     (e) Article XI, Section 4,  subparagraphs (b) and (c) are hereby amended by
     deleting the same and substituting therefor the following:

               "(b) If at any time  dividends  payable  on the  Preferred  Stock
               shall be in  default  in an  amount  equal to or  exceeding  four
               quarterly dividend payments, or if the Company shall fail to make
               any required sinking fund payment on the Preferred  Stock,  then,
               until all  dividends or sinking fund  payments so in default have
               been paid or declared and set apart for  payment,  the holders of
               shares  of  Preferred  Stock of each and every  class or  series,
               voting  as a single  class,  shall  be  entitled,  at any  annual
               meeting during which dividends or sinking fund payments are so in
               default, to elect two Directors.

               "(c)  Notwithstanding  the provisions of Section 5 of Article III
               of these  By-Laws,  except as provided in  paragraph  (b) of this
               Section 4, the  holders of the 9 1/4%  Preferred  Stock and the 9
               1/2% Preferred Stock shall not be entitled to vote at any meeting
               of stockholders."

     (f)  Article  XI,  Section 5 is hereby  amended  by  deleting  the same and
     substituting therefor the following:

               "Section 5. In case of liquidation or dissolution of the Company,
               the assets, irrespective of whether they shall consist of capital
               assets or accumulated earnings,  shall be distributed as follows:
               All  holders of  Preferred  Stock shall be entitled to be paid in
               full both the par amount of their  shares and an amount  equal to
               the unpaid dividends  accumulated and accrued thereon and, in the
               case  of the 9 1/4%  Preferred  Stock  and  the 9 1/2%  Preferred
               Stock, if such liquidation or dissolution is voluntary, an amount
               equal to the premium specified in Section 6(a) below,  before any
               amount shall be paid to the holders of the Common  Stock,  and in
               case the assets shall not be sufficient to pay in full all of the
               Preferred Stock and dividends  accumulated  and accrued  thereon,

<PAGE>

               and applicable premium, then the principal thereof shall first be
               paid,  thereafter a pro rata  distribution of any excess shall be
               made on account of the accumulated dividends,  based on the total
               amount of unpaid dividends  accumulated and accrued thereon,  and
               thereafter a pro rata distribution of any excess shall be made on
               account  of  applicable  premium,  based on the  total  amount of
               applicable premium,  but after such payment to the holders of the
               Preferred  Stock, the remaining assets and funds shall be paid to
               the holders of the Common  Stock,  according to their  respective
               shares."

     (g)  Article  XI,  Section 6 is hereby  amended  by  deleting  the same and
     substituting therefor the following:

               "Section 6. (a) The 7%  Preferred  Stock shall bear  dividends at
               the rate of 7% per  annum and  shall  not be  redeemable.  The 4%
               Preferred Stock, Series A, shall bear dividends at the rate of 4%
               per annum and shall be  redeemable  at 112% if called on or prior
               to October 1, 1950; at 111%  thereafter  through October 1, 1951;
               and after  October 1, 1951 at 110%,  plus  accrued  dividends  in
               every case.  The 4 1/4%  Preferred  Stock shall bear dividends at
               the rate of 4 1/4% per annum and shall be  redeemable  at 102% if
               called on or prior to April 1, 1954; at 101%  thereafter  through
               April 1,  1959;  and after  April 1, 1959 at 100%,  plus  accrued
               dividends in every case.  The 9 1/4%  Preferred  Stock shall bear
               dividends at the rate of 9 1/4% per annum and shall be redeemable
               at the option of the Company as follows:

               At 109.25% if called on or prior to December 1, 1976;
               at 108.63% thereafter through December 1, 1977;
               at  108.01%  thereafter  through  December  1,  1978;
               at 107.39% thereafter through December 1, 1979;
               at 106.77% thereafter through December 1, 1980;
               at 106.15% thereafter through December 1, 1981;
               at  105.53%  thereafter  through  December  1,  1982;
               at 104.91% thereafter through December 1, 1983;
               at 104.29% thereafter through December 1, 1984;
               at  103.67%  thereafter  through  December  1,  1985;
               at 103.05% thereafter through December 1, 1986;
               at 102.43% thereafter through December 1, 1987;
               at 101.81% thereafter through December 1, 1988;
               at 101.19% thereafter through December 1, 1989;
               at 100.57% thereafter through December 1, 1990;
               and after December 1, 1990 at 100%
               plus accrued dividends in every case;

               provided, however, that except as provided in Section 6(b) below,
               the  Company  may not  redeem any of the 9 1/4%  Preferred  Stock
               prior to December 1, 1986, as a part of, or in  anticipation  of,
               any refunding  operation  involving the application,  directly or

<PAGE>

               indirectly,  of money  borrowed by the Company having an interest
               cost (calculated in accordance with generally  accepted financial
               practice),  or through the  issuance of Preferred  Stock  ranking
               equally  with or prior  to the 9 1/4%  Preferred  Stock  having a
               dividend cost  (calculated  as aforesaid) of less than 9 1/4% per
               annum.  The 9 1/2%  Preferred  Stock shall bear  dividends at the
               rate of 9 1/2% per annum and shall be redeemable at the option of
               the Company as follows:

               At 109.5% if called on or prior to August 1, 1980;
               at 109.0% if called on or prior to August 1, 1981;
               at 108.5% if called on or prior to August 1, 1982;
               at 108.0% if called on or prior to August 1, 1983;
               at 107.5% if called on or prior to August 1, 1984;
               at 107.0% if called on or prior to August 1, 1985;
               at 106.5% if called on or prior to August 1, 1986;
               at 106.0% if called on or prior to August 1, 1987;
               at 105.5% if called on or prior to August 1, 1988;
               at 105.0% if called on or prior to August 1, 1989;
               at 104.5% if called on or prior to August 1, 1990;
               at 104.0% if called on or prior to August 1, 1991;
               at 103.5% if called on or prior to August 1, 1992;
               at 103.0% if called on or prior to August 1, 1993;
               at 102.5% if called on or prior to August 1, 1994;
               at 102.0% if called on or prior to August 1, 1995;
               at 101.5% if called on or prior to August 1, 1996;
               at 101.0% if called on or prior to August 1, 1997;
               at 100.5% if called on or prior to August 1, 1998;
               and after August 1, 1998 at 100%
               plus accrued dividends in every case;

               provided,  however,  that,  except as  provided  in Section  6(b)
               below,  the  Company  may not redeem any of the 9 1/2%  Preferred
               Stock prior to August 1, 1989,  as a part of, or in  anticipation
               of, any refunding operation  involving the application,  directly
               or  indirectly,  of  money  borrowed  by the  Company  having  an
               interest cost  (calculated in accordance with generally  accepted
               financial  practice),  or through the issuance of Preferred Stock
               having a dividend cost  (calculated  as aforesaid) of less than 9
               1/2%  per  annum.  Preferred  Stock,  which  is  the  subject  of
               redemption,  may be called in whole or in part upon any  dividend
               date by appropriate  resolution adopted by the Board of Directors
               at any  regular or special  meeting  upon 60 days'  notice to the
               owners thereof  redemption,  postage  prepaid,  addressed to such
               owners at their  addresses  as shown on the books of the Company.
               If less than all of the outstanding shares of any class or series
               of Preferred Stock shall be redeemed at any time, the stock to be
               so  redeemed  shall be  determined  by lot, in such manner as the

<PAGE>


               Board of Directors may determine and  prescribe,  except that the
               shares of the 9 1/4%  Preferred  Stock  and the 9 1/2%  Preferred
               Stock to be redeemed may be  determined  by lot or pro rata or in
               such other manner as the Board of  Directors  may  determine  and
               prescribe.

                    "(b) The 9 1/4%  Preferred  Stock  and the 9 1/2%  Preferred
               Stock shall also be subject to  redemption  through the operation
               of sinking  funds (herein  collectively  called the Sinking Funds
               and  individually  called the 9 1/4% Preferred Stock Sinking Fund
               or the 9 1/2%  Preferred  Stock Sinking  Fund) at the  redemption
               price (the Sinking Fund Redemption  Price) of $100 per share plus
               an amount equal to the  dividends  accrued and unpaid  thereon to
               the redemption date,  whether or not earned or declared.  For the
               purposes  of the  Sinking  Funds,  out of any net  assets  of the
               Company   legally   available   therefor   remaining  after  full
               cumulative dividends upon all Preferred Stock then outstanding to
               the end of the current  dividend  period therefor shall have been
               paid or declared and set apart for payment, the Company shall set
               aside in cash annually (1) on December 1 in each year  commencing
               with  December 1, 1982, an amount  sufficient  to redeem,  at the
               Sinking  Fund  Redemption  Price,  1000  shares  of  the  9  1/4%
               Preferred Stock, and (2) on August 1 in each year commencing with
               August 1, 1985, an amount  sufficient  to redeem,  at the sinking
               Fund Redemption Price, 2000 shares of the 9 1/2% Preferred Stock.
               The  Sinking  Funds  shall be  cumulative  so that if on any such
               December 1 and/or August 1, the net assets of the Company legally
               available  therefor  shall be  insufficient  to  permit  any such
               amount to be set aside in full,  or if for any other  reason such
               amount  shall not have been set aside in full,  the amount of the
               deficiency shall be set aside, but without  interest,  before any
               dividend shall be paid or declared,  or any distribution made, on
               any  junior  shares  or any  junior  shares  shall be  purchased,
               redeemed,  or  otherwise  acquired by the  Company,  or any money
               shall be paid to or set  aside or made  available  for a  sinking
               fund  for  the  purchase  or  redemption  of any  junior  shares.
               Notwithstanding  the  foregoing,  the Company may at any time (1)
               pay  dividends  in  junior  shares  or (2)  purchase,  redeem  or
               otherwise  acquire  junior  shares in exchange for, or out of the
               net cash  proceeds  from the  concurrent  sale of,  other  junior
               shares.  As used  herein,  the term  "junior  shares"  shall mean
               Common  Stock or any other  shares  ranking  junior to the 9 1/4%
               Preferred  Stock  or  the 9 1/2%  Preferred  Stock  either  as to
               dividends or upon liquidation,  dissolution or winding up. Monies
               in the Sinking  Funds shall be applied  (and  disbursed)  on such

<PAGE>


               December 1 and August 1 to the redemption of shares of the 9 1/4%
               Preferred Stock and the 9 1/2% Preferred Stock, respectively. The
               Company shall,  prior to each such Sinking Fund redemption,  give
               notice  of  redemption  of such  number  of  shares of the 9 1/4%
               Preferred Stock and the 9 1/2% Preferred Stock as may be required
               to satisfy the Sinking Funds.

                    "(c) In addition,  the Company shall have the right,  at its
               option,  to redeem at the Sinking  Fund  Redemption  Price (1) on
               December 1, 1982 and on any December 1 thereafter  an  additional
               number  of  shares  of the 9 1/4%  Preferred  Stock up to but not
               exceeding  1,000  shares,  and (2) on August 1, 1985,  and on any
               August 1 thereafter an additional  number of shares of the 9 1/2%
               Preferred Stock up to but not exceeding  2,000 shares;  provided,
               however,  that  the  aggregate  number  of  shares  of the 9 1/2%
               Preferred  Stock which may be redeemed  pursuant to this  Section
               6(c)(2)  may not exceed  9000  shares.  This  right  shall not be
               cumulative  and shall be lost to the  extent not  exercised.  Any
               redemption of shares of the 9 1/4% Preferred  Stock or the 9 1/2%
               Preferred  Stock  pursuant to this Section 6(c) shall not operate
               to reduce the number of shares  which the Company is obligated to
               redeem pursuant to this Section 6(b)."

               and

     FURTHER  RESOLVED that any and all requirements of prior notice of proposed
amendments or  alterations  of the By-Laws,  including  the notice  requirements
contained in Article XII, Section 2 of the By-Laws,  are hereby waived, and that
the  foregoing  amendments  to the By-Laws are adopted  effective as of the date
hereof without further action of the Board of Directors; and

     FURTHER RESOLVED that the form of proposed agreement presented this date to
the  Board for the sale of the 9 1/2%  Preferred  Stock to the  purchaser  named
therein is hereby approved;  that the Chairman of the Board,  the President,  or
any Vice  President  of the Company or any of them be and each of them is hereby
authorized to execute the same in substantially  the form presented as aforesaid
with such changes as the officer executing the same may approve acting under the
advice of counsel for this Company,  and that the execution and delivery of said
agreement shall be conclusive evidence of such approval.

                           A true copy.

                           Attest: \ss\  Robert S. Briggs, Clerk


<PAGE>



For use by the
Secretary of State

                                  STATE OF MAINE              MAINE
File No. 103-240               ARTICLES OF AMENDMENT     SECRETARY OF STATE
Fee Paid $20,625 & 10.00                                      FILED
C.B.     746                (Amendment by Shareholders     April 29, 1980
Date:  4-29-80                Voting as Separate Class)       Agent
                                          OF
                             BANGOR HYDRO-ELECTRIC COMPANY

                           a Quasi-Public Corporation

Pursuant to 13-A MRSA 805 and 807,  the  undersigned  corporation  adopts  these
Articles of Amendment.

     FIRST:  As set out in detail in "THIRD",  one or more  classes of shares of
the corporation were entitled to vote on the following  amendments as a separate
class.

     SECOND:  The amendments to the Articles of Incorporation of the corporation
set out in Exhibit A attached hereto were adopted by the shareholders thereof at
a meeting legally called and held on April 22, 1980.

     THIRD:  On said date,  the number of shares of each class  outstanding  and
entitled  to vote on  such  amendments  (whether  or not  entitled  to vote as a
separate class), the manner in which


<PAGE>



each such class was entitled to vote (whether or not as a separate  class),  and
the number of shares voted for and against such amendments,  respectively,  were
as follows:

              Designation of       Manner        No. of Shares
              Each Class           in which      Outstanding
              However Entitled     Entitled      And Entitled   Voted   Voted
Proposal      To Vote              To Vote       To Vote        For     Against
-------------------------------------------------------------------------------
To increase  Common stock          as a class      1,816,933   997,599  65,482
Authorized   $5 par value
Preferred
Stock
$100 par
value      Preferred Stock         as a class         97,340*   80,044     859
                                                   ---------   -------   -----
                                          TOTALS   1,914,273 1,085,643  66,341
                                                   ========= =========  ======

To increase  Common Stock          as a class      1,816,933 1,000,607  60,147
Authorized    $5 par value
Common Stock
$5 par      Preferred Stock          general          47,340    26,635   1,074
value        $100 par value                        --------- ---------  ------
                                           TOTALS  1,864,273 1,027,242  61,221
                                                   ========= =========  ======

To Authorize   Common Stock  general               1,816,933 1,023,208  48,866
Directors To   $5 par value
Divide Unissued
Preferred Stk. Preferred Stk. as a class              97,340*   88,202     607
                                                  ---------- ---------  ------
                                            TOTALS 1,914,273 1,111,410  49,473
                                                   ========= =========  ======

*Includes 50,000 shares which do not have general voting powers.

     FOURTH:  If such  amendments  provide  for  exchange,  reclassification  or
cancellation  of issued shares the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.

     Not applicable.



<PAGE>


     FIFTH:  If such  amendments  effect a change in the number or par values of
authorized  shares,  the number of shares which the corporation has authority to
issue after giving effect to such amendments is as follows:

Class                 Series       Number of Shares     Par Value
---------------    ------------    ----------------     ---------
Common Stock,           N/A            5,000,000          $  5
$5 par value

Preferred Stock,  As determined by       250,000          $100
$100 par value    Board of Directors

     The aggregate  par value of such shares (of all classes and series)  having
par value is $50,000,000.

     The total number of all such shares (of all classes and series) without par
value is -0- shares.

     SIXTH: The address of the registered office of the corporation in the State
of Maine is 33 State Street, PO Box 932, Bangor, Maine 04401.

Dated:  April 25, 1980

         Legibly print or           Bangor Hydro-Electric Company
         type name and                (name of corporation)
         capacity of all            By \ss\ Robert S. Briggs
         signers                            Robert S. Briggs, Clerk
                                            (type or print name & capacity)

I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Robert S. Briggs
        Clerk

FORM NO. MBCA-9A


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

             EXHIBIT A TO ARTICLES OF AMENDMENT DATED APRIL 25, 1980


                  RESOLVED that the Articles of Incorporation of the Company, as
                  amended to date, be further  amended to increase the Company's
                  authorized  capital stock by $27,500,000,  such increase to be
                  represented  by 150,000  shares of Preferred  Stock of the par
                  value of $100 each and 2,500,000 shares of Common Stock of the
                  par value of $5 each,  so that the total amount of  authorized
                  capital stock of the Company will be  $50,000,000  represented
                  by 250,000 shares of Preferred  Stock of the par value of $100
                  each and 5,000,000  shares of Common Stock of the par value of
                  $5 each.

                  RESOLVED that the Articles of Incorporation of the Company, as
                  amended to date,  be further  amended by adding the  following
                  provision:

                           The shares of any  preferred or special  class of the
                           Company's  capital  stock  may be  divided  into  and
                           issued  in  series.  The  Board of  Directors  of the
                           Company shall have  authority to divide any or all of
                           the shares of any  preferred or special  class of the
                           Company's  capital  stock into  series and to fix and
                           determine the relative  rights and preferences of the
                           shares of any series so established.


<PAGE>



For use by the
Secretary of State

                           STATE OF MAINE                 MAINE
File No. 103-240       STATEMENT OF RESOLUTION      SECRETARY OF STATE
Fee Paid $5.00          ESTABLISHING SERIES OF            FILED
C.B.     520           SHARES OF BANGOR HYDRO-       January 13, 1983
Date:    1-14-83          ELECTRIC COMPANY                Agent
                        (13% Preferred Stock)

Pursuant to 13-A MRSA 503, the undersigned corporation submits the following for
the purpose of  establishing  and  designating a series of shares and fixing and
determining the relative rights and preferences thereof:

     FIRST: The attached resolution  establishing and designating the series and
fixing and  determining  the relative  rights and  preferences  thereof was duly
adopted by the Board of Directors on January 10, 1983.

     SECOND:  The  Articles  expressly  grant  to the  Board  of  Directors  the
authority to make such a resolution.

     THIRD: The address of the registered office of the corporation is: 33 State
Street, PO Box 932, Bangor, Maine 04401.

         Dated:  January 12, 1983


         Legibly print or  Bangor Hydro-Electric Company
         type name and                (name of corporation)
         capacity of all   By \ss\ Robert S. Briggs
         signers                Robert S. Briggs, Clerk
                                (type or print name & capacity)

---------------------------------
*        The name of the corporation  should be typed,  and the document must be
         signed by (1) the Clerk or (2) by the President or a vice-president and
         by the Secretary or an assistant secretary or such other officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  Directors  or by such
         Directors  as may be  designated  by a majority  of  Directors  then in
         office or (4) if there are no such Directors,  then by the holders,  or
         such  of them as may be  designated  by the  holders,  of  record  of a
         majority of all  outstanding  shares entitled to vote thereon or (5) by
         the holders of all the outstanding shares of the corporation.

FORM NO. MBCA-7


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

                       RESOLUTIONS ADOPTED BY THE BOARD OF
                     DIRECTORS BY UNANIMOUS CONSENT WITHOUT
                        A MEETING AS OF JANUARY 10, 1983

     WHEREAS  the  Company  desires to secure  additional  funds for its general
corporate purposes, including, among other things, capital expenditures; and

     WHEREAS 153,660 of the 250,000 shares of the Company's authorized Preferred
Stock, $100 par value, are presently unissued,  and may be issued in one or more
classes or series with such  dividends,  designations,  terms,  conditions,  and
restrictions  as  may be  determined  in  their  discretion  by  this  Board  of
Directors; and

         WHEREAS in the  judgment of this Board of  Directors it is advisable to
secure a portion of such  additional  funds by  authorizing  the issue of 50,000
shares of the Company's  authorized but unissued shares of Preferred Stock, $100
par value; and

     WHEREAS the  officers  of the Company  have  consulted  with Smith  Barney,
Harris  Upham & Co.,  Incorporated  of New York  concerning  the most  desirable
method of offering such additional  Preferred Stock, and have determined that it
should be sold at private sale to a limited number of institutional investors;

     NOW  THEREFORE BE IT RESOLVED  that the Company  hereby  establishes  a new
series  of  Preferred  Stock  to be  designated  as  the  13%  Preferred  Stock,
consisting of 50,000 shares of the authorized but unissued Preferred Stock, $100
par value of the Company; and

     FURTHER  RESOLVED that the 13% Preferred Stock be sold at not less than the
par value at a private sale to a limited number of institutional investors; and

     FURTHER  RESOLVED  that none of the holders of any of the classes or series
of the  Preferred  Stock,  and none of the holders of the Common  Stock,  of the
Company shall have the preemptive  right to subscribe for and take shares of the
13% Preferred Stock; and

     FURTHER  RESOLVED that the Company does hereby appoint and designate  Smith
Barney,  Harris Upham & Co.  Incorporated of New York as its  representative  in
this sale of the 13%  Preferred  Stock,  and does  hereby  authorize  said Smith
Barney,  Harris Upham & Co.  Incorporated to dispose of said 13% Preferred Stock
at private sale at par value plus accrued dividends, if any; and

<PAGE>


     FURTHER  RESOLVED that the appropriate  officers of the Company be and they
hereby are  authorized  and  directed  to file with the Maine  Public  Utilities
Commission  an  application  for approval of the  issuance of the 13%  Preferred
Stock,  including  any and all  amendments  thereto,  and to do all  other  acts
necessary  or  desirable  in order to secure the  approval of said Maine  Public
Utilities Commission; and

     FURTHER  RESOLVED  that  upon  receipt  of the Order of said  Maine  Public
Utilities  Commission  relative to the  issuance  and sale of the 13%  Preferred
Stock,  said Order is to be recorded  upon the books of the Company by its Clerk
or Assistant Clerk; and

     FURTHER RESOLVED that pursuant to Article XI of the By-Laws of the Company,
said By-Laws be amended in order to set forth the dividend,  designation, terms,
conditions and restrictions relative to the 13% Preferred Stock, as follows:

     (a) The first  paragraph of Article XI, Section 2 is hereby amended to read
as follows:

         "Section 2. The 250,000  shares of  Preferred  Stock shall be available
         for classification and  reclassification in different classes or series
         from time to time.  Subject  to  reclassification  upon  retirement  by
         redemption  or otherwise,  25,000  shares shall be 7% Preferred  Stock,
         17,500 shares shall be 4% Preferred Stock, Series A, 4,840 shares shall
         be 4 1/4%  Preferred  Stock,  20,000  shares shall be 9 1/4%  Preferred
         Stock, 30,000 shares shall be 9 1/2% Preferred Stock, and 50,000 shares
         shall be 13% Preferred Stock."

     (b) The first line of the second  paragraph  of Article  XI,  Section 2, is
hereby amended to read as follows:

         "The remaining shares, 102,660 in number, plus additional shares...."

     (c) the third  sentence of the first  paragraph of Article XI, Section 3 is
hereby amended to read as follows:

          "Except as provided in paragraph (b) of Section 6 and paragraph (e) of
          Section 7,..."

     (d) Article XI, Section 4,  subparagraph  (c) is hereby amended by deleting
the same and substituting therefor the following:

         "(c)  Notwithstanding  the  provisions  of Section 5 of Article  III of
         these  By-Laws,  except as provided in paragraph (b) of this Section 4,
         the holders of the 9 1/4% Preferred  Stock, the 9 1/2% Preferred Stock,
         and  the 13%  Preferred  Stock  shall  not be  entitled  to vote at any
         meeting of stockholders."

<PAGE>


     (e)  Article  XI,  Section 5 is hereby  amended  by  deleting  the same and
substituting therefor the following:

         "Section 5. In case of liquidation  or dissolution of the Company,  the
         assets, irrespective of whether they shall consist of capital assets or
         accumulated  earnings,  shall be distributed as follows: All holders of
         Preferred  Stock  shall  be  entitled  to be paid in full  both the par
         amount of their  shares  and an amount  equal to the  unpaid  dividends
         accumulated  and  accrued  thereon  and,  in  the  case  of  the 9 1/4%
         Preferred  Stock,  the 9 1/2%  Preferred  Stock  and the 13%  Preferred
         Stock, if such liquidation or dissolution is voluntary, an amount equal
         to the premium specified in Section 6(a) below, before any amount shall
         be paid to the  holders  of the  Common  Stock,  and in case the assets
         shall not be sufficient  to pay in full all of the Preferred  Stock and
         dividends accumulated and accrued thereon, and applicable premium, then
         the principal  thereof  shall first be paid pro rata,  thereafter a pro
         rata  distribution  of any  excess  shall  be  made on  account  of the
         accumulated  dividends,  based on the total amount of unpaid  dividends
         accumulated and accrued thereon, and thereafter a pro rata distribution
         of any excess shall be made on account of applicable premium,  based on
         the total amount of applicable  premium,  but after such payment to the
         holders of the Preferred Stock, the remaining assets and funds shall be
         paid to the holders of the Common Stock,  according to their respective
         shares."

     (f)  Article  XI,  Section 6 is hereby  amended  by  deleting  the same and
substituting therefor the following:

         "Section 6. (a) The 7% Preferred Stock shall bear dividends at the rate
         of 7% per annum and shall not be  redeemable.  The 4% Preferred  Stock,
         Series A, shall bear dividends at the rate of 4% per annum and shall be
         redeemable  at 112% if called on or prior to October  1, 1950;  at 111%
         thereafter  through October 1, 1951; and after October 1, 1951 at 110%,
         plus accrued  dividends in every case. The 4 1/4% Preferred Stock shall
         bear  dividends at the rate of 4 1/4% per annum and shall be redeemable
         at 102% if  called  on or prior to April 1,  1954;  at 101%  thereafter
         through  April 1, 1959;  and after April 1, 1959 at 100%,  plus accrued
         dividends  in  every  case.  The 9  1/4%  Preferred  Stock  shall  bear
         dividends  at the rate of 9 1/4% per annum and shall be  redeemable  at
         the option of the Company as follows:

               At 109.25% if called on or prior to December 1, 1976;
               at 108.63% thereafter through December 1, 1977;
               at 108.01% thereafter through December 1, 1978;
               at 107.39% thereafter through December 1, 1979;
               at 106.77% thereafter through December 1, 1980;
               at 106.15% thereafter through December 1, 1981;
               at 105.53% thereafter through December 1, 1982;
               at 104.91% thereafter through December 1, 1983;

<PAGE>


               at 104.29% thereafter through December 1, 1984;
               at 103.67% thereafter through December 1, 1985;
               at 103.05% thereafter through December 1, 1986;
               at 102.43% thereafter through December 1, 1987;
               at 101.81% thereafter through December 1, 1988;
               at 101.19% thereafter through December 1, 1989;
               at 100.57% thereafter through December 1, 1990;
               and after December 1, 1990 at 100% plus
               accrued dividends in every case;

         provided  however,  that except as provided in Section 6(b) below,  the
         Company  may not  redeem  any of the 9 1/4%  Preferred  Stock  prior to
         December 1, 1986,  as a part of, or in  anticipation  of, any refunding
         operation involving the application,  directly or indirectly,  of money
         borrowed  by  the  Company  having  an  interest  cost  (calculated  in
         accordance with generally accepted financial practice),  or through the
         issuance of Preferred Stock ranking equally with or prior to the 9 1/4%

<PAGE>

         Preferred  Stock having a dividend  cost  (calculated  as aforesaid) of
         less than 9 1/4% per  annum.  The 9 1/2%  Preferred  Stock  shall  bear
         dividends  at the rate of 9 1/2% per annum and shall be  redeemable  at
         the option of the Company as follows:

               At 109.5% if called on or prior to August 1, 1980;
               at 109.0% if called on or prior to August 1, 1981;
               at 108.5% if called on or prior to August 1, 1982;
               at 108.0% if called on or prior to August 1, 1983;
               at 107.5% if called on or prior to August 1, 1984;
               at 107.0% if called on or prior to August 1, 1985;
               at 106.5% if called on or prior to August 1, 1986;
               at 106.0% if called on or prior to August 1, 1987;
               at 105.5% if called on or prior to August 1, 1888;
               at 105.0% if called on or prior to August 1, 1989;
               at 104.5% if called on or prior to August 1, 1990;
               at 104.0% if called on or prior to August 1, 1991;
               at 103.5% if called on or prior to August 1, 1992;
               at 103.0% if called on or prior to August 1, 1993;
               at 102.5% if called on or prior to August 1, 1994;
               at 102.0% if called on or prior to August 1, 1995;
               at 101.5% if called on or prior to August 1, 1996;
               at 101.0% if called on or prior to August 1, 1997;
               at 100.5% if called on or prior to August 1, 1998;
               and after  August 1, 1988 at 100%,
               plus accrued dividends in every case;

         provided,  however,  that except as provided in Section 6(b) below, the
         Company  may not  redeem  any of the 9 1/2%  Preferred  Stock  prior to
         August 1, 1989;  as a part of, or in  anticipation  of,  any  refunding
         operation involving the application,  directly or indirectly,  of money
         borrowed  by  the  Company  having  an  interest  cost  (calculated  in
         accordance with generally accepted financial practice),  or through the
         issuance of  Preferred  Stock  having a dividend  cost  (calculated  as

<PAGE>

         aforesaid) of less than 9 1/2% per annum. The 13% Preferred Stock shall
         bear  dividends at the rate of 13% per annum and shall be redeemable at
         the option of the Company as follows:

               At 113.00% if called on or prior to January 31, 1984;
               at 112.46% if called on or prior to January 31, 1985;
               at 111.92% if called on or prior to January 31, 1986;
               at 111.38% if called on or prior to January 31, 1987;
               at 110.83% if called on or prior to January 31, 1988;
               at 110.29% if called on or prior to January 31, 1989;
               at 109.75% if called on or prior to January 31, 1990;
               at 109.21% if called on or prior to January 31, 1991;
               at 108.67% if called on or prior to January 31, 1992;
               at 108.13% if called on or prior to January 31, 1993;
               at 107.58% if called on or prior to January 31, 1994;
               at 107.04% if called on or prior to January 31, 1995;
               at 106.50% if called on or prior to January 31, 1996;
               at 105.96% if called on or prior to January 31, 1997;
               at 105.42% if called on or prior to January 31, 1998;
               at 104.88% if called on or prior to January 31, 1999;
               at 104.33% if called on or prior to January 31, 2000;
               at 103.79% if called on or prior to January 31, 2001;
               at 103.25% if called on or prior to January 31, 2002;
               at 102.71% if called on or prior to January 31, 2003;
               at 102.17% if called on or prior to January 31, 2004;
               at 101.63% if called on or prior to January 31, 2005;
               at 101.08% if called on or prior to January 31, 2006;
               at 100.54% if called on or prior to January 31, 2007;
               and after January 31, 2007 at 100%,
               plus accrued dividends in every case;

         provided,  however,  that except as provided in Section 6(b) below, the
         Company may not redeem any of the 13% Preferred  Stock prior to January
         31, 1993, as a part of, or in anticipation of, any refunding  operation
         involving the application, directly or indirectly, of money borrowed by
         the Company  having an interest cost  (calculated  in  accordance  with
         generally  accepted  financial  practice),  or through the  issuance of
         Preferred  Stock having a dividend  cost  (calculated  as aforesaid) of
         less than 13% per  annum.  Preferred  Stock,  which is the  subject  of
         redemption, may be called in whole or in part upon any dividend date by
         appropriate resolution adopted by the Board of Directors at any regular
         or special  meeting upon 60 days' notice to owners thereof of record to
         be given  by  mailing  copies  of the  notice  of  redemption,  postage
         prepaid,  addressed  to such owners at their  addresses as shown on the
         books of the Company. If less than all of the outstanding shares of any
         class or series of Preferred  Stock shall be redeemed at any time,  the
         stock to be so redeemed  shall be  determined by lot, in such manner as
         the Board of Directors  may determine  and  prescribe,  except that the
         shares of the 9 1/4% Preferred  Stock,  the 9 1/2% Preferred  Stock and


<PAGE>

         the 13% Preferred  Stock to be redeemed may be determined by lot or pro
         rata or in such other  manner as the Board of Directors  may  determine
         and prescribe.

         "(b) The 9 1/4% Preferred Stock, the 9 1/2% Preferred Stock and the 13%
         Preferred  Stock  shall  also be  subject  to  redemption  through  the
         operation  of sinking  funds  (herein  collectively  called the Sinking
         Funds and individually  called the 9 1/4% Preferred Stock Sinking Fund,
         the 9 1/2%  Preferred  Stock  Sinking Fund or the 13%  Preferred  Stock
         Sinking  Fund) at the  redemption  price (the Sinking  Fund  Redemption
         Price) of $100 per share plus an amount equal to the dividends  accrued
         and unpaid  thereon to the  redemption  date,  whether or not earned or
         declared.  For the purposes of the Sinking Funds, out of any net assets
         of  the  Company  legally  available   therefor  remaining  after  full
         cumulative  dividends upon all Preferred Stock then  outstanding to the
         end of the current  dividend  period  therefor  shall have been paid or
         declared and set apart for payment, the Company shall set aside in cash
         annually  (1) on December 1 in each year  commending  with  December 1,
         1982, an amount  sufficient to redeem,  at the Sinking Fund  Redemption
         Price,  1000 shares of the 9 1/4% Preferred  Stock,  (2) on August 1 in
         each year  commencing  with  August 1, 1985,  an amount  sufficient  to
         redeem, at the Sinking Fund Redemption Price, 2000 shares of the 9 1/2%
         Preferred  Stock,  and (3) on January 31 in each year  commencing  with
         January 31, 1989, an amount  sufficient to redeem,  at the Sinking Fund
         Redemption  Price,  2500 shares of the 13% Preferred Stock. The Sinking
         Funds shall be  cumulative  so that if on any such December 1, August 1
         or  January  31,  as the case may be,  the net  assets  of the  Company
         legally  available  therefor shall be  insufficient  to permit any such
         amount to be set aside in full,  or if for any other reason such amount
         shall  not have been set aside in full,  the  amount of the  deficiency
         shall be set aside, but without interest,  before any dividend shall be
         paid or declared, or any distribution made, on any junior shares or any
         junior shares shall be purchased,  redeemed,  or otherwise  acquired by
         the  Company,  or any  monies  shall  be paid to or set  aside  or made
         available  for a sinking  fund for the  purchase or  redemption  of any
         junior shares.  Notwithstanding  the  foregoing,  except as provided in
         paragraph  (c) of  Section  7,  the  Company  may at any  time  (1) pay
         dividends in junior shares or (2) purchase, redeem or otherwise acquire
         junior shares in exchange for, or out of the net cash proceeds from the
         concurrent  sale of,  other  junior  shares.  As used  herein  the term
         "junior  shares"  shall mean Common Stock or any other  shares  ranking
         junior to the 9 1/4% Preferred Stock, the 9 1/2% Preferred Stock or the
         13% Preferred Stock, as the case may be, either as to dividends or upon
         liquidation,  dissolution  or winding up.  Monies in the Sinking  Funds
         shall be applied  (and  disbursed)  on such  December  1,  August 1 and
         January 31, to the redemption of shares of the 9 1/4% Preferred  Stock,


<PAGE>

         the 9 1/2% Preferred Stock and the 13% Preferred  Stock,  respectively.
         The Company  shall,  prior to each such Sinking Fund  redemption,  give
         notice of redemption  of such number of shares of the 9 1/4%  Preferred
         Stock, the 9 1/2% Preferred Stock and the 13% Preferred Stock as may be
         required to satisfy the Sinking Funds.

         "(c) In addition,  the Company shall have the right, at its option,  to
         redeem at the Sinking Fund Redemption Price (1) on December 1, 1982 and
         on any December 1 thereafter  an  additional  number of shares of the 9
         1/4% Preferred  Stock up to but not exceeding  1000 shares,  and (2) on
         August 1, 1985, and on any August 1 thereafter an additional  number of
         shares  of the 9 1/2%  Preferred  Stock  up to but not  exceeding  2000
         shares, provided, however, that the aggregate number of shares of the 9
         1/2%  Preferred  Stock which may be redeemed  pursuant to this  Section
         6(c)(2)  may  not  exceed  9000  shares.  These  rights  shall  not  be
         cumulative  and  shall  be  lost  to  the  extent  not  exercised.  Any
         redemption  of  shares  of the 9  1/4%  Preferred  Stock  or the 9 1/2%
         Preferred  Stock  pursuant  to this  Section  6(c) shall not operate to
         reduce the number of shares  which the Company is  obligated  to redeem
         pursuant to Section 6(b).

         "(d)  Furthermore  (1) the Company shall have the right, at its option,
         to redeem at the Sinking Fund Redemption Price on January 31, 1989, and
         on each January 31  thereafter,  an additional  number of shares of the
         13% Preferred Stock up to but not exceeding 2500 shares,  such right to
         be  non-cumulative  so that if in any year such right is not exercised,
         it shall be  forfeited,  and (2) the  purchasers  of the 13%  Preferred
         Stock  named in the  Purchase  Agreement  dated as of January  20, 1983
         between the Company and such purchasers  shall have the right, at their
         option,  to cause the Company to redeem at the Sinking Fund  Redemption
         Price  on  January  31,  1989  and  on any  January  31  thereafter  an
         additional  number of shares of the 13%  Preferred  Stock up to but not
         exceeding 2500 shares,  in aggregate  amount from all such  purchasers,
         per year, such right to be  non-cumulative  so that if in any year such
         right is not exercised, it shall be forfeited.  Requests for redemption
         pursuant  to this  Section  6(d)(2)  shall be filed with the Company no
         later  than 15 days prior to the  applicable  redemption  date.  In the
         event such requests  aggregate more than 2500 shares, the Company shall
         allocate the amount so those  requesting such  redemption  shall agree.
         Any  redemption of shares of the 13% Preferred  Stock  pursuant to this
         Section 6(d) shall not operate to reduce the number of shares which the
         Company is obligated to redeem pursuant to Section 6(b)."

     (g)  Sections  7, 8,  9,  10 and 11 of  Article  XI are  hereby  renumbered
Sections 8, 9, 10, 11 and 12, and a new Section 7 is hereby adopted as follows:

<PAGE>

         "Section 7.  Notwithstanding  any provision to the contrary herein,  so
         long as there remain outstanding any shares of the 13% Preferred Stock,
         the following provisions shall apply:

                  (a)  Without  the prior  written  consent of the  holders of a
                  majority of the shares of the 13% Preferred Stock ("Consent"),
                  the Board of Directors will not authorize and the Company will
                  not issue any shares of  preferred  stock  (either of the same
                  class  or  series  or of a  different  class or  series)  with
                  preferences  or rights  superior or prior to the 13% Preferred
                  Stock in the payment of dividends,  the distribution of assets
                  in  liquidation,  or the  application  of funds  available for
                  mandatory sinking fund payments.

                  (b) Without  Consent,  the  Company  shall not, at any time at
                  which it is  delinquent  (1) in the full  payment of dividends
                  due and payable on the 13% Preferred Stock, (2) in the payment
                  in full of any sinking  fund  installment  with respect to the
                  13%  Preferred  Stock,  or (3) in the making of any  mandatory
                  redemption or repurchase of the 13% Preferred Stock, issue any
                  shares of Preferred Stock of the Company.

                  (c) Without  Consent,  the Company  shall not declare or pay a
                  dividend  on or  voluntarily  redeem or  repurchase  shares of
                  Common  Stock of the Company or any class or series of capital
                  stock  of the  Company  that is  junior  to the 13%  Preferred
                  Stock, either as to dividends or upon liquidation, dissolution
                  or winding  up,  unless and until the  Company has (1) paid in
                  full the  dividends  accrued on and sinking fund payments with
                  respect  to  the  13%  Preferred   Stock,  and  (2)  made  all
                  redemptions  which it is  required  to have made  through  the
                  applicable dates.

                  (d) The  Company  shall not  voluntarily  redeem,  including a
                  voluntary redemption of shares under the provisions of Section
                  6(c) hereto, or repurchase any shares of outstanding preferred
                  stock of the Company, unless and until the Company has paid in
                  full the dividends  accrued and sinking fund payments due with
                  respect to the 13% Preferred Stock.

                  (e) The Board of  Directors  may  declare  dividends  upon the
                  Common  Stock  only if the  dividends  upon the 13%  Preferred
                  Stock, with all accumulations, shall have been paid in full."

     FURTHER  RESOLVED that any and all requirements of prior notice of proposed
amendments or  alterations  of the By-Laws,  including  the notice  requirements
contained in Article XII, Section 2 of the By-Laws,  are hereby waived, and that

<PAGE>

the  foregoing  amendments  to the By-Laws are adopted  effective as of the date
hereof without further action of the Board of Directors; and

     FURTHER  RESOLVED that the appropriate  officers of the Company and each of
them be and they hereby are authorized and directed to prepare, execute and file
with the  Secretary of State of the State of Maine,  a Statement  of  Resolution
Establishing Series of Shares in accordance with 13-A M.R.S.A. 503 incorporating
the relative  rights and  preferences  of the 13%  Preferred  Stock set forth in
Article XI if the By-Laws of the Company as  hereinbefore  amended and including
such other information as may be required by applicable law, rule or regulation;
and

     FURTHER  RESOLVED that the form of proposed  agreement (draft of January 5,
1983)  presented  to the Board of  Directors  for the sale of the 13%  Preferred
Stock to the purchasers named therein is hereby  approved;  that the Chairman of
the Board, the President, or any Vice President of the Company or any of them be
and each of them is hereby  authorized to execute the same in substantially  the
form presented as aforesaid with such changes as the officer  executing the same
may approve  acting  under the advice of counsel for the  Company,  and that the
execution and delivery of said  agreement  shall be conclusive  evidence of such
approval; and

     FURTHER  RESOLVED that all the powers and duties of Northeast  Bank & Trust
Co., as Transfer  Agent for the shares of  Preferred  Stock of the Company  (the
"Transfer  Agent"),  and all the powers and duties of The Merrill Trust Company,
as Registrar of the shares of Preferred Stock of the Company, (the "Registrar"),
are hereby extended upon the same terms and conditions to cover the transfer and
registration,  respectively,  of the 13%  Preferred  Stock;  and that the proper
officers of the Company be, and each of them hereby is,  authorized and directed
to give the Transfer Agent and Registrar,  as the case may be, such instructions
as may be  appropriate  to effect  the  issuance  and sale of the 13%  Preferred
Stock; and

     FURTHER  RESOLVED that the Chairman of the Board, the President or any Vice
President of the Company or any of them be and each of them hereby is authorized
in the name of and on behalf of the  Company  to pay to the  Transfer  Agent and
Registrar all proper fees and charges  arising out of or in connection  with the
performance  by the same of  their  respective  duties  in  connection  with the
Shares,  and to pay any and all expenses and fees arising in connection with the
issuance and sale of the 13% Preferred Stock; and

     FURTHER  RESOLVED that the appropriate  officers of the Company and each of
them be and they hereby are  authorized  and  directed to make,  sign,  execute,
verify, acknowledge and deliver, or cause to be made, signed, execute, verified,
acknowledged  and  delivered,   any  and  all  of  such  orders,   certificates,

<PAGE>

directions,  requests and other appropriate  instruments and to do all such acts
and things as may be  reasonably  required  from time to time  hereafter to give
effect to the  foregoing  votes,  or any of them,  or to  otherwise  effect  the
issuance and sale of the 13% Preferred Stock.

                                              A true copy.

                                              Attest:  \ss\ Robert S. Briggs


<PAGE>



                                 STATE OF MAINE


File No. 240001D         ARTICLES OF AMENDMENT                MAINE
Fee Paid $9,375. &$10   (Amendment by Shareholders          SECRETARY
C.B.     929              Voting as Separate Class           OF STATE
Date:    5-2-83                   of                          FILED
                       Bangor Hydro-Electric Company        May 2, 1983
                         a Quasi-Public Corporation           Agent

Pursuant to 13-A MRSA 805 and 807,  the  undersigned  corporation  adopts  these
Articles of Amendment.

FIRST:  As set out in detail in  "THIRD",  one or more  classes of shares of the
corporation  were  entitled  to vote on the  following  amendment  as a separate
class.

SECOND:  The amendment to the Articles of  Incorporation  of the corporation set
out in Exhibit A attached  hereto was adopted by the  shareholders  thereof at a
meeting legally called and held on April 26, 1983.

THIRD: On said date, the number of shares of each class outstanding and entitled
to vote on such amendment (whether or not entitled to vote as a separate class),
the manner in which each such class was  entitled  to vote  (whether or not as a
separate  class) and the number of shares voted for and against said  amendment,
respectively, were as follows:

Designation of         Manner         No. of Shares
Each Class             in Which       Outstanding
However Entitled       Entitled       and Entitled       Voted      Voted
to Vote                to Vote        to Vote            For        Against
--------------------------------------------------------------------------------

Common Stock           as a separate    3,441,101      2,028,290    98,603
   $5 par value        class

Preferred Stock        general              47,340        26,749     1,038
                                         ---------     ---------    ------
    Totals of all Classes                3,488,441     2,055,039    99,641
                                         =========     =========    ======

FOURTH:   If  such  amendment   provides  for  exchange,   reclassification   or
cancellation  of issued shares the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.


<PAGE>



*FIFTH:  If such  amendment  effects  a change in the  number  or par  values of
authorized  shares the number of shares which the  corporation  has authority to
issue after giving effect to such amendment, is as follows:

                    Series           Number             Par Value
   Class           (If Any)          of Shares          (if any)
--------------------------------------------------------------------------------
Common Stock        N/A              7,500,000           $5

Preferred Stock   As determined by     250,000           $100
  $00 par value    Board of Directors

The  aggregate  par value of all such shares (of all classes and series ) having
par value is $62,500,000.

The total  number of all such shares (of all  classes  and  series)  without par
value is -0- shares.

SIXTH:  The address of the registered  office of the corporation in the State of
Maine is 33 State Street, PO Box 932, Bangor, Maine 04401.

         Dated:  April 29, 1983

         Legibly print or          Bangor Hydro-Electric Company
         type name and                (name of corporation)
         capacity of all           By \ss\ Robert S. Briggs
         signers                        Robert S. Briggs, Clerk

I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Robert S. Briggs
Robert S. Briggs, Clerk

EXHIBIT A.

RESOLVED that the Articles of Incorporation of the Company,  as amended to date,
be  further  amended to  increase  the  Company's  authorized  capital  stock by
$12,500,000, such increase to be represented by 2,500,000 shares of Common Stock
of the par value of $5 each,  so that the total  amount  of  authorized  capital
stock of the  Company  will be  $62,500,000  represented  by  250,000  shares of
Preferred  Stock of the par  value of $100 each and  7,500,000  shares of Common
Stock of the par value of $5 each.


<PAGE>



NOTE:     Shares  may be  entitled  to vote as a  separate  class for any of the
          reasons  stated in 806, or if so provided  in the  Articles.  For vote
          necessary for adoption, see 805.

------------------------------------
   *      To be  completed  only if  Exhibit  A or B do not give  this  required
          information.

  **      The name of the corporation should be typed, and the
          document must be signed by (1) Clerk or (2) by the
          President of a vice-president and by the Secretary or an
          assistant secretary or such other officer as the bylaws may
          designate as a second certifying officer or (3) if there
          are no such officers, then by a majority of the Directors
          or by such Directors as may be designated by majority of
          directors then in office or (4) if there are not such
          Directors, then by the holders, or such of them as may be
          designated by the holders, of record of a majority of all
          outstanding shares entitled to vote thereon or (5) by the
          holders of all of the outstanding shares of the
          corporation.







FORM NO. MBCA-9A


<PAGE>



For use by the
Secretary of State

                         STATE OF MAINE               MAINE
File No. 240001D       CHANGE OF CLERK of        SECRETARY OF STATE
Fee Paid $5.00      REGISTERED OFFICE or BOTH         FILED
C.B.     ---                    OF                July 19, 1985
Date:   8-6-85    BANGOR HYDRO-ELECTRIC COMPANY       Agent

Pursuant  to 13-A MRSA  304,  the  undersigned  corporation  advises  you of the
following change(s):

     FIRST: The name and registered  office of the Clerk appearing on the record
in Secretary of State's office:  Robert S. Briggs, Esq., 33 State Street, PO Box
932, Bangor, Maine 04401.

     SECOND:  The name and  registered  office of its successor (new Clerk)* are
Frederick S. Samp, Esq., 33 State Street, PO Box 932, Bangor, Maine 04401.

     THIRD: Upon a change in Clerk this must be completed:

                  (X)      Such change was  authorized by the Board of Directors
                           and the power to make such change is not  reserved to
                           the shareholders by the articles or the bylaws.

                  ( )      Such change was authorized by the shareholders.

Dated:  July 17, 1985

         Legibly print or        Bangor Hydro-Electric Company
         type name and
         capacity of all         By \ss\ Frederick S. Samp
         signers                       Frederick S. Samp, Clerk
         13-A MRSA 104
---------------------------------
 *       The Clerk of a domestic corporation must be a person resident in Maine.

**       The name of the corporation  should be typed,  and the document must be
         signed by (1) the Clerk or (2) by the President of a vice-president and
         by the Secretary or an assistant secretary or such other officer as the
         by-laws may  designate as a second  certifying  officer or (3) if there
         are no such officers, then by a majority of Directors then in office or
         (4) if there are no such  Directors,  then by the  holders,  or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-7 - Rev. 77


<PAGE>



For use by the
Secretary of State

                          STATE OF MAINE                 MAINE
File No. 240001D       ARTICLES OF AMENDMENT       SECRETARY OF STATE
Fee Paid $10.00        (Amendment by Share-              FILED
C.B.     -----           holders Voting as            May 23, 1986
Date:    6-6-86             One Class)                   Agent
                         OF BANGOR HYDRO-
                         ELECTRIC COMPANY
                     a Quasi-Public Corporation
              which is engaged in selling of Electricity

Pursuant to 13-A MRSA 805 and 807,  the  undersigned  corporation  adopts  these
Articles of Amendment.

     FIRST:  All outstanding  shares of the corporation were entitled to vote on
the following amendment as one class.

     SECOND:  The amendment to the Articles of  Incorporation of the corporation
set out in Exhibit A attached hereto was adopted by the shareholders  thereof at
a meeting legally called and held on May 21, 1986.

     THIRD: On said date, the number of shares  outstanding and entitled to vote
on such  amendment,  and the  number  of  shares  voted  for  and  against  said
amendment, respectively, were as follows:

Number of Shares Outstanding           Voted               Voted
and Entitled to Vote                   For                 Against
----------------------------        -------------          ---------
Common Stock    4,450,684            2,711,364              849,024
$5 par value

Preferred Stock    47,340               35,635                  553
              -----------            ---------              -------
      Totals    4,498,024            2,746,999              839,577
               ==========           ==========            =========

     FOURTH:  If such  amendment  provides  for  exchange,  reclassification  or
cancellation of issued shares, the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.



<PAGE>



     *FIFTH:  If such amendment  effects a change in the number or par values of
authorized  shares the number of shares which the  corporation  has authority to
issue after giving effect to such amendment is as follows:

                  Series             Number                   Par Value
Class             (If any)          of Shares                  (If any)
-----             --------          ---------                 ---------

 N/A

     The  aggregate  par value of all such  shares (of all  classes  and series)
having par value is N/A.

     The total number of all such shares (of all classes and series) without par
value is N/A shares.

     SIXTH: The address of the registered office of the corporation in the State
of Maine is 33 State Street, PO Box 932, Bangor, Maine 04401.

         Dated:  May 22, 1986

         Legibly print or              Bangor  Hydro-Electric  Company
         type name and                   (name of corporation)
         capacity  of  all             By  \ss\  Frederick  S.  Samp
         signers                             Frederick S. Samp, Clerk
         13-A MRSA 104.

I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Frederick S. Samp
Frederick S. Samp, Clerk

NOTE:     This form  should not be used if any class of shares  entitled to vote
          as a separate  class for any of the reasons set out in 806, or because
          the articles so provide. For vote necessary for adoption see 805.

------------------------------------
 *       To be completed only if Exhibit A or B do not give this required
         information.

**       The name of the corporation  should be typed,  and the document must be
         signed by (1) Clerk or (2) by the President of a vice-president  and by
         the  Secretary or an assistant  secretary or such other  officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  Directors  or by such
         Directors as may be designated by majority of Directors  then in office
         or (4) if there are not such Directors, then by the holders, or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-9A


<PAGE>

                                                                       EXHIBIT A

                          BANGOR HYDRO-ELECTRIC COMPANY

                     AMENDMENTS TO ARTICLES OF INCORPORATION

                  ADOPTED AT THE ANNUAL MEETING OF STOCKHOLDERS

                                 ON MAY 21, 1986

                                   ARTICLE I.

                               BOARD OF DIRECTORS

     A. The business  and affairs of the Company  shall be managed by a Board of
Directors  consisting of not less than nine nor more than fifteen  persons.  The
exact  number of Directors  within the  limitations  specified in the  preceding
sentence shall be fixed from time to time by the Board of Directors  pursuant to
a  resolution  adopted by a majority of the  Continuing  Directors  (hereinafter
defined).  Until  otherwise  fixed by the  Board of  Directors  pursuant  to the
preceding  sentence,  the number of Directors  shall be nine. The Directors need
not be elected by ballot unless required by the By-Laws of the Company.

     The Board of Directors  shall be divided into three classes as nearly equal
in number as may be. The  initial  term of office of each  Director in the first
class shall expire at the annual  meeting of  shareholders  in 1987; the initial
term of office of each  Director in the second  class shall expire at the annual
meeting of shareholders in 1988; and the initial term of office of each Director
in the third class shall expire at the annual meeting of  shareholders  in 1989.
At each annual  election  commencing at the annual  meeting of  shareholders  in
1987, the  successors to the class of Directors  whose term expires at that time
shall be elected to hold office for a term of three years to succeed those whose
term expires, so that the term of one class of Directors shall expire each year.
Each  Director  shall  hold  office  for the term for  which  he is  elected  or
appointed  and until his  successor  shall be elected and qualified or until his
death, or until he shall resign or be removed.

     In the  event of any  increase  or  decrease  in the  authorized  number of
Directors, (i) each Director then serving as such shall nevertheless continue as
a  director  of the class of which he is a member  until the  expiration  of his
current term, or his earlier resignation, removal from office or death, and (ii)
the newly created or eliminated  directorships  resulting  from such increase or
decrease shall be apportioned by the Board of Directors  among the three classes
of Directors so as to maintain such classes as nearly equal in number as may be.

     B.  Newly  created  directorships   resulting  from  any  increase  in  the
authorized  number of  Directors  or any  vacancies  on the  Board of  Directors
resulting from death, resignation,  retirement,  disqualification,  removal from

<PAGE>

office  or other  cause  shall be filled by a  majority  vote of the  Continuing
Directors  then in office,  or a sole remaining  Director,  although less than a
quorum,  and  Directors so chosen  shall hold office for a term  expiring at the
annual meeting of shareholders at which the term of the class to which they have
been  elected  expires.  If one or more  Directors  shall  resign from the Board
effective  as of a future  date,  such  vacancy  or  vacancies  shall be  filled
pursuant to the provisions  hereof,  and such new  directorship(s)  shall become
effective when such resignation or resignations shall become effective, and each
Director so chosen shall hold office as herein  provided in the filling of other
vacancies.

     C. Any Director or the entire Board of Directors  may be removed;  however,
unless such  removal is for cause and is approved as set forth in this  Section,
the  affirmative  vote of not less than 80% of the  voting  power of the  shares
entitled to vote thereon shall be required to effect such removal. Except as may
otherwise be provided by law, cause for removal shall be construed to exist only
if:

          1. the Director whose removal is proposed has been convicted, or where
     a  Director  was  granted  immunity  to  testify  where  another  has  been
     convicted,  of a  felony  by a court  of  competent  jurisdiction  and such
     conviction is no longer subject to direct appeal;

          2. such Director has been grossly  negligent in the performance of his
     duties to the Company; or

          3.  such  Director  has  been  adjudicated  by a  court  of  competent
     jurisdiction to be mentally incompetent, which mental incompetency directly
     affects his ability as a Director of the Company,  and such adjudication is
     no longer subject to direct appeal.

     Removal for cause, as cause is defined above,  must be approved by at least
a two-thirds vote of the voting power of the shares of the Company then entitled
to be voted at an election for that Director, and the action for removal must be
brought within three months of such conviction or adjudication.

     Notwithstanding the foregoing,  and except as otherwise provided by law, in
the event that  Preferred  Stock of the Company is issued and holders of any one
or more series of such  Preferred  Stock are  entitled,  voting  separately as a
class,  to elect one or more Directors of the Company to serve for such terms as
set forth in the Articles of Incorporation, the provisions of this Section shall
also apply,  in respect to the removal of the  Director or Directors so elected,
to the vote of the  holders of the  outstanding  shares of that class and not to
the vote of the outstanding shares as a whole.

     D. Notwithstanding the foregoing,  and except as otherwise provided by law,
in the event  that the  holders  (the  "Preferred  Stock  Class") of one or more

<PAGE>

series of the  Preferred  Stock of the Company shall be entitled to elect one or
more Directors of the Company  ("Preferred  Stock  Directors") to serve for such
terms as set forth in the Articles of  Incorporation,  the manner of election of
the  Board of  Directors  shall  be  unaffected,  except  to the  extent  herein
provided.  For each Preferred Stock Director which shall be elected the Board of
Directors  shall select from its members one Director (a  "Displaced  Director")
who shall,  for so long as the Preferred Stock Director shall remain a Preferred
Stock  Director,  be deemed to have  temporarily  vacated his or her office as a
Director of the Company.  The  Continuing  Directors,  by majority  vote,  shall
designate the member or members who shall be Displaced Directors. Such Displaced
Directors  shall  be  designated  initially  from  those  Directors  who are not
Continuing  Directors,  and  subsequently,  if  there  shall  not  have  been  a
sufficient number of Directors who are not Continuing Directors,  the balance of
the  Displaced  Directors  shall  be  selected  from  those  Directors  who  are
Continuing Directors.

                                   ARTICLE II

                MERGERS AND CERTAIN OTHER BUSINESS COMBINATIONS.

     A. Unless the Business Combination (as hereinafter defined) shall have been
approved by a majority vote of the Continuing Directors (as hereinafter defined)
(whether  such approval is made prior to or  subsequent  to the  acquisition  of
beneficial  ownership  of the Voting  Stock that caused the  Related  Person (as
hereinafter  defined)  to become a Related  Person,  then,  in  addition  to any
affirmative vote required by law or the Articles of Incorporation or the By-Laws
of the Company, a Business Combination shall require the affirmative vote of not
less than eighty  percent (80%) of the votes  entitled to be cast by the holders
of all of the then outstanding shares of Voting Stock (as hereinafter  defined),
voting  together  as a single  class.  Such  affirmative  vote shall be required
notwithstanding  the  fact  that  no vote  may be  required,  or  that a  lesser
percentage or separate  class vote may be specified,  by law or in any agreement
with any national securities exchange or otherwise.

     B. In  addition to the voting  requirements  set forth in Section A of this
Article  II,  unless the  Business  Combination  shall have been  approved  by a
majority of the Continuing Directors,  a Business Combination shall require that
all of the following  conditions be met with respect to every class or series of
outstanding Capital Stock (as hereinafter  defined),  whether or not the Related
Person  has  previously  acquired  beneficial  ownership  of  any  shares  of  a
particular class or series of Capital Stock:

     1. The aggregate  amount of cash and the Fair Market Value (as  hereinafter
defined),  as of the date of the  consummation of the Business  Combination,  of
consideration  other than cash to be received per share by the holders of Common

<PAGE>

Stock in such Business Combination shall be at least equal to the highest amount
determined under clauses (a), (b), (c) and (d) below:

          (a) (if  applicable)  the  highest  per  share  price  (including  any
     brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
     or on  behalf  of the  Related  Person  for any  share of  Common  Stock in
     connection  with  the  acquisition  by the  Related  Person  of  beneficial
     ownership  of any of its  holdings of Common  Stock,  as  adjusted  for any
     subsequent  stock split,  stock dividend,  subdivision or  reclassification
     with respect to Common Stock;

          (b) the Fair Market Value per share of Common Stock on the date of the
     first  public  announcement  of  the  proposed  Business  Combination  (the
     "Announcement  Date") or on the date on which the Related  Person  became a
     Related Person (the "Determination Date"), whichever is higher, as adjusted
     for  any   subsequent   stock  split,   stock   dividend,   subdivision  or
     reclassification with respect to Common Stock;

          (c) (if applicable) the price per share equal to the Fair Market Value
     per share of Common Stock determined pursuant to the immediately  preceding
     clause  (b),  multiplied  by the ratio of (x) the  highest  per share price
     (including  any  brokerage  commissions,   transfer  taxes  and  soliciting
     dealers'  fees) paid by or on behalf of the Related Person for any share of
     Common Stock in connection  with the  acquisition  by the Related Person of
     beneficial  ownership of any of its holdings of Common  Stock,  as adjusted
     for  any   subsequent   stock  split,   stock   dividend,   subdivision  or
     reclassification  with respect to Common Stock to (y) the Fair Market Value
     per share of Common Stock immediately  prior to the initial  acquisition of
     any  share of Common  Stock by such  Related  Person  (as  determined  by a
     majority of the Continuing Directors), as adjusted for any subsequent stock
     split, subdivision or reclassification with respect to Common Stock; and

          (d) the  Company's  net income per share of Common  Stock for the four
     full  consecutive  fiscal quarters  immediately  preceding the Announcement
     Date, multiplied by the higher of the then price/earnings multiple (if any)
     of such  Related  Person  or the  highest  price/earnings  multiple  of the
     Company within the two-year period  immediately  preceding the Announcement
     Date  (such  price/earnings   multiples  being  determined  as  customarily
     computed and reported in the financial community).

     2. The aggregate  amount of cash and Fair Market  Value,  as of the date of
the date of the consummation of the Business Combination, of consideration other
than cash to be  received  per share by holders of shares of any class or series

<PAGE>

of  outstanding  Capital  Stock,  shall be at least equal to the highest  amount
determined under clauses (a), (b), (c) and (d) below:

          (a) (if  applicable)  the  highest  per  share  price  (including  any
     brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
     or on behalf  of the  Related  Person  for any  share of  Capital  Stock in
     connection  with  the  acquisition  by the  Related  Person  of  beneficial
     ownership  of any of its  holdings  of such  class  of  Capital  Stock,  as
     adjusted for any subsequent  stock split,  stock  dividend,  subdivision or
     reclassification with respect to such class or series of Capital Stock;

          (b) the Fair Market Value per share of such class or series of Capital
     Stock on the Announcement Date or on the Determination  Date,  whichever is
     higher,  as  adjusted  for any  subsequent  stock  split,  stock  dividend,
     subdivision  or  reclassification  with  respect to such class or series of
     Capital Stock;

          (c) (if applicable) the price per share equal to the Fair Market Value
     per share of such class or series of Capital Stock  determined  pursuant to
     the immediately  preceding  clause (b),  multiplied by the ratio of (x) the
     highest per share price  (including  any  brokerage  commissions,  transfer
     taxes and  soliciting  dealers'  fees) paid by or on behalf of the  Related
     Person for any share of such class or series of Capital Stock in connection
     with the  acquisition by the Related Person of beneficial  ownership of any
     of its holdings of such class or series of Capital  Stock,  as adjusted for
     any subsequent stock split, stock dividend, subdivision or reclassification
     with  respect  to such  class or  series of  Capital  Stock to (y) the Fair
     Market Value per share of such class or series of Capital Stock immediately
     prior to the  initial  acquisition  of any share of such class or series of
     Capital Stock (as determined by a majority of the Continuing Directors), as
     adjusted for any subsequent  stock split,  stock  dividend,  subdivision or
     reclassification with respect to such class or series of Capital Stock; and

          (d) (if applicable) the highest preferential amount per share to which
     the  holders of shares of such class or series of  Capital  Stock  would be
     entitled  in  the  event  of  any  voluntary  or  involuntary  liquidation,
     dissolution  or winding  up of the  affairs of the  Company  regardless  of
     whether the Business  Combination  to be  consummated  constitutes  such an
     event.

     3. The consideration to be received by the holders of each particular class
or series of outstanding Capital Stock of the Company in a Business  Combination
shall be (a) in cash or (b) if the shares of any  particular  class or series of
the Capital Stock of the Company  beneficially owned by the Related Person shall

<PAGE>

have been  acquired for a  consideration  in a form other than cash, in the same
form and of the same  kind as the  consideration  used to  acquire  the  largest
number of shares of such class or series  previously  acquired and  beneficially
owned by he Related Person.

     4.  After  the  Determination  Date and prior to the  consummation  of such
Business Combination:

          (a) except as  approved  by a majority  of the  Continuing  Directors,
     there  shall have been no failure to declare  and pay at the  regular  date
     therefor any full quarterly  dividends (whether or not cumulative)  payable
     in accordance with the terms of any outstanding Capital Stock;

          (b) there shall have been no reduction in the annual rate of dividends
     paid on the Common  Stock  (except as necessary to reflect any stock split,
     stock dividend or subdivision of the Common Stock), except as approved by a
     majority of the continuing Directors;

          (c) there shall have been an increase in the annual rate of  dividends
     paid on the  Common  Stock as  necessary  to reflect  any  reclassification
     (including any reverse stock split),  recapitalization,  reorganization  or
     any  similar  transaction  that has the  effect of  reducing  the number of
     outstanding shares of Common Stock,  unless the failure so to increase such
     annual rate is approved by a majority of the Continuing Directors:

          (d) such Related Person shall not have become the beneficial  owner of
     any  additional  shares of Capital Stock except as part of the  transaction
     that results in such Related Person becoming a Related Person and except in
     a transaction that would not result in any increase in the Related Person's
     percentage of any class or series of Capital Stock; and

          (e) the  Related  Person  shall  have taken  steps to ensure  that the
     Company's  Board of  Directors  included  at all  times  representation  by
     Continuing  Directors  proportionate  to the ratio that the  Capital  Stock
     which from time to time are owned by persons other than the Related  Person
     bear to all Capital  Stock  outstanding  at such  respective  times (with a
     Continuing Director to occupy any resulting fractional Board position).

     5. A proxy or information  statement complying with the requirements of the
Securities  Exchange  Act of  934,  as  amended  (the  "Exchange  Act"),  or any
successor thereto,  shall have been mailed to all shareholders of the Company at
least 45 days prior to the consummation of the Business  Combination (whether or
not such proxy or information statement is required to be mailed pursuant to the
Exchange  Act or  subsequent  provisions)  unless such  requirement  for a proxy

<PAGE>

statement  is waived by a vote of a majority of the  Continuing  Directors.  The
proxy statement shall contain:

          (a) at the front thereof,  in a prominent place any recommendations as
     to the advisability (or  inadvisability) of the Business  Combination which
     the  Continuing  Directors,  or any of them, may have furnished in writing;
     and

          (b) if deemed advisable by a majority of the Continuing Directors,  an
     opinion of a reputable  investment banking firm as to the fairness (or lack
     of fairness) of the terms of such Business  Combination,  from the point of
     view of the holders of the  Company's  Capital Stock other than any Related
     Person  (such  investment  banking firm to be selected by a majority of the
     Continuing Directors, to be a firm which has not previously been associated
     with or rendered  services to or acted as manager of an  underwriting or as
     an agent for a Related  Person,  to be furnished  with all  information  it
     reasonably requests and to be paid a reasonable fee for its services by the
     Company upon receipt by the Company of such opinion).

     6. After such Related Person has acquired ownership of not less than 10% of
the  outstanding  shares of any class or series of Capital  Stock of the Company
and prior to the consummation of such Business Combination,  such Related Person
shall not have:

          (a)   received   the   benefit,   directly   or   indirectly   (except
     proportionately  as a  shareholder)  of any  loans,  advances,  guarantees,
     pledges  or  other  financial  assistance,  or tax  credits  or  other  tax
     advantages provided by the Company,

          (b) made any  material  changes in the  Company's  business  or equity
     capital   structure  or  entered   into  any   contract,   arrangement   or
     understanding with the Company except any change, contract,  arrangement or
     understanding  as may have been  approved by a majority  of the  Continuing
     Directors, or

          (c) used any  asset of the  Company  as  collateral,  or  compensating
     balances,  directly  or  indirectly,  for any  obligation  of such  related
     Person.

C. As used in this Article II, the following definitions shall apply:

     1. The terms "Affiliate" and "Associate" shall have the respective meanings
ascribed  to such terms in Rule 12b-2 under the Act as in effect on May 21, 1986
(the "Effective Date") (the term "registrant" in said Rule 12b-2 meaning in this
case the Company).

     2. A person shall be a  "beneficial  owner" of any Capital  Stock (a) which
such person or any of its Affiliates or Associates  beneficially owns,  directly

<PAGE>

or indirectly (b) which such person or any of its Affiliates or Associates  has,
directly  or  indirectly,  (i) the  right  to  acquire  (whether  such  right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement,  arrangement  or  understanding  or upon the  exercise of  conversion
rights,  exchange rights, warrants or option, or otherwise, or (ii) the right to
vote pursuant to any agreement,  arrangement or understanding;  or (c) which are
beneficially owned, directly or indirectly,  by any other person with which such
person or any of its Affiliates or Associates has any agreement,  arrangement or
understanding for the purpose of acquiring,  holding, voting or disposing of any
shares of Capital Stock.  For the purposes of determining  whether a person is a
Related  Person  pursuant to Paragraph 8 of this Section C, the number of shares
of  Capital  Stock  deemed  to  be  outstanding   shall  include  shares  deemed
beneficially  owned by such person  through  application  of this Paragraph 2 of
Section C, but shall not include any other  shares of Capital  Stock that may be
issuable  pursuant  to any  agreement,  arrangement  or  understanding  or  upon
exercise of conversion rights, warrant or options, or otherwise.

     3. The term "Business Combination" shall mean:

          (a) any merger or  consolidation  or share  exchange of the Company or
     any Subsidiary (as hereinafter defined) with (i) any Related Person or (ii)
     any other  company  (whether  or not itself a Related  Person)  which is or
     after such merger or  consolidation  would be an Affiliate (as such term is
     hereinafter  defined) or Associate (as such term is hereinafter defined) of
     a Related Person, in each case irrespective of which corporation or company
     is the surviving entity; or

          (b) any sale, lease,  exchange,  mortgage,  pledge,  transfer or other
     disposition or security arrangement,  investment loan, advance,  guarantee,
     agreement to purchase, agreement to pay, extension of credit, joint venture
     participation  or other  arrangement  (in one  transaction  or a series  of
     transactions)  with,  to or for the  benefit of any  Related  Person or any
     Affiliate  or  Associate  of  any  Related  Person  involving  any  assets,
     securities or  commitments  of the Company,  any  Subsidiary or any Related
     Person or any  Affiliate  or  Associate  of any  Related  Person  having an
     Aggregate  Fair Market  Value and/or  involving  aggregate  commitments  of
     $5,000,000 or more or constituting more than five percent of the book value
     of the  total  assets  (in the case of  transactions  involving  assets  or
     commitments  other than Capital Stock) or five percent of the shareholders'
     equity  (in the case of  transactions  in  Capital  Stock) of the entity in
     question (the  "Substantial  Part"), as reflected in the most recent fiscal
     year-end consolidated balance sheet of such entity existing at the time the
     shareholders  of the Company  would be required to approve or authorize the
     Business  Combination  involving the assets,  securities and/or commitments
     constituting any Substantial Part; or


<PAGE>

          (c) the issuance or transfer by the Company or any  Subsidiary (in one
     transaction or a series of related  transactions)  of any securities of the
     Company  or any  Subsidiary  to any  Related  Person  or any  Affiliate  or
     Associate  thereof (other than an issuance or transfer of securities  which
     is effected on a pro rata basis to all shareholders of the Company); or

          (d) the  adoption  of any  plan or  proposal  for the  liquidation  or
     dissolution  of the  Company  proposed  by or on behalf of, or voted for or
     consented to by, a Related Person or Affiliate or Associate thereof; or

          (e) any  reclassification  of securities  (including any reverse stock
     split) or  recapitalization or reorganization of the Company, or any merger
     or  consolidation  of the Company with any of its Subsidiaries or any other
     transaction  (whether  or not with a  Related  Person or any  Affiliate  or
     Associate  thereof)  that  has  the  effect,  directly  or  indirectly,  of
     increasing the proportionate  share of any class or series of Capital Stock
     or of any securities of a Subsidiary,  or any securities  convertible  into
     Capital  Stock  or  into  equity  securities  of any  Subsidiary,  that  is
     beneficially  owned by any Related  Person or any Affiliate or Associate of
     any Related Person; or

          (f) any other transaction or series of transactions that is similar in
     purpose  or effect  to, or any  agreement,  contract  or other  arrangement
     providing  for any one or more of, the actions  specified in the  foregoing
     clauses (a) through (e).

     4. The term  "Capital  Stock"  shall mean all capital  stock of the Company
authorized to be issued from time to time under the Articles of Incorporation of
the Company, as such may be amended from time to time.

     5.  The  term  "Continuing  Director"  means  any  member  of the  Board of
Directors,  while such person is a member of the Board of Directors,  who is not
an  Affiliate or Associate  or  representative  of the Related  Person and was a
member  of the Board of  Directors  prior to the time  that the  Related  Person
became a Related Person, and any successor of a Continuing Director,  while such
successor  is a member of the Board of  Directors,  who is not an  Affiliate  or
Associate or  representative of the Related Person and is recommended or elected
to succeed the Continuing Director by a majority of Continuing Directors then in
office.

     6. The term "Fair Market  Value" means (a) in the case of cash,  the amount
of such cash;  (b) in the case of stock,  the highest  closing sale price during
the 30-day period immediately  preceding the date in question of a share of such
stock on the Composite Tape for New York Stock  Exchange-Listed  Stocks,  or, if

<PAGE>

such stock is not quoted on the Composite  Tape, on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the principal United States
securities  exchange  registered under the Act on which such stock is listed, or
if such  stock is not  listed on any such  exchange,  the  highest  closing  bid
quotation  with  respect  to a share of such  stock  during  the  30-day  period
preceding  the  date in  question  on the  National  Association  of  Securities
Dealers,  Inc. Automated Quotations System or any similar system then in use, or
if no such  quotations  are  available,  the  fair  market  value on the date in
question of a share of such stock as determined by a majority of the  Continuing
Directors  in good  faith;  and (c) in the case of  property  other than cash or
stock,  the fair  market  value of such  property  on the  date in  question  as
determined in good faith by a majority of the Continuing Directors.

     7. The term  "person"  shall mean any  individual,  firm,  company or other
entity and shall include any group  comprised of any person and any other person
with whom such  person or any  Affiliate  or  Associate  of such  person has any
agreement, arrangement or understanding, directly or indirectly, for the purpose
of acquiring, holding voting or disposing of Capital Stock.

     8. The term  "Related  Person"  shall  mean any  person,  or  Associate  or
Affiliate  thereof  (other than the Company or any Subsidiary and other than and
profit-sharing,  employee stock ownership or other employee  benefit plan of the
Company or any  Subsidiary  or any trustee of or  fiduciary  with respect to any
such plan when acting in such capacity) who (a) is the  beneficial  owner of (i)
ten percent (10%) or more of the then outstanding  shares of any class of Voting
Stock or (ii) Voting Stock  representing  ten percent (10%) or more of the votes
entitled to be cast by the holders of all the then outstanding  shares of Voting
Stock (any such ten percent (10%)  ownership to be hereinafter  referred to as a
"Ten Percent Interest");  or (b) is an Affiliate or Associate of the Company and
at any  time  within  the  five  year  period  immediately  prior to the date in
question  was the  beneficial  owner  of a Ten  Percent  Interest;  or (c) is an
assignee of or has otherwise succeeded to any shares of Capital Stock which were
at any time within five years prior to the date in question  beneficially  owned
by any Related Person,  and such assignment or succession shall have occurred in
the course of a  transaction  or series of  transactions  not involving a public
offering within the meaning of the Securities Act of 1933.

     9. The term  "Subsidiary"  means any corporation of which a majority of any
class of equity  security  (as defined in Rule 3a11-1 under the Act as in effect
on the Effective Date) is beneficially owned by the Company; provided,  however,
that for the purposes of the definition of Related Person set forth in Paragraph
8 of this  Section C, the term  "Subsidiary"  shall mean only a  corporation  of
which a majority of each class of equity security is  beneficially  owned by the
Company.

<PAGE>

     10. The term "Voting  Stock" shall mean all Capital Stock which by its term
may be voted on all matters submitted to shareholders of the Company generally.

     11. In the event of any Business Combination in which the Company survives,
the phrase  "consideration other than cash to be received" as used in Paragraphs
1 and 2 of Section B of this Article II shall include the shares of Common Stock
and/or the shares of any other class or series of Capital Stock  retained by the
holders of such shares.

     D. A majority of the Continuing  Directors shall have the power and duty to
determine for the purposes of this Article II, on the basis of information known
to them after reasonable inquiry,  (a) whether a person is a Related Person, (b)
the number of shares of Capital Stock or other securities  beneficially owned by
any person,  (c) whether a person is an Affiliate  or Associate of another,  (d)
whether the assets that are the subject of any Business Combination have, or the
consideration  to be received for the issuance or transfer of  securities by the
Company or any  Subsidiary in any Business  Combination  has, an aggregate  Fair
Market Value of  $5,000,000 or more,  (e) whether the assets or securities  that
are the subject of any Business  Combination  constitute a Substantial part, (f)
whether a person has an agreement,  arrangement or understanding with another as
to the matters  referred to in  Paragraph 6 of Section C of this Article II, and
(g) any other matters with respect to which a  determination  is required  under
this Article II. Any such  determination made in good faith shall be binding and
conclusive on all parties.

     E.  Nothing  contained in this Article II shall be construed to relieve any
Related Person from any fiduciary obligation imposed by law.

     F. The fact that any Business  Combination  complies with the provisions of
Section B of this  Article II shall not be  construed  to impose  any  fiduciary
duty,  obligation or  responsibility  on the Board of  Directors,  or any member
thereof,  to approve such Business  Combination  or to recommend its adoption or
approval to the  shareholders of the Company,  nor shall such compliance  limit,
prohibit  or  otherwise  restrict in any manner the Board of  Directors,  or any
member thereof,  with respect to evaluations or actions and responses taken with
respect to such Business Combination.

                                   ARTICLE III

                   FACTORS TO BE CONSIDERED IN CONNECTION WITH
          PROPOSALS FOR MERGERS AND CERTAIN OTHER BUSINESS COMBINATIONS

     The Board of Directors,  in evaluating any proposal by another party to (a)
make a tender or exchange  offer for any  securities of the Company,  (b) effect

<PAGE>

Business  Combination  (as  defined  in  Article  II),  or (c)  effect any other
transaction  having an effect upon the properties,  operations or control of the
Company  similar to a tender or exchange offer or Business  Combination,  as the
case  may be,  whether  by a  Related  Person  (as  defined  in  Article  II) or
otherwise, may, in connection with the exercise of its judgment as to what is in
the best interests of the Company and its  shareholders,  give due consideration
to the following:

          A. the consideration to be received by the Company or its shareholders
     in  connection  with  such  transaction  in  relation  not only to the then
     current  market  price for the  outstanding  Capital  Stock (as  defined in
     Article II) of the  Company,  but also to the market  price for the Capital
     Stock of the Company over a period of years, the estimated price that might
     be  achieved  in a  negotiated  sale of the  Company  as a whole or in part
     through  orderly  liquidation,  the  premiums  over  market  price  for the
     securities  of  other   corporations  in  similar   transactions,   current
     political,  economic and other factors bearing on securities prices and the
     Company's  financial  condition,  future  prospects  and future value as an
     independent corporation;

          B. the character, integrity and business philosophy of the other party
     or parties to the transaction and the management of such party or parties;

          C. the business and financial conditions and earnings prospects of the
     other party or parties to the transaction,  including,  but not limited to,
     debt service and other  existing or likely  financial  obligations  of such
     party or  parties,  the  intention  of the other  party or  parties  to the
     transaction  regarding  the use of the assets of the Company to finance the
     acquisition,  and the possible  effect of such  conditions upon the Company
     and its subsidiaries and the other elements of the communities in which the
     Company and its subsidiaries operate or are located;

          D. the projected  social,  legal and economic  effects of the proposed
     action or transaction upon the Company or its subsidiaries,  its employees,
     suppliers,  customers  and others  having  similar  relationships  with the
     Company,  and the communities in which the Company and its  subsidiaries do
     business;

          E. the general  desirability  of the  continuance of the Company as an
     independent entity; and

          F. such  other  factors as the  Continuing  Directors  (as  defined in
     Article II) may deem relevant.


<PAGE>



                                   ARTICLE IV.

                                   AMENDMENTS.

     Notwithstanding  any other  provisions of the Articles of  Incorporation or
the  By-Laws  of the  Company  (and  notwithstanding  the  fact  that  a  lesser
percentage  or separate  class vote may be  specified  by law,  the  Articles of
Incorporation  or the  By-Laws  of the  Company),  the  affirmative  vote of the
holders of not less than eighty  percent (80%) of the votes  entitled to be cast
by the  holders  of all the then  outstanding  shares  of Voting  Stock,  voting
together as a single  class shall be  required  to amend,  change or repeal,  or
adopt  any  provisions   inconsistent  with,  or  which  modify  or  permit  the
circumvention of, these Articles I, II, III and IV; provided, however, that this
Article IV shall not apply to, and such eighty  percent  (80%) vote shall not be
required  for,  any  amendment,  change,  repeal or  adoption  recommended  by a
majority of the Continuing Directors.


<PAGE>



For use by the
Secretary of State

                            STATE OF MAINE             MAINE
File No. 19240001D
         19260012D     ARTICLES OF MERGER OF     SECRETARY OF STATE
Fee Paid $25.00        STONINGTON & DEER ISLE          FILED
C.B.     -----             POWER COMPANY          November 23, 1987
Date:    2-8-88        (A MAINE CORPORATION)           Agent
                                INTO
                    BANGOR HYDRO-ELECTRIC COMPANY
                        (A MAINE CORPORATION)

Pursuant  to 13-A  MRSA  903,  the  Board  of  Directors  of each  participating
corporation  approve  and the  undersigned  corporations,  adopt  the  following
Articles of Merger:

     FIRST:  The plan of merger is set forth in  Exhibit A  attached  hereto and
made a part thereof.

     SECOND:  As to each  corporation,  the  shareholders of which voted on such
plan of  merger,  the  number of  shares  outstanding  and the  number of shares
entitled  to vote on such  plan,  and the  number of such  shares  voted for and
against the plan as follows:

 Name of       No. of Shares    No. of Shares        Voted     Voted
Corporation       Outstanding   Entitled to Vote     For       Against
------------      ------------  -----------------    -----     --------
Stonington &               40                 40        40           0
 Deer Isle
 Power Company

     THIRD:  If the shares of any class were  entitled  to vote as a class,  the
designation  and number of the  outstanding  shares of each such class,  and the
number of  shares of each such  class  voted for and  against  the plan,  are as
follows:

 Name of          No. of Shares      No. of Shares       Voted     Voted
Corporation       Outstanding        Entitled to Vote    For       Against
------------      ------------      ----------------     -----     --------
  N/A

               (Include the following paragraph if the merger was
             authorized without the vote of the shareholders of the
                 surviving corporation. Omit if not applicable.)

     FOURTH:  The plan of merger was  adopted by the  participating  corporation
which is to become the surviving  corporation  in the merger without any vote of
its shareholders, pursuant to section 902, subsection 5. The number of shares of
each class  outstanding  immediately  prior to the effective date of the merger,
and the  number of shares of each  class  outstanding  immediately  prior to the
effective  date of the  merger,  and the  number of  shares of each  class to be
issued or delivered pursuant to the plan or merger of the surviving  corporation
are set forth as follows:
<PAGE>


                              Number of Shares      Number of Shares
                                Outstanding          to be Issued
                              Immediately Prior      or Delivered
Designation                     to Effective          Pursuant to
 of Class                      Date of Merger         the Merger
----------------          ----------------------    ---------------
Common                           4,450,684                  0

7% Preferred                        25,000                  0

4 1/4 % Preferred                    4,840                  0

4% Preferred                        17,500                  0

     FIFTH:  The address of the registered  office in Maine of Stonington & Deer
Isle Power Company, herein designated as the merged corporation, is Main Street,
Sunset, Maine 04683.

     The  address  of the  registered  office in Maine of Bangor  Hydro-Electric
Company, herein designated as the surviving corporation,  is 33 State Street, PO
Box 932, Bangor, Maine 04041.

     SIXTH:  Effective  date of the  merger  (if  other  than  date of filing of
Articles) is . (Cannot exceed 60 days subsequent to filing date of articles, see
905, sub-1.)

         Dated:  November 23, 1987

                           Bangor Hydro-Electric Company
                              (name of corporation)
                           By \ss\ Frederick S. Samp
                                Frederick S. Samp, Clerk
                           Stonington & Deer Isle Power Company
                                 (name of corporation)
                           By \ss\ Robert L. Platt
                                Robert L. Platt, Clerk


<PAGE>



I certify  that I have  custody of the minutes  showing the above  action by the
shareholders of Stonington & Deer Isle Power Company.

\ss\  Robert L. Platt
   Robert L. Platt, Clerk

------------------------------------
 *       The name of the corporation  should be typed,  and the document must be
         signed by (1) Clerk or (2) by the President of a vice-president  and by
         the  Secretary or an assistant  secretary or such other  officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  Directors  or by such
         Directors as may be designated by majority of directors  then in office
         or (4) if there are not such directors, then by the holders, or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-10


<PAGE>



                                                                       EXHIBIT A

                          AGREEMENT AND PLAN OF MERGER

         AGREEMENT  AND  PLAN  OF  MERGER,   dated  as  of  May  12,  1987  (the
"Agreement")  between  BANGOR   HYDRO-ELECTRIC   COMPANY,  a  Maine  corporation
("Bangor"),  and  STONINGTON  & DEER ISLE  POWER  COMPANY,  a Maine  corporation
("Stonington").

         WHEREAS,  the Boards of  Directors of Bangor and  Stonington  have each
determined that it is in the best interests of their respective stockholders for
Stonington  to merge with and into  Bangor  (the  "Merger"),  upon the terms and
subject to the conditions set forth herein;

NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                                   THE MERGER

     Section  1.1.  The  Merger.  On the  Effective  Date (as defined in Section
1.2.),  Stonington  shall be merged with and into Bangor in accordance  with the
applicable  provisions  of the  law of the  State  of  Maine  and  the  separate
existence of Stonington shall cease. Bangor, as the surviving corporation in the
Merger,  shall continue its corporate  existence under its present name pursuant
to the laws of the State of Maine.

     Section  1.2.   Effective  Date.  As  promptly  as  practicable  after  the
satisfaction  or waiver of the  conditions  set forth in Article V, the  parties
hereto  shall cause the Merger to be  consummated  by filing  Articles of Merger
with the Secretary of State of the State of Maine,  in such form as required by,
and executed in accordance  with the relevant  provisions of Maine law (the date
of such filing being the "Effective Date").

     Section 1.3. Subsequent Actions.  If, at any time after the Effective Date,
Bangor shall consider or be advised that any deeds, bills of sale,  assignments,
assurances  or any other  actions or things are  necessary or desirable to vest,
perfect or confirm of record or otherwise in Bangor its right, title or interest
in, to or under any of the rights,  properties or assets of Stonington  acquired
or to be acquired by Bangor as a result of, or in connection with, the Merger or
otherwise to carry out this  Agreement,  the  officers  and  directors of Bangor
shall be  authorized  to  execute  and  deliver,  in the name and on  behalf  of
Stonington,  all such deeds,  bills of sale,  assignments  and assurances and to
take and do, in the name and on behalf of Stonington, all such other actions and
things as may be necessary or desirable to vest,  perfect or confirm any and all
right, title and interest in, to and under such rights,  properties or assets in
Bangor or otherwise to carry out this Agreement.


<PAGE>

     Section 1.4.  Articles of  Incorporation.  The Articles of Incorporation of
Bangor as in effect on the Effective  Date shall  continue to be the Articles of
Incorporation of Bangor.

     Section 1.5.  By-Laws.  The By-Laws Of Bangor as in effect on the Effective
Date shall continue to be the By-Laws of Bangor.

     Section 1.6.  Directors and Officers.  The directors and officers of Bangor
as of the  Effective  Date shall  continue to serve as directors and officers in
accordance with the By-Laws of Bangor.

     Section 1.7.  Conversion of Shares.  As of the Effective Date, by virtue of
the  Merger and  without  any action on the part of the  holders  thereof,  each
outstanding share of common stock of Stonington (other than Dissenting Shares as
defined  in Section  1.8) shall be  cancelled  and  converted  into the right to
receive from Bangor a sum in cash to be computed as follows: 1) a fraction,  the
numerator of which is the total common  equity of  Stonington as of the last day
of the month next preceding the month in which the Effective Date falls, and the
denominator  of which is the  number of  outstanding  shares of common  stock of
Stonington as of the Effective  Date;  plus 2) S40,000  divided by the number of
outstanding shares of common stock of Stonington as of the Effective Date. Total
common  equity shall be determined  from the books of Stonington  subject to the
right of Bangor to confirm the amount by an independent audit.

     Section  1.8.  Dissenting  Shares.  Notwithstanding  any  provision of this
Agreement to the  contrary,  any share of common stock of  Stonington  held by a
holder who has  demanded  payment  of the fair value of his share in  accordance
with Maine law and as of the Effective  Date has neither  effectively  withdrawn
nor lost his  right to make  such  demand  ("Dissenting  Shares"),  shall not be
converted into or represent a right to receive cash pursuant to Section 1.7, but
the holder thereof shall only be entitled to such rights as are granted by Maine
law.

     Section  1.9.  Surrender  of  Shares.  Each  holder  of  a  certificate  or
certificates  representing  any shares  cancelled  upon the Merger  pursuant  to
Section 1.7. may on or after the Effective Date  surrender  such  certificate or
certificates  to the Assistant  Treasurer of Bangor or his designee for a period
of one  year  after  the  Effective  Date.  At the time of such  surrender,  the
Assistant  Treasurer  of  Bangor or his  designee  shall  make the cash  payment
specified in Section 1.7. Stonington agrees that it shall cause the distribution
to holders of record of common  stock as of the  Effective  Date of  appropriate
materials to facilitate such surrender.


<PAGE>



                                   ARTICLE II

                  REPRESENTATIONS AND WARRANTIES OF STONINGTON

     Stonington represents and warrants to Bangor as follows:

     Section 2.1.  Corporate  Organization.  Stonington  is a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Maine and has the  requisite  corporate  power and  authority  and any necessary
governmental  authority to own, operate or lease the properties that it purports
to own,  operate  or  lease  and to  carry on its  business  as it is now  being
conducted.

     Section  2.2.  Authority  Relative to this  Agreement.  The  execution  and
delivery of this Agreement by Stonington and the  consummation  by Stonington of
the transactions  contemplated hereby have been duly authorized by all necessary
corporate  action  on the part of  Stonington  and,  subject  to  obtaining  any
necessary  stockholder  approval of the Merger, no other corporate proceeding is
necessary for the execution and delivery of this  Agreement by  Stonington,  the
performance by Stonington of its obligations  hereunder and the  consummation by
Stonington of the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Stonington and constitutes a legal,  valid and binding
obligation of Stonington,  enforceable  against it in accordance  with its terms
subject  to  laws  affecting  the  enforcement  of  creditors'  rights  and  the
availability of equitable remedies.

     Section 2.3. No Conflict.  The execution and delivery of this  Agreement by
Stonington do not, and the performance of this Agreement by Stonington will not,
(a)  conflict  with or violate any law,  regulation,  court  order,  judgment or
decree  applicable  to  Stonington  by which any of their  property  is bound or
affected,  (b) violate or conflict with either the Articles of  Incorporation or
By-Laws of  Stonington,  or (c) result in any breach of or  constitute a default
(or an event which with notice or lapse of time or both would  become a default)
under, or give to others any rights of termination or cancellation of, or result
in the  creation of a lien or  encumbrance  of any of the  property or assets of
Stonington pursuant to, any contract,  instrument,  permit, license or franchise
to which  Stonington is a party or by which Stonington or any of its property is
bound or affected.

     Section 2.4. Required Filings and Consents.  Except for filings or consents
listed as conditions  precedent to the  obligations  of Stonington in Article V,
and except for  filing  and  recordation  of  appropriate  merger  documents  as
required by Maine Law,  Stonington is not required to submit any notice,  report
or other  filing  with any  governmental  authority,  domestic  or  foreign,  in
connection with the execution,  delivery or performance of this Agreement or the
consummation of the transactions  contemplated  hereby, and no waiver,  consent,

<PAGE>

approval or authorization of any governmental or regulatory authority,  domestic
or foreign,  is required to be obtained or made by Stonington in connection with
its execution, delivery or performance of this Agreement.

     Section 2.5. Common Stock of Stonington.  As of the date hereof, Stonington
has issued  and  outstanding  40 shares of common  stock,  $100 par  value.  All
outstanding shares of common stock of Stonington are duly and validly authorized
and  issued,  fully  paid and  nonassessable,  and none of such  shares has been
issued  in  violation  of  any  preemptive  rights  of  any  present  or  former
shareholders.  Stonington  has no  outstanding  securities  convertible  into or
exercisable  for its common stock and is not a party to any other  agreements of
any nature  whereby it may be  obligated  to issue  additional  shares of common
stock.

     Section 2.6. Liabilities, Debts, or Obligations. Stonington has no material
liabilities,  debts or obligations,  whether  accrued,  absolute,  contingent or
otherwise,  and  whether  due or to become  due,  which  have not been fully and
adequately disclosed to Bangor.

     Section  2.7.  Actions.  Suits or  Proceedings.  To the best  knowledge  of
management of  Stonington,  other than matters  pending  before the Maine Public
Utilities  Commission,  there are no actions,  suits or  proceedings  pending or
threatened  against or affecting  Stonington or any of its properties before any
court, arbitrator,  or governmental body which would, if determined adversely to
Stonington, have a material adverse effect on the financial condition,  business
or  operations  of  Stonington  or the  ability of  Stonington  to  perform  its
obligations under this Agreement.

     Section 2.8. Title to Properties.  Stonington has as of the date hereof and
as of the  Effective  Date  will have  good and  marketable  title to all of its
properties and assets,  free and clear of all restrictions,  conditions,  liens,
mortgages and encumbrances and similar claims, except as disclosed in writing to
Bangor.

     Section 2.9.  Brokers' or Finders'  Fees.  Stonington  has not incurred and
will not incur any brokers' or finders' fees in connection with the merger.

     Section 2.10. Tax Liabilities.  Stonington has filed all Federal, State and
local tax  returns  required  to be filed by it,  except  those for which  valid
extensions of time have been granted, and paid all taxes, assessments,  fees and
other  governmental  charges  imposed  upon  Stonington,  or  upon  any  of  its
properties,  income or franchises which are due and payable,  except such taxes,
if any, as are being  contested in good faith and as to which adequate  reserves
have been  provided.  Except as to taxes which may result from the  transactions
contemplated  by this  Agreement,  and taxes  related  to  contributed  property

<PAGE>

contributed  since January 1, 1987 for which no reserve has been  established or
exists  (although  such taxes will be reflected on the financial  statements for
the month next  preceding the month in which the Effective Date falls) all known
tax liabilities of Stonington are adequately provided for.

     Section 2.11. Employment or Similar Contracts. Stonington does not have any
employment,  bonus, pension or similar type contracts,  plans or agreements with
any persons.

     Section  2.12.  Books and  Records.  The books of  account  and  records of
Stonington   accurately  reflect  the  amount  and  nature  of  its  assets  and
liabilities and the transactions represented by such books of account and record
as of the date hereof and as of the  Effective  Date.  Such books of account and
records  constitute an accurate  basis upon which to determine the investment in
property  dedicated  to public  utility  service and to support the  appropriate
calculations for rate-making and Federal and State income tax purposes.

                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF BANGOR

     Bangor represents and warrants to Stonington as follows:

     Section  3.1.  Corporate   Organization.   Bangor  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State Of
Maine and has the  requisite  corporate  power and  authority  and any necessary
governmental  authority to own, operate or lease the properties that it purports
to own,  operate  or  lease  and to  carry on its  business  as it is now  being
conducted.

     Section  3.2.  Authority  Relative to this  Agreement.  The  execution  and
delivery  of this  Agreement  by Bangor  and the  consummation  by Bangor of the
transactions  contemplated  hereby have been duly  authorized  by all  necessary
corporate  action on the part of Bangor  and no other  corporate  proceeding  is
necessary  for the  execution  and  delivery of this  Agreement  by Bangor,  the
performance  by Bangor of the  obligations  hereunder  and the  consummation  by
Bangor of the  transactions  contemplated  hereby.  This Agreement has been duly
executed and  delivered  by Bangor and  constitutes  a legal,  valid and binding
obligation  of  Bangor,  enforceable  against it in  accordance  with its terms,
subject  to  laws  affecting  the  enforcement  of  creditors'  rights  and  the
availability of equitable remedies.

     Section 3.3. No Conflict.  The execution and delivery of this  Agreement by
Bangor do not,  and the  performance  of this  Agreement by Bangor will not, (a)
violate or conflict  with either the  Articles  of  Incorporation  or By-Laws of
Bangor,  or (b) result in any breach of or  constitute a default (or an event of
which with  notice or lapse of time or both would  become a default)  under,  or

<PAGE>

give to others any rights of  termination or  cancellation  of, or result in the
creation  of a lien or  encumbrance  on any of the  property or assets of Bangor
pursuant to, any  contract,  instrument,  permit,  license or franchise to which
Bangor  is a party  or by  which  Bangor  or any of its  property  is  bound  or
affected.

     Section 3.4. Required Filings and Consents.  Except for filings or consents
listed as conditions  precedent to the  obligations  of Bangor in Article V, and
except for filing and recordation of appropriate merger documents as required by
Maine Law,  Bangor is not required to submit any notice,  report or other filing
with any  governmental  authority,  domestic or foreign,  in connection with the
execution,  delivery or performance of this Agreement or the consummation of the
transactions   contemplated  hereby,  and  no  waiver,   consent,   approval  or
authorization of any governmental or regulatory authority,  domestic or foreign,
is required to be obtained or made by Bangor in connection  with its  execution,
delivery or performance of this Agreement

     Section 3.5.  Actions,  Suits or Proceedings.  To the best knowledge of the
management  of Bangor,  there are no actions,  suits or  proceedings  pending or
threatened  against  or  affecting  Bangor or any of its  properties  before any
court, arbitrator,  or governmental body which would, if determined adversely to
Bangor, have a material adverse effect on the financial  condition,  business or
operations of Bangor or the ability of Bangor to perform its  obligations  under
this Agreement.

                                   ARTICLE IV

                     CONDUCT OF BUSINESS PENDING THE MERGER

     Section  4.1.   Acquisition   Proposals.   Stonington  will  notify  Bangor
immediately  if any inquiries or proposals are received by, any  information  is
requested from, or any negotiations or discussions are sought to be initiated or
continued  with  Stonington,  in each case in connection  with any  acquisition,
business combination or purchase of all or any significant portion of the assets
of, or any equity interest in Stonington.

     Section  4.2.  Conduct  of  Business  of  Stonington  Pending  the  Merger.
Stonington  covenants and agrees that between the date of this Agreement and the
Effective Date, unless Bangor shall otherwise  consent in writing,  the business
of  Stonington  shall be conducted  only in, and  Stonington  shall not take any
action  except in, the ordinary  course of business  and in a manner  consistent
with  past  practice;  and  Stonington  will use its best  efforts  to  preserve
substantially intact the business organization of Stonington,  to keep available
the services of the present  officers,  employees and  consultants of Stonington
and  to  preserve  the  present  relationships  of  Stonington  with  customers,
suppliers  and other  persons with which  Stonington  has  significant  business
relations.

<PAGE>

         Section 4.3.  Provision of Records and  Information.  Stonington  shall
permit  representatives of Bangor to make such independent audit and examination
of its books,  contracts,  tax returns,  orders and other records and properties
and  shall  furnish  Bangor  with such  additional  information  as  Bangor  may
reasonably  request.  If for any reason this Merger is not  consummated,  Bangor
will not use  confidential  information  obtained from  Stonington in any manner
detrimental to Stonington  and will promptly  return to Stonington all materials
obtained during the course of any investigation.

     Section 4.4. Dividends. Stonington will not declare or pay any dividends on
any  outstanding   shares  or  purchase  any  such  shares  or  make  any  other
distribution on such shares prior to the Effective Date.

                                    ARTICLE V

             CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES

     The  obligations  of Bangor and  Stonington  pursuant to this Agreement are
subject to the fulfillment and  satisfaction at, or prior to the Effective Date,
of each of the following conditions:

     Section 5.1 Stockholder Approval.  The Merger and this Agreement shall have
been approved and adopted by the stockholders of Stonington.

     Section 5.2.  Approval by Boards of Directors.  All actions required by law
to have  been  taken by the  Board  of  Directors  of  Bangor  and the  Board of
Directors of Stonington in order to effect the Merger and perform this Agreement
shall have been duly and validly taken.

     Section  5.3.  Representations  and  Warranties.  The  representations  and
warranties  of Bangor and  Stonington  set forth in Articles II and III shall be
true and correct in all  material  respects on the date hereof and shall also be
true and correct in all material respects on and as of the Effective Date.

     Section 5.4. Approval by the Maine Public Utilities Commission.  Bangor and
Stonington  shall have obtained all approvals  required under Maine Law from the
Maine Public Utilities Commission in order to effect the Merger and perform this
Agreement.

     Section 5.5. Approval by the Federal Energy Regulatory  Commission.  Bangor
and Stonington shall have obtained all approvals required under Federal Law from
the  Federal  Energy  Regulatory  Commission  in order to effect  the Merger and
perform this Agreement.

<PAGE>

     Section  5.6.  Other  Required  Filings,  Consents,  Approvals,   Licenses,
Exemptions  or  Registrations.  Other than the filing of Articles of Merger with
the Secretary of State of the State of Maine, all other required filings and all
other consents, approvals,  licenses, exemptions or registrations required to be
obtained from any court or governmental department,  commission,  board, bureau,
agency or  instrumentality  necessary  in order to effect the Merger and perform
this Agreement shall have been obtained.

                                   ARTICLE VI

                           TERMINATION AND ABANDONMENT

     This Agreement may be terminated and the Merger abandoned at any time prior
to the Effective Date:

     Section  6.1.  Mutual  Agreement.  By  mutual  agreement  of the  Boards of
Directors of Bangor and Stonington;

     Section 6.2. By Bangor.  By the Board of Directors of Bangor if at any time
before the Effective Date, any of the representations or warranties contained in
Article II shall be incorrect or if  Stonington  is otherwise in default of this
Agreement;

     Section 6.3. By  Stonington.  By the Board of Directors of Stonington if at
any time before the Effective  Date,  any of the  representations  or warranties
contained in Article III shall be incorrect or if Bangor is otherwise in default
of this Agreement.

     Section 6.4. By Passage of Time. By either party upon two (2) days' written
notice if the Effective Date shall not have occurred by February 29, 1988.

                                   ARTICLE VII

                              AMENDMENT AND WAIVER

     Section 7.1. Amendment. This Agreement may be amended by the parties hereto
at any time prior to the Effective Date. Any amendment shall be by an instrument
in writing signed by the parties hereto.

     Section 7.2. Waiver.  At any time prior to the Effective Date, either party
hereto may (a) waive any  inaccuracies  in the  representations  and  warranties
contained  herein or in any  document  delivered  pursuant  hereto and (b) waive
compliance  with any of the  agreements  or  conditions  contained  herein.  Any
agreement  on the part of a party  hereto to any such waiver shall be valid only
as against such party and only if set forth in an instrument  in writing  signed
by such party.


<PAGE>



                                  ARTICLE VIII

                               GENERAL PROVISIONS

     Section 8.1. Notices.  All notices and other  communications  given or made
pursuant hereto shall be in writing and delivered  personally or sent by mail to
the parties as follows:

                  (a)      If to Bangor, to:

                           Robert S. Briggs, Esq.
                           Bangor Hydro-Electric Company
                           33 State Street
                           P. O. Box 932
                           Bangor, ME 04401

                  (B)      if to Stonington, to:

                           Robert Platt

                           Stonington & Deer Isle Power Company
                           Sunset, ME  04683

     Section 8.2.  Headings.  The headings  contained in this  Agreement are for
reference  purposes  only  and  shall  not  affect  in any  way the  meaning  or
interpretation of this Agreement.

     Section  8.3.  Entire  Agreement.  This  Agreement  constitutes  the entire
agreement of the parties and supersedes  any and all other prior  agreements and
undertakings,  both written and oral, with respect to the subject matter hereof,
and except as otherwise  expressly  provided  herein,  is not intended to confer
upon any other person any rights or remedies hereunder.

     Section 8.4.  Assignment.  This Agreement is not assignable by either party
in any respect without the prior written consent of the other.

     Section  8.5.  Governing  Law.  This  Agreement  shall be  governed  by and
construed in accordance with the laws of the State of Maine.

     Section 8.6.  Counterparts.  This  Agreement may be executed in one or more
counterparts,  each of which shall be deemed to be an original  but all of which
shall together constitute one and the same Agreement.

     Section  8.7.  Expenses.  Both parties to this  Agreement  shall bear their
respective  expenses  incurred  in  connection  herewith  whether  or  not  this
Agreement  is  consummated,  including  without  limitation  the  fees of  their
respective counsel.


<PAGE>



     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed as of the date first stated above by their duly authorized officers.

WITNESSES:                          BANGOR HYDRO-ELECTRIC COMPANY

\ss\ Robert S. Briggs                    By:  \ss\ T.A. Greenquist
                                         Its: President

\ss\ ...                            STONINGTON & DEER ISLE POWER COMPANY
                                         By: \ss\
                                         Its: Chairman of the Board


<PAGE>



For use by the
Secretary of State

                                 STATE OF MAINE                   MAINE
File No. 19240001D                                          SECRETARY OF STATE
Fee Paid $20.00                   STATEMENT OF                  FILED
C.B.     -----              RESOLUTION ESTABLISHING         December 21, 1989
 Date:  12-21-89              SERIES OF SHARES OF                Agent
                         BANGOR HYDRO-ELECTRIC COMPANY
                             (8.76% Preferred Stock)

     Pursuant  to  13-A  MRSA  503,  the  undersigned  corporation  submits  the
following for the purpose of establishing and designating a series of shares and
fixing and determining the relative rights and preferences thereof:

     FIRST: The attached resolution  establishing and designating the series and
fixing and  determining  the relative  rights and  preferences  thereof was duly
adopted by the Board of Directors on December 20, 1989.

     SECOND:  The  Articles  expressly  grant  to the  Board  of  Directors  the
authority to make such a resolution.

     THIRD: The address of the registered office of the corporation is: 33 State
Street, PO Box 932, Bangor ME 04401.

         Dated:  December 20, 1989

         Legibly print or            Bangor  Hydro-Electric  Company
         type name and                 (name of corporation)
         capacity  of  all           By  \ss\  Frederick  S.  Samp
         signers                           Frederick S. Samp, Clerk
         13-A MRSA 104.

------------------------------------
 *       The name of the corporation  should be typed,  and the document must be
         signed by (1) Clerk or (2) by the President of a vice-president  and by
         the  Secretary or an assistant  secretary or such other  officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  directors  or by such
         directors as may be designated by majority of directors  then in office
         or (4) if there are not such directors, then by the holders, or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-7


<PAGE>



     FURTHER  RESOLVED  that none of the holders of any of the classes or series
of the  Preferred  Stock,  and none of the holders of the Common  Stock,  of the
Company shall have the preemptive  right to subscribe for and take shares of the
8.76% Preferred Stock; and

     FURTHER  RESOLVED that the Company does hereby appoint and designate  Smith
Barney,  Harris Upham & Co.  Incorporated of New York as its  representative  in
this sale of the 8.76%  Preferred  Stock,  and does hereby  authorize said Smith
Barney, Harris Upham & Co. Incorporated to dispose of said 8.76% Preferred Stock
at private sale at part value; and

     FURTHER  RESOLVED that the appropriate  officers of the Company be and they
hereby are  authorized  and  directed  to file with the Maine  Public  Utilities
Commission an  application  for approval of the issuance of the 8.76%  Preferred
Stock,  including  any and all  amendments  thereto,  and to do all  other  acts
necessary  or  desirable  in order to secure the  approval of said Maine  Public
Utilities Commission; and

     FURTHER  RESOLVED  that  upon  receipt  of the Order of said  Maine  Public
Utilities  Commission  relative to the issuance and sale of the 8.76%  Preferred
Stock,  said Order is to be recorded  upon the books of the Company by its Clerk
or Assistant Clerk; and

         FURTHER  RESOLVED  that  pursuant  to Article XII of the By-Laws of the
Company,   said  By-Laws  be  amended  in  order  to  set  forth  the  dividend,
designation,  terms, conditions and restrictions relative to the 8.76% Preferred
Stock, as follows:

     (a) The first paragraph of Article XI, Section 2, is hereby amended to read
as follows:

         "Section 2. The 250,000  shares of  Preferred  Stock shall be available
         for classification and  reclassification in different classes or series
         from time to time.  Subject  to  reclassification  upon  retirement  by
         redemption  or otherwise,  25,000  shares shall be 7% Preferred  Stock,
         17,500 shares shall be 4% Preferred Stock, Series A, 4,840 shares shall
         be 4 1/4% Preferred  Stock, and 150,000 shares shall be 8.76% Preferred
         Stock."

     (b) The first line of the second  paragraph  of Article  XI,  Section 2, is
hereby amended to read as follows:

         "The remaining shares, 52,660 in number, plus additional shares...

     (c) The fourth  sentence  of  Article  XI,  Section 3 is hereby  amended by
deleting the words "and  paragraph (e) of Section 7" so that the sentence  reads
as follows:

         "Except as provided in  paragraph  (b) of Section 6, the holders of the
         Common  Stock are  entitled  to receive all  additional  surplus or net

<PAGE>

         profits which the Directors may order  distributed in dividends,  after
         the dividends above provided for shall have been paid or set apart."

         (d)      Article XI, Section 4(b) is hereby amended to read as follows:

         "(b) If at any time dividends  payable on the Preferred  Stock shall be
         in default in an amount equal to or exceeding four  quarterly  dividend
         payments,  or if the Company  shall fail to make any  required  sinking
         fund  payment on the  Preferred  Stock,  then,  until all  dividends or
         sinking fund  payments so in default have been paid or declared and set
         apart for payment, the holders of shares of Preferred Stock of each and
         every class or series,  voting as a single class, shall be entitled, at
         any annual meeting during which  dividends or sinking fund payments are
         so in default,  to elect the smallest number of Directors  necessary to
         constitute  a majority of the full Board of  Directors,  the balance of
         the  directors  to be elected by the holders of shares  having  general
         voting powers."

     (e) Article XI,  Section 4 is hereby  amended by adding a subsection (c) to
read as follows:

         "(c)  Notwithstanding  the  provisions  of Section 5 of Article  III of
         these  By-Laws,  except as provided in paragraph (b) of this Section 4,
         the holders of the 8.76%  Preferred Stock shall not be entitled to vote
         at any meeting of stockholders."

     (f) Article XI, Section 5 is hereby amended to read as follows:

         Section 5. In case of liquidation  or  dissolution of the Company,  the
         assets, irrespective of whether they shall consist of capital assets or
         accumulated  earnings,  shall be distributed as follows: All holders of
         Preferred  Stock  shall  be  entitled  to be paid in full  both the par
         amount of their  shares  and an amount  equal to the  unpaid  dividends
         accumulated and accrued thereon and, in the case of the 8.76% Preferred
         Stock, if such  liquidation or dissolution is voluntary an amount equal
         to the premium specified in Section 6(a) below, before any amount shall
         be paid to the  holders  of the  Common  Stock,  and in case the assets
         shall not be sufficient  to pay in full all of the Preferred  Stock and
         dividends accumulated and accrued thereon, and applicable premium, then
         the principal  thereof  shall first be paid pro rata,  thereafter a pro
         rata  distribution  of any  excess  shall  be  made on  account  of the
         accumulated  dividends,  based on the total amount of unpaid  dividends

<PAGE>

         accumulated and accrued thereon, and thereafter a pro rata distribution
         of any excess shall be made on account of applicable premium,  based on
         the total amount of applicable  premium,  but after such payment to the
         holders of the Preferred Stock, the remaining assets and funds shall be
         paid to the holders of the Common Stock,  according to their respective
         shares."

     (g) Article XI, Section 6 is hereby redesignated as Article XI Section 6(a)
and is hereby amended to read as follows:

         "Section 6. (a) The 7% Preferred Stock shall bear dividends at the rate
         of 7% per annum and shall not be  redeemable.  The 4% Preferred  Stock,
         Series A, shall bear dividends at the rate of 4% per annum and shall be
         redeemable  at 112% if called on or prior to October  1, 1950;  at 111%
         thereafter  through October 1, 1951; and after October 1, 1951 at 110%,
         plus accrued  dividends in every case. The 4 1/4% Preferred Stock shall
         bear  dividends at the rate of 4 1/4% per annum and shall be redeemable
         at 102% is  called  on or prior to April 1,  1954;  at 101%  thereafter
         through April 1, 1959;  and after April 1, 1959 at 100%;  plus occurred
         dividends  in every case.  Except as provided in Sections  6(d) through
         6(o),  the 8.76%  Preferred  Stock shall bear  dividends at the rate of
         8.76% per annum and shall not be redeemable prior to December 27, 1994.
         Dividends on the 8.76%  Preferred  Stock shall be  cumulative  and paid
         quarterly no later than the first  business day following  each January
         19, April 19, July 19, and October 19. The 8.76%  Preferred Stock shall
         be redeemable at the option of the Company as follows:

          At 105.63% if called on or prior to December 27, 1995;
          At 105.01% if called on or prior to December 27, 1996;
          At 104.38% if called on or prior to December 27, 1997;
          At 103.75% if called on or prior to December 27, 1998;
          At 103.13% if called on or prior to December 27, 1999;
          At 102.50% if called on or prior to December 27, 2000;
          At 101.88% if called on or prior to December 27, 2001;
          At 101.25% if called on or prior to December 27, 2002;
          At 100.63% if called on or prior to December 27, 2003;
          and after December 27, 2003 at 100%;
          plus accrued dividends in every case.

Preferred Stock,  which is the subject of redemption,  may be called in whole or
in part upon any dividend payment date by appropriate  resolution adopted by the
Board of  Directors  at any  regular or special  meeting  upon 60 days'  written
notice to the  owners  thereof  of record to be given by  mailing  copies of the
notice  of  redemption,  postage  prepaid,  addressed  to such  owners  at their
addresses  as  shown  on the  books of the  Company.  In the  case of the  8.76%
Preferred  Stock,  notice of redemption to the owners thereof of record shall be
by certified mail,  postage  prepaid,  or by a nationally  recognized  overnight
delivery  service.  If less than all of the  outstanding  shares of any class or
series of  Preferred  Stock shall be  redeemed  at any time,  the stock to be so

<PAGE>

redeemed  shall be  determined  by lot, in such manner as the Board of Directors
may determine and prescribe, except that the shares of the 8.76% Preferred Stock
shall be redeemed pro rata."

     (h) Article XI,  Section 6 is hereby  amended by adding a subsection (b) to
read as follows:

         "(b) The 8.76%  Preferred  Stock  shall also be  subject to  redemption
         through the operation of a sinking fund (hereinafter called the Sinking
         Fund) at the redemption price of $100 per share plus an amount equal to
         the  dividends  accrued  and  unpaid  thereon to the  redemption  date,
         whether or not earned or declared (the Sinking Fund Redemption  Price).
         For the  purposes  of the  Sinking  Fund,  out of any net assets of the
         Company  legally  available  therefor  remaining  after full cumulative
         dividends upon all Preferred  Stock then  outstanding to the end of the
         current  dividend  period therefor shall have been paid or declared and
         set apart for payment,  the Company shall set aside in cash annually on
         December 27 in each year  commencing  with December 27, 1995, an amount
         sufficient  to redeem at the  Sinking  Fund  Redemption  Price,  15,000
         shares  of the  8.76%  Preferred  Stock.  The  Sinking  Fund  shall  be
         cumulative  so that if on any such  December  27 the net  assets of the
         Company legally available  therefor shall be insufficient to permit any
         such  amount to be set aside in full,  or if for any other  reason such
         amount  shall  not have  been set  aside in  full,  the  amount  of the
         deficiency shall be set aside but without interest, before any dividend
         shall  be paid or  declared,  or any  distribution  made on any  junior
         shares or any junior shares shall be purchased,  redeemed, or otherwise
         acquired by the  Company,  or any monies  shall be paid to or set aside
         for by the Company,  or any monies shall be paid to or set side for the
         purchase  or  redemption  of any  junior  shares.  Notwithstanding  the
         foregoing,  the  Company  may at any time (1) pay  dividends  in junior
         shares or (2) purchase,  redeem or otherwise  acquire  junior shares in
         exchange  for, or out of the  proceeds  from the current sale of, other
         junior  shares.  As used  herein the term  "junior  shares"  shall mean
         Common Stock or any other shares ranking junior to the 8.76%  Preferred
         Stock either as to dividends upon  liquidation,  dissolution or winding
         up. Monies in the Sinking Fund shall be applied (and disbursed) on such
         December 27 to redemption of the shares of the 8.76%  Preferred  Stock.
         The Company  shall,  prior to each such Sinking Fund  redemption,  give
         notice of redemption, as specified in subsection (a) of this Section 6,
         of such  number  of  shares  of the  8.76%  Preferred  Stock  as may be
         required to satisfy the Sinking Fund."

     (i) Article XI,  Section 6 is hereby  amended by adding a subsection (c) to
read as follows:

<PAGE>

         "(c) In addition,  the Company shall have the right, at its option,  to
         redeem at the Sinking Fund Redemption Price on December 27, 1995 and on
         any December 27 thereafter an additional  number of shares of the 8.76%
         Preferred  Stock  up to but  not  exceeding  15,000  shares,  provided,
         however,  that the  aggregate  number of shares of the 8.76%  Preferred
         Stock  which may be  redeemed  pursuant  to this  Section  6(c) may not
         exceed  30,000  shares.  Notice  of any  such  redemption  shall  be as
         specified in  subsection  (a) of this Section 6. These rights shall not
         be  cumulative  and  shall be lost to the  extent  not  exercised.  Any
         redemption  of shares of the 8.76%  Preferred  Stock  pursuant  to this
         Section 6(c) shall not operate to reduce the number of shares which the
         Company is obligated to redeem pursuant to Section 6(b)."

     (j) Article XI,  Section 6 is hereby  amended by adding a subsection (d) to
read as follows:

         "(d) At all  times  that  dividends  on the 8.76%  Preferred  Stock are
         payable  pursuant to these  By-Laws,  the Company  will treat the 8.76%
         Preferred  Stock as stock and not as  indebtedness  and will  treat the
         dividends paid with respect to the 8.76%  Preferred  Stock as dividends
         (within the meaning of Section 316 of the Internal Revenue Code of 1986
         as amended  (the  "Code")) to the maximum  extent  permitted  under the
         Code."

     (k) Article XI,  Section 6 is hereby  amended by adding a subsection (e) to
read as follows:

         "(e) At all  times  that  dividends  on the 8.76%  Preferred  Stock are
         payable pursuant to these By-laws, the Company will not:

                  "(1) take any action which would require or permit the Company
         to treat the dividends paid with respect to the 8.76%  Preferred  Stock
         as interest  for any purpose or to treat the 8.76%  Preferred  Stock as
         indebtedness for any purpose;

                  "(2)  exercise any option or election  that may at any time be
         available  under the Code or  otherwise  to  deduct  all or part of the
         dividends  paid with respect to the 8.76%  Preferred  Stock if so doing
         would  reduce  the  after-Federal  income  tax  yield per annum on such
         dividends to any corporate holder of the 8.76% Preferred Stock;

                  "(3)  change  its  place  of   incorporation,   by  merger  or
         otherwise, to a jurisdiction other than the District of Columbia or one
         of the 50 states of the United States; or

                  "4)   otherwise   take  any  action   which  would  cause  the
         Dividend-Received  Deduction  contained  in Section  243 of the Code to
         cease to be available with regard to dividends paid with respect to the

<PAGE>

         8.76%  Preferred  Stock to a corporate  holder of 8.76% Preferred Stock
         otherwise eligible to claim the Dividend-Received Deduction."

     (l) Article XI,  Section 6 is hereby  amended by adding a subsection (f) to
read as follows:

         "(f) In the  event  that the  Company  shall  fail to take  the  action
         required in subsection  (d) of this Section 6, or shall take any of the
         actions  referred  to in  subsection  (e) of this  Section  6, then the
         Company will pay to each corporate  holder of 8.76% Preferred Stock, in
         addition to all  dividends  required to be paid on the 8.76%  Preferred
         Stock, such amount as is necessary so that the after-Federal income tax
         yield per annum from  dividends  and such  additional  payments  on the
         8.76% Preferred Stock is 7.8665% (or 7.5538% in the case of a corporate
         holder subject to Section 832(b) of the Code) to such corporate  holder
         at a Federal  income tax rate equal to 34%.  Payments  pursuant  to the
         preceding  sentence shall be made to the extent  necessary with respect
         to any and all  dividends on the 8.76%  Preferred  Stock  (whether such
         dividends  are paid before,  at the same time as or after the action or
         failure  to act);  provided,  that no such  payments  pursuant  to this
         subsection (f) shall be made to any particular  corporate  holder until
         such  corporate  holder has provided the Company with a written  notice
         specifying  (1) that such holder  requires  indemnification  under this
         subsection  (f),  (2) the  amount  to be paid  by the  Company  to such
         holder,  and (3) supporting  calculations  and that in the event that a
         corporate holder makes a written demand for indemnification pursuant to
         this  subsection  (f),  the  Company  shall  thereafter,  on each  date
         subsequent  to the date of the action or failure to act giving  rise to
         such demand on which dividends are paid on the 8.76%  Preferred  Stock,
         in addition to such dividends,  pay to such holder the amount set forth
         in the demand for indemnification  previously  furnished to the Company
         until such time as such  holder  furnishes  written  notice,  including
         supporting  calculations,   to  the  Company  that  indemnification  is
         required,  whether  pursuant  to  this  subsection,  subsection  (h) or
         otherwise, at a greater or lesser rate."

     (m) Article XI,  Section 6 is hereby  amended by adding a subsection (g) to
read as follows:

         "(g) If the  Company  shall  pay a  dividend  in  respect  of the 8.76%
         Preferred  Stock which  constitutes,  in whole or in part,  a return of
         capital  for  Federal   income  tax   purposes  not  eligible  for  the
         Dividend-Received   Deduction,  then  the  Company  will  pay  to  each
         corporate holder of 8.76% Preferred Stock, in addition to all dividends
         required  to be paid on the  8.76%  Preferred  Stock,  an  amount  (the
         "Indemnity  Amount") as is necessary so that the  after-Federal  income
         tax  yield  per  annum  from  such  non-qualifying  dividends  and such

<PAGE>

         additional payments on the 8.76% Preferred Stock is 7.8665% (or 7.5538%
         in the case of a  corporate  holder  subject to  Section  832(b) of the
         Code).  For the purposes of calculating the Indemnity Amount it will be
         assumed  that each  corporate  holder is subject to, and pays,  Federal
         income  tax at the  highest  marginal  rate in the  case  of  "ordinary
         income" and the highest marginal rate in the case of long-term "capital
         gains," in the year in which the  Indemnity  Amount is paid;  provided,
         that no such Indemnity Amount shall be paid to any particular corporate
         holder  until  the  earlier  of (1) the time of the sale,  exchange  or
         redemption  (including a sinking fund  purchase or  redemption)  of the
         8.76% Preferred Stock, or (2) the time additional Federal income taxes,
         including  estimated taxes,  resulting from the payment of dividends on
         the 8.76%  Preferred  Stock in any calendar year which  constitute,  in
         whole or in part,  a return of capital for Federal  income tax purposes
         not eligible  for the  Dividend-Received  Deduction,  are paid or would
         have been paid if the corporate  holder were liable for Federal  income
         tax; provided,  further,  that in the case of a sale or exchange of the
         8.76% Preferred Stock, such Indemnity Amount shall be paid at the later
         of 1) fourteen (14) days after notice of such sale or exchange is given
         to the Company by such corporate  holder, or (2) the occurrence of such
         sale or exchange; and provided,  further, that if such Indemnity Amount
         cannot be  determined  at the time of the sale,  exchange or redemption
         (i.e.,  the sale,  exchange or redemption of the 8.76%  Preferred Stock
         are, in whole or in part, a return of capital)  then the Company  shall
         pay such Indemnity  Amount at the earlier of (1)  forty-five  (45) days
         after the end of the calendar  year, or (2) the time when the Indemnity
         Amount can be determined."

     (n) Article XI,  Section 6 is hereby  amended by adding a subsection (h) to
read as follows:

         "(h) In the event that, after December 27, 1989, Federal legislation is
         enacted  (whether in the form of an amendment of the Code or otherwise)
         which  (whether by the terms of such  legislation  or by U.S.  Treasury
         regulations  promulgated  thereunder  or  a  ruling  published  by  the
         Internal  Revenue  Service) (1) causes or makes any corporate holder of
         8.76%  Preferred  Stock  ineligible  to  claim  the   Dividend-Received
         Deduction in  connection  with  dividends  paid on the 8.76%  Preferred
         Stock or (2) reduces the effective rate,  either directly or indirectly
         (such as by taking  into  account  any  proration  required  by Section
         832(b)  of the  Code),  of the  Dividend-Received  Deduction  which any
         corporate  holder of 8.76% Preferred Stock may claim in connection with
         dividends paid on the 8.76%  Preferred  Stock,  the Company will pay to
         each such corporate holder, in addition to all dividends required to be
         paid on the 8.76% Preferred Stock,  such amount as is necessary so that
         the  after-Federal  income tax yield per annum from  dividends and such

<PAGE>

         additional payments on the 8.76% Preferred Stock is 7.8665% (or 7.5538%
         in the case of a  corporate  holder  subject to  Section  832(b) of the
         Code) to such corporate  holder based on an assumed  Federal income tax
         rate of 34%. Payments pursuant to the preceding  sentence shall be made
         to the extent  necessary  with respect to any and all  dividends on the
         8.76% Preferred  Stock (whether such dividends are paid before,  at the
         same time as or after the enactment of such legislation or the issuance
         of such regulations or ruling);  provided,  that no such payments shall
         be made to any  particular  corporate  holder  until  such  holder  has
         provided the Company with a written  notice,  at any time subsequent to
         the effective date of such  legislation,  regulations or ruling, as the
         case may be,  specifying (i) that such holder requires  indemnification
         from the Company  for the amount of loss  incurred by the holder due to
         such  legislation,  regulations or ruling, as the case may be, (ii) the
         amount  to  be  paid  by  the  Company  to  such  holder  so  that  the
         after-Federal  income  tax  yield  per annum  from  dividends  and such
         additional payments on the 8.76% Preferred Stock is 7.8665% (or 7.5538%
         in the case of a  corporate  holder  subject to  Section  832(b) of the
         Code) to such corporate  holder based on an assumed  Federal income tax
         rate of 34% and (iii)  supporting  calculations.  In the  event  that a
         corporate  holder makes a written demand for  indemnification  pursuant
         hereto,  the Company shall  thereafter,  on each date subsequent to the
         effective date of such legislation,  regulations or ruling, as the case
         may be, on which  dividends are paid on the 8.76%  Preferred  Stock, in
         addition to such dividends,  pay to such holder the amount set forth in
         the demand for  indemnification  previously  furnished  to the  Company
         until such time as such  holder  furnishes  written  notice,  including
         supporting  calculations,   to  the  Company  that  indemnification  is
         required,  whether  pursuant to this subsection (h),  subsection (f) or
         otherwise,  at a greater  or lesser  rate.  In the event  that  further
         legislation,  U.S.  Treasury  regulations  or rulings  published by the
         Internal  Revenue  Service,  if any,  further limit the  eligibility to
         claim the Dividend-Received Deduction in connection with dividends paid
         with  respect  to the 8.76%  Preferred  Stock by any  corporate  holder
         thereof or further reduce the effective  rate of the  Dividend-Received
         Deduction which any corporate holder of 8.76% Preferred Stock may claim
         in connection  with dividends paid on the 8.76% Preferred  Stock,  then
         any such corporate  holder may deliver  another notice pursuant to this
         subsection (h) requesting a new payment amount."

     (o) Article XI,  Section 6 is hereby  amended by adding a subsection (i) to
read as follows:

         "(i) In the event that the Company  shall  become  obligated  to make a
         payment to any holder of 8.76%  Preferred  Stock pursuant to subsection
         (h) of this  Section  6, then the  Company  shall have the right at its
         option within 30 days after  receipt of notice from any holder  seeking

<PAGE>

         indemnification   pursuant  to  subsection  (h)  (but  not  at  a  time
         thereafter  that the  Company  is no  longer  obligated  to make such a
         payment),  to purchase  all or a portion of the 8.76%  Preferred  Stock
         held by such  holder at $100 per share plus  accrued  dividends  to the
         date of purchase;  provided, that, the Company shall have no obligation
         to make a payment pursuant to subsection (h) and shall have no right to
         purchase  the  8.76%  Preferred  Stock  of a  holder  pursuant  to this
         subsection  (i) if such holder waives the Company's  obligation to make
         payment  pursuant to subsection (h) within 60 days after receipt of the
         Company's notice exercising its right to purchase 8.76% Preferred Stock
         pursuant to this  subsection  (i); and provided,  further,  that if the
         Company becomes  obligated (and such obligation has not been waived) to
         make payments pursuant to such subsection (h) to holders of 50% or more
         of then  outstanding  8.76%  Preferred  Stock,  the  Company  shall  be
         entitled  to so purchase  all,  but not part,  of the then  outstanding
         8.76% Preferred  Stock; and provided,  further,  that in no event shall
         the Company be relieved of its obligation to make any payment  required
         under  subsection (h) with respect to any dividends  payable,  prior to
         the actual date of purchase by the Company of 8.76% Preferred Stock, to
         any corporate  holder whose 8.76%  Preferred  Stock is purchased by the
         Company pursuant to this Section 6."

     (p) Article XI,  Section 6 is hereby  amended by adding a subsection (j) to
read as follows:

         "(j) In calculating the payments to be made to a corporate holder under
         subsections  (f),  (g) or (h),  such holder shall take into account any
         and all payments (including,  without limitation,  taxes,  interest and
         penalties)  that  such  holder is  required  to make as a result of the
         event  or  events  that  resulted  in the  demand  for  indemnification
         pursuant to such  subsections.  All amounts  payable under  subsections
         (f), (g) and (h) of this Section 6 shall be considered  contract claims
         taxable as  ordinary  income  not  eligible  for the  Dividend-Received
         Deduction."

     (q) Article XI,  section 6 is hereby  amended by adding a subsection (k) to
read as follows:

         "(k) In  computing  "after-Federal  income tax yield" to any  corporate
         holder of 8.76%  Preferred  Stock in any  particular  taxable year from
         dividends paid with respect to the 8.76%  Preferred  Stock for purposes
         of this Section 6, (1) only Federal  income taxes shall be  considered,
         (2) the effective rate of the Dividend-Received  Deduction available to
         a corporate  holder of 8.76% Preferred Stock in any particular  taxable
         year  shall  be  determined  by  taking  into  account  any  applicable
         provision of the Code (including,  without limitation,  section 832(b))

<PAGE>

         that reduces or enlarges the amount of any other  deduction,  exclusion
         or adjustment that would otherwise be available to such holder for such
         taxable year, if such  reduction or  enlargement is required to be made
         because   such   holder   is   entitled   to   the   benefits   of  the
         Dividend-Received Deduction and by taking into account any reduction or
         enlargement  in the effective rate of the  Dividend-Received  Deduction
         required to be made  because  such holder or any income or loss of such
         holder is subject to any  applicable  provision  of the Code other than
         Section  234  (a)(1),  (3) except to the extent  provided in clause (2)
         above, the Dividend-Received  Deduction of the 1990 calendar year shall
         be deemed to be 70%, (4) for the purposes of subsection (j) the maximum
         marginal rate  applicable to dividends  received by corporations in the
         first full  taxable year in which the 8.76%  Preferred  Stock is issued
         and  outstanding  shall be deemed to be 34%,  (5)  except to the extent
         required by the provisions of clause (2) above, the dividends paid with
         respect to the 8.76% Preferred  Stock to a corporate  holder thereof in
         such  particular  taxable  year  shall be deemed to be the only item of
         income  for  such  particular  taxable  year  of such  holder,  (6) the
         Dividend-Received  Deduction,  if actually available  (disregarding any
         disallowance  pursuant  to Code  Section  246A) to such holder for such
         particular  taxable year, and only to the extent actually  available to
         such holder for such particular taxable year, as detailed in clause (2)
         above, shall be deemed to be the only deduction or exclusion  available
         to such holder,  except as otherwise  provided in clause (2) above, and
         (7) for the purposes of subsection  (j) the rate of Federal  income tax
         imposed with respect to the receipt of ordinary income (i.e.,  contract
         claims) shall be deemed to be the maximum  marginal rate  applicable to
         ordinary income  received by  corporations  in such particular  taxable
         year. In the case of a holder of 8.76%  Preferred Stock who did not own
         any 8.76%  Preferred  Stock for the 1990 calendar year, the computation
         shall be made as though such holder has owned 8.76%  Preferred Stock in
         such taxable year."

     (r) Article XI,  Section 6 is hereby  amended by adding a subsection (1) to
read as follows:

         "(1) Any  references  to the  after-Federal  income tax yield per annum
         referred  to in this  Section 6 shall be adjusted  in  accordance  with
         subsection (o) of this Section 6."

     (s) Article XI,  Section 6 is hereby  amended by adding a subsection (m) to
read as follows:

         "(m) As referred  to in Note 5 to the  Company's  financial  statements
         included in its  Quarterly  Report on Form 10-Q for the  quarter  ended
         September 30, 1989,  an adjustment in the Federal  income tax liability
         of the Company has been proposed by the Internal Revenue Service.  Such
         proposed  adjustment  relates  to  the  Company's  Federal  income  tax

<PAGE>

         treatment of certain issues which relate to the Company's ownership and
         subsequent  sale  of its  interest  in the  Seabrook  project  and  the
         Company's abandonment of Seabrook Unit 2."

     (t) Article XI,  Section 6 is hereby  amended by adding a subsection (n) to
read as follows:

         "(n) In the event that, as a result of the proposed adjustment asserted
         in the Internal  Revenue  Service  Audit  described in  subsection  (m)
         above,

          "(1) the Company  shall  reduce or be required by  generally  accepted
               accounting  principles,  the Federal Energy Regulatory Commission
               or the Maine Public  Utilities  Commission to reduce its Retained
               Earnings  in the  cumulative  amount,  including  tax  liability,
               interest and penalties, of $15 million or more; and

          "(2) during the  twelve-month  period  subsequent  to the reduction or
               required reduction in Retained Earnings referred to in subsection
               (n)(1) above,  the holders of the 8.76% Preferred Stock shall not
               have received written  notification,  addressed to them and dated
               after the date of the reduction or required reduction in Retained
               Earnings  referred to in  subsection  (n)(1)  above,  from either
               Moody's  Investors  Service,  Inc.  ("Moody's")  or Standard  and
               Poor's  Corporation  ("S&P") that the 8.76% Preferred Stock has a
               rating of at least "baa3" from Moody's or "BBB-" from S&P; and

          "(3) any holder provides written notice to the Company, within 30 days
               after the beginning of each of the fifth through twelfth quarters
               following the reduction in Retained  Earnings or  requirement  to
               reduce Retained  Earnings referred to in subsection (n)(1) above,
               that it elects to receive an increased dividend rate on the 8.76%
               Preferred Stock held by it pursuant to this subsection (n);

         then  commencing at the beginning of the first quarter during which the
         notice referred to in subsection (n)(3) above is provided, the dividend
         rate  payable on such 8.76%  Preferred  Stock for that quarter and each
         subsequent  quarter shall  increase by 50 basis points per quarter to a
         maximum  increase  of 300 basis  points  (an 11.76%  dividend  rate per
         annum);  provided,  that so long as the Company is  obligated to pay an
         increased  dividend rate pursuant to this  subsection  (n), the Company
         shall have the right at its option to purchase,  upon 30 days'  written
         notice  to each  holder  of 8.76%  Preferred  Stock as to which  notice
         referred to in  subsection  (n)(3)  above has been given,  all, but not

<PAGE>

         part,  of such 8.76%  Preferred  Stock held by such  holder at $100 per
         share  plus  accrued  dividends  to the  date  of  purchase;  provided,
         further,  that under no circumstances  shall the Company be relieved of
         its obligation to pay an increased dividend pursuant to this subsection
         (n) prior to the actual  date of  purchase  by the Company of the 8.76%
         Preferred  Stock;  and  provided,  further,  that if  subsequent to the
         receipt of the notice  referred  to in  subsection  (n)(3)  above,  the
         Company shall receive  notification  from Moody's or S&P that the 8.76%
         Preferred  Stock has a rating of at least "baa3" from Moody's or "BBB-"
         from S&P,  then (i) the  Company  shall give  notice to each  holder of
         8.76% Preferred  Stock entitled to an increased  dividend rate pursuant
         to this  subsection  (n) that,  commencing  with the  beginning  of the
         quarter following the mailing of such  notification,  the dividend rate
         payable on such  8.76%  Preferred  Stock  shall be reduced to 8.76% per
         annum, and (ii) the Company shall have no further right to purchase the
         8.76% Preferred Stock pursuant to this subsection (n)."

     (u) Article XI,  Section 6 is hereby  amended by adding a subsection (o) to
read as follows:

         "(o) So long as the  Company  is  required  to pay any  holder of 8.76%
         Preferred Stock an increased  dividend rate pursuant to subsection (n),
         the  after-Federal  income tax yield  applicable  to any payments to be
         made pursuant to  subsections  (f), (g) and (h) of this Section 6 shall
         be increased as follows:

                                             After-Federal
          Increase in      After-Federal    Income Tax Yield
         Dividend Rate     Income Tax       to Holder Subject
         (Basis Points)       Yield         to Section 832(b)
         ---------------   -------------    -----------------

               50             8.3155             7.9849
              100             8.7645             8.4161
              150             9.2135             8.8472
              200             9.6625             9.2784
              250            10.1115             9.7095
              300            10.5605            10.1407"

     FURTHER  RESOLVED that any and all requirements of prior notice of proposed
amendments or  alterations  of the By-Laws,  including  the notice  requirements
contained in Article XII, Section 2 of the By-Laws,  are hereby waived, and that
the  foregoing  amendments  to the By-Laws are adopted  effective as of the date
hereof without further action of the Board of Directors; and

     FURTHER  RESOLVED that the appropriate  officers of the Company and each of
them be and they are hereby are authorized and directed to prepare,  execute and
file  with the  Secretary  of  State  of the  State of  Maine,  a  Statement  of

<PAGE>

Resolution  Establishing  Series of Shares in accordance with 13-A M.R.S.A.  503
incorporating  the relative  rights and preferences of the 8.76% Preferred Stock
set forth in Article XI of the  By-Laws of the Company as  hereinbefore  amended
and including such other  information as may be required by applicable law, rule
or regulation; and

     FURTHER RESOLVED that the form of proposed agreement (draft of December 14,
1989)  presented to the Board of Directors  for the sale of the 8.76%  Preferred
Stock to the purchaser  named therein is hereby  approved;  that the Chairman of
the  Board  and Chief  Executive  Officer,  the  President  and Chief  Operating
Officer,  the Treasurer,  or any Vice President of the Company or any of them be
and each of them is hereby  authorized to execute the same in substantially  the
form presented as aforesaid with such changes as the officer  executing the same
may approve  acting  under the advice of counsel for the  Company,  and that the
execution and delivery of said  agreement  shall be conclusive  evidence of such
approval; and

     FURTHER RESOLVED that the form of certificate for the 8.76% Preferred Stock
as presented to the Board of Directors is hereby approved;  that the Chairman of
the  Board  and Chief  Executive  Officer,  the  President  and Chief  Operating
Officer,  the Treasurer,  or any Vice President of the Company or any of them be
and each of them is hereby  authorized to issue a certificate or certificates in
substantially the form presented as aforesaid; and

     FURTHER  RESOLVED that all the powers and duties of Fleet Bank of Maine, as
Transfer  Agent and Registrar  for the shares of Preferred  Stock of the Company
(the "Transfer Agent and Registrar") are hereby extended upon the same terms and
conditions to cover the transfer and  registration of the 8.76% Preferred Stock;
and that the proper  officers  of the  Company  be, and each of them  hereby is,
authorized   and  directed  to  give  the  Transfer  Agent  and  Registrar  such
instructions  as may be appropriate to effect the issuance and sale of the 8.76%
Preferred Stock; and

     FURTHER  RESOLVED  that the  Chairman  of the  Board  and  Chief  Executive
Officer, the President and Chief Operating Officer,  the Treasurer,  or any Vice
President of the Company or any of them be and each of them is hereby authorized
in the name of and on behalf of the  Company  to pay to the  Transfer  Agent and
Registrar all proper fees and charges  arising out of or in connection  with the
performance  by it of its duties in connection  with the Shares,  and to pay any
and all expenses and fees  arising in  connection  with the issuance and sale of
the 8.76% Preferred Stock; and

     FURTHER  RESOLVED that the appropriate  officers of the Company and each of
them be and they hereby are  authorized  and  directed to make,  sign,  execute,
verify,  acknowledge  and  deliver,  or  cause  to be  made,  signed,  executed,

<PAGE>

verified,  acknowledged  and delivered,  any and all such orders,  certificates,
directions,  requests and other appropriate  instruments and to do all such acts
and things as may be reasonably be required from time to time  hereafter to give
effect to the  foregoing  votes,  or any of them,  or to  otherwise  effect  the
issuance and sale of the 8.76% Preferred Stock.


<PAGE>



For use by the
Secretary of State

                               STATE OF MAINE               MAINE
File No. 19240001D         ARTICLES OF AMENDMENT     SECRETARY OF STATE
Fee Paid $11,250-$35       (Amendment by Share-              FILED
C.B.     -------             holders Voting as            June 5, 1992
Date:    6-9-92             Separate Class) OF               Agent
                               BANGOR HYDRO-
                             ELECTRIC COMPANY
                       a Quasi-Public Corporation

Pursuant to 13-A MRSA 805 and 807,  the  undersigned  corporation  adopts  these
Articles of Amendment.

     FIRST:  As set out in detail in "THIRD",  one or more  classes of shares of
the corporation  were entitled to vote on the following  amendment as a separate
class.

     SECOND:  The amendment to the Articles of  Incorporation of the corporation
set out in Exhibit A attached hereto was adopted by the shareholders  thereof at
a meeting legally called and held on May 20, 1992.

     THIRD:  On said date,  the number of shares of each class  outstanding  and
entitled  to  vote on  such  amendment  (whether  or not  entitled  to vote as a
separate  class),  the  manner in which  each such  class was  entitled  to vote
(whether  or not as a separate  class),  and the number of shares  voted for and
against said amendment, respectively, were as follows:

Designation of       Manner        No. of Shares
Each Class           In Which      Outstanding
However Entitled     Entitled      And Entitled        Voted       Voted
   to vote           To Vote       To Vote             For         Against
-----------------    ---------     -------------       ------      --------
Common               As a Class       5,370,684       3,110,728     545,539
$5 par value

Preferred Stock,     As a Class          197,340*        173,031         374
    $100 par value                   -----------       ---------   ---------

         Total of All Classes          5,568,024       3,283,759     545,913
                                       =========       =========   =========

     FOURTH:  If such  amendment  provides  for  exchange,  reclassification  or
cancellation  of issued shares the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.



<PAGE>



     *FIFTH:  If such amendment  effects a change in the number or par values of
authorized  shares the number of shares which the  corporation  has authority to
issue after giving effect to such amendment is as follows:

                   Series           Number           Par Value
Class             (If any)          of Shares        (If any)
-----             --------          ---------        ---------

Common              N/A             7,500,000          $  5

Preferred                             400,000           100


     The  aggregate  par value of all such  shares (of all  classes  and series)
having par value is $77,500,000.

     The total number of all such shares (of all classes and series) without par
value is -0- shares.

     SIXTH: The address of the registered office of the corporation in the State
of Maine is 33 State Street, PO Box 932, Bangor, Maine 04401.

Dated: June 3, 1992


Legibly print or           Bangor Hydro-Electric Company
type name and                 (name of corporation)
capacity of all            By \ss\ Frederick S. Samp
signers                         Frederick S. Samp, Clerk


I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Frederick S. Samp
Frederick S. Samp, Clerk

NOTE:     Shares  may be  entitled  to vote as a  separate  class for any of the
          reasons  stated in 806, or if so provided  in the  Articles.  For vote
          necessary for adoption, see 805.

------------------------------------
 *       To be completed only if Exhibit A or B do not give this required
         information.

**       The name of the corporation  should be typed,  and the document must be
         signed by (1) Clerk or (2) by the President of a vice-president  and by
         the  Secretary or an assistant  secretary or such other  officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  Directors  or by such
         Directors as may be designated by majority of Directors  then in office

<PAGE>

         or (4) if there are not such Directors, then by the holders, or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-9A


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

             EXHIBIT A TO ARTICLES OF AMENDMENT DATED JUNE 3, 1992


         RESOLVED that the Articles of Incorporation of the Company,  as amended
         to date,  be  further  amended to  increase  the  Company's  authorized
         capital  stock by  $15,000,000,  such  increase  to be  represented  by
         150,000  shares of  Preferred  Stock of the par value of $100 each,  so
         that the total amount of  authorized  capital stock of the Company will
         be $77,500,000  represented by 400,000 shares of Preferred Stock of the
         par value of $100 each and 7,500,000  shares of Common Stock of the par
         value of $5 each.


<PAGE>



Filing Fee (See Sec. 1-01)                This Space for Use By
For Use by The                              Secretary of State
Secretary of State

                           STATE OF MAINE
File No. _______         ARTICLES OF AMENDMENT
Fee Paid _______          (Amendment by Share-
C.B.     _______            holders Voting as
Date:    _______          Separate Class) OF
                            BANGOR HYDRO-
                         ELECTRIC COMPANY
                       a Quasi-Public Corporation

Pursuant to 13-A MRSA Section 805 and 807, the  undersigned  corporation  adopts
these Articles of Amendment.

     FIRST:  As set out in detail in "THIRD",  one or more  classes of shares of
the corporation  were entitled to vote on the following  amendment as a separate
class.

     SECOND:  The amendment to the Articles of  Incorporation of the corporation
set out in Exhibit A attached hereto was adopted by the shareholders  thereof at
a meeting legally called and held on May 18 and June 16, 1994.

     THIRD:  On said date,  the number of shares of each class  outstanding  and
entitled  to  vote on  such  amendment  (whether  or not  entitled  to vote as a
separate  class),  the  manner in which  each such  class was  entitled  to vote
(whether  or not as a separate  class),  and the number of shares  voted for and
against said amendment, respectively, were as follows:

Designation of       Manner        No. of Shares
Each Class           In Which      Outstanding
However Entitled     Entitled      And Entitled        Voted       Voted
   to vote           To Vote       To Vote             For         Against
-----------------    ---------     -------------       ------      --------
ON COMMON STOCK
Common Stock

$5 par value         As a Class      6,245,174       4,459,161     474,723
Preferred stock
$100 par value       As a Class         47,340          34,193       2,608
                                     ---------       ---------     -------
Total of all                         6,292,514       4,493,354     477,331

ON PREFERRED STOCK
Common Stock

$5 par value         As a Class      6,245,174       3,409,615     651,515
Preferred Stock
$100 par value                         197,340*        163,962       9,688
                                    ----------       ---------   ---------
         Total of All Classes        6,442,514       3,573,577     661,203

* Includes 150,000 shares with no general voting power.



<PAGE>

     FOURTH:  If such  amendment  provides  for  exchange,  reclassification  or
cancellation  of issued shares the manner in which the same shall be effected is
contained in Exhibit B attached hereto,  if it is not set forth in the amendment
itself.

     *FIFTH:  If such amendment  effects a change in the number or par values of
authorized  shares the number of shares which the  corporation  has authority to
issue after giving effect to such amendment, is as follows:

                    Series           Number           Par Value
Class             (If any)          of Shares          (If any)
-----             --------          ---------         ---------

Common Stock

$5 par value        N/A             10,000,000          $  5

Preferred Stock

$100 par value      As determined      600,000          $100
                    by Board of
                    Directors

     The  aggregate  par value of all such  shares (of all  classes  and series)
having par value is $10,000,000.

     The total number of all such shares (of all classes and series) without par
value is -0- shares.

     SIXTH: The address of the registered office of the corporation in the State
of Maine is 33 State Street, PO Box 932, Bangor, Maine 04402-0932.

Dated:  August 11, 1994


Legibly print or           Bangor Hydro-Electric Company
type name and                   (name of corporation)
capacity of all            By \ss\ Frederick S. Samp
signers                         Frederick S. Samp, Clerk
13-A MRSA Section 104.     By --------------------------


I certify  that I have  custody of the minutes  showing the above  action by the
shareholders.

\ss\ Frederick S. Samp

NOTE:     Shares  may be  entitled  to vote as a  separate  class for any of the
          reasons stated in Section 806, or if so provided in the Articles.  For
          vote necessary for adoption, see Section 805.

<PAGE>


 *       To be completed only if Exhibit A or B do not give this required
         information.

**       The name of the corporation  should be typed,  and the document must be
         signed by (1) Clerk or (2) by the President or a vice-president  and by
         the  Secretary or an assistant  secretary or such other  officer as the
         bylaws may designate as a second certifying officer or (3) if there are
         no  such  officers,  then by a  majority  of the  directors  or by such
         directors as may be designated by majority of directors  then in office
         or (4) if there are no such directors,  then by the holders, or such of
         them as may be  designated  by the holders,  of record of a majority of
         all  outstanding  shares entitled to vote thereon or (5) by the holders
         of all of the outstanding shares of the corporation.

FORM NO. MBCA-9A


<PAGE>



                          BANGOR HYDRO-ELECTRIC COMPANY

             EXHIBIT A TO ARTICLES OF AMENDMENT DATED JULY 1, 1994


         RESOLVED that the Articles of Incorporation of the Company,  as amended
         to date,  be  further  amended to  increase  the  Company's  authorized
         capital  stock by  $32,500,000,  such  increase  to be  represented  by
         200,000  shares of Preferred  Stock of the par value of $100 each,  and
         2,500,000  shares of common stock of the par value of $5 each,  so that
         the total  amount of  authorized  capital  stock of the Company will be
         $110,000,000  represented by 600,000  shares of Preferred  Stock of the
         par value of $100 each and 10,000,000 shares of Common Stock of the par
         value of $5 each.

</TEXT>
</DOCUMENT>
