-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AEVDsofZWQjQMZeDAAvIJf0UR9xMP98Lruc387K/byM9gYYeiGV7fX5f3lYVKhzB h8jpwNrhe1HbQgff7yZA0w== 0000031224-94-000061.txt : 19940502 0000031224-94-000061.hdr.sgml : 19940502 ACCESSION NUMBER: 0000031224-94-000061 CONFORMED SUBMISSION TYPE: U5S PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN UTILITIES ASSOCIATES CENTRAL INDEX KEY: 0000031224 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 041271872 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U5S SEC ACT: 1935 Act SEC FILE NUMBER: 001-05366 FILM NUMBER: 94525041 BUSINESS ADDRESS: STREET 1: ONE LIBERTY SQ STREET 2: P O BOX 2333 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173579590 U5S 1 ANNUAL REPORT ON FORM U5S - 1993 PUHCA 1935 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. FORM U5S ANNUAL REPORT For the Year ended December 31, 1993 Filed pursuant to the Public Utility Holding Company Act of 1935 by Eastern Utilities Associates, P.O. Box 2333, Boston, Massachusetts 02107 04-1271872 (I.R.S. Employer Identification No.) FORM U5S-ANNUAL REPORT For the Calendar Year 1993 ITEMS ITEM 1. SYSTEM COMPANIES AND INVESTMENTS THEREIN AS OF DECEMBER 31, 1993
% of Name of Company Number of Common Voting Issuer Owner's (add_abbreviation_used_herein) __Shares_Owned__ _Power Book_Value Book_Value Eastern Utilities Associates Publicly Owned (1) $333,165,135 $ (EUA or the Association) EUA Service Corporation 1,000 100% (2) 4,915,103 4,915,103 (EUA Service) Blackstone Valley Electric 184,062 100% (2) 35,378,948 35,378,948 Company (Blackstone) Newport Electric Corporation 1,000,000 100% (2) 21,841,822 21,841,822 (Newport) Eastern Edison Company 2,891,357 100% (2) 223,005,067 223,005,067 (Eastern Edison) Montaup Electric Company 686,000 100% (3) 192,960,743 192,960,743 (Montaup) Preferred Stock (3) 1,500,000 1,500,000 Debenture Bonds (Unsecured) (3) 135,575,000 135,575,000 Pollution Control Bonds (Unsecured) - Net (3) 36,207,088 36,207,088 EUA Cogenex Corporation 1,000 100% (2) 39,270,351 39,270,351 (EUA Cogenex) EUA Onsite 50% (5) 2,700,730 2,700,730 Promissory Note 18,740,658 18,740,658 EUA Energy Capital and Services I 50% (5) 1,918,252 1,918,252 Promissory Note 5,484,574 5,484,574 EUA Energy Capital and Services II 50% (5) 2,895,540 2,895,480 Promissory Note 9,479,910 9,479,910 EUA ICC Partners 40% (5) (106,654) (106,654) Promissory Note 232,732 232,732 EUA Highland Energy Partners 50% (5) 227,364 227,364 Promissory Note 1,787,786 1,787,786 EUA FRC II Energy Partners 50% (6) 842,508 842,508 Promissory Note 15,575,105 15,575,105 Micro Utility Partners of America 50% (6) (1,347,460) (1,347,460) Promissory Note 4,957,513 4,957,513 EUA Energy Investment Corporation 100 100% (2) (4,142,016) (4,142,016) (EUA Energy) Eastern Unicord Corporation 1,000 100% (4) (1,840,000) (1,840,000) (Unicord) EUA Ocean State Corporation 1 100% (2) 16,567,834 16,567,834 (EUA Ocean State) Ocean State Power I 29.9% 29.9% (5)(7) 33,422,213 33,422,213 Ocean State Power II 29.9% 29.9% (5)(7) 26,467,166 26,467,166 *Eastern Edison Electric Company 100% (2) 1,000 1,000
_________ (1) Cumulative Voting. (2) Wholly-owned by EUA. (3) Wholly-owned by Eastern Edison. (4) Wholly-owned by EUA Energy. (5) General Partnership (6) Limited Partnership (7) Capital Contribution *Inactive ITEM 2. ACQUISITIONS OR SALES OF UTILITY ASSETS
Brief Description Name of Company of Transaction Consideration Exemptions ______(1)______ _______(2)_______ _____(3)_____ ____(4)___ Eastern Edison Sale of Land $74,802 44(b)(2) 63 Broad St. Bridgewater, MA
ITEM 3. ISSUE, SALE, PLEDGE, GUARANTEE OR ASSUMPTION OF SYSTEM SECURITIES (a)
Type of Maximum Amount Name of Name of Issuer Security Outstanding During 1993 Guarantor ______(1)_____ ___(2)__ _________(3)___________ ___(4)__ EUA Cogenex Unsecured Notes $ 50,000,000 (b) Eastern Edison First Mortgage Bonds (FMBs) $155,000,000 (c) 52(a) Eastern Edison Pollution Revenue Bonds $ 40,000,000 (c) 52(a) Eastern Edison Preferred Stock 300,000 shs.(c) 52(a) EUA Common Shares, $5 par 1,300,000 shs.(d)
(a) See Form 10-K, Schedule IX of EUA for 1993, File No. 1-5366 for Short-term Borrowings in 1993 (b) For Authorization see Release No. 35-25839, June 29, 1993 (c) For Authorization see Release No. 35-25851, July 9, 1993 (d) For Authorization see Release No. 35-25778, April 1, 1993 ITEM 4. ACQUISITION, REDEMPTION OR RETIREMENT OF SYSTEM SECURITIES
Name of Company Acquiring, Name of Issuer Redeeming Number of Shares or and or Retiring Principal Amount Title of Issue Securities Acquired, Redeemed, Consideration Authorization ______(1)______ ______(2)_____ __or_Retired_(3)___ _____(4)_____ _____(5)_____ Newport: Newport Preferred Stock, $100 par value: 9.75% issue 1,000 shs. $ 100,000 (b) First Mortgage Bonds: 8.95% due 2001 $ 650,000 $ 650,000 (b) 11.50% due 1997 $1,400,000 $1,471,680 (b) 10.00% due 1998 $ 600,000 $ 615,900 (b) Small Business Administration Loan: 6.5% due 2005 $ 71,145 $ 71,145 (b) Promissory Note: 12.00% due 1993 $ 6,785 $ 6,785 (b) Eastern Edison: Eastern Edison Preferred Stock, $100 par value: 9.00% issue 126,000 shs. $13,450,500 (a)(b)(c) 9.80% issue 200,000 shs. 21,352,400 (a)(b)(c) 8.32% issue 30,000 shs. 3,106,200 (c) 4.64% issue 60,000 shs. 6,178,800 (c) Secured Medium Term Notes: 4.50% due 1993 $ 5,000,000 $ 5,000,000 (a) First Mortgage Bonds: 6.5% due 1997 $ 7,000,000 $ 7,061,600 (c) 10.125% due 1997 $35,000,000 $35,941,500 (c) 9.875% due 1998 $40,000,000 $41,708,000 (c) 8.375% due 1999 $ 5,000,000 $ 5,089,000 (c) 7.875% due 2002 $ 8,000,000 $ 8,218,400 (c) 8.375% due 2003 $10,000,000 $10,356,000 (c) 9.625% due 2016 $55,000,000 $58,498,000 (c) Pollution Control Revenue Bonds: 10.125% $40,000,000 $41,200,000 (c) Montaup: Montaup Debentures: 10.125% due 2008 $ 1,858,000 $ 1,858,000 (c) EUA Service: EUA Service Secured Notes: 10.20% due 2008 $ 2,200,000 $ 2,200,000 (b) EUA Ocean State: EUA Ocean State Unsecured Notes: 9.59% due 2011 $ 4,881,000 $ 4,881,143 (b)
(a) Rule 42 (b) (2) (b) Rule 42 (b) (4) (c) For Authorization, see Release No. 35-25379, September 19, 1991 ITEM 5. INVESTMENTS IN SECURITIES OF NONSYSTEM COMPANIES (1)
% of Number of Shares Voting or Principal Book Name of Owner Name of Issuer Security Owned Power Amount Owned Value ____(1)______ ______(2)_____ ______(3)_____ __(4)_ ______(5)_______ _(6)_ Eastern Edison Aggregate number of $ 50,405 investments-six (6) Montaup Electric Yankee Atomic Capital Stock 4.5 6,903 shares 1,081,101 Electric Co. * " " Conn. Yankee Capital Stock 4.5 15,750 shares 4,486,747 Atomic Power Co. * " " Vermont Yankee Capital Stock 2.5 9,801 shares 1,361,867 Nuclear Power Corp. * " " Maine Yankee Capital Stock 4.0 20,000 shares 2,761,831 Atomic Power Co. * " " NH Hydro Trans. Capital Stock 3.3 130,812 shares 2,371,494 Electric Co. ** " " NH Hydro Capital Stock 3.3 752,169 shares 1,361,550 Trans. Corp. **
___________ *Regional nuclear generating company. **Owner of Transmission Facilities. Item 6. Officers and Directors Part I. As of December 31, 1993. ___________Names_of_System_Companies_with_which_Connected___________
Blackstone Eastern EUA Valley Newport Eastern Utilities Service Electric Electric Edison Associates Corporation Company___ Corporation Company Elizabeth J. Alden P.O. Box 510 D Brockton, MA 02403 Henry J. Blais III 150 Main Street D Pawtucket, RI 02862 Russell A. Boss One Albion Road TR Lincoln, RI 02865 Richard M. Burns One Liberty Square Comp, AS, AT D, Comp, AT, VP, AT, AS VP, AT VP, AT, AC Boston, MA 02109 AS, AC, VP John D. Carney 110 Mulberry Street D, VP D, P Brockton, MA 02403 Paul J. Choquette, Jr. 7 Jackson Walkway TR Providence, RI 02940 John E. Conway 137 Washington Street TR D Norwell, MA 02061 Peter S. Damon P. O. Box 450 TR D Middletown, RI 02842 Richard P. Eannarino 20 Thurben Blvd Smithfield, RI 02917 John F.G. Eichorn, Jr. 1531 Georgina Avenue TR Santa Monica, CA 90402 Joseph F. Fitzpatrick Boott Mills South D, VP 100 Foot of John Street Lowell, MA 01852 Peter B. Freeman 100 Alumni Drive TR D Providence, RI 02906 Robert W. Giggey P.O. Box 2980 D Fall River, MA 02722 David H. Gulvin Washington Highway D, VP D, P Lincoln, RI 02865 Barbara A. Hassan 110 Mulberry Street VP Brockton, MA 02403 Arthur A. Hatch One Liberty Square EVP D, EVP D, EVP D, EVP D, EVP Boston, MA 02109 Robert J. Healey Friendship Street D Newport, RI 02840 Clifford J. Hebert, Jr. One Liberty Square T T T T T Boston, MA 02109 Michael J. Hirsh Washington Highway VP Lincoln, RI 02865 Ann L. Hogan 65 Carter Avenue D Pawtucket, RI 02861 Robert W. Lavoie 110 Mulberry Street VP Brockton, MA 02403 Arthur P. Lennon 704 Executive Blvd. Valley Cottage, NY 10989 Edward T. Liston Boott Mills South 100 Foot of John Street Lowell, MA 01852 Wesley W. Marple 413 Hayden Hall TR Northeastern University Boston, MA 02115 John S. Meschisen One Liberty Square D, VP D, VP D, VP D, VP Boston, MA 02109 Herbert L. Miller 35 Follett Street D Cumberland, RI 02864 William F. O'Connor One Liberty Square S D, VP, S, C S S C Boston, MA 02109 Basil G. Pallone Booth Mills South 100 Foot of John Street Lowell, MA 01852 Donald G. Pardus One Liberty Square TR, CH, CEO D, CH D, CH D, CH D, CH Boston, MA 02109 Paul R. Pinkham P.O. Box 543 VP W. Bridgewater, MA 02379 Robert G. Powderly P.O. Box 543 EVP D, EVP D, EVP D, EVP D, EVP W. Bridgewater, MA 02379 Donald H. Ramsbottom University of Mass. D Dartmouth Foundation Old Westport Road No. Dartmouth, MA 02747 Larry D. Settle P.O. Box 4128 VP, AT Middletown, RI 02840 Margaret M. Stapleton P. O. Box 111 TR Boston, MA 02115 John R. Stevens One Liberty Square TR, COO, P D, P D, VCH D, VCH D, VCH Boston, MA 02109 W. Nicholas Thorndike 150 Dudley Street TR Brookline, MA 02146 Mark S. White Boott Mills South 100 Foot of John Street Lowell, MA 01852
Item 6. Officers and Directors - Continued Part I. As of December 31, 1993.
______Names_of_System_Companies_with_which_Connected____ Montaup EUA EUA Energy EUA Electric Cogenex Investment Ocean State Company_ Corporation Corporation Corporation Elizabeth J. Alden P.O. Box 510 Brockton, MA 02403 Henry J. Blais III 150 Main Street, Pawtucket, RI 02862 Russell A. Boss One Albion Road Lincoln, RI 02865 Richard M. Burns One Liberty Square, D, VP, D, Comp, AT D, VP, AT, AC AT Boston, MA 02109 AT, AC John D. Carney 110 Mulberry Street D, VP Brockton, MA 02403 Paul J. Choquette, Jr. 7 Jackson Walkway Providence, RI 02940 John E. Conway 137 Washington Street Norwell, MA 02061 Peter S. Damon P. O. Box 450 Middletown, RI 02842 Richard P. Eannarino 20 Thurben Blvd VP Smithfield, RI 02917 John F.G. Eichorn, Jr. 1531 Georgina Avenue Santa Monica, CA 90402 Joseph F. Fitzpatrick Boott Mills South D, P 100 Foot of John Street Lowell, MA 01852 Peter B. Freeman 100 Alumni Drive Providence, RI 02960 Robert W. Giggey P.O. Box 2980 Fall River, MA 02722 David H. Gulvin Washington Highway D, VP Lincoln, RI 02865 Barbara A. Hassan 110 Mulberry Street Brockton, MA 02403 Arthur A. Hatch One Liberty Square D, EVP D, EVP D, EVP D, EVP Boston, MA 02109 Robert J. Healey Friendship Street Newport, RI 02840 Clifford J. Hebert, Jr. One Liberty Square T T, AC T T Boston, MA 02109 Michael J. Hirsh Washington Highway Lincoln, RI 02865 Ann L. Hogan 65 Carter Avenue Pawtucket, RI 02861 Robert W. Lavoie 110 Mulberry Street Brockton, MA 02403 Arthur P. Lennon 704 Executive Blvd. VP Valley Cottage, NY 10989 Edward Liston Boott Mills South VP 100 Foot of John Street Lowell, MA 01852 Wesley W. Marple 413 Hayden Hall Northeastern University Boston, MA 02115 John S. Meschisen One Liberty Square D, VP Boston, MA 02109 Herbert L. Miller 35 Follett Street Cumberland, RI 02864 William F. O'Connor One Liberty Square D, C D, C D, C S Boston, MA 02109 Basil G. Pallone Boott Mills South VP 100 Foot of John Street Lowell, MA 01852 Donald G. Pardus One Liberty Square D, CH D, CH D, CH D, CH Boston, MA 02109 Paul R. Pinkham P. O. Box 543 W. Bridgewater, MA 02379 Robert G. Powderly P.O. Box 543 D, EVP D, EVP D, EVP D, EVP W. Bridgewater, MA 02379 Donald H. Ramsbottom University of Mass. Dartmouth Foundation Old Westport Road No. Dartmouth, MA 02747 Larry D. Settle P.O. Box 4128 Middletown, RI 02840 Margaret M. Stapleton P. O. Box 111 Boston, MA 02115 John R. Stevens One Liberty Square D, P D, VCH D, P D, P Boston, MA 02109 W. Nicholas Thorndike 150 Dudley Street Brookline, MA 02146 Mark S. White Boott Mills South VP 100 Foot of John Street Lowell, MA 01852 KEY CH - Chairman of the Board T - Treasurer C - Clerk VCH - Vice Chairman of the Board TR - Trustee AC - Assistant Clerk P - President Comp - Comptroller D - Director EVP - Executive Vice President AT - Assistant Treasurer CEO - Chief Executive Officer SVP - Senior Vice President S - Secretary COO - Chief Operating Officer VP - Vice President AS - Assistant Secretary
Part II. As of December 31, 1993.
Position Held Name of Name and Location of in Financial Applicable Officer or Director Financial Institution Institution Exemption Rule ________(1)________ _________(2)_________ _____(3)____ _____(4)______ Russell A. Boss Fleet National Bank Trustee Rule 70(a) Providence, RI Paul J. Choquette, Jr. Fleet Financial Group Trustee Rule 70(a) Providence, RI Peter S. Damon Bank of Newport Trustee Rule 70(a)
_____________________ (Note: In the answer to this part II of Item 6, the phrase "financial connection within the provisions of Section 17(c) of the Act" is regarded as being limited by the definitions in Paragraph (h) of Rule 70 under the Act as in effect at December 31, 1993.) Part III. (A)Information is set out below as to cash compensation paid by the Association and its subsidiaries for the years 1993, 1992 and 1991 to each of the five highest paid executive officers of each Company whose aggregate cash compensation for the year exceeded $100,000.
Long-Term All Compensation Other Name and Annual Compensation Restricted Compen- Principal Fiscal Incentive Stock sation Position Year Salary __Bonus__ Other(1) Awards(2) (3) EUA Service Corporation Donald G. Pardus 1993 $375,025 $137,500 $ 8,444 $ - $8,438 Chairman 1992 350,025 100,000 7,795 210,000 7,000 1991 335,025 70,000 - - - John R. Stevens 1993 275,025 107,500 12,071 - 6,188 President 1992 253,025 90,000 10,441 165,000 5,060 1991 238,025 45,000 - - - Arthur A. Hatch 1993 198,025 56,677 9,132 - 4,455 Executive Vice 1992 186,025 35,433 6,157 82,376 3,720 President 1991 177,025 24,375 - - - Robert G. Powderly 1993 143,025 44,559 8,710 - 3,218 Executive Vice 1992 122,825 24,194 9,241 66,606 2,456 President 1991 108,925 9,918 - - - Richard M. Burns 1993 125,025 25,621 - - 2,188 Comptroller 1992 117,125 35,000(4) - 34,373 1,186 1991 111,125 6,756 - - - Eastern Edison Company John D. Carney 1993 $134,025 $38,867 $6,618 $ - $3,015 President 1992 126,025 24,003 3,443 60,616 2,520 1991 113,025 10,170 - - - Barbara A. Hassan 1993 101,025 23,343 - - 2,272 Vice President 1992 91,025 11,557 - - 1,668 1991 84,025 5,040 - - - Robert W. Lavoie 1993 100,758 21,352 - - 2,269 Vice President 1992 94,925 12,179 - - 1,898 1991 88,942 5,394 - - - Blackstone Valley Electric Company David H. Gulvin 1993 $126,625 $ 37,497 $2,978 $ - $2,848 President 1992 112,775 21,831 1,364 51,569 2,255 1991 100,558 9,648 - - - Michael J. Hirsh 1993 98,275 21,146 - - 2,218 Vice President 1992 92,725 12,116 - - 1,854 1991 85,275 5,400 - - - Newport Electric Corporation Larry D. Settle 1993 $105,000 $12,941 - - $3,221 Vice President 1992 100,938 12,941 - - 2,018 1991 91,385 5,877 - - - EUA Cogenex Corporation Joseph S. Fitzpatrick 1993 $136,993 $58,097 $3,917 - $3,834 President 1992 120,225 45,075(6) 3,765 $27,302(5) 2,404 1991 104,225 52,000 - - - Richard P. Eannarino 1993 150,045 - - - 1,543 Vice President 1992 - - - - - 1991 - - - - - Edward J. Liston 1993 120,525 40,588 2,372 - 3,376 Vice President 1992 105,525 31,650(6) 2,640 24,144(5) 2,109 1991 91,539 36,606 - - - Arthur P. Lennon 1993 119,400 40,588 1,552 - 3,457 Vice President 1992 103,825 31,140(6) 1,556 23,105(5) 2,076 1991 94,840 37,926 - - - Mark S. White 1993 84,657 21,542 4,603 - - Vice President 1992 74,848 20,000 3,611 8,150 - 1991 65,439 9,796 2,053 - -
___________________ (1) Represents amounts reimbursed for tax liability accruing as a result of personal use of company-owned automobiles. (2) Aggregate amount and value (including the value reflected in the table under "Restricted Stock Awards") of shares granted under Association's Restricted Stock Plan to the officers listed above are as follows: Mr. Pardus, 13,607 shares, $314,148; Mr. Stevens, 9,798 shares, $218,652; Mr. Hatch, 5,433 shares, $124,982; Mr. Powderly, 3,919 shares, $87,120; Mr. Burns, 1,687 shares, $34,373; Mr. Carney, 3,725 shares, $84,286; and, Mr. Gulvin, 3,181 shares, $72,030. (3) Contributions made under the Association's Employees' Savings Plan. (footnotes continued on next page) (4) Includes a bonus received by Mr. Burns in addition to his 1992 Incentive Plan Bonus for extraordinary effort during the year. (5) Aggregate amount and value (including the value reflected in the table under "Restricted Stock Awards") of shares granted under Restricted Stock Plans to the officers listed above is as follows: Mr. Fitzpatrick, 2,290 shares, $57,285; Mr. Liston, 1,185 shares, $24,144; Mr. Lennon, 1,134 shares, $23,105; and, Mr. White, 400 shares, $8,180. (6) Compensation received that was received after the publication of this report for 1992. (B) Securities Interest Common Shares of the Association Beneficially_Owned_at_January_7,_1994(a)
Executive Employees Stock Savings Grant (b) __Plan___ __Plan___ Total Henry J. Blais, III 84 1,342 - - 1,425(c) Russell A. Boss 1,000 - - - 1,000(d) Richard M. Burns 179 - 75 1,687 1,941 John D. Carney 387 - 641 3,725 4,753 John E. Conway - 3,168 - - 3,168 Paul J. Choquette 511 - - - 511 Peter S. Damon - 392 - - 392 John F. G. Eichorn, Jr. 4,460 - - - 4,460 Joseph S. Fitzpatrick 472 - 546 2,290 3,307 Peter B. Freeman 2,190 - - - 2,190 David H. Gulvin 479 885 612 3,181 5,158 Arthur A. Hatch 1,408 244 1,832 5,433 8,918 Wesley W. Marple 885 - - - 885(e) John S. Meschisen - - 1,716 - 1,716 William F. O'Connor 166(f) - 2,603 - 2,769 Donald G. Pardus 977 3,631 3,649 13,607 21,864 Robert G. Powderly 725(f) 125 1,003 3,919 5,771 Margaret M. Stapleton 1,156 - - - 1,156 John R. Stevens 1,449 - 1,098 9,798 12,345 W. Nicholas Thorndike 1,668 - - - 1,668 Directors and Officers as a Group(g) 19,436 1,337 23,089 49,550 102,417(g)
(a) Unless otherwise indicated, beneficial ownership is based on sole investment and voting power. Each individual's ownership represents less than two-tenths of one percent of the outstanding common shares of the Association. (b) Jointly owned with spouse. (c) In addition, Mr. Blais is a partner in the law firm of Blais Cunningham & Crowe Chester which owns 750 common shares of EUA. Beneficial ownership of these shares may be attributed to Mr. Blais, although he disclaims such beneficial ownership. (d) In addition, Mr. Boss owns 5 shares of Blackstone Valley Electric Company's 4.25% Preferred Stock. (e) In addition, Mr. Marple's spouse owns 263 EUA common shares. Mr. Marple disclaims any beneficial interest in such shares. (f) Includes shares held in a fiduciary capacity. (g) Represents less than one percent of the outstanding common shares of the Association. (C) Contracts and Transactions with System Companies See Section (E) below regarding severance agreements. (D) Indebtedness to System Companies None (E) The Employees' Retirement Plan of Eastern Utilities Associates and its Subsidiary Companies (the Plan) is a tax-qualified defined benefit plan available to eligible employees who have completed one year of service and have attained the age of twenty-one. The officers named in the remuneration table above participate in the Plan. Trustees and Directors who are not also employees of EUA and its Subsidiaries (EUA System) are not covered by the Plan. The benefits of participants become fully vested after five years of service. Annual lifetime benefits are determined under formulas applicable to all employees regardless of position and the amounts depend on length of credited service and salaries prior to retirement. Benefits are equal to one and six tenths percent of salaries (averaged over the four years preceding retirement) for each year of credited service up to thirty-five, reduced for each such year by one and two tenths percent of the participant's estimated age sixty-five Social Security benefit, plus seventy-five hundredths percent of salaries for each year of credited service in excess of thirty-five years up to the Plan maximum of forty years. Any contributions to provide benefits under the Plan are made by the EUA System in amounts determined by the Plan's actuaries to meet the funding standards established by the Employee Retirement Income Security Act of 1974, as amended. Any contributions are actuarially determined and cannot appropriately be allocated to individual participants. The annual benefits shown in the tables below are straight life annuity amounts, without reduction for primary Social Security benefits as described above. Federal law limits the annual benefits payable from qualified pension plans in the form of a life annuity, after reduction for Social Security benefits, to $115,641 plus adjustments for increases in the cost of living. The number of years of service credited at present under the Plan to Messrs. Burns, Carney, Fitzpatrick, Gulvin, Ms. Hassan, Hatch, Hirsh, Lavoie, Lennon, Liston, Pardus, Powderly, Settle, Stevens and White are 18, 27, 5, 34, 23, 40, 16, 32, 6, 6, 31, 14, 28, 28 and 8, respectively. Average Annual ____________________Years_of_Service________________________ _____Salary____ ____15________20________25________30________35_________40___ $100,000 $ 24,000 $ 32,000 $ 40,000 $ 48,000 $ 56,000 $ 59,750 200,000 48,000 64,000 80,000 96,000 112,000 119,500 300,000 72,000 96,000 120,000 144,000 168,000 179,250 400,000 96,000 128,000 160,000 192,000 224,000 239,000 500,000 120,000 160,000 200,000 240,000 280,000 298,750 600,000 144,000 192,000 240,000 288,000 336,000 358,500 The Association has a non-qualified supplemental retirement plan for certain officers of the Association and its Subsidiaries. The plan provides for the annual payment of supplemental retirement benefits equal to 25% of the officer's base salary when he retires, for a period of fifteen (15) years following the date of retirement. In addition, in the event of the death of the participant prior to retirement an amount equal to 200% of the officer's base salary at that time will be paid to his beneficiary. The Association, and its employer Subsidiaries through its Subsidiary, EUA Service Corporation, maintain life insurance on the participants, to fund, in whole or in part, all of their future liabilities under the plan, and that Corporation is the owner and beneficiary of all such life insurance. Any amounts not covered by insurance will be paid out of other funds available to the Association and/or its subsidiaries. In the event of a change in control of the EUA System, a trust fund will be established by the EUA System to ensure the performance of its payments under the supplemental retirement plan. The Association maintains a non-qualified, unfunded Retirement and Savings Restoration Plan ("The Restoration Plan"). The purpose of the Restoration Plan is to restore benefits under the qualified plans' formulas which can not be paid from, or into, the qualified plan trusts due to federal limitations on either earnings, contributions or benefits. Payments or contributions which exceed the applicable federal limitations are made outside the qualified plans in the same manner and under the same conditions as are applicable to benefits payable from, or contributions payable to, the qualified plans. In the event of a change in control of the Association, a trust fund will be established by the Association to ensure the performance of its payment obligations under the Restoration Plan. Severance agreements with certain executive officers of the Association and its subsidiaries, including each of the executive officers named in the above table agreements provide that an officer's stipulated compensation, benefits, position, responsibilities and other conditions of employment will not be reduced during the term of the agreement, which is thirty-six months commencing upon the date on which a Change in Control, as defined in the agreements, of the Association occurs. If within thirty-six months after a Change in Control the officer's employment is terminated for any reason other than Cause, as defined, the Association will, subject to certain limitations to comply with provisions of the Internal Revenue Code, pay the officer within five business days a lump-sum cash amount equal to three times the present value of such officer's annualized total compensation, continue or vest certain fringe benefits and common share grants, and reimburse legal fees and expenses incurred as a result of the termination or to enforce the provisions of the severance agreement. If the officer leaves the employ of the Association or a subsidiary following a reduction in his position, compensation, responsibilities, authority or other benefits existing prior to the Change in Control, or suffers a relocation of regular employment of more than fifty miles, such departure will be deemed to be a termination for reasons other than Cause. (F) Rights to Indemnity Article 32 of EUA's Declaration of Trust, as set forth in Exhibit B-1(a), to Form U5S of EUA for the year ended December 31, 1986 is incorporated herein by reference. ITEM 7. CONTRIBUTIONS AND PUBLIC RELATIONS
Accounts Charged if any, Per Books Name of Recipient of Disbursing Name of Company of Beneficiary Purpose Company Amount ______(1)______ _______(2)_______ __(3)__ _______(4)_______ __(5)__ Montaup Various payments Lobbying 426.4 $ 6,791 under $1,000 Expenditures Eastern Edison Edison Electric Lobbying 426.4 $ 808 Institute Expenditures Blackstone Edison Electric Lobbying 426.4 $ 410 Institute Expenditures Blackstone Metro South Legislative 426.4 $ 18 Chamber of activity Commerce Blackstone RI Chamber of Legislative 426.1 $ 1,820 Commerce activity Newport Electric Edison Electric Lobbying 426.4 $ 65 Institute Expenditures Newport Electric RI Chamber Legislative 426.1 $ 170 of Commerce activity
ITEM 8. SERVICE, SALES AND CONSTRUCTION CONTRACTS Part I. Trans Serving Receiving Date of actions Company _Company_ Contract Compensation All applicable services are disclosed in the EUA Service Corporation's annual filing under the 1935 Act on Form U-13-60 for the same fiscal period as this report. Part II. No Part III. No Company Company Performing Receiving Scope of _Service__ _Service_ Services Compensation None ITEM 9. WHOLESALE GENERATORS AND FOREIGN UTILITY COMPANIES None ITEM 10. FINANCIAL STATEMENTS AND EXHIBITS (*Filed herewith) The following financial statements and supplemental schedules are filed as a part of this Annual Report. FINANCIAL STATEMENTS 1 - Consolidating Balance Sheets - December 31, 1993. 2 - Consolidating Statements of Capitalization - December 31, 1993. 3 - Consolidating Income Statements for the year ended December 31, 1993. 4 - Consolidating Statements of Cash Flows for the year ended December 31, 1993. 5 - Consolidating Statements of Retained Earnings and Other Paid-In Capital for the year ended December 31, 1993. 6 - Notes to Financial Statements Exhibits Exhibit A - (incorporated herein by reference) A-1 Form 10-K of EUA for 1993 (including Annual Report to Shareholders and Proxy Statement, portions of which are incorporated therein by reference; File No. 1-5366). A-2 Form 10-K of Eastern Edison for 1993 (File No. 0-8480). A-3 Form 10-K of Blackstone for 1993 (File No. 0-2602). Exhibit B - B-1 Declaration of Trust of EUA, dated April 2, 1928, as amended (Exhibit A-3, File No. 70-3188; Exhibit 1 to EUA's 8-K reports for April in each of the years 1957, 1962, 1966, 1968, 1972, and 1973, File No. 1-5366; Exhibit A-1 (a), Amendment No. 2 to Form U-1, File No. 70-5997, Exhibit 4-3, Registration No. 2-72589; Exhibit 1 to Certificate of Notification, File No. 70-6713; Exhibit 1 to Certificate of Notification, File No. 70-7084; Exhibit 3-2, Form 10-K of EUA for 1987, File No. 1-5366). B-2 Charter of Blackstone (formerly Blackstone Valley Gas and Electric Company), as amended (Exhibit (a)(1) and (a)(2), Form 1-A filed March, 1957, File No. 24B-970; Exhibit A-2, Form U5S of Eastern Utilities Associates ("EUA") for the year 1958, File No. 1-5366; Exhibit (1), Form 8-K for March, 1965 File No. 0-2602; Exhibit A-2, Form U5S of EUA for the year 1966, File No. 1-5366 and Exhibit (1), Form 8-K for June 1976, File No. 0-2602; Exhibit (1), Form 10-Q for quarter ended June 30, 1988, File No. 0-2602); Exhibit 3-3, Form 10-K of Blackstone for 1989, File No. 0-2602). B-3 By-laws of Blackstone, (Exhibit A-2, Form U-1 filed October 16, 1990, File No. 70-7769). *B-4 Restated and Amended Articles of Organization of Eastern Edison dated August 4, 1993. B-5 By-laws of Eastern Edison, as amended (Exhibit 3-2, Form 10-K of Eastern Edison for 1980, File No. 0-8480). B-6 Charter of Montaup Electric Company ("Montaup"), as amended (Exhibits A-6(a), A-6(b) and A-6(c) to Post Effective Amendment No. 18 to Form U-1, File No. 70-5388; Exhibit 3, Form 10-K of EUA for 1977, File No. 1-5366; and Exhibit 6 to Form U5S of EUA for 1979). B-7 By-laws of Montaup, as amended (Exhibit 4, Form 10-K of EUA for 1977, File No. 1-5366). B-8 Charter of EUA Service Corporation (Exhibit A-1, File No. 37-67). B-9 By-laws of EUA Service Corporation, as amended (Exhibit 2, Form 10-K of EUA for 1977, File No. 1-5366). B-10 Charter of EUA Cogenex Corporation, as amended (Exhibit A-1, File No. 70-7287, Exhibit B-15 to Form U5S of EUA for 1986). B-11 By-Laws of EUA Cogenex Corporation, as amended (Exhibit A-2, File No. 70-7287, to Form U5S of EUA for 1986). B-12 Agreement of Limited Partnership among Onsite Energy and EUA Cogenex Corporation dated as of November 30, 1988 (Exhibit A-4 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-13 EUA/FRCII Energy Associates Agreement of Limited Partnership dated as of September 19, 1989 (Exhibit A-5 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-14 Micro Utility Partners of America, L.P., Agreement of Limited Partnership dated as of December 20, 1988 (Exhibit A-6 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-15 Energy Capital and Services I, LP, Agreement of Limited Partnership dated as of April 10, 1990 (Exhibit A-7 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-16 EUA/ICC Agreement of Limited Partnership dated as of June 1, 1989 (Exhibit A-8 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-17 EUA/SYCOM General Partnership Agreement dated as of September 20, 1989 (Exhibit A-9 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-18 EUA/Highland Energy Partners, Agreement of Limited Partnership dated as of September 27, 1990 (Exhibit A-10 to Post-Effective Amendment No. 3 of Form U-1, File No. 70-7825, dated October 21, 1991). B-19 Articles of Incorporation of EUA Energy Investment Corporation (Exhibit B-14 to Form U5S of EUA for 1987). B-20 By-Laws of EUA Energy Investment Corporation (Exhibit B-15 to Form U5S of EUA for 1987). B-21 Articles of Incorporation of EUA Ocean State Corporation (Exhibit B-16 to Form U5S of EUA for 1988). B-22 By-Laws of EUA Ocean State Corporation (Exhibit B-17 to Form U5S of EUA for 1988). B-23 Charter of Newport, as amended (Exhibit B-18 to Form U5S of EUA for 1990). B-24 By-Laws of Newport (Exhibit B-19 to Form U5S of EUA for 1990). B-25 Ocean State Power Amended and Restated General Partnership Agreement among EUA Ocean State, Ocean State Power Company, TCPL Power Ltd., Narragansett Energy Resources Company and NECO Power, Inc. (collectively, the "OSP Partners") dated as of December 2, 1988, and First Amendment thereto dated as of March 27, 1989 (Exhibit 10-107, Form 10-K of EUA for 1989, File No. 1-5366). B-26 Ocean State Power II Amended and Restated General Partnership Agreement among EUA Ocean State, JMC Ocean State Corporation, Makowski Power, Inc., TCPL Power Ltd., Narragansett Energy Resources Company and Newport Electric Power Corporation (collectively, the "OSP II Partners") dated as of September 29, 1989 (Exhibit 10-110, Form 10-K of EUA for 1989, File No. 1-5366). Exhibit C - (a) C-1 Form of 8% Debenture Bonds due 2000 of Montaup (Exhibit 4-10, Registration File No. 2-41488). C-2 Form of 8-1/4% Debenture Bonds due 2003 of Montaup (Exhibit B-3, Form U5S of EUA for year 1973). C-3 Form of 14% Debenture Bonds due 2005 of Montaup (Exhibit 4-11, Registration No. 2-55990). C-4 Form of 10% Debenture Bonds due 2008 of Montaup (Exhibit 5-3, Registration No. 2-65785). C-5 Form of 16-1/2% Debenture Bonds due 2010 of Montaup (Exhibit 4-11, Form 10-K of EUA for 1980, File No. 1-5366). C-6 Form of 12-3/8% Debenture Bonds due 2013 of Montaup (Exhibit 4-13, Form 10-K of EUA for 1983, File No. 1-5366). C-7 Form of 9% Debenture Bonds due 2020 of Montaup (Exhibit 4-10, Form 10-K of Eastern Edison for 1990, File No. 0-8480). C-8 Form of 9-3/8% Debenture Bonds due 2020 of Montaup (Exhibit 4-11, Form 10-K of Eastern Edison for 1990, File No. 0-8480). C-9 Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 of Eastern Edison (Exhibit 4-1, Registration No. 2-77468). C-10 First Supplemental Indenture dated as of February 1, 1953 of Eastern Edison (Exhibit A, File No. 70-3015). C-11 Second Supplemental Indenture dated as of May 1, 1954 of Eastern Edison (Exhibit A-3, File No. 70-3371). C-12 Third Supplemental Indenture dated as of June 1, 1955 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-3371). C-13 Fourth Supplemental Indenture dated as of September 1, 1957 of Eastern Edison (Exhibit D to Certificate of Notification, File No. 70-3619). C-14 Fifth Supplemental Indenture dated as of April 1, 1959 of Eastern Edison (Exhibit D to Certificate of Notification, File No. 70-3798). C-15 Sixth Supplemental Indenture dated as of October 1, 1963 of Eastern Edison (Exhibit F to Certificate of Notification, File No. 70-4164). C-16 Seventh Supplemental Indenture dated as of June 1, 1969 of Eastern Edison (Exhibit D to Certificate of Notification, File No. 70-4748). C-17 Eighth Supplemental Indenture dated as of July 1, 1972 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-5195). C-18 Ninth Supplemental Indenture dated as of September 1, 1973 of Eastern Edison (Exhibit F to Certificate of Notification, File No. 70-5379). C-19 Tenth Supplemental Indenture dated as of October 1, 1975 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-5719). C-20 Eleventh Supplemental Indenture dated as of January 1, 1979 of Eastern Edison (Exhibit 5-24, Registration No. 2-65785). C-21 Twelfth Supplemental Indenture dated as of October 1, 1980 of Eastern Edison (Exhibit F to Certificate of Notification, File No. 70-6463). C-22 Thirteenth Supplemental Indenture dated as of July 1, 1981 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-6608). C-23 Fourteenth Supplemental Indenture dated as of June 1, 1982 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-6737). C-24 Fifteenth Supplemental Indenture dated as of August 1, 1983 of Eastern Edison (Exhibit F to Certificate of Notification, File No. 70-6851). C-25 Sixteenth Supplemental Indenture dated as of September 1, 1984 of Eastern Edison (Exhibit 4-31, Form 10-K of EUA for 1984, File No. 1-5366). C-26 Seventeenth Supplemental Indenture dated as of July 1, 1986 of Eastern Edison. (Exhibit F to Certificate of Notification, File No. 70-7254). C-27 Eighteenth Supplemental Indenture dated as of June 1, 1987 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-7373). C-28 Nineteenth Supplemental Indenture dated as of November 1, 1987 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-7373). C-29 Twentieth Supplemental Indenture dated as of May 1, 1988 of Eastern Edison (Exhibit C to Certificate of Notification, File No. 70-7373). C-30 Twenty-first Supplemental Indenture dated as of September 1, 1988 of Eastern Edison (Exhibit F to Certificate of Notification, File No. 70-7511). C-31 Twenty-second Supplemental Indenture dated as of December 1, 1990 of Eastern Edison (Exhibit 4-34, Form 10-K of Eastern Edison for 1990, File No. 0-8480). C-32 Twenty-third Supplemental Indenture dated as of July 1, 1992 of Eastern Edison (Exhibit 4-24, Form 10-K of Eastern Edison for 1992, File No. 0-8480). *C-33 Twenty-Fourth Supplemental Indenture of Eastern Edison dated as of May 1, 1993. *C-34 Twenty-Fifth Supplemental Indenture of Eastern Edison dated as of July 1, 1993. *C-35 Twenty-Fifth Supplemental Indenture of Eastern Edison dated as of September 1, 1993. C-36 Indenture dated as of December 1, 1990 of Eastern Edison with Citibank, N.A., as Trustee (Exhibit 4-35, Form 10-K of Eastern Edison for 1990, File No. 0-8480). C-37 Form of Eastern Edison Medium Term Note (Exhibit 4-36, Form 10-K of Eastern Edison for 1990, File No. 0-8480). C-38 First Mortgage Indenture and Deed of Trust dated as of December 1, 1980 of Blackstone (Exhibit A, Form 8-K of EUA dated January 14, 1981, File No. 1-5366). C-39 First Supplemental Indenture dated as of August 1, 1989 of Blackstone (Exhibit 4-33, Form 10-K of EUA for 1989, File 1-5366). C-40 Second Supplemental Indenture dated as of November 26, 1990 of Blackstone (Exhibit 4-3, Form 10-K of BVE for 1990, File No. 0-2602). C-41 Loan Agreement between Rhode Island Industrial Facilities Corporation and Blackstone dated as of December 1, 1984 (Exhibit 10-72, Form 10-K of EUA for 1984, File No. 1-5366). C-42 Note Purchase Agreement dated as of January 13, 1988 of Service (Exhibit 4-38, Form 10-K of EUA for 1987, File No. 1-5366). C-43 Note Agreement dated as of June 28, 1990 of EUA Cogenex with the Prudential Insurance Company of America (Exhibit 4-46, Form 10-K of EUA for 1990, File No. 1-5366). C-44 Note Agreement dated as of October 29, 1991 between EUA Cogenex and Prudential Insurance Company of America (Exhibit 4-55, Form 10-K of EUA for 1991, File No. 1-5366). C-45 Note Purchase Agreement dated as of September 29, 1992 of EUA Cogenex and the Prudential Life Insurance Company of America (Exhibit 4-44 to Form 10-K of EUA for 1992, File No. 1-5366). C-46 Guaranty, dated June 28, 1990, made by Eastern Utilities Associates in favor of The Prudential Insurance Company of America (Exhibit B-2 to Form U-1, File No. 70-7655, dated June 14, 1990). C-47 Indenture of First Mortgage dated as of June 1, 1954 of Newport, as supplemented on August 1, 1959, April 1, 1962, October 1, 1964, April 1, 1967, September 1, 1969, September 1, 1970, June 1, 1978, October 1, 1978, May 1, 1986, December 1, 1987 and November 1, 1989 (Exhibit 4-49, Form 10-K of EUA for 1990, File No. 1-5366). C-48 United States Government Small Business Administration Loan to Newport entitled, "Base Closing Economic Injury Loan", signed May 30, 1975 and amended on October 6, 1983 (Exhibit 4-50, Form 10-K of EUA for 1990, File No. 1-5366). C-49 Indenture of Second Mortgage dated as of September 1, 1982 of Newport, as supplemented on December 1, 1988 (Exhibit 4-51, Form 10-K of EUA for 1990, File No. 1-5366). C-50 Loan Agreement between Rhode Island Port Authority and Economic Development Corporation and Newport dated as of September 1, 1982 (Exhibit 4-52, Form 10-K of EUA for 1990, File No. 1-5366). C-51 Note Purchase Agreement dated as of January 16, 1992 between EUA Ocean State Corporation and John Hancock Mutual Life Insurance Company (Exhibit 4-56, Form 10-K of EUA for 1991, File No. 1-5366). C-52 Guaranty, dated January 16, 1993 made by EUA in favor of John Hancock Mutual Life Insurance Company (Exhibit 10-125, Form 10-K of EUA for 1991, File No. 1-5366). C-53 Service contract and supplement among the EUA System, New England Electric System, Boston Edison Co., New England Gas & Electric Association system and Vermont Electric Power Company, Inc. for services to be provided by the New England Power Service Company dated as of January 1, 1994 (filed as Exhibit 10-14.03 to EUA's Form 10-K for 1993, File No. 1-5336). C-54 Thirtieth Amendment to NEPOOL Agreement dated as of June 1, 1993 regarding pool planning, pool-planned facilities, pool-planned purchases and pool-planned unit provisions (filed as Exhibit 10-15.03 to EUA's Form 10-K for 1993, File No. 1-5336). C-55 Trust Agreement dated as of July 1, 1993 between Massachusetts Industrial Finance Agency and Shawmut Bank, N.A. (filed as Exhibit 10-1.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480). C-56 Loan Agreement dated as of July 1, 1993 between Massachusetts Industrial Finance Agency and Eastern Edison (filed as Exhibit 10-2.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480). C-57 Power Purchase Agreement entered into as of September 20, 1993 by and between Meridian Middleboro Limited Partnership and Eastern Edison Company (filed as Exhibit 10-3.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480). C-58 Inducement Letter dated July 14, 1993 from Eastern Edison to the Massachusetts Industrial Finance Agency and Goldman, Sachs & Company and Citicorp Securities Markets, Inc. (filed as Exhibit 10-4.08 to Eastern Edison's Form 10-K for 1993, File No. 0-8480). C-59 Indenture dated September 1, 1993 between EUA Cogenex and the Bank of New York as Trustee (filed as Exhibit 4-4.10 to EUA's Form 10-K for 1993, File No. 1-5366). C-60 Loan Agreement between the Rhode Island Port Authority and Economic Development Corporation and Newport Electric Corporation dated as of January 6, 1994 (filed as Exhibit 4-14.14 to EUA's Form 10-K for 1993, File No. 1-5366). C-61 Trust Indenture between the Rhode Island Authority and Economic Development Corporation and Newport Electric Corporation dated as of January 1, 1994 (filed as Exhibit 4-5.14 to EUA's Form 10-K for 1993, File No. 1-5366). C-62 Letter of Credit and Reimbursement Agreement among Newport and the Canadian Imperial Bank of Commerce dated January 6, 1994 (filed as Exhibit 4-6.14 to EUA's Form 10-K for 1993, File No. 1-5366). C-63 Memorandum of understanding by and between Canal Electric Company and Montaup Electric Company dated September 23, 1993 (Exhibit 10-39.05, Eastern Edison 10-K for 1993, File No. 0-8480). C-64 Ancillary Agreement by and between Algonquin Gas Transmission Company, Canal Electric Company and Montaup Electric Company dated October 8, 1993 (Exhibit 10-40.05 of Eastern Edison 10-K for 1993, File No. 0-8480). (b) None *Exhibit D - Tax allocation agreement for 1994 pursuant to Rule 45(c). Exhibit E - Other documents. None. Exhibit F - Supporting schedules (see pages 52-54). SIGNATURE The undersigned system company has duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized, pursuant to the requirements of the Public Utility Holding Company Act of 1935. EASTERN UTILITIES ASSOCIATES and Subsidiaries By __________________________ R. M. Burns, Comptroller (Principal Accounting Officer) April 28, 1994 EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING BALANCE SHEETS DECEMBER 31, 1993 ASSETS
Eastern EUA EUA Utilities Service Consolidated Eliminations Associates Corporation Utility Plant and Other Investments: Utility plant in service $1,016,452,356 $ $ $30,657,575 Less accumulated provision for depreciation and amortization 296,995,073 10,077,759 Net utility plant in service 719,457,283 20,579,816 Construction work in progress (Notes H and J) 8,728,261 171,025 Net utility plant 728,185,544 20,750,841 Non-utility property 123,110,177 Less accumulated provision for depreciation 23,319,207 Net non-utility property 99,790,970 Investments in subsidiaries (at equity) 73,631,510 703,144,760 336,901,930 Excess of carring values of investments in subsidiaries 17,488 17,488 Notes receivable 50,918,149 Other 346,518 1,000 Total Utility Plant and Other Investments 952,890,179 703,144,760 336,920,418 20,750,841 Current Assets: Cash and temporary cash investments 4,180,382 145,221 Notes receivable 16,407,144 12,772,927 12,772,927 Accounts receivable - Net: Customers 57,473,414 Accrued unbilled revenue 10,481,194 Others 16,885,050 8,370,138 575,368 Accounts receivable - associated companies 63,913,390 766,860 6,249,060 Materials and supplies (at average cost): Fuel 6,410,423 Plant materials and operating supplies 6,722,060 48,946 Other current assets 16,340,106 90,833 215,335 Total Current Assets 134,899,773 76,686,317 22,000,758 7,233,930 Deferred Debits: Unamortized debt expense 6,641,793 165,906 Unrecovered regulatory plant costs (Note J) 16,907,500 Other deferred debits 91,798,276 7,496,321 686,457 Total Deferred Debits 115,347,569 7,496,321 852,363 Total Assets $1,203,137,521 $779,831,077 $366,417,497 $28,837,134 LIABILITIES Capitalization: Common equity $333,165,135 $529,862,672 $333,229,955 $4,915,103 Non-redeemable preferred stock of subsidiaries 6,900,550 1,500,000 Redeemable preferred stock of subsidiaries - net 29,898,989 Preferred stock redemption cost (4,846,081) Long-term debt - net 496,815,788 171,782,087 14,500,000 Total Capitalization 861,934,381 703,144,759 333,229,955 19,415,103 Current Liabilites: Preferred stock sinking fund requirements 50,000 Long-term debt due within one year 5,415,378 1,100,000 Notes payable 37,168,000 12,772,927 28,580,000 Accounts payable 36,110,544 107,359 1,627,076 Accounts payable - associated companies 58,140,227 128,427 58,660 Customer deposits 4,571,767 Taxes accrued 12,298,624 7,482 Interest accrued 10,687,638 5,773,164 82,451 803,468 Dividends accrued 86,464 Other current liabilites 14,627,396 3,207,873 68,099 Total Current Liabilties 121,015,811 76,686,318 32,106,110 3,664,785 Deferred Credits: Unamortized investment credit 23,273,990 Other deferred credits 59,472,915 5,709,570 Total Deferred Credits 82,746,905 5,709,570 Accumulated deferred taxes 137,440,424 1,081,432 47,676 Commitments and contingencies (Note J) Total Liabilities and Capitalization $1,203,137,521 $779,831,077 $366,417,497 $28,837,134 ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING BALANCE SHEETS (continued) DECEMBER 31, 1993
ASSETS Blackstone Valley Newport Eastern Montaup Electric Electric Edison Electric Company Corporation Company Company Utility Plant and Other Investments: Utility plant in service $128,629,557 $72,501,826 $213,385,135 $571,278,263 Less accumulated provision for depreciation and amortization 40,599,476 19,925,715 66,081,624 160,310,499 Net utility plant in service 88,030,081 52,576,111 147,303,511 410,967,764 Construction work in progress (Notes H and J) 702,059 1,075,055 1,267,993 5,512,129 Net utility plant 88,732,140 53,651,166 148,571,504 416,479,893 Non-utility property 70,206 105,734 2,609,614 Less accumulated provision for depreciation 21,004 9,697 Net non-utility property 49,202 96,037 2,609,614 Investments in subsidiaries (at equity) 366,242,831 13,424,590 Excess of carring values of investments in subsidiaries Notes receivable Other 50,405 Total Utility Plant and Other Investments 88,781,342 53,651,166 514,960,777 432,514,097 Current Assets: Cash and temporary cash investments 757,014 146,564 945 695,836 Notes receivable Accounts receivable - Net: Customers 11,376,398 5,211,227 24,519,099 1,470,141 Accrued unbilled revenue 1,232,822 653,344 8,595,028 Others 1,578,076 1,611,774 1,801,953 767,210 Accounts receivable - associated companies 633,946 180,218 5,761,047 50,313,129 Materials and supplies (at average cost): Fuel 86,204 6,324,219 Plant materials and operating supplies 740,166 802,142 1,518,026 1,995,555 Other current assets 2,968,402 745,206 4,659,765 6,187,888 Total Current Assets 19,286,824 9,436,679 46,855,863 67,753,978 Deferred Debits: Unamortized debt expense 879,822 446,993 3,606,784 32,714 Unrecovered regulatory plant costs (Note J) 16,907,500 Other deferred debits 5,603,680 3,950,339 26,377,638 44,360,205 Total Deferred Debits 6,483,502 4,397,332 29,984,422 61,300,419 Total Assets $114,551,668 $67,485,177 $591,801,062 $561,568,494 LIABILITIES Capitalization: Common equity $35,378,948 $21,841,822 $223,005,067 $192,960,743 Non-redeemable preferred stock of subsidiaries 6,129,500 771,050 1,500,000 Redeemable preferred stock of subsidiaries - net 229,453 29,669,536 Preferred stock redemption cost (4,846,081) Long-term debt - net 39,500,000 22,661,568 264,134,022 171,782,088 Total Capitalization 81,008,448 45,503,893 511,962,544 366,242,831 Current Liabilites: Preferred stock sinking fund requirements 50,000 Long-term debt due within one year 1,838,718 Notes payable Accounts payable 325,053 2,656,421 1,246,221 21,364,905 Accounts payable - associated companies 8,303,057 4,840,020 41,505,399 2,438,537 Customer deposits 1,956,110 941,359 1,141,406 Taxes accrued 5,701,474 508,612 336,501 3,888,730 Interest accrued 1,137,349 1,135,030 5,174,082 6,093,136 Dividends accrued 72,187 14,277 Other current liabilites 1,099,564 750,168 900,235 8,108,246 Total Current Liabilties 18,594,794 12,734,605 50,303,844 41,893,554 Deferred Credits: Unamortized investment credit 2,673,606 1,468,074 4,862,576 14,269,734 Other deferred credits 5,689,243 1,775,215 9,171,904 37,056,848 Total Deferred Credits 8,362,849 3,243,289 14,034,480 51,326,582 Accumulated deferred taxes 6,585,577 6,003,390 15,500,194 102,105,527 Commitments and contingencies (Note J) Total Liabilities and Capitalization $114,551,668 $67,485,177 $591,801,062 $561,568,494 ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING BALANCE SHEETS (continued) DECEMBER 31, 1993
ASSETS EUA EUA Energy EUA Cogenex Investment Ocean State Corporation Corporation Corporation Utility Plant and Other Investments: Utility plant in service $ $ $ Less accumulated provision for depreciation and amortization Net utility plant in service Construction work in progress (Notes H and J) Net utility plant Non-utility property 120,324,623 Less accumulated provision for depreciation 23,288,506 Net non-utility property 97,036,117 Investments in subsidiaries (at equity) 317,539 59,889,380 Excess of carring values of investments in subsidiaries Notes receivable 50,918,149 Other 295,113 Total Utility Plant and Other Investments 147,954,266 317,539 60,184,493 Current Assets: Cash and temporary cash investments 2,429,685 1,573 3,544 Notes receivable 16,407,144 Accounts receivable - Net: Customers 14,896,549 Accrued unbilled revenue Others 2,048,816 131,715 Accounts receivable - associated companies 9,130 Materials and supplies (at average cost): Fuel Plant materials and operating supplies 1,617,225 Other current assets 1,462,265 5,206 5,206 Total Current Assets 38,861,684 138,494 17,880 Deferred Debits: Unamortized debt expense 1,006,021 503,553 Unrecovered regulatory plant costs (Note J) Other deferred debits 3,303,490 14,582 5,564 Total Deferred Debits 4,309,511 14,582 509,117 Total Assets $191,125,461 $470,615 $60,711,490 LIABILITIES Capitalization: Common equity $39,270,351 ($4,142,016) $16,567,834 Non-redeemable preferred stock of subsidiaries Redeemable preferred stock of subsidiaries - net Preferred stock redemption cost Long-term debt - net 120,000,000 36,020,197 Total Capitalization 159,270,351 (4,142,016) 52,588,031 Current Liabilites: Preferred stock sinking fund requirements Long-term debt due within one year 2,476,660 Notes payable 15,879,000 4,713,927 768,000 Accounts payable 8,778,580 4,929 Accounts payable - associated companies 776,847 65,632 23,648 Customer deposits 532,892 Taxes accrued 992,029 863,796 Interest accrued 1,132,269 595,285 307,732 Dividends accrued Other current liabilites 489,545 3,666 Total Current Liabilties 28,581,162 5,379,773 4,443,502 Deferred Credits: Unamortized investment credit Other deferred credits 70,135 Total Deferred Credits 70,135 Accumulated deferred taxes 3,203,813 (767,142) 3,679,957 Commitments and contingencies (Note J) Total Liabilities and Capitalization $191,125,461 $470,615 $60,711,490 ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF CAPITALIZATION DECEMBER 31, 1993
Eastern EUA EUA Utilities Service Consolidated Eliminations Associates Corporation Common Equity: Common shares, $5 par value of Registrant (1) $95,162,990 $161,456,906 $95,162,990 $1,000 Other paid-in capital 202,181,825 147,698,041 202,181,825 5,000,000 Common share expense (3,822,174) (742,215) (3,778,262) Retained earnings 39,642,494 221,449,939 39,663,402 (85,897) Total Common Equity 333,165,135 529,862,671 333,229,955 4,915,103 Non-Redeemable Preferred: 4.25%, $100 par value, 35,000 shares (2) 3,500,000 5.60%, $100 par value, 25,000 shares (2) 2,500,000 3.75%, $100 par value, 7,689 shares(2) 768,900 Montaup Preferred, $100 par value 1,500,000 Premium, net of expense 131,650 Total Non-Redeemable 6,900,550 1,500,000 Redeemable Preferred: 6.625%, $100 par value, 30,000 shares(2) 30,000,000 9.75%, $100 par value, 2,900 shares(2) 240,000 Expense, net of premium (341,009) Preferred stock redemption cost (4,846,082) Total Redeemable 25,052,909 Long-Term Debt: Secured Notes: 10.2% due 2008 (Note F) 15,600,000 15,600,000 Unsecured Notes: 9.59% due 2011 38,496,857 7% due 2000 50,000,000 7.22% due 1997 15,000,000 9.6% due 2001 20,000,000 10.56% due 2005 35,000,000 9%-9.25% Series A due 1995 25,000,000 Variable Rate Bonds: Demand due 2014 (3) 6,500,000 First Mortgage and Collateral Trust Bonds: 5.875% due 1998 20,000,000 8.9% Secured medium-term notes due 1995 10,000,000 6.875% due 2003 40,000,000 8% due 2023 40,000,000 6.35% due 2003 8,000,000 4.875% due 1996 7,000,000 7.875% Secured medium-term notes due 2002 35,000,000 5.75% due 1998 40,000,000 Pollution Control Revenue Bonds: 5.875% due 2008 $40,000,000 Debenture Bonds: 8% due 2000 8,500,000 8-1/4% due 2003 12,800,000 14% due 2005 26,000,000 10% due 2008 9,275,000 16-1/2% due 2010 19,000,000 12-3/8% due 2013 30,000,000 10-1/8% due 2008 36,207,088 9% due 2020 5,000,000 9-3/8% due 2020 25,000,000 First Mortgage Bonds: 9-1/2% due 2004 (Series B) 15,000,000 10.35% due 2010 (Series C) 18,000,000 4-3/4% due 1994 1,000,000 9% due 1999 1,400,000 9.8% due 1999 8,000,000 8.95% due 2001 5,200,000 Second Mortgage Bonds: 12% due 2011 6,045,000 8-1/2% due 1998 1,880,000 6-1/2% SBA Loan due 2005 975,286 Unamortized (Discount) - Net (865,977) 502,231,166 171,782,088 15,600,000 Less portion due within one year 5,415,379 1,100,000 Total Long-Term Debt 496,815,787 171,782,088 14,500,000 Total Capitalization $861,934,381 $703,144,759 $333,229,955 $19,415,103 (1) Authorized 36,000,000 shares, outstanding 18,959,650 (2) Authorized and Outstanding. (3) Weighted average interest rate was 2.5% for 1993.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF CAPITALIZATION (continued) DECEMBER 31, 1993
Blackstone Valley Newport Eastern Montaup Electric Electric Edison Electric Company Corporation Company Company Common Equity: Common shares, $5 par value of Registrant (1) $9,203,100 $11,368,779 $72,283,925 $68,600,000 Other paid-in capital 17,907,930 9,000,000 47,249,634 29,528,000 Common share expense (742,215) (43,912) Retained earnings 8,267,918 2,215,257 103,515,420 94,832,743 Total Common Equity 35,378,948 21,841,821 223,005,067 192,960,743 Non-Redeemable Preferred: 4.25%, $100 par value, 35,000 shares (2) 3,500,000 5.60%, $100 par value, 25,000 shares (2) 2,500,000 3.75%, $100 par value, 7,689 shares(2) 768,900 Montaup Preferred, $100 par value 1,500,000 Premium, net of expense 129,500 2,150 Total Non-Redeemable 6,129,500 771,050 1,500,000 Redeemable Preferred: 6.625%, $100 par value, 30,000 shares(2) 30,000,000 9.75%, $100 par value, 2,900 shares(2) 240,000 Expense, net of premium (10,545) (330,464) Preferred stock redemption cost (4,846,082) Total Redeemable 229,455 24,823,454 Long-Term Debt: Secured Notes: 10.2% due 2008 (Note F) Unsecured Notes: 9.59% due 2011 7% due 2000 7.22% due 1997 9.6% due 2001 10.56% due 2005 9%-9.25% Series A due 1995 25,000,000 Variable Rate Bonds: Demand due 2014 (3) 6,500,000 First Mortgage and Collateral Trust Bonds: 5.875% due 1998 20,000,000 8.9% Secured medium-term notes due 1995 10,000,000 6.875% due 2003 40,000,000 8% due 2023 40,000,000 6.35% due 2003 8,000,000 4.875% due 1996 7,000,000 7.875% Secured medium-term notes due 2002 35,000,000 5.75% due 1998 40,000,000 Pollution Control Revenue Bonds: 5.875% due 2008 $40,000,000 Debenture Bonds: 8% due 2000 8,500,000 8-1/4% due 2003 12,800,000 14% due 2005 26,000,000 10% due 2008 9,275,000 16-1/2% due 2010 19,000,000 12-3/8% due 2013 30,000,000 10-1/8% due 2008 36,207,088 9% due 2020 5,000,000 9-3/8% due 2020 25,000,000 First Mortgage Bonds: 9-1/2% due 2004 (Series B) 15,000,000 10.35% due 2010 (Series C) 18,000,000 4-3/4% due 1994 1,000,000 9% due 1999 1,400,000 9.8% due 1999 8,000,000 8.95% due 2001 5,200,000 Second Mortgage Bonds: 12% due 2011 6,045,000 8-1/2% due 1998 1,880,000 6-1/2% SBA Loan due 2005 975,286 Unamortized (Discount) - Net (865,977) 39,500,000 24,500,286 264,134,023 171,782,088 Less portion due within one year 1,838,719 Total Long-Term Debt 39,500,000 22,661,567 264,134,023 171,782,088 Total Capitalization $81,008,448 $45,503,893 $511,962,544 $366,242,831 (1) Authorized 36,000,000 shares, outstanding 18,959,650 (2) Authorized and Outstanding. (3) Weighted average interest rate was 2.5% for 1993. The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATEMENTS OF CAPITALIZATION (continued) DECEMBER 31, 1993
EUA EUA Energy EUA Cogenex Investment Ocean State Corporation Corporation Corporation Common Equity: Common shares, $5 par value of Registrant (1) $100 $1 $1 Other paid-in capital 27,553,279 999 11,458,199 Common share expense Retained earnings 11,716,972 (4,143,016) 5,109,634 Total Common Equity 39,270,351 (4,142,016) 16,567,834 Non-Redeemable Preferred: 4.25%, $100 par value, 35,000 shares (2) 5.60%, $100 par value, 25,000 shares (2) 3.75%, $100 par value, 7,689 shares(2) Montaup Preferred, $100 par value Premium, net of expense Total Non-Redeemable Redeemable Preferred: 6.625%, $100 par value, 30,000 shares(2) 9.75%, $100 par value, 2,900 shares(2) Expense, net of premium Preferred stock redemption cost Total Redeemable Long-Term Debt: Secured Notes: 10.2% due 2008 (Note F) Unsecured Notes: 9.59% due 2011 38,496,857 7% due 2000 50,000,000 7.22% due 1997 15,000,000 9.6% due 2001 20,000,000 10.56% due 2005 35,000,000 9%-9.25% Series A due 1995 Variable Rate Bonds: Demand due 2014 (3) First Mortgage and Collateral Trust Bonds: 5.875% due 1998 8.9% Secured medium-term notes due 1995 6.875% due 2003 8% due 2023 6.35% due 2003 4.875% due 1996 7.875% Secured medium-term notes due 2002 5.75% due 1998 Pollution Control Revenue Bonds: 5.875% due 2008 Debenture Bonds: 8% due 2000 8-1/4% due 2003 14% due 2005 10% due 2008 16-1/2% due 2010 12-3/8% due 2013 10-1/8% due 2008 9% due 2020 9-3/8% due 2020 First Mortgage Bonds: 9-1/2% due 2004 (Series B) 10.35% due 2010 (Series C) 4-3/4% due 1994 9% due 1999 9.8% due 1999 8.95% due 2001 Second Mortgage Bonds: 12% due 2011 8-1/2% due 1998 6-1/2% SBA Loan due 2005 Unamortized (Discount) - Net 120,000,000 38,496,857 Less portion due within one year 2,476,660 Total Long-Term Debt 120,000,000 36,020,197 Total Capitalization $159,270,351 ($4,142,016) $52,588,031 (1) Authorized 36,000,000 shares, outstanding 18,959,650 (2) Authorized and Outstanding. (3) Weighted average interest rate was 2.5% for 1993. The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING INCOME STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 1993
Eastern EUA EUA Utilities Service Consolidated Eliminations Associates Corporation Operating Revenues $566,477,217 $325,655,455 $ $ Operating Expenses: Operation $381,713,758 365,378,997 1,043,978 37,234,943 Maintenance 25,147,999 376,865 522 924,337 Depreciation and amortization 44,721,790 690,181 2,039 1,344,120 Taxes - Other than income 24,468,444 852,226 4,554 2,009,051 - Income (credit) 10,482,767 31,075 (1,535) 14,335 - Deferred (credit) 4,536,594 (9,677) 152,769 (44,342) Total Operating Expenses 491,071,352 367,319,667 1,202,327 41,482,444 Operating Income 75,405,865 (41,664,212) (1,202,327) (41,482,444) Other Income and Deductions: Interest and dividend income 4,934,589 20,513,580 518,142 692 Equity in earnings of jointly- owned companies 14,140,545 62,050,720 41,096,876 Allowance for other funds used during construction 378,666 Other (deductions) income - net (1,036,734) 42,467,907 6,199,709 43,550,699 Total Other Income 18,417,066 125,032,207 47,814,727 43,551,391 Income Before Interest Charges 93,822,931 83,367,995 46,612,400 2,068,947 Interest Charges: Interest on long-term debt 41,529,993 19,994,753 1,591,200 Amortization of debt expense and premium 1,904,050 37,043 Other interest expense (principally short-term notes) 4,136,889 1,322,522 1,681,277 47,351 Allowance for borrowed funds used during construction - (credit) (1,988,759) Total Interest Charges 45,582,173 21,317,275 1,681,277 1,675,594 Net Income 48,240,758 62,050,720 44,931,123 393,353 Preferred Dividends Requirement 3,309,635 Earnings available for common shareholders $44,931,123 $62,050,720 $44,931,123 $393,353 Earnings per EUA Common Share: 18,391,147 weighted average shares outstanding $2.44 ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING INCOME STATEMENTS (continued) FOR THE YEARS ENDED DECEMBER 31, 1993
Blackstone Valley Newport Eastern Montaup Electric Electric Edison Electric Company Corporation Company Company Operating Revenues $143,665,758 $63,696,176 $270,983,237 $346,875,629 Operating Expenses: Operation 115,665,485 51,296,841 234,861,366 260,649,771 Maintenance 3,070,535 1,890,636 4,470,687 11,782,783 Depreciation and amortization 5,122,422 2,463,000 8,815,997 17,633,535 Taxes - Other than income 9,508,055 4,048,347 3,941,406 5,345,094 - Income (credit) 1,590,430 (749,590) 4,696,430 8,200,392 - Deferred (credit) 397,198 1,258,624 (413,015) 3,461,536 Total Operating Expenses 135,354,125 60,207,858 256,372,871 307,073,111 Operating Income 8,311,633 3,488,318 14,610,366 39,802,518 Other Income and Deductions: Interest and dividend income 41,312 192,849 20,091,084 347,670 Equity in earnings of jointly- owned companies 20,953,844 1,749,838 Allowance for other funds used during construction 43,045 46,210 104,219 185,192 Other (deductions) income - net (59,607) 273,556 (273,490) (459,719) Total Other Income 24,750 512,615 40,875,657 1,822,981 Income Before Interest Charges 8,336,383 4,000,933 55,486,023 41,625,499 Interest Charges: Interest on long-term debt 3,448,977 2,449,110 22,584,392 19,994,753 Amortization of debt expense and premium 98,033 88,877 1,436,525 169,933 Other interest expense (principally short-term notes) 469,948 206,918 464,498 792,207 Allowance for borrowed funds used during construction - (credit) (38,086) (55,141) (100,491) (285,237) Total Interest Charges 3,978,872 2,689,764 24,384,924 20,671,656 Net Income 4,357,511 1,311,169 31,101,099 20,953,843 Preferred Dividends Requirement 288,750 64,422 2,956,463 Earnings available for common shareholders $4,068,761 $1,246,747 $28,144,636 $20,953,843 Earnings per EUA Common Share: 18,391,147 weighted average shares outstanding ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING INCOME STATEMENTS (continued) FOR THE YEARS ENDED DECEMBER 31, 1993
EUA EUA Energy EUA Cogenex Investment Ocean State Corporation Corporation Corporation Operating Revenues $66,911,872 $ $ Operating Expenses: Operation 43,978,691 2,185,937 175,743 Maintenance 3,385,084 280 Depreciation and amortization 9,863,959 30,913 135,986 Taxes - Other than income 458,960 2,866 2,337 - Income (credit) (1,075,407) 56,470 (2,217,683) - Deferred (credit) 364,334 (647,501) (2,686) Total Operating Expenses 56,975,621 1,628,685 (1,906,023) Operating Income 9,936,251 (1,628,685) 1,906,023 Other Income and Deductions: Interest and dividend income 4,242,219 14,201 Equity in earnings of jointly- owned companies 12,390,707 Allowance for other funds used during construction Other (deductions) income - net (2,998,028) 197,344 (4,999,291) Total Other Income 1,244,191 197,344 7,405,617 Income Before Interest Charges 11,180,442 (1,431,341) 9,311,640 Interest Charges: Interest on long-term debt 7,461,097 3,995,217 Amortization of debt expense and premium 45,664 27,975 Other interest expense (principally short-term notes) 1,647,630 119,462 30,120 Allowance for borrowed funds used during construction - (credit) (1,509,804) Total Interest Charges 7,644,587 119,462 4,053,312 Net Income 3,535,855 (1,550,803) 5,258,328 Preferred Dividends Requirement Earnings available for common shareholders $3,535,855 ($1,550,803) $5,258,328 Earnings per EUA Common Share: 18,391,147 weighted average shares outstanding ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1993
Eastern EUA EUA Utilities Service Consolidated Eliminations Associates Corporation CASH FLOW FROM OPERATING ACTIVITIES: Net Income $48,240,758 $62,050,720 $44,931,123 $393,353 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and amortization 50,492,252 (251,125) 207,432 1,380,982 Amortization of nuclear fuel 5,135,804 Deferred taxes 11,098,766 (9,676) 5,353,874 (44,342) Investment tax credit, net (1,278,907) Allowance for funds used during construction (2,367,424) Other - net 13,010,805 (6,287,106) (10,783,708) 6,321,299 Net Changes to Working Capital: Accounts receivable (9,608,922) (26,542,765) (2,586,178) (3,496,231) Materials and supplies 451,646 20,289 Notes receivable (5,602,627) (9,790,518) (9,790,518) Accounts payable (1,884,922) 30,021,394 20,107 (237,051) Accrued taxes 3,381,676 (3,643,428) (21,340) Other - net (10,154,568) 164,797 (190,803) (2,717,457) Net Cash Provided from (Used in) Operating Activities 100,914,337 45,712,293 27,161,329 1,599,502 CASH FLOW FROM INVESTING ACTIVITIES: Construction expenditures (60,767,131) (380,305) Increase/Decrease in other investments (13,244,257) Investments in subsidiaries (7,300,000) (7,300,000) Net Cash Used in Investing Activities (74,011,388) (7,300,000) (7,300,000) (380,305) CASH FLOW FROM FINANCING ACTIVITIES: Issuances: Common shares/capital contribution 46,313,383 7,300,000 46,313,383 Preferred stock 30,000,000 Long-term debt 245,000,000 Redemptions: Long-term debt (214,809,073) (2,200,000) Preferred stock (41,700,000) Premium on reacquisition and financing expenses (14,955,662) (1,464,738) EUA common share dividends paid (26,101,449) (55,014,562) (26,101,449) Subsidiary preferred dividends paid (3,316,266) (488,250) Net (decrease) increase in short-term debt (72,768,001) 9,790,519 (38,668,000) Net Cash Provided from (Used in) Financing Activities (52,337,068) (38,412,293) (19,920,804) (2,200,000) NET (DECREASE) INCREASE IN CASH (25,434,119) (59,475) (980,803) Cash and temporary cash investments at beginning of year 29,614,502 59,475 1,126,024 Cash and temporary cash investments at end of year $4,180,383 $ $145,221 Cash paid during the year for: Interest (net of amounts capitalized) $45,057,046 $19,994,755 $1,666,025 $1,746,978 Income Taxes(Refund) $12,918,701 ($4,957,404) $79,638 ( ) denotes contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) FOR THE YEAR ENDED DECEMBER 31, 1993
Blackstone Valley Newport Eastern Montaup Electric Electric Edison Electric Company Corporation Company Company CASH FLOW FROM OPERATING ACTIVITIES: Net Income $4,357,511 $1,311,169 $31,101,099 $20,953,843 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and amortization 5,918,253 3,200,282 11,268,984 18,207,436 Amortization of nuclear fuel 5,135,804 Deferred taxes 397,198 1,258,624 (413,014) 3,394,312 Investment tax credit, net (176,244) (86,160) (319,080) (697,423) Allowance for funds used during construction (81,131) (101,351) (204,710) (470,428) Other - net 428,407 (149,852) 3,567,911 (3,951,184) Net Changes to Working Capital: Accounts receivable 372,285 1,223,435 (369,132) (27,609,746) Materials and supplies 124,225 150,441 162,336 736,691 Notes receivable Accounts payable (2,399,071) 1,606,908 30,083,720 (2,903,956) Accrued taxes (82,663) 28,575 303,525 531,141 Other - net (23,929) (1,483,335) (5,396,159) (750,877) Net Cash Provided from (Used in) Operating Activities 8,834,841 6,958,736 69,785,480 12,575,613 CASH FLOW FROM INVESTING ACTIVITIES: Construction expenditures (5,306,338) (4,039,931) (11,185,843) (11,395,280) Increase/Decrease in other investments Investments in subsidiaries Net Cash Used in Investing Activities (5,306,338) (4,039,931) (11,185,843) (11,395,280) CASH FLOW FROM FINANCING ACTIVITIES: Issuances: Common shares/capital contribution Preferred stock 30,000,000 Long-term debt 195,000,000 Redemptions: Long-term debt (2,727,930) (205,000,000) Preferred stock (100,000) (41,600,000) Premium on reacquisition and financing expenses (100,447) (100,757) (12,428,567) EUA common share dividends paid (3,241,332) (24,778,930) (22,329,300) Subsidiary preferred dividends paid (288,750) (50,145) (2,977,371) (488,250) Net (decrease) increase in short-term debt Net Cash Provided from (Used in) Financing Activities (3,630,529) (2,978,832) (61,784,868) (22,817,550) NET (DECREASE) INCREASE IN CASH (102,026) (60,027) (3,185,231) (21,637,217) Cash and temporary cash investments at beginning of year 859,040 206,591 3,186,176 22,333,054 Cash and temporary cash investments at end of year $757,014 $146,564 $945 $695,837 Cash paid during the year for: Interest (net of amounts capitalized) $3,441,781 $2,419,725 $27,283,177 $19,525,945 Income Taxes(Refund) $2,430,480 ($2,331,744) $4,588,416 $8,784,038 ( ) denotes contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) FOR THE YEAR ENDED DECEMBER 31, 1993
EUA EUA Energy EUA Cogenex Investment Ocean State Corporation Corporation Corporation CASH FLOW FROM OPERATING ACTIVITIES: Net Income $3,535,855 ($1,550,803) $5,258,328 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation and amortization 9,863,959 30,913 162,886 Amortization of nuclear fuel Deferred taxes 364,335 (703,368) 1,481,471 Investment tax credit, net Allowance for funds used during construction (1,509,804) Other - net 8,272,020 (14,543) 3,033,349 Net Changes to Working Capital: Accounts receivable (3,570,557) (128,127) 12,564 Materials and supplies (742,336) Notes receivable (5,602,627) Accounts payable 1,914,331 65,649 (14,165) Accrued taxes 32,519 452,154 (1,505,663) Other - net 496,222 117,386 (40,819) Net Cash Provided from (Used in) Operating Activities 13,053,917 (1,730,739) 8,387,951 CASH FLOW FROM INVESTING ACTIVITIES: Construction expenditures (28,459,434) Increase/Decrease in other investments (13,244,257) Investments in subsidiaries Net Cash Used in Investing Activities (41,703,691) CASH FLOW FROM FINANCING ACTIVITIES: Issuances: Common shares/capital contribution 8,000,000 (700,000) Preferred stock Long-term debt 50,000,000 Redemptions: Long-term debt (4,881,143) Preferred stock Premium on reacquisition and financing expenses (861,153) EUA common share dividends paid (4,665,000) Subsidiary preferred dividends paid Net (decrease) increase in short-term debt (26,809,000) 1,731,518 768,000 Net Cash Provided from (Used in) Financing Activities 30,329,847 1,731,518 (9,478,143) NET (DECREASE) INCREASE IN CASH 1,680,073 779 (1,090,192) Cash and temporary cash investments at beginning of year 749,612 794 1,093,736 Cash and temporary cash investments at end of year $2,429,685 $1,573 $3,544 Cash paid during the year for: Interest (net of amounts capitalized) $4,904,273 $4,063,897 Income Taxes(Refund) $1,974,694 ($450,639) $2,801,222 ( ) denotes contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATMENTS OF RETAINED EARNINGS AND OTHER PAID-IN-CAPITAL DECEMBER 31, 1993
Eastern EUA EUA Utilities Service Consolidated Eliminations Associates Corporation Balance of retained earnings at begining of year $21,433,884 $214,404,656 $21,433,884 ($479,250) Additions: Net Income (Loss) 48,240,758 62,050,720 44,931,123 393,353 Total 69,674,642 276,455,376 66,365,007 (85,897) Deductions: Dividends: Preferred - subsidiaries 3,330,543 488,250 Common - subsidiaries 55,014,562 Common - registrant - $1.42 per share 26,101,449 26,101,449 Total Dividends 29,431,992 55,502,812 26,101,449 Other 600,156 600,156 600,156 Total Deductions 30,032,148 56,102,968 26,701,605 Balance of retained earnings at end of period $39,642,494 $220,352,408 $39,663,402 ($85,897) Other Paid-In Capital at Beginning of Year $161,590,081 $161,590,081 Additions: Excess of aggregate sales price over par value of 385,825 EUA Common Shares issued during 1993, in connection with the EUA Dividend Reinvestment and Common Share Purchase Plan and Employee Share Ownership Plans at an average price of $26.12 8,146,757 8,146,757 per Common Share Common share issue in April (1.3 million shs.) 29,737,500 29,737,500 J.L. Day Co. acquisition in December (108,985 shs.) 2,454,887 2,454,887 Amortization restricted stock costs 252,600 252,600 Other Paid-In Capital at End of Year $202,181,825 $202,181,825 ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATMENTS OF RETAINED EARNINGS AND OTHER PAID-IN-CAPITAL (continued) DECEMBER 31, 1993
Blackstone Valley Newport Eastern Montaup Electric Electric Edison Electric Company Corporation Company Company Balance of retained earnings at begining of year $7,440,489 $972,146 $100,767,143 $96,696,450 Additions: Net Income (Loss) 4,357,511 1,311,169 31,101,099 20,953,843 Total 11,798,000 2,283,315 131,868,242 117,650,293 Deductions: Dividends: Preferred - subsidiaries 288,750 64,421 2,977,372 488,250 Common - subsidiaries 3,241,332 24,778,930 22,329,300 Common - registrant - $1.42 per share Total Dividends 3,530,082 64,421 27,756,302 22,817,550 Other 3,636 596,520 Total Deductions 3,530,082 68,057 28,352,822 22,817,550 Balance of retained earnings at end of period $8,267,918 $2,215,258 $103,515,420 $94,832,743 Other Paid-In Capital at Beginning of Year Additions: Excess of aggregate sales price over par value of 385,825 EUA Common Shares issued during 1993, in connection with the EUA Dividend Reinvestment and Common Share Purchase Plan and Employee Share Ownership Plans at an average price of $26.12 per Common Share Common share issue in April (1.3 million shs.) J.L. Day Co. acquisition in December (108,985 shs.) Amortization restricted stock costs Other Paid-In Capital at End of Year ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
EASTERN UTILITIES ASSOCIATES AND SUBSIDIARY COMPANIES CONSOLIDATING STATMENTS OF RETAINED EARNINGS AND OTHER PAID-IN-CAPITAL (continued) DECEMBER 31, 1993
EUA EUA Energy EUA Cogenex Investment Ocean State Corporation Corporation Corporation Balance of retained earnings at begining of year $7,083,584 ($2,592,212) $4,516,306 Additions: Net Income (Loss) 3,535,855 (1,550,803) 5,258,328 Total 10,619,439 (4,143,015) 9,774,634 Deductions: Dividends: Preferred - subsidiaries Common - subsidiaries 4,665,000 Common - registrant - $1.42 per share Total Dividends 4,665,000 Other Total Deductions 4,665,000 Balance of retained earnings at end of period $10,619,439 ($4,143,015) $5,109,634 Other Paid-In Capital at Beginning of Year Additions: Excess of aggregate sales price over par value of 385,825 EUA Common Shares issued during 1993, in connection with the EUA Dividend Reinvestment and Common Share Purchase Plan and Employee Share Ownership Plans at an average price of $26.12 per Common Share Common share issue in April (1.3 million shs.) J.L. Day Co. acquisition in December (108,985 shs.) Amortization restricted stock costs Other Paid-In Capital at End of Year ( ) Denotes Contra The accompanying notes are an integral part of the financial statements.
Notes To Consolidated Financial Statements December 31, 1993 (A) Summary Of Significant Accounting Policies: Basis of Consolidation: The consolidated financial statements include the accounts of EUA and all subsidiaries. In 1993 EUA consolidated the EUA Cogenex partnerships which had previously been accounted for as equity investments. All material intercompany transactions between the consolidated subsidiaries have been eliminated. System of Accounts: The accounts of EUA and its consolidated subsidiaries are maintained in accordance with the uniform system of accounts prescribed by the regulatory bodies having jurisdiction. Jointly Owned Companies: Montaup follows the equity method of accounting for its stock ownership investments in jointly owned companies including four regional nuclear generating companies. Montaup's investments in these nuclear generating companies range from 2.25% to 4.50%. Montaup is entitled to electricity produced from these facilities based on its ownership interests and is billed for its entitlement pursuant to contractual agreements which are approved by the Federal Energy Regulatory Commission (FERC). One of the four facilities is being decommissioned, but Montaup is required to pay, and has received FERC authorization to recover, its proportionate share of any unrecovered costs and costs incurred after the plant's retirement. Montaup also has a stock ownership investment of 3.27% in each of two companies which own and operate certain transmission facilities between the Hydro Quebec electric system and New England. EUA Ocean State follows the equity method of accounting for its 29.9% partnership interest in the Ocean State Power Project. Montaup's stock ownership investments and EUA Ocean State's investment in the Ocean State Power Project are included in "Investments in Jointly Owned Companies" on the Consolidated Balance Sheet. Plant and Depreciation: Utility plant is stated at original cost. The cost of additions to utility plant includes contracted work, direct labor and material, allocable overhead, allowance for funds used during construction and indirect charges for engineering and supervision. For financial statement purposes, depreciation is computed on the straight-line method based on estimated useful lives of the various classes of property. On a consolidated basis, provisions for depreciation on utility plant were equivalent to a composite rate of approximately 3.4% in 1993 based on the average depreciable property balances at the beginning and end of each year. Non-utility property and equipment of EUA Cogenex is stated at original cost. For financial statement purposes, depreciation on office furniture and equipment and computer equipment is computed on the straight-line method based on estimated useful lives ranging from five to fifteen years. Project equipment is depreciated over the term of the applicable contracts or based on the estimated useful lives, whichever is shorter, ranging from five to fifteen years. Allowance for Funds Used During Construction (AFUDC) and Capitalized Interest: AFUDC represents the estimated cost of borrowed and equity funds used to finance the EUA System's construction program. In accordance with regulatory accounting, AFUDC is capitalized as a cost of utility plant in the same manner as certain general and administrative costs. AFUDC is not an item of current cash income but is recovered over the service life of utility plant in the form of increased revenues collected as a result of higher depreciation expense. The combined rate used in calculating AFUDC was 9.5% in 1993. The caption Allowance for Borrowed Funds Used During Construction also includes interest capitalized for non-regulated entities in accordance with Financial Accounting Standards Board (FASB) Statement No. 34. Operating Revenues: Utility revenues are based on billing rates authorized by applicable federal and state regulatory commissions. Eastern Edison, Blackstone and Newport accrue the estimated amount of unbilled base rate revenues at the end of each month to match costs and revenues more closely. In addition they also record the difference between fuel costs incurred and fuel costs billed. Montaup recognizes revenues when billed. Montaup, Blackstone, and Newport also record revenues related to rate adjustment mechanisms. EUA Cogenex's revenues are recognized based on financial arrangements established by each individual contract. Under paid from savings contracts, revenues are recognized as energy savings are realized by customers. Revenue from the sale of energy equipment is recognized when the sale is complete. Revenue from sales-type lease contracts is recognized when savings to be realized by customers are verified. Energy Sales Contracts revenue is recognized as energy is provided to the customer. In circumstances in which material uncertainties exist as to contract profitability, cost recovery accounting is followed and revenues received under such contracts are first accounted for as recovery of costs to the extent incurred. Federal Income Taxes: EUA and its subsidiaries generally reflect in income the estimated amount of taxes currently payable, and provide for deferred taxes on certain items subject to temporary timing differences to the extent permitted by the various regulatory agencies. EUA's rate-regulated subsidiaries generally defer recognition of annual investment tax credits and amortize these credits over the productive lives of the related assets. Cash and Temporary Cash Investments: EUA considers all highly liquid investments and temporary cash investments with a maturity of three months or less when acquired to be cash equivalents. (B) Income Taxes: EUA adopted FASB statement No. 109, "Accounting for Income Taxes" (FAS109) effective as of January 1, 1993. FAS109 superseded FASB Statement No. 96 (FAS96) which required recognition of deferred income taxes for temporary differences that are reported in different years for financial reporting and tax purposes using the liability method. Under the liability method, deferred tax liabilities or assets are computed using the tax rates that will be in effect when temporary differences reverse. Generally, for regulated companies, the change in tax rates may not be immediately recognized in operating results because of rate making treatment and provisions in the Tax Reform Act of 1986. The adoption of FAS109 had no impact on the results of operations for 1993. At December 31, 1993 total deferred tax assets for which no valuation allowance was deemed necessary were $41.8 million and total deferred tax liabilities were $179 million. Total deferred tax assets and liabilities are comprised as follows: Deferred Tax Deferred Tax Assets Liabilities (000) (000) Plant Related Plant Related Differences $19,574 Differences $159,370 Alternative Refinancing Minimum Tax 9,507 Costs 2,666 Litigation 1,218 Pensions 1,981 Bad Debts 2,274 Pensions 1,497 Other 7,776 Other 14,977 Total $41,846 Total $178,994 As of December 31, 1993 EUA had recorded on its Consolidated Balance Sheet a regulatory liability to ratepayers of approximately $28.8 million. This amount primarily represents excess deferred income taxes resulting from the reduction in the federal income tax rate and also include deferred taxes provided on investment tax credits. Also at December 31, 1993 a regulatory asset of approximately $46.7 million had been recorded, representing the cumulative amount of federal income taxes on temporary depreciation differences which were previously flowed through to ratepayers. EUA has approximately $4.9 million of investment tax credit carryforwards which expire between the years 2001 and 2005. EUA also has $9.2 million of alternative minimum tax credits which can be utilized to reduce the consolidated regular tax liability and have no expiration. Under the terms of the December 1992 settlement agreement with EUA Power, EUA is entitled to utilize EUA Power's tax credits to reduce the 1993 Consolidated Tax Liability without compensation to EUA Power. Approximately $6.9 million of such credits were utilized in 1993 of which $4.9 million was charged against 1993 federal income tax expense. Components of income tax expense for the year 1993 is as follows on the following page: NOTE B - INCOME TAXES: Components of income and deferred tax expense for the year 1993 are as follows:
Eastern EUA Montaup EUA Utilities Service Electric Consolidated Associates Corporation Company Federal: Current $9,389,781 ($1,535) ($115,427) $7,595,810 Deferred 4,203,672 152,769 (34,665) 2,969,811 Investment Tax Credit, Net (1,196,708) (697,424) 12,396,745 151,234 (150,092) 9,868,197 State: Current 2,289,694 98,687 1,302,006 Deferred 332,924 491,725 2,622,618 0 98,687 1,793,731 Charged to Operations - Federal & State 15,019,363 151,234 (51,405) 11,661,928 Charged to Other Income Current 1,582,507 (5,219,088) 502,335 Deferred 6,562,171 5,201,105 (67,224) Investment Tax Credit, Net (5,049,200) (4,967,000) Total $18,114,841 ($4,833,749) ($51,405) $12,097,039
Blackstone Valley Newport Eastern Electric Electric Edison Company Corporation Company Federal: Current $1,751,192 ($752,142) $3,958,120 Deferred 408,856 1,258,624 (128,586) Investment Tax Credit, Net (176,244) (3,960) (319,080) 1,983,804 502,522 3,510,454 State: Current 15,481 6,512 1,057,390 Deferred (11,658) (284,428) 3,823 6,512 772,962 Charged to Operations - Federal & State 1,987,627 509 4,283,416 Charged to Other Income Current (9,500) 51,768 (110,244) Deferred Investment Tax Credit, Net (82,200) Total $1,978,127 ($29,923) $4,173,172
EUA EUA EUA Cogenex Energy Ocean State Corporation Investment Corporation Federal: Current ($883,109) $55,558 ($2,218,686) Deferred 227,050 (647,501) (2,686) Investment Tax Credit, Net (656,059) (591,943) (2,221,372) State: Current (192,298) 912 1,004 Deferred 137,285 (55,013) 912 1,004 Charged to Operations - Federal & State (711,072) (591,031) (2,220,368) Charged to Other Income Current 3,038,770 (186,670) 3,515,136 Deferred (55,867) 1,484,157 Investment Tax Credit, Net Total $2,327,698 ($833,568) $2,778,925
Federal income tax expense was different than the amounts computed by applying the statutory rates to book income subject to tax for the following reasons:
Eastern EUA Montaup EUA Utilities Service Electric Consolidated Associates Corporation Company Tax Computed at Statutory Rates $23,224,460 ($349,824) $119,682 $2,217,473 (Decrease) Increase in Tax From: Equity Component of AFUDC (132,533) (15,066) Depreciatiion of Equity AFUDC 1,229,714 358,196 Amortization of Investment Tax Credits (6,295,479) (4,967,000) (176,244) Tax impact of write-off of EUA's investment in EUA Power 4,046,179 4,046,179 State Tax, Net of Federal Income Tax Benefit 2,236,545 64,147 2,485 Cost of Removal (582,726) (245,315) Other - Net (5,611,319) (3,563,104) (235,234) (163,402) Total $18,114,841 ($4,833,749) ($51,405) $1,978,127
Blackstone Valley Newport Eastern Electric Electric Edison Company Corporation Company Tax Computed at Statutory Rates $626,420 $5,012,150 $11,567,808 (Decrease) Increase in Tax From: Equity Component of AFUDC (16,173) (36,477) (64,817) Depreciatiion of Equity AFUDC 8,416 (208,519) 1,059,287 Amortization of Investment Tax Credits (86,160) (319,080) (746,995) Tax impact of write-off of EUA's investment in EUA Power State Tax, Net of Federal Income Tax Benefit 4,233 490,317 1,244,697 Cost of Removal (64,173) (273,238) Other - Net 6,039 (491,981) (962,941) Total $478,602 $4,173,172 $12,097,039
EUA EUA EUA Cogenex Energy Ocean State Corporation Investment Corporation Tax Computed at Statutory Rates $2,052,243 ($834,530) $2,813,038 (Decrease) Increase in Tax From: Equity Component of AFUDC Depreciatiion of Equity AFUDC 12,334 Amortization of Investment Tax Credits Tax impact of write-off of EUA's investment in EUA Power State Tax, Net of Federal Income Tax Benefit 429,421 592 653 Cost of Removal Other - Net (153,966) 370 (47,100) Total $2,327,698 ($833,568) $2,778,925
The provisions for deferred income taxes resulting from timing differences is comprised of the following:
Eastern EUA Montaup EUA Utilities Service Electric Consolidated Associates Corporation Company Excess Tax Depreciation $8,936,020 $70,447 $537,684 Estimated Unbilled Revenue 250,262 Unbilled Fuel Costs 128,742 (53,558) Debt Component of AFUDC (1,899,000) Capitalized Overheads (64,241) 33,603 Effect of State and Local Taxes 321,188 (11,658) Deferred Charges 349,539 (177,394) 12,261 Pilgrim Refund 127,218 34,460 Provision for estimated tax liability resulting from the write-off of EUA's investment in EUA Power Deferred Tax Expense (Benefits) 4,046,179 4,046,179 associated with Write-Offs (55,867) Other - Net (1,041,271) 1,307,695 72,282 (155,594) Total $11,098,769 $5,353,874 ($34,665) $397,198
Blackstone Valley Newport Eastern Electric Electric Edison Company Corporation Company Excess Tax Depreciation $621,779 $385,879 $5,318,478 Estimated Unbilled Revenue 250,262 Unbilled Fuel Costs 182,300 Debt Component of AFUDC (18,048) (1,880,952) Capitalized Overheads 71,472 (169,316) Effect of State and Local Taxes (284,428) 479,989 Deferred Charges (31,774) 637,702 (82,128) Pilgrim Refund 9,502 83,256 Provision for estimated tax liability resulting from the write-off of EUA's investment in EUA Power Deferred Tax Expense (Benefits) associated with Write-Offs Other - Net 226,555 (1,288,847) (271,759) Total $1,258,624 ($413,014) $3,394,312
EUA EUA EUA Cogenex Energy Ocean State Corporation Investment Corporation Excess Tax Depreciation $1,014,893 $986,860 Estimated Unbilled Revenue Unbilled Fuel Costs Debt Component of AFUDC Capitalized Overheads Effect of State and Local Taxes 137,285 Deferred Charges (9,128) Pilgrim Refund Provision for estimated tax liability resulting from the write-off of EUA's investment in EUA Power Deferred Tax Expense (Benefits) associated with Write-Offs (55,867) Other - Net (778,714) (647,501) 494,611 Total $364,336 ($703,368) $1,481,471
(C) Capital Stock: The changes in the number of common shares outstanding and related increases in Other Paid-In Capital during the years ended December 31, 1993 were as follows (dollars in thousands): Number of Common Shares Issued in 1993 Dividend Reinvestment Common Other Public and Employee J.L. Day Co. Shares Paid-In Offering Savings Plans Acquisition At Par Capital 1,300,000 385,825 108,985 $ 8,974 $ 40,339 Eastern Edison redeemed with available cash its 8.32% Series and 4.64% Series non-redeemable preferred stock on June 1, 1993 and December 1, 1993, respectively. In connection with these redemptions, Eastern Edison incurred premiums of approximately $106,000 related to the 8.32% Series and $179,000 related to the 4.64% Series. These amounts are included in Preferred Stock Redemption Costs on the Consolidated Statement of Equity Capital and Preferred Stock. Eastern Edison will seek recovery of these amounts in its next rate proceeding. In the event of involuntary liquidation, the holders of non-redeemable preferred stock of Blackstone, Eastern Edison and Newport are entitled to $100 per share plus accrued dividends. In the event of voluntary liquidation, or if redeemed at the option of these companies, each share of the non-redeemable preferred stock is entitled to accrued dividends plus the following: Company Issue Amount Blackstone: 4.25% issue $104.40 5.60% issue 103.82 Newport: 3.75% issue 103.50 The preferred stock provisions of Blackstone, Eastern Edison and Newport place certain restrictions upon the payment of dividends on common stock by each company. At December 31, 1993 each company was in excess of the minimum requirements which would make these restrictions effective. (D) Redeemable Preferred Stock: On June 1, 1993, Eastern Edison used available cash to redeem all of its 9.00% Series Preferred Stock. In connection with this redemption, a premium of approximately $850,500 was incurred and is included in Preferred Stock Redemption Costs on the Consolidated Statement of Equity Capital and Preferred Stock. On August 11, 1993, Eastern Edison issued 300,000 shares of $100 par value, 6 5/8% Preferred Stock. The proceeds were used to redeem its outstanding 9.80% Series Preferred Stock and for other corporate purposes. In connection with the 9.80% Series redemption, Eastern Edison incurred a premium of approximately $1,352,000. This premium is also included in Preferred Stock Redemption Costs on the Consolidated Statement of Equity Capital and Preferred Stock. Eastern Edison will seek recovery of these premiums in its next rate proceeding. Eastern Edison's 6 5/8% Preferred Stock issue is entitled to mandatory sinking funds sufficient to redeem 15,000 shares during each twelve-month period commencing September 1, 2003. The redemption price is $100 per share plus accrued dividends. All outstanding shares of the 6 5/8% issue will be subject to mandatory redemption on September 1, 2008 at a price of $100 per share plus accrued dividends. Newport's 9.75% Preferred Stock issue is entitled to a mandatory sinking fund sufficient to redeem 500 shares during each twelve-month period until the year 2000, at which time any shares outstanding must be redeemed. The redemption price is $100 per share plus accrued dividends. In the event of liquidation, the holders of Eastern Edison's 6 5/8% Preferred Stock are entitled to $100 per share plus accrued dividends. In the event of involuntary liquidation, the holders of Newport's redeemable preferred stock are entitled to $100 per share plus accrued dividends. In the event of voluntary liquidation, or if redeemed at the option of Newport, the holders of the 9.75% issue are entitled to $104.88 per share plus accrued dividends prior to October 1, 1993 and $102.44 per share plus accrued dividends thereafter. The aggregate amount of redeemable preferred stock sinking fund requirements for each of the five years following 1993 is $50,000 related to Newport's 9.75% issue. (E) Long-Term Debt: The various mortgage bond issues of Blackstone, Eastern Edison, and Newport are collateralized by substantially all of their utility plant. In addition, Eastern Edison's bonds are collateralized by securities of Montaup, which are wholly-owned by Eastern Edison, in the principal amount of approximately $259 million. Blackstone's Variable Rate Demand Bonds are collateralized by an irrevocable letter of credit which expires on January 21, 1996. The letter of credit permits an extension of one year upon mutual agreement of the bank and Blackstone. EUA Service's 10.2% Secured Notes due 2008 are collateralized by certain real estate and property of the company. In March 1993, Newport used available cash to redeem $600,000 of 10% and $1.4 million of 11 1/2% First Mortgage Bonds (FMBs). In May 1993, Eastern Edison issued $100 million of FMBs in the following denominations: (i) $20 million of 5 7/8% Bonds due May 1, 1998; (ii) $40 million of 6 7/8% Bonds due May 1, 2003; and (iii) $40 million of 8% Bonds due May 1, 2023. The proceeds were used to redeem Eastern Edison's $55 million of 9 5/8%, $35 million of 10 1/8% and $10 million of 8 3/8% FMBs. In June 1993, Eastern Edison used available cash to redeem $5 million of 8 3/8% FMBs. In July 1993, Eastern Edison issued $40 million of 5 3/4% FMBs, proceeds of which were used to redeem its $40 million of 9 7/8% FMBs in September 1993. Eastern Edison redeemed in mid-August 1993 its $40 million of 10 1/8% Pollution Control Revenue Bonds with the proceeds from the July issuance of $40 million of 5 7/8% Pollution Control Revenue Bonds. In September 1993, Eastern Edison issued $8 million of 6.35% FMBs and $7 million of 4 7/8% FMBs. The proceeds were used to redeem $8 million of 7 7/8% FMBs and $7 million of 6 1/2% FMBs. In October Eastern Edison used available cash to redeem $5 million of 4 1/2% FMBs at maturity. Also in October 1993, EUA Cogenex issued $50 million of 7% Unsecured Notes. Proceeds were used to retire all outstanding bank loans and repay a portion of its short-term loans to EUA. The EUA System's aggregate amount of current cash sinking fund requirements and maturities of long-term debt, (excluding amounts that may be satisfied by available property additions) for each of the five years following 1993 are: $5,416,000 in 1994, $41,721,000 in 1995, $19,626,000 in 1996, $27,631,000 in 1997 and $73,916,000 in 1998. (F) Fair Value of Financial Instruments: The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate: Cash and Temporary Cash Investments: The carrying amount approximates fair value because of the short-term maturity of those instruments. Preferred Stock and Long-Term Debt of Subsidiaries: The fair value of the System's redeemable preferred stock and long-term debt, as set forth on the following table (in thousands), were based on quoted market prices for such securities at December 31, 1993. Carrying Fair Amount ($) Value ($) EUA Cash and Temporary Cash Investments $ - $ - Redeemable Preferred Stock - - Long-Term Debt - - EUA Service Cash and Temporary Cash Investments 145 145 Redeemable Preferred Stock - - Long-Term Debt 15,600 17,979 Blackstone Cash and Temporary Cash Investments 757 757 Redeemable Preferred Stock - - Long-Term Debt 39,500 43,280 Newport Cash and Temporary Cash Investments 146 146 Redeemable Preferred Stock 290 290 Long-Term Debt 24,500 25,793 Eastern Edison Cash and Temporary Cash Investments 1 1 Redeemable Preferred Stock 30,000 30,975 Long-Term Debt 264,134 270,827 Montaup Cash and Temporary Cash Investments 696 696 Redeemable Preferred Stock - - Long-Term Debt - - EUA Cogenex Carrying Fair Amount Value Cash and Temporary Cash Investments 2,430 2,430 Redeemable Preferred Stock - - Long-Term Debt 120,000 122,656 EUA Energy Cash and Temporary Cash Investments 2 2 Redeemable Preferred Stock - - Long-Term Debt - - EUA Ocean State Cash and Temporary Cash Investments 3 3 Redeemable Preferred Stock - - Long-Term Debt 38,497 41,048 (G) Lines Of Credit: EUA System companies maintain short-term lines of credit with various banks aggregating approximately $140 million. At December 31, 1993, unused short- term lines of credit were approximately $103 million. In accordance with informal agreements with the various banks, commitment fees are required to maintain certain lines of credit. (H) Jointly Owned Facilities: At December 31, 1993, in addition to the stock ownership interests discussed in Note A, Summary of Significant Accounting Policies - Jointly Owned Companies, Montaup and Newport had direct ownership interests in the following electric generating facilities (dollars in thousands): Accumulated Provision For Net Construct- Utility Depreciation Utility tion Percent Plant in and Plant in Work in Owned Service Amortization Service Progress Montaup: Canal Unit 2 50.00% $ 67,000 $40,142 $26,858 $ 873 Wyman Unit 4 1.96% 4,020 1,803 2,217 11 Seabrook Unit 1 2.90% 207,898 15,676 192,222 1,480 Millstone Unit 3 4.01% 183,938 33,491 150,447 486 Newport: Wyman Unit 4 0.67% 1,311 603 708 - The foregoing amounts represent Montaup's and Newport's interest in each facility, including nuclear fuel where appropriate, and are included on the like-captioned lines on the Consolidating Balance Sheet. At December 31, 1993, Montaup's total net investment in nuclear fuel of the Seabrook and Millstone Units amounted to $5.7 million and $2.8 million, respectively. Montaup's and Newport's shares of related operating and maintenance expenses with respect to units reflected in the table above are included in the corresponding operating expenses. (I) Financial Information By Business Segments: The Core Electric Business includes results of the System's electric utility operations of Blackstone, Eastern Edison, Newport and Montaup. Energy Related Business includes results of the EUA System's diversified energy related subsidiaries, EUA Cogenex, EUA Ocean State and EUA Energy. Corporate results include the operations of EUA Service and EUA Parent.
Pre-Tax Depreciation Cash Equity in Operating Operating Income and Construction Subsidiary (dollars in Thousands) Revenues Income Taxes Amortization Expenditures Earnings Year Ended December 31, 1993 Core Electric $ 499,565 $ 84,654 $ 18,443 $ 34,035 $ 31,928 $ 1,750 Energy Related 66,912 6,690 (3,523) 10,031 28,459 12,390 Corporate - (919) 99 656 380 - Total $ 566,477 $ 90,425 $ 15,019 $ 44,722 $ 60,767 $ 14,140
December 31, 1993 Total Plant and Other Investments Core Electric $ 723,664 Energy Related 208,457 Corporate 20,770 Total Plant and Other Investments 952,891 Other Assets Core Electric 188,611 Energy Related 43,842 Corporate 17,793 Total Other Assets 250,246 Total Assets $ 1,203,137 (J) Commitments And Contingencies: Nuclear Power Issues: Joint owners of nuclear projects are subject to the risk that one of their number may be unable or unwilling to finance its share of the project's costs, thus jeopardizing continuation of the project. On February 28, 1991, Great Bay Power Corporation (formerly known as EUA Power Corporation) a 12.13% owner of the Seabrook nuclear project, filed for protection under Chapter 11 of the Federal Bankruptcy Code. On March 5, 1993, the United States Bankruptcy Court for the District of New Hampshire (Bankruptcy Court) confirmed the fifth amended plan of reorganization as filed by the officially appointed committee representing the holders of Great Bay Power's outstanding secured notes (Bondholders Committee). The plan was subject to securing a financing facility in an amount sufficient to cover projected cash operating shortfalls through December 1995. On February 2, 1994, the Bondholders Committee announced that it accepted a plan of reorganization financing proposal which provided for a $35 million equity investment in exchange for 60% of the equity of the reorganized Great Bay Power. A modified plan of reorganization filed by the Bondholders Committee with the Bankruptcy Court awaits approval. The modified plan also requires the approval of various regulatory agencies including the Nuclear Regulatory Commission (NRC). In addition to its 2.9% ownership interest in Seabrook Unit 1, Montaup also has a 2.9% ownership interest in Seabrook Unit 2. On November 6, 1986, the joint owners of Seabrook, recognizing that Seabrook Unit 2 had been cancelled, voted to dispose of the Unit. Plans regarding disposition of Seabrook Unit 2 are still under consideration, but have not been finalized and approved. Montaup is unable, therefore, to estimate the costs for which it would be responsible in connection with the disposition of Seabrook Unit 2. Montaup must pay monthly charges with respect to Seabrook Unit 2 in order to preserve and protect its components and various warranties. These costs are currently being recovered in rates. Nuclear Fuel Disposal and Nuclear Plant Decommissioning Costs: The Nuclear Waste Policy Act of 1982 (NWPA) establishes that the federal government is responsible for the disposal of spent nuclear fuel and obligates the Department of Energy (DOE) to design, license, build and operate a permanent repository for high level radioactive wastes and spent nuclear fuel. NWPA specifies that DOE provide for the disposal of the waste and spent fuel starting in 1998. DOE does not expect to achieve this date. As an interim strategy, DOE is considering making available other federal government sites to temporarily accommodate those firms that have depleted their own on-site spent nuclear fuel storage capacity. The DOE anticipates that a permanent disposal site for spent fuel will be ready to accept fuel for storage or disposal on or before 2010. However, the NRC, which must license the site, has stated only that a permanent repository will become available by the year 2025. Millstone Unit 3 management has indicated it has sufficient on-site storage facilities to accommodate high level wastes and spent fuel for the projected life of the unit. No significant expenditures are projected for the foreseeable future. At Seabrook there is on-site storage capacity which, with minimal capital expenditures, should be sufficient for twenty years, or to the year 2010. No near-term capital expenditures are anticipated to accommodate an increase in storage requirements after 2010. Montaup is required to pay a fee based on its share of the generation from Millstone Unit 3 and Seabrook Unit 1. Montaup is recovering these fees through its fuel adjustment clause. Also, Montaup is recovering through rates its share of estimated decommissioning costs for Millstone Unit 3 and Seabrook Unit 1. Montaup's share of the current estimate of total costs to decommission Millstone Unit 3 is $15.1 million in 1993 dollars, and Seabrook Unit 1 is $10.6 million in 1993 dollars. These figures are based on studies performed for the lead owners of the plants. Montaup also pays into decommissioning reserves pursuant to contractual arrangements with other nuclear generating facilities in which it has an equity ownership interest or life of the unit entitlement. Such expenses are currently recoverable through rates. Shareholder Proceeding: The Superior Court of The Commonwealth of Massachusetts, in approving a settlement agreement in connection with a class action suit filed on behalf of certain EUA shareholders in Superior Court naming EUA and certain current and former Trustees of EUA as defendants, permitted a former shareholder of approximately 540,000 shares to exclude himself from the plaintiff class. On February 11, 1992 that former shareholder filed a suit against EUA and three officers of EUA in the Federal District Court of Massachusetts alleging fraudulent and negligent misrepresentations and violations of Rule 10b-5 under the Securities Exchange Act in connection with statements made regarding the business prospects for EUA Power and the portion of EUA's common share dividends attributable to AFUDC from EUA Power. The suit has been dismissed with respect to two of the officers. EUA and the officer named in the Federal District Court suit deny all allegations of liability and all of the claims and contentions alleged by the former shareholder, and are vigorously contesting the suit. Discovery has proceeded through 1993 and the deadline for discovery has been extended until April 30, 1994. EUA believes that the outcome of this litigation will not have a material impact on its financial position. Pensions: The EUA System companies' retirement plans are non-contributory defined benefit pension plans covering substantially all of their employees. Regular plan benefits are based on years of service and average compensation over the four years prior to retirement or in the case of the supplemental retirement plan for certain officers of the EUA System, benefits are based on compensation at retirement date. It is the EUA System's policy to fund the regular plan on a current basis in amount s determined to meet the funding standards established by the Employee Retirement Income Security Act of 1974. Net pension expense for the regular plan for 1993 included the following components (dollars in thousands): Service cost-benefits earned during the period $ 2,567 Interest cost on projected benefit obligations 8,761 Actual return on assets (18,005) Net amortization and deferrals 6,795 Net periodic pension expense $ 118 Assumptions used to determine pension costs: Discount Rate 8.75% Compensation Increase Rate 6.00% Long-Term Return on Assets 10.00% The following table sets forth the actuarial present value of benefit obligations and funded status at December 31, 1993 (dollars in thousands): Accumulated benefit obligations Vested $ 101,279 Non-vested 358 Total $ 101,637 Projected benefit obligations $(121,082) Plan assets at fair value, primarily stocks and bonds 130,040 Less: Unrecognized net gain on assets (11,689) Unamortized net assets at January 1 5,944 Net pension assets $ 3,213 The assumptions used to determine pension costs changed effective January 1, 1994 to 7.25%, 4.75% and 9.50% for the discount rate, compensation increase rate and expected long-term return on assets, respectively. These rates were used to calculate the plans funded status at December 31, 1993. All benefits provided under the supplemental plan are unfunded and any payments to plan participants are made by EUA. As of December 31, 1993 approximately $2.1 million was included in accrued expenses and other liabilities for this plan. For the year ended December 31, 1993 expenses related to the supplemental plan were $2.3 million. Post-Retirement Benefits: Retired employees are entitled to participate in health care and life insurance benefit plans. Health care benefits are subject to deductibles and other limitations. Health care and life insurance benefits are partially funded by EUA System companies for all qualified employees. The EUA System adopted FAS106, "Accounting for Post-Retirement Benefits Other Than Pensions," as of January 1, 1993. This standard establishes accounting and reporting standards for such post-retirement benefits as health care and life insurance. FAS106 further requires the accrual of the cost of such benefits during an employee's years of service and the recognition of the actuarially determined total post-retirement benefit obligations (Transition Obligation) earned by existing employees and retirees. EUA elected to recognize the Transition Obligation over a period of 20 years, as permitted by FAS106. The resultant annual expense, including amortization of the Transition Obligation and net of capitalized amounts, was approximately $8.1 million in 1993. Regulatory decisions issued in December 1992 permit EUA's retail subsidiaries to recover through rates approximately $3.5 million of this amount in 1993. As a result of the December 1992 regulatory decisions, EUA's retail subsidiaries established a regulatory asset of approximately $1.5 million in 1993 due to the future recoverability of such amounts. Montaup was allowed to defer FAS106-related expenses through 1995 or until it filed for recovery of such amounts prior to that time. Accordingly approximately $1.4 million of FAS106-related expenses were deferred by Montaup in 1993. Montaup has requested recovery of all of its FAS106 expenses including amortization of deferred amounts in its 1994 rate application. The total cost of post-retirement benefits other than pensions for 1993 includes the following components (in thousands): Service cost $ 1,337 Interest cost 5,983 Actual return on plan assets (68) Amortization of transition obligation 3,429 Other amortizations & deferrals -net (60) Total post-retirement benefit cost $ 10,621 Assumptions: Discount rate 8.75% Health care cost trend rate - near-term 13% - long-term 6.25% Salary increase rate 6.00% Rate of return on plan assets - union 8.50% - non-union 5.50% Reconciliation of funded status: Accumulated post-retirement benefit obligation (APBO): Retirees $(38,008) Active employees fully eligible for benefits (15,324) Other active employees (25,357) Total $(78,689) Fair value of assets, primarily notes and bonds 3,522 Unrecognized transition obligation 65,147 Unrecognized prior service cost Unrecognized net loss (gain) 5,368 (Accrued)/prepaid post-retirement benefit cost $ (4,652) The assumptions used to determine post-retirement benefit costs were changed effective January 1, 1994 to 7.25%, 13.0% and 5.0% for the discount rate, near-term health care cost trend and long-term health care cost trend, respectively. These assumptions were used to calculate the funded status of Post-Retirement benefits at December 31, 1993. Increasing the assumed health care cost trend rate by 1% each year would increase the total post-retirement benefit cost for 1993 by $1.1 million and increase the total accumulated post-retirement benefit obligation by $10.8 million. Prior to 1993 the EUA System followed the "pay-as-you-go" methodology for accounting for post retirement benefits other than pensions and charged these costs to expense. The EUA System, has also established an irrevocable external Voluntary Employee Benefit Association Trust Fund as required by the aforementioned regulatory decisions. Contributions to the fund commenced in March 1993 and totaled approximately $6.0 million during 1993. Post-Employment Benefits: In November 1992, FASB issued Statement No. 112, "Employers' Accounting for Post-employment Benefits". EUA is required to adopt this standard no later than January 1, 1994. The estimated impact of this standard on the EUA System is immaterial and therefore it is anticipated that no liability will be recorded. Long-Term Purchased Power Contracts: The EUA System is committed under long-term purchased power contracts, expiring on various dates through September 2021, to pay demand charges whether or not energy is received. Under terms in effect at December 31, 1993, the aggregate annual minimum commitments for such contracts are approximately $139 million in 1994, $136 million in 1995 and 1996, $133 million in 1997, $137 million in 1998 and will aggregate $1.6 billion for the ensuing years. In addition, the EUA System is required to pay additional amounts depending on the actual amount of energy received under such contracts. The demand costs associated with these contracts are reflected as Purchased Power-Demand on the Consolidating Statement of Income. Such costs are recoverable through rates. Construction and Energy Related Investments: The EUA System's cash construction requirements are estimated at $84.0 million for the year 1994 and $342.7 million for the years 1995 through 1998. This includes estimated construction expenditures of EUA Cogenex of $42.4 million for 1994 and $197.5 million for the years 1995 through 1998. In addition, energy related investments of EUA Cogenex are estimated to be $11.3 million for 1994 and aggregate $40.0 million for the years 1995 through 1998. Environmental Matters: The Comprehensive Environmental Response, Compensation Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, and certain similar state statutes authorize various governmental authorities to seek court orders compelling responsible parties to take cleanup action at disposal sites which have been determined by such governmental authorities to present an imminent and substantial danger to the public and to the environment because of an actual or threatened release of hazardous substances. Because of the nature of the EUA System's business, various by-products and substances are produced or handled which are classified as hazardous under the rules and regulations promulgated by the EPA as well as state and local authorities. The EUA System geneally provides for the disposal of such substances through licensed contractors, but these statutory provisions generally impose potential joint and several responsibility on the generators of the wastes for cleanup costs. Subsidiaries of EUA have been notified with respect to a number of sites where they may be responsible for such costs, including sites where they may have joint and several liability with other responsible parties. It is the policy of the EUA System companies to notify liability insurers and to initiate claims; at this time, however, no claims have been filed against any insurer and EUA is unable to predict whether liability, if any, will be assumed by, or can be enforced against, the insurance carrier in these matters. As of December 31, 1993, the EUA System had incurred costs of approximately $2.8 million in connection with these sites. Of this amount, approximately $2.7 million relates to Blackstone. These amounts have been financed primarily by internally generated cash. Blackstone is currently amortizing substantially all of its incurred costs over a five-year period, and recovering those costs in rates. EUA estimates that additional costs ranging from $2.0 million to $9.2 million may be incurred at these sites through 1995 by its subsidiaries and the other responsible parties. Of this amount, approximately $8.4 million relates to sites at which Blackstone is a potentially responsible party. Estimates beyond 1995 cannot be made since site studies, which are the basis of these estimates, have not been completed. As a result of the recoverability of cleanup costs in rates and the uncertainty regarding both its estimated liability, as well as its potential contributions from insurance carriers and other responsible parties, EUA does not believe that the ultimate impact of the environmental costs will be material to the EUA System or to any individual subsidiary and thus no loss accrual has been made. The Clean Air Act Amendments of 1990 (Clean Air Act) created new regulatory programs and generally updated and strengthened air pollution control laws. These amendments will expand the regulatory role of the United States Environmental Protection Agency (EPA) regarding emissions from electric generating facilities and a host of other sources. EUA System generating facilities will most probably be first affected in 1995, when EPA regulations will take effect for facilities owned by the EUA System. Tests at Montaup's coal-fired Somerset Unit #6 indicate it will be able to utilize lower sulfur coal than is already being burned to meet the 1995 air standards with only a minimal capital investment. Montaup determined that it would not be economical to repair Unit #5 of the Somerset Station and therefore has placed it in deactivated reserve. EUA does not anticipate the impact from the Amendments to be material to the financial position of the EUA System. In April 1992, the Northeast States for Coordinated Air Use Management (NESCAUM), an environmental advisory group for eight Northeast states including Massachusetts and Rhode Island, issued recommendations for nitrogen oxide (NOx) controls for existing utility boilers required to meet the ozone non-attainment requirements of the Clean Air Act. The NESCAUM recommendations are more restrictive than the Clean Air Act requirements. The Massachusetts Department of Environmental Management has amended its regulations to require that Reasonably Available Control Technology be implemented at all stationary sources potentially emitting 50 tons or more per year of NOx. Rhode Island has not yet issued regulations to implement NOx reduction requirements. Montaup is in the process of reviewing compliance strategies. Any compliance strategy may require the implementation of additional pollution control technology as early as 1995. Montaup would seek recovery of pollution control expenditures through rates. A number of scientific studies in the past several years have examined the possibility of health effects from electric and magnetic fields (EMF) that are found everywhere there is electricity. While some of the studies have indicated there may be so me association between exposure to EMF and health effects, many studies have indicated no direct association. In addition, the research to date has not conclusively established a direct causal relationship between EMF exposure and human health. Additional studies, which are intended to provide a better understanding of the subject, are continuing. Some states have enacted regulations to limit the strength of magnetic fields at the edge of transmission line rights-of-way. Rhode Island has enacted a statute which authorizes and directs the Energy Facility Siting Board to establish rules and regulations governing construction of high voltage transmission lines of 69kv or more. Various bills are pending in the Massachusetts Legislature that would require certain disclosures about the potential health effects of EMF. Management cannot predict the ultimate outcome of the EMF issue. Guarantee of Financial Obligations: EUA has guaranteed or entered into equity maintenance agreements in connection with certain obligations of its subsidiaries. EUA has guaranteed the repayment of EUA Cogenex's $35 million 10.56% unsecured long-term notes due 2005 and EUA Ocean State's $38.6 million 9.59% unsecured long-term notes due 2011. In addition, EUA has entered into equity maintenance agreements in connection with the issuance of EUA Service's 10.2% Secured Notes and EUA Cogenex's 7.22% and 9.6% Unsecured Notes. Under the December 1992 settlement agreement with EUA Power, EUA reaffirmed its guarantee of up to $10 million of EUA Power's share of the decommissioning costs of Seabrook Unit 1 and any costs of cancellation of Unit 1 or Unit 2. EUA guaranteed this obligation in 1990 in order to secure the release to EUA Power of a $10 million fund established by EUA Power at the time EUA Power acquired its Seabrook interest. EUA has not provided a reserve for this guarantee because management believes that it is unlikely that EUA will ever be required to honor the guarantee. Montaup is a 3.27% equity participant in two companies which own and operate transmission facilities interconnecting New England and the Hydro Quebec system in Canada. Montaup has guaranteed approximately $6.0 million of the outstanding debt of these two companies. In addition, Montaup and Newport have minimum rental commitments which total approximately $14.3 million and $1.8 million, respectively under a noncancellable transmission facilities support agreement for years subsequent to 1993. Other: In December 1992, Montaup commenced a declaratory judgment action in which it sought to have the Massachusetts Superior Court determine its rights under the Power Purchase Agreement between it and Aquidneck Power Limited Partnership (Aquidneck). Montaup sought a declaration that the Power Purchase Agreement was binding on the parties according to its terms. Aquidneck asserted that Montaup had either an express or implied obligation to negotiate new terms and conditions to the Power Purchase Agreement. Specifically, the defendants sought to amend, through negotiations, certain milestone events to which they were bound in the Power Purchase Agreement as written. Aquidneck failed to meet the first milestone of January 1, 1993. Accordingly, on January 5, 1993, Montaup exercised its rights to terminate the Power Purchase Agreement effective immediately. In January 1994, a counterclaim by Aquidneck claimed certain breaches of the Power Purchase Agreement, including an alleged failure on the part of Montaup to renegotiate the terms and conditions of the Power Purchase Agreement relating to the first milestone event. Also in January 1994, Aquidneck sought to join EUA and EUA Service as parties to the suit. Aquidneck apparently claims $11 million of damages on the theory that EUA can "avoid an approximately $11 million obligation to purchase capacity and power which it does not currently need." Aquidneck seeks treble damages claiming Montaup, EUA and EUA Service violated state laws willfully and knowingly. Montaup, EUA and EUA Service intend to defend the counterclaim vigorously and believe that Aquidneck's claims have no basis in law. EX-99.B-4 2 AMENDED ARTICLES OF EECO EXHIBIT B-4 The Commonwealth of Massachusetts MICHAEL JOSEPH CONNOLLY Secretary of State ONE ASHBURTON PLACE, BOSTON, MASS: 02108 FEDERAL IDENTIFICATION NO. 04-1123095 RESTATED ARTICLES OF ORGANIZATION General Laws, Chapter 164, Section 8C This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the restated articles of organization. The fee for filing this certificate is prescribed by General Laws, Chapter 164, Section 33. Make check payable to the Commonwealth of Massachusetts. ----- We, Richard M. Burns, Vice President, and William F. O'Connor, Clerk of Eastern Edison Company located at 110 Mulberry Street, Brockton, Massachusetts 02403 do hereby certify that the following restatement of the articles of organization of the corporation was duly adopted at a meeting held on August 4, 1993, by vote of 2,891,357 shares of Common Stock out of 2,891,357 shares outstanding, being at least two-thirds of each class of stock outstanding and entitled to vote and of each class or series of stock adversely affected thereby: 1. The name by which the corporation shall be known as: Eastern Edison Company 2. The purposes for which the corporation is formed are as follows: "The purpose for which the Corporation is constituted is the application of electricity to lighting streets and buildings, to heating, to the furnishing of mechanical power, and to all other useful purposes, in the City of Brockton in said Commonwealth, and in such other cities or towns in the Counties of Norfolk, Plymouth and Bristol in said Commonwealth as the Directors of this Company may from time to time deem it desirable in the interests of this Company so to do, and for the purpose of making, selling and distributing gas for light, or for heating, cooking, chemical and mechanical purposes in the City of Brockton and in such other cities and towns in the Counties of Norfolk, Plymouth and Bristol in said Commonwealth as the Directors of this Company may from time to time deem it desirable in the interests of this Company so to do." 3. The total number of shares and the par value, if any, of each class of stock which the corporation is authorized to issue is as follows: WITHOUT PAR VALUE WITH PAR VALUE CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE Preferred 60,000 4.64% $ 100 200,000 9.80% $ 100 300,000 6 5/8% $ 100 Total 560,000 Common 2,891,357 $ 25 * 4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: STOCK PROVISIONS Section 1 Definitions Section 1.1. The term "Preferred Stock" when referred to collectively shall mean the classes of Preferred Stock now or hereafter described in Section 2 and additional classes of stock created or permitted by Section 3 with respect to which all dividends and amounts payable upon any liquidation, dissolution or winding up of the Corporation shall be payable on a parity with and in proportion to the amounts payable on outstanding classes of Preferred Stock, notwithstanding that such additional classes of Preferred Stock may have par values, dividend rates, redemption prices, amounts payable thereon upon liquidation, dissolution or winding up, sinking or purchase funds, voting rights and other terms and provisions varying from those of the outstanding Preferred Stock, and each class of Preferred Stock when referred to separately shall be designated by including in its title the annual dividend rate or such other distinguishing term as may be adopted at the time of original authorization of such class. Section 1.2. The term "Gross Income available for payment of interest charges on the Corporation's indebtedness" shall mean the gross revenues of the Corporation and other revenue (including interest and dividends received from Montaup Electric Corporation) from all sources less all proper deductions for operating expenses, taxes (including income, excess profits and other taxes based on or measured by income or undistributed earnings or income) and other appropriate items, including provisions for maintenance, retirements, depreciation and obsolescence (but in respect of retirements, depreciation and obsolescence the amount thereof shall not be less than the minimum provision therefor required by the terms of the indenture or agreement securing any outstanding indebtedness of the Corporation), determined in accordance with such system of accounting as may at the time be prescribed by governmental authorities having jurisdiction in the premises or in the absence thereof in accordance with sound accounting practice; provided, however, that no deduction or adjustment shall be made for or in respect of profits or losses from sales of utility property or other capital assets, or from the reacquisitions of any securities of the Corporation, or taxes on or in respect of any such profits. Section 1.3. The term "Net Income of the Corporation available for Junior Stock Dividends" shall mean the "Gross Income available for payment of interest charges on the Corporation's indebtedness", as defined in Section 1.2, reduced by interest and amortization charges and other income deductions and dividends paid or accrued on all shares of the Preferred Stock and on any class of stock-ranking as to dividends equal to or prior to the Preferred Stock; provided, however, no deduction or adjustment shall be made for or in respect of (i) expenses in connection with the issuance of capital stock or redemption or retirement of any securities issued by the Corporation (including any amount paid in excess of the principal amount or par or stated value of securities redeemed or retired) or (ii) items stated in the provision in Section 1.2 above. Section 1.4. The term "Junior Stock" shall mean any capital stock (including the outstanding capital stock which shall hereafter be designated as Common Stock) ranking junior to the Preferred Stock as to dividends or assets. Section 1.5. The term "Junior Stock Equity" shall mean the aggregate of the par value of, or stated capital represented by, the outstanding shares of Junior Stock and all earned surplus, capital or paid in surplus of the Corporation and any premium on all classes of Junior Stock of the Corporation then carried on the books of the Corporation, less - (1) The excess if any of the aggregate amount payable on involuntary liquidation of the Corporation upon all outstanding shares of each class of Preferred Stock and of each class of stock ranking prior or equal to Preferred Stock in liquidation over the sum of (i) the aggregate par or stated value of such shares and (ii) any premiums thereon; (2) Any amounts on the books of the Corporation known, or estimated if not known, to represent the excess, if any, of recorded value over original cost of used or useful utility plant of the Corporation; and (3) Any intangible items included in an asset account on the books of the Corporation, in accordance with good accounting practice; provided, however, that no deductions shall be required to be made in respect of items referred to in paragraphs (2) and (3) hereof in cases in which such items are being amortized or are provided for, or being provided for, by reserves of the Corporation. Section 1.6. The term "Capitalization" shall mean the aggregate of (i) the Junior Stock Equity, (ii) the principal amount of all indebtedness of the Corporation outstanding maturing more than twelve (12) months after the date of issue or assumption thereof, and (iii) the par value of, or stated capital represented by, premiums shown on the books of the Corporation in respect of, the outstanding shares of all classes of stock of the Corporation, other than Junior Stock. Section 2 Classes of Preferred Stock Section 2.1. The 4.64% Preferred Stock. The authorized amount of the 4.64% Preferred Stock, hereby designated as "4.64% Preferred Stock", (which shares are hereinafter sometimes called "Preferred Stock (1963 Class)"), shall consist of 60,000 shares of the par value of $100 per share. (a) Dividends Out of any funds of the Corporation available for dividends, the holders of the Preferred Stock (1963 Class) at the time outstanding shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 4.64% per annum, and no more, payable quarterly on March1, June1, September 1 and December 1 in each year, beginning with December 1, 1963. Dividends on the shares of Preferred Stock (1963 Class) shall be cumulative from and after September 1, 1963 on shares initially issued and on subsequently issued shares from and after the first date of the quarterly period in which they are issued. (b) Liquidation Rights In the event of any liquidation, dissolution or winding up of the Corporation the holders of the Preferred Stock (1963 Class) shall be entitled to receive the amounts prescribed in Section 3.2. (c) Redemption Provisions The Corporation may, at its option expressed by vote of its Board of Directors, redeem the Preferred Stock (1963 Class) as a whole at any time or in part from time to time at $100 per share, plus a premium of $3.62 per share if redeemed prior to September 1, 1968 $3.48 per share if redeemed on September 1, 1963, or thereafter prior to September 1, 1973 $3.23 per share if redeemed on September 1, 1973, or thereafter prior to September 1, 1978 and $2.98 per share if redeemed on or after September 1, 1978, in each case together with any accrued dividends. (d) Voting and Other Rights The holders of Preferred Stock (1963 Class) shall have such voting and other rights and be subject to such restrictions and qualifications as are set forth in Sections 3 and 5. Section 2.2. The 9.80% Preferred Stock. The authorized amount of the 9.80% Preferred Stock, hereby designated as "9.80% Preferred Stock" (which shares are hereinafter sometimes called "Preferred Stock (1988 Class)"), shall consist of 200,000 shares of the par value of $100 per share. (a) Dividends Out of the funds of the Corporation available for dividends, the holders of the Preferred Stock (1988 Class) at the time outstanding shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 9.80% per annum, and no more, payable quarterly on March 1, June 1, September 1, and December 1 in each year, beginning with December 1, 1988. Dividends on the shares of Preferred Stock (1988 Class) shall be cumulative from and after September 29, 1988 on shares initially issued and on subsequently issued shares from and after the first day of the quarterly period in which they are issued. (b) Liquidation Rights In the event of any liquidation, dissolution or winding up of the Corporation the holders of the Preferred Stock (1988 Class) shall be entitled to receive the amounts prescribed in Section 3.2. (c) Redemption Provisions The Corporation may, at its option expressed by vote of its Board of Directors, redeem the Preferred Stock (1988 Class) as a whole at any time or in part from time to time at $100 per share, plus a premium of $109.80 per share if redeemed prior to September 1, 1993, $107.35 per share if redeemed on September 1, 1993 or thereafter prior to September 1, 1998, $104.90 per share if redeemed on September1, 1998, or thereafter prior to September 1, 2003, $102.45 per share if redeemed on September 1, 2003, or thereafter prior to September 1, 2008, and $100.98 per share if redeemed on or after September 1, 2008. in each case together with any accrued dividends; provided, however, that (i) no share of Preferred Stock (1988 Class) shall be redeemed prior to September 1, 1993 if such redemption is for the purpose or in anticipation of refunding such share, directly or indirectly, through the incurring of debt, or through the issuance of capital stock ranking equally with or prior to the Preferred Stock (1988 Class) as to dividends or assets, if such debt has an effective interest cost to the Corporation (computed in accordance with generally accepted financial practice), or such stock has an effective dividend cost to the Corporation (so computed), of less than the effective dividend cost to the Corporation of the Preferred Stock (1988 Class); and (ii) on and after September 1, 1993 shares of Preferred Stock (1988 Class) may be redeemed at $100.00 per share together with any accrued dividends to the extent required or permitted for the sinking fund for such shares pursuant to paragraph (d) of this Section 2.2. (d) Sinking Fund (1) As long as any shares of Preferred Stock (1988 Class) are outstanding, the Corporation shall, on or before August 31, 1993, and on or before August 31 of each year thereafter, deposit (out of any funds legally available therefor) with the transfer agent for the Preferred Stock (1988 Class) as a sinking fund, in trust for the benefit of the holders of shares of Preferred Stock (1988 Class) to be called for redemption, a cash sum sufficient to redeem 8,000 shares of the Preferred Stock (1988 Class) on the next succeeding September 1 at a price of $100.00 per share plus dividends accrued to such September 1. In addition to the cash required to be deposited with such transfer agent pursuant to the preceding sentence, the Corporation may at its option on any such August 31 also deposit with such transfer agent as and for an increased sinking fund a sum in cash sufficient to redeem at such price on the next succeeding September 1 a whole multiple of 100 shares, but not in excess of 8,000 shares, of Preferred Stock (1988 Class). Any election by the Corporation to use such option shall be evidenced by written notice delivered to such transfer agent not later than July15, in the year in question, and shall be irrevocable upon such delivery. The option to increase the size of the sinking fund shall be noncumulative so that the failure to elect such option in any year, in whole or in part, shall not increase the maximum amount which may be deposited with such transfer agent in any subsequent year. The foregoing is subject to the provision that the Corporation shall be entitled to credit against any required or optional sinking fund payment, at $100.00 per share (not including any amount equal to any dividends accrued), any shares of Preferred Stock (1988 Class), which the Corporation may have previously acquired in any manner other than through the operation of the required or optional provisions of the sinking fund, and not previously used as such credit, provided that on or before July 15 in the year in which such credit is to be used such transfer agent is furnished with a written notice of the number of shares of Preferred Stock (1988 Class) to be used as such credit and provided, further, that not later than the next succeeding August 31 the Corporation delivers to such transfer agent certificates, cancelled or for cancellation, representing such number of shares. Forthwith after July 15 in each year in which a deposit of cash is to be made as required or permitted hereby the Corporation shall take such action as shall be required to cause the amount so deposited to be applied to the redemption of the largest number of shares of Preferred Stock (1988 Class) that can be redeemed therewith on the next succeeding September 1, at a price of $100.00 per share plus dividends accrued to such September 1, in the manner and with the effect provided in Section 3.3 of Article 4 of the Articles of Organization. Any balance remaining in the sinking fund shall be carried forward and added to the next sinking fund deposit required to be made. If the transfer agent for the Preferred Stock (1988 Class) is not a bank or trust Corporation doing business in the City of New York, New York or the City of Boston, Massachusetts, having a capital and surplus of at least $3,000,000, any deposit of cash required or permitted hereunder shall be made with such a bank or trust Corporation, in trust for the benefit of the holders of shares of Preferred Stock (1988 Class) to be called for redemption, instead of with such transfer agent. (2) If and so long as a default exists in any obligation of the Corporation for the benefit of the Preferred Stock (1988 Class) set forth in paragraph (1), no Restricted Stock Payment as defined in Section 3.6 of Article 4 of the Articles of Organization may be declared or made. The restriction imposed by this paragraph (2) is in addition to and not in substitution for the provisions of said Section 3.6. (e) Voting and Other Rights The holders of Preferred Stock (1988 Class) shall have voting and other rights, and be subject to such restrictions and qualifications, as are set forth in Sections 3 and 5. Section 2.3. The 6 5/8% Preferred Stock. The authorized amount of the 6 5/8% Preferred Stock, hereby designated as "6 5/8% Preferred Stock" (which shares are hereinafter sometimes called "Preferred Stock (1993 Class)"), shall consist of 300,000 shares of the par value of $100 per share. (a) Dividends Out of any funds of the Corporation available for dividends, the holders of the Preferred Stock (1993 Class) at the time outstanding shall be entitled to receive, but only when and as declared by the Board of Directors, dividends at the rate of 6 5/8% per annum, and no more, payable quarterly on March 1, June 1, September 1, and December 1 in each year, beginning with September 1, 1993. Dividends on the shares of Preferred Stock (1993 Class) shall be cumulative from and after August 11, 1993 on shares initially issued and on subsequently issued shares from and after the first day of the quarterly period in which they are issued. (b) Liquidation Rights In the event of any liquidation, dissolution or winding up of the Corporation the holders of the Preferred Stock (1993 Class) shall be entitled to receive the amounts prescribed in Section3.2. (c) Redemption Provisions The Corporation may, at its option expressed by vote of its Board of Directors, redeem the Preferred Stock (1993 Class) as a whole or in part from time to time at any time on or after September 1, 2003 at $100 per share, together with any accrued dividends and on or after September 1, 2003, 15,000 shares of Preferred Stock (1993 Class) may be redeemed at $100.00 per share together with any accrued dividends to the extent required for the sinking fund for such shares pursuant to paragraph (d) of this Section 2.3; provided, however, that the Corporation shall redeem on September 1, 2008 all outstanding shares of Preferred Stock (1993 Class) at $100.00 per share together with any accrued dividends. (d) Sinking Fund (1) As long as any shares of Preferred Stock (1993 Class) are outstanding, the Corporation shall, on or before August 31, 2003, and on or before August 31 of each year thereafter, deposit (out of any funds legally available therefor) with the transfer agent for the Preferred Stock (1993 Class) as a sinking fund, in trust for the benefit of the holders of shares of Preferred Stock (1993 Class) to be called for redemption, a cash sum sufficient to redeem 15,000 shares of the Preferred Stock (1993 class) on the next succeeding September 1 at a price of $100.00 per share plus dividends accrued to such September 1. The foregoing is subject to the provision that the Corporation shall be entitled to credit against any sinking fund payment, at $100.00 per share (not including any amount equal to any dividends accrued), any shares of Preferred Stock (1993 Class), which the Corporation may have previously acquired in any manner other than through the operation of the provisions of the sinking fund, and not previously used as such credit, provided that on or before July 15 in the year in which such credit is to be used such transfer agent is furnished with a written notice of the number of shares of Preferred Stock (1993 Class) to be used as such credit and provided, further, that not later than the next succeeding August 31 the Corporation delivers to such transfer agent certificates, cancelled or for cancellation, representing such number of shares. Forthwith after July 15 in each year in which a deposit of cash is to be made as required hereby the Corporation shall take such action as shall be required to cause the amount so deposited to be applied to the redemption of the largest number of shares of Preferred Stock (1993 Class) that can be redeemed therewith on the next succeeding September 1, at the price of $100.00 per share plus dividends accrued to such September 1, in the manner and with the effect provided in Section3.3 of Article4 of the Articles of Organization. Any balance remaining in the sinking fund shall be carried forward and added to the next sinking fund deposit required to be made. If the transfer agent for the Preferred Stock (1993 Class) is not a bank or trust corporation doing business in the City of New York, New York or the City of Boston, Massachusetts, having a capital and surplus of at least $3,000,000, any deposit of cash required or permitted hereunder shall be made with such a bank or trust corporation, in trust for the benefit of the holders of shares of Preferred Stock (1993 Class) to be called for redemption, instead of with such transfer agent. (2) If and so long as a default exists in any obligation of the Corporation for the benefit of the Preferred Stock (1993 Class) set forth in paragraph (1), no Restricted Stock Payment as defined in Section3.6 of Article4 of the Articles of Organization may be declared or made. The restriction imposed by this paragraph(2) is in addition to and not in substitution for the provisions of said Section3.6. (e) Voting and Other Rights The holders of Preferred Stock (1993 Class) shall have such voting and other rights, and be subject to such restrictions and qualifications, as are set forth in Sections3 and 5. Section 3 Dividends Rights, Liquidation Rights, Redemption Provisions, Restrictions On Corporate Action, Voting Rights, Dividend Restrictions and Preemptive Rights Applicable to All Classes of Preferred Stock Section 3.1. Dividend Rights. Dividends in full shall not be declared, paid or set apart for payment on any class of Preferred Stock for any dividend period unless dividends in full have been or are contemporaneously declared, paid or set apart for payment on all outstanding shares of all classes of Preferred Stock for such dividend period and for all prior dividend periods. When the specified dividends are not paid in full on any class of Preferred Stock, the shares of each class of Preferred Stock shall share ratably in the payment of dividends, including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends, including accumulations, were paid in full. No dividends shall be paid up or set apart for the shares of any class of Junior Stock, unless full dividends on all the outstanding shares of Preferred Stock for all past quarterly dividend periods shall have been paid or declared and a sum sufficient for the payment thereof set apart and the full dividend for the then current quarterly dividend period shall have been or concurrently shall be paid or declared and a sum sufficient for the payment thereof set apart, and then only on compliance with the provisions of Sections 3.6 and 4.1. Any accumulation of dividends on the Preferred Stock shall not bear interest. Section 3.2. Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of each class of Preferred Stock shall be entitled to receive, for each share thereof, the par value thereof together with accrued dividends, plus, in case such liquidation, dissolution or winding up shall have been voluntary, an amount per share equal to the redemption premium that would then be payable to the holders of the particular class of Preferred Stock as set forth in Section2 hereof if such Preferred Stock were to be redeemed as set forth below under the caption "Redemption Provisions", before any distribution of the assets shall be made to the holders of Junior Stock; but the holders of the Preferred Stock shall be entitled to no further participation in such distribution. The term "accrued dividends", means in respect of each share of the Preferred Stock that amount which shall be equal to simple interest upon the par value thereof at an annual rate equal to the dividend rate thereon and no more from the date upon which dividends on such share became cumulative to the date fixed for payment of any amount to be distributed as aforesaid or upon redemption as hereafter provided less the aggregate amount (without interest thereon) of all dividends theretofore paid or declared and set apart for payment thereon. A consolidation or merger of the Corporation or sale, conveyance, exchange or transfer (for cash, shares of stock, securities or other consideration) of all or substantially all of the property or assets of the Corporation shall not be deemed a liquidation, dissolution or winding up of the Corporation within the meaning of this Section 3.2. Section 3.3. Redemption Provisions. Any redemption of any class of Preferred Stock under Section 2 hereof shall be in such amount, at such place and by such method, which if in part shall be by lot, as shall from time to time be determined by vote of the Board of Directors. Notice of any proposed redemption of any class of Preferred Stock shall be given by the Corporation by mailing a copy of such notice at least thirty (30) days but not more than ninety (90) days prior to the date fixed for such redemption to the holders of records of the particular shares of Preferred Stock to be redeemed at their respective addresses then appearing on the books of the Corporation. On or after the date specified in such notice, each holder of shares of any class or classes of Preferred Stock called for redemption as aforesaid upon presentation and surrender at the place designated in such notice of the certificates for such shares of Preferred Stock held by him, properly endorsed in blank for transfer or accompanied by proper instruments of assignment or transfer in blank (if required by the Corporation) and bearing all necessary stock transfer tax stamps thereto affixed and cancelled, shall be entitled to receive therefor the redemption price thereof. From and after the date fixed for redemption, unless default is made by the Corporation in providing moneys for payment of the redemption price, all dividends on the shares called for redemption shall cease to accrue, and from and after such redemption date, unless default be made as aforesaid or, at the election of the Corporation, from and after the earlier deposit by the Corporation with a bank or trust Corporation doing business in the City of Boston, Massachusetts, and having a capital and surplus of at least $1,000,000, in trust for the benefit of the holders of the shares so called for redemption, of all funds necessary for such redemption as aforesaid (provided in the latter case that there shall have been mailed as aforesaid to holders of records of shares to be redeemed a notice of the redemption thereof stating that such deposit has been or is to be made, or that the Corporation shall have executed and delivered to the Transfer Agent for the particular class or classes of Preferred Stock or to the bank or trust Corporation with which such deposit is made an instrument, purporting to be irrevocable, authorizing it to mail such notice) all rights of the holders of the shares called for redemption as stockholders of the Corporation, except only the right to receive the redemption price, shall cease and determine and Preferred Stock so redeemed shall not be reissued. Any funds so deposited which shall remain unclaimed by the holders of such Preferred Stock at the end of six (6) years after the redemption date, together with any interest thereon which shall have been allowed by the bank or trust corporation with which such deposit shall have been made, shall be paid by it to the Corporation and thereafter such holders shall be entitled to look only to the Corporation for the payment of the redemption price. The Corporation may also from time to time purchase shares of its Preferred Stock at not exceeding the redemption price plus customary brokerage commissions. Shares of Preferred Stock so purchased may in the discretion of the Board of Directors be reissued or otherwise disposed of from time to time to the extent permitted by law. So long as there are dividends in arrears on any shares of Preferred Stock, (a) the Corporation shall not redeem or purchase any shares of Preferred Stock unless, (i) in the case of redemption, all of the outstanding Preferred Stock is redeemed; or (ii) in the case of purchases, an offer to purchase is made to the holders of all the outstanding Preferred Stock and approval of such purchase of any other acquisition thereof (other than by redemption) is obtained under the Public Utility Holding Corporation Act of 1935, and (b) the Corporation shall not redeem or purchase any shares of any Junior Stock. Section 3.4. Restrictions on Corporate Action. (a) So long as any class of Preferred Stock is outstanding, the Corporation shall not, without the consent (given in writing or by a vote in person or by proxy at a meeting called for the purpose) of the holders of at least two thirds in voting power of the total number of shares of the Preferred Stock outstanding, voting as one class: (i) Create or authorize (a) any shares of any class of stock ranking as to dividends or assets prior to the Preferred Stock or (b) any obligation or security convertible into stock ranking as to dividends or assets prior to the Preferred Stock, or issue any shares of any such prior class of stock (except upon conversion pursuant to (b) above) more than twelve months after the Corporation was empowered to create or authorize such stock; (ii) Amend, change, alter or repeal any of the express rights, preferences or powers of the Preferred Stock outstanding in any manner so as to affect adversely any such rights, preferences or powers of the holders thereof, except that, if such amendment, change, alteration or repeal affects adversely the rights, preferences or power of the holders of one or more, but not all, the classes of the Preferred Stock at the time outstanding only the consent of the holders of two thirds in voting power of the total number of shares of all classes so affected shall be required; provided, however, that an amendment to increase or decrease the authorized but unissued amount of Preferred Stock, or of any class of stock ranking equal to the Preferred Stock as to dividends or assets, shall not be deemed to affect adversely the rights, preferences or powers of the holders of any class of Preferred Stock, or (iii) Issue shares of Preferred Stock, in addition to the shares authorized in Section 2, or any shares of any other class of stock ranking equal to the Preferred Stock as to dividends or assets for any purpose other than to refinance an equal par amount or stated value of Preferred Stock or stock ranking prior to or equal to the Preferred Stock as to dividends or assets at the time outstanding, or reissue any reacquired shares of Preferred Stock or of any class of stock ranking equal to the Preferred Stock as aforesaid, unless: (A) the "Gross Income available for payment of interest charges on the Corporation's indebtedness" for any period of twelve (12) consecutive calendar months within the fifteen (15) calendar months immediately preceding the month within which such additional shares are to be issued, shall have been at least one and one-half (1 1/2) times the aggregate annual interest charges on indebtedness of the Corporation and the annual dividend requirements upon all shares of Preferred Stock and on all shares of any other class of stock ranking as to dividends or assets equal to or prior to the Preferred Stock to be outstanding immediately after the issue of any such additional shares, and (B) the Junior Stock Equity shall be not less than the sum of the aggregate amounts payable upon involuntary liquidation, dissolution or winding up of the Corporation to the holders of Preferred Stock and to the holders of any other class of stock, if any, ranking as to dividends or assets equal to or prior to the Preferred Stock of the Corporation, to be outstanding after giving effect to such issue, excluding all shares thereof to be retired in connection with such proposed issue; provided, however, that if it shall have been necessary to take into consideration any earned surplus of the Corporation in such computation, the Corporation shall not thereafter pay any dividends on, or take any distribution in respect of, or purchase or otherwise acquire for value, Junior Stock, which would result in reducing the Junior Stock Equity to an amount less than the amount payable on involuntary liquidation dissolution or winding up of the Corporation with respect to all shares of Preferred Stock and all shares of any class of stock at the time outstanding ranking equal to or prior to the Preferred Stock as to dividends or assets. There shall be excluded from the foregoing computations interest charges on all indebtedness and dividend requirements on all classes of stock which are to be retired in connection with the issue of such additional shares. The Gross Income (as above) of any property acquired by the Corporation during the period for which income is computed or which is to be acquired in connection with the issuance of any such additional shares may be included on a pro forma basis in the foregoing computations. (b) So long as any shares of the Preferred Stock (1963 Class) and (1988 Class) are outstanding, the Corporation shall not, without the consent (given in writing or by vote in person or by proxy at a meeting called for that purpose) of the holders of a majority in voting power of the total number of shares of the Preferred Stock (1963 Class) and (1988 Class) outstanding, voting as one class, issue or assume any unsecured notes, debentures, or other securities representing unsecured indebtedness, for purpose other than for the refunding or renewing of such outstanding unsecured securities with equal or longer maturities theretofore issued or assumed by the Corporation or the redemption or other retirement of all outstanding shares of the Preferred Stock (1963 Class) and (1988 Class) if, immediately after such issue or assumption (1) the total principal amount of all unsecured notes debentures or other securities representing unsecured indebtedness issued or assumed by the Corporation and then outstanding would exceed twenty percent (20%) of the aggregate of (x) the total principal amount of all bonds or other securities representing secured indebtedness issued or assumed by the Corporation, and then to be outstanding and (y) the capital (including premiums on capital stock) and surplus of the Corporation as then to be stated on the books of account of the Corporation, or (2) the total outstanding principal amount of all unsecured notes, debentures or other securities representing unsecured indebtedness issued or assigned by the Corporation of maturities of less than 10 years would exceed 10% of such aggregate. (For the purpose of the foregoing, the payment due upon the maturity of unsecured indebtedness having an original single maturity in excess of 10 years of the payment due upon the final maturity of any unsecured serial indebtedness which had original maturities in excess of 10 years shall not be regarded as unsecured indebtedness of a maturity of less than 10 years until such payment shall be required to be made within three years.) (c) So long as any shares of the Preferred Stock are outstanding, the Corporation shall not, without the consent (given in writing or by vote in person or by proxy at a meeting called for that purpose) of the holders of a majority in voting power of the total number of shares of the Preferred Stock outstanding, voting as one class, merge or consolidate with or into any other corporation or corporations or sell or otherwise dispose of all or substantially all of its assets unless such merger, consolidation, sale or other disposition or the issuance and assumption of all securities to be issued or assumed in connection with any such merger or consolidation, shall have been ordered, approved, or permitted under the provisions of the Public Utility Holding Corporation Act of 1935. (d) The voting rights of the Preferred Stock hereinabove set forth shall not be effective as to a particular class or classes thereof if in connection with any of the matters specified in paragraph (a), (b) and (c), provision shall have been made for the redemption of all of the outstanding shares of such class or classes of Preferred Stock or provision shall have been made that the proposed action shall not be effective unless provision be made for the purchase, redemption or retirement of all shares of such class or classes of Preferred Stock at the time outstanding. Section 3.5. Voting Rights. The holders of the Preferred Stock shall not be entitled to vote except: (a) as provided in Section 3.4; (b) as may from time to time be required by the laws of Massachusetts; or (c) for the election of the smallest number of directors necessary to constitute a majority of the full Board of Directors whenever and as often as dividends payable on any class of the Preferred Stock shall be in arrears in an amount equivalent to or exceeding four quarterly dividends, which right may be exercised as hereinafter provided until such time as all dividends in arrears or any class of Preferred Stock shall have been paid or declared and set apart for payment, at which time such right shall terminate. So long as holders of the Preferred Stock shall have the right to elect directors under the terms of the foregoing clause (c), the Preferred Stock shall vote as one class and the holders of the Common Stock voting separately as a class shall be entitled to elect the remaining directors. Whenever, under the provisions of the foregoing clause (c) the right of holders of the Preferred Stock to elect directors shall accrue or shall terminate, the clerk of the Corporation shall in accordance with the by-laws of the Corporation, call a special meeting of the holders of the class or classes of stock of the Corporation entitled to vote for the election of directors to be held not less than 45 days and not more than 90 days after the accrual or termination of the aforesaid right, for the purpose of electing a full Board of Directors to serve until the next annual meeting and until their respective successors shall be elected and shall qualify. If at any meeting called as aforesaid or at any annual meeting of stockholders after accrual or termination of the right of holders of the Preferred Stock to elect directors as in the foregoing clause (c) provided, any director shall not be re- elected, his term of office shall end upon the election and qualification of his successor, notwithstanding that the term for which such director was originally elected shall not at the time have expired. If, during any interval between annual meetings of stockholders for the election of directors while holders of the Preferred Stock shall be entitled to elect any director pursuant to the foregoing clause (c), the number of directors in office who have been elected by the holders of the Preferred Stock or Common Stock, as the case may be, shall become less than the total number of directors subject to election by holders of shares of such class, whether by reason of the resignation, death or removal of any director or directors, or an increase in the total number of directors, (1) the vacancy or vacancies shall be filled by a majority vote of the remaining directors who either were elected by the votes of shares of such class or succeeded to a vacancy originally filled by the votes of shares of such class, and (2) if such remaining directors then in office do not constitute a majority of the number of directors subject to election by the holder of such class or if they fail to fill such vacancy within sixty days after such vacancy occurs, they, or the clerk of the Corporation, shall call a special meeting of holders of shares of such class upon not less than seven (7) days' notice and the vacancy or vacancies shall be filled at such special meeting. Any director may be removed from office for cause by vote of the holders of a majority of the shares of the class of stock voted for his election or for his predecessor in cases where such director was elected by the Board of Directors. A special meeting of holders of shares of the appropriate class may be called by a majority vote of the Board of Directors for the purpose of removing a director in accordance with the provisions of the preceding sentence, and shall be called by the clerk within forty (40) days after there shall have been delivered to the Corporation at its principal office a request to such effect signed by holders of at least five percent (5%) of the outstanding shares of the class entitled to vote with respect to the removal of any such director. Whenever, under the provisions hereof, the right of holders of the Preferred Stock to elect directors shall accrue and be exercised, the amount of all dividends on the Preferred Stock which shall be in default shall be paid, or shall be deposited in trust, out of any assets of the Corporation available therefor as soon as shall be reasonably practicable. Each holder of Preferred Stock, as to all matters in respect of which such stock has voting power, is entitled to one vote for each share of stock standing in his name, provided that if there shall be several classes of Preferred Stock outstanding which have a different par value per share for the purposes of all votes or consents contemplated in this Section 3, the class having the lowest par value per share shall be entitled to one vote per share and each other class shall be entitled to a number of votes per share proportionate to the par value per share thereof, and provided further that if at any meeting of stockholders the holders of one or more classes of Preferred Stock and the holders of any other class of stock (including Common Stock) shall be entitled to vote together and not as classes, the holders of Preferred Stock shall be entitled only to one vote per share without regard to the par value of any share. Section 3.6. Dividend Restrictions. So long as any shares of the Preferred Stock shall be outstanding, the Corporation shall not declare or pay any dividend or make any distribution on any shares of Junior Stock (other than dividends payable in shares of Junior Stock) or purchase or otherwise acquire for value any shares of any Junior Stock (other than by the issuance in exchange therefor, or by the application forthwith of the proceeds of the contemporaneous issuance or sale, of any such Junior Stock of the Corporation), each such payment, distribution, purchase and/or acquisition being hereinafter referred to as a "Restricted Stock Payment", except to the extent permitted by the following provisions: (a) No Restricted Stock Payment shall be declared or made in an amount which, together with all other dividends on any such Junior Stock declared and any other Restricted Stock Payments made in the year ending on (and including) the date of the declaration of any such dividend or the making of any other such Restricted Stock Payment, would in the aggregate exceed fifty percent (50%) of the "Net Income of the Corporation available for Junior Stock dividends" for the period of twelve (12) consecutive calendar months immediately preceding the calendar month in which such dividend is declared or such other payment is made, if at the end of such twelve (12) months' period the ratio (herein referred to as the "Capitalization Ratio") of the Junior Stock Equity of the Corporation to the Capitalization of the Corporation (after adjustment, in each case, of the surplus accounts to reflect such Restricted Stock Payment) would be less than twenty percent (20%); (b) No Restricted Stock Payment shall be declared or made in an amount which, together with all other dividends on any such Junior Stock declared and any other Restricted Stock Payments made in the year ending on (and including) the date of the declaration of any such dividend or the making of any other such Restricted Stock Payment, would in the aggregate exceed seventy-five percent (75%) of the Net Income of the Corporation available for Junior Stock dividends for the period of twelve (12) consecutive calendar months immediately preceding the calendar month in which such dividend is declared or such other payment is made, if at the end of such twelve (12) month period the Capitalization Ratio (after adjustment, in each case, of the surplus accounts to reflect such Restricted Stock Payment) would be twenty percent (20%) or more but less than twenty-five percent (25%). Section 3.7. Subscription Rights. Holders of Preferred Stock shall be entitled to subscribe for or acquire (a) new or additional shares of any class of Preferred Stock or (b) securities convertible into new or additional shares of any class of Preferred Stock, unless the stockholders upon authorizing such increase in new or additional shares of any class of Preferred Stock or such convertible securities shall provide that such new or additional shares or convertible securities shall be disposed of without being offered to the Stockholders. Except as above provided, the holders of Preferred Stock shall have no right to subscribe for or acquire any new or additional shares of stock of the Corporation. No holder of Preferred Stock need be given notice of any increase of stock of the Corporation to which he is not entitled to subscribe. Section 4 Common Stock Section 4.1. Dividends. Out of any funds of the Corporation available for dividends remaining after full cumulative dividends upon the Preferred Stock then outstanding shall have been paid, or declared and a sum sufficient for the payment thereof set apart, for all past quarterly dividend periods, and after, or concurrently with, making payment of or provision for full dividends for the current quarterly dividend period on the Preferred Stock or any other stock, if any, then outstanding ranking as to dividends ahead of the Common Stock, and provided that the Corporation is not in default in any sinking fund obligations provided for any Preferred Stock, then, and not otherwise, dividends may be paid upon the Common Stock to the exclusion of the Preferred Stock subject to the limitations provided for in section 3.6. Section 4.2. Distribution of Assets. In the event of any liquidation, dissolution or winding up of the Corporation, after there shall have been paid to or set aside for the holders of Preferred Stock or any other stock, if any, ranking as to assets ahead of the Common Stock, the full preferential amounts to which they are respectively entitled, the holders of the Common Stock shall be entitled to receive, pro rata, all of the remaining assets of the Corporation available for distribution to its stockholders. The Board of Directors by vote of the majority of the members thereof, may distribute in kind to the holders of the Common Stock such remaining assets of the Corporation or may sell, transfer or otherwise dispose of all or any of the remaining property and assets of the Corporation to any other corporation and receive payment therefor wholly or part in cash and/or in stock and/or in obligations of such corporation and may sell all or any part of the consideration received therefor or distribute the same and/or the balance thereof in kind to the holders of the Common Stock. Section 4.3. Subscription Rights. Holders of Common Stock shall have the right to subscribe for or acquire any additional share of Common Stock and, to the extent permitted by law, to subscribe for or acquire stock or securities of any kind or class convertible into shares of Common Stock, but no holder of Common Stock shall have any right to subscribe for or acquire any additional shares of Preferred Stock or any other class of stock of the Corporation except Common Stock or any stock or securities of any kind or class convertible into shares of any other class of stock of the Corporation other than Common Stock, unless otherwise determined by the Stockholders authorizing such additional shares or convertible securities. No holder of Common Stock need be given notice of any increase of stock of the Corporation to which he is not entitled to subscribe. Section 4.4. Voting Rights. Subject to the voting rights expressly conferred upon the Preferred Stock by Section 3 and the voting rights of any other class of Junior Stock, the holders of the Common stock shall exclusively possess full voting power for the election of directors and for all other purposes. Section 5 Miscellaneous Section 5.1. Amendments. From time to time and without limitation of other rights and powers of the Corporation as provided by law, the Corporation may create or authorize one or more classes or kinds of stock ranking prior to or on a parity with or junior to the Preferred Stock or may increase the authorized amount of any class of stock, authorize the disposition thereof permitted by law or make other amendments to the Article of Organization or the By-Laws of the Corporation permitted by law, including, in particular, the provisions setting out the preferences, restrictions or qualifications of any class of stock at the time outstanding, upon the vote given at a meeting called for the purpose of the holders of a majority of the shares of stock then entitled to vote thereon, or upon such other vote as may then be provided by law; provided that the consent of the holders of shares of any class of Preferred Stock required by Section 3.4, if any such consent be so required, shall have been obtained, and provided further that the rights, privileges, terms and conditions of shares of the Common stock shall not be subject to amendment, alteration, change or repeal without the consent by vote at a meeting called for that purpose of the holders of a majority of the total number of shares of the Common Stock then outstanding. Notwithstanding the foregoing, the Board of Directors of the Corporation to the extent permitted by law, may fix the par values, dividends rates, redemption prices, amounts payable thereon upon liquidation, dissolution or winding up and sinking or purchase funds and other permitted provisions for additional classes of Preferred Stock within the aggregate par value thereof authorized by the Articles of Organization, votes of the Stockholders or By-Laws. * 5. The restrictions, if any, imposed by the articles of organization upon the transfer of shares of stock of any class are as follows: None. * 6. Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: None. * We further certify that the foregoing restated articles of organization effect no amendments to the articles of organization of the corporation as heretofore amended, except amendments to the following articles 3 and 4. Briefly describe amendments in space below: The authorized shares of Preferred Stock have been reduced from 800,000 to 560,000. Sections 2.02 through 2.06 of Article 4 have been deleted. Sections 2.01 and 2.07 of Article 4 have been redesignated Sections 2.1 and 2.2. A new Section 2.3 has been inserted into Article 4. Paragraph (b) of Section 3.4 of Article 4 has been deleted and replaced. * If there are no such provisions, state "None". IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 9th day of August in the year 1993 /s/ Richard M. Burns, Vice President /s/ William F. O'Connor, Clerk THE COMMONWEALTH OF MASSACHUSETTS RESTATED ARTICLES OF ORGANIZATION (General Laws, Chapter 164, Section 8C) I hereby approve the within restated articles of organization and, the filing fee in the amount of $400 having been paid, said articles are deemed to have been filed with me this 9th day of August, 1993. /s/ Michael Joseph Connolly MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION PHOTO COPY OF RESTATED ARTICLES OF ORGANIZATION TO BE SENT TO: Arthur I. Anderson, Esq. McDermott, Will & Emery 75 State Street, Suite 1700 Boston, MA 02109 617/345-5016 EX-99.C-33 3 24TH SUPPL INDENTURE OF EECO EXHIBIT C-33 EASTERN EDISON COMPANY TO STATE STREET BANK AND TRUST COMPANY (formerly State Street Trust Company) BOSTON, MASSACHUSETTS, Trustee TWENTY-FOURTH SUPPLEMENTAL INDENTURE Dated as of May 1, 1993 Supplementing the Indenture of First Mortgage And Deed of Trust Dated As Of September 1, 1948 This is a Mortgage of Personal Property as well as a Mortgage upon Real Estate. *n* THIS TWENTY-FOURTH SUPPLEMENTAL INDENTURE, dated as of May 1, 1993 between Eastern Edison Company (formerly named Brockton Edison Company), as Debtor (its Federal tax number being 04-1123095), a corporation organized and existing under the laws of The Commonwealth of Massachusetts and having its principal place of business and mailing address at 110 Mulberry Street in the City of Brockton in said Commonwealth (hereinafter sometimes called the "Company"), party of the first part, and State Street Bank and Trust Company (formerly State Street Trust Company and hereinafter sometimes called the "Trustee"), as Secured Party (its Federal tax number being 04-1867445), a corporation duly organized and existing under the laws of The Commonwealth of Massachusetts, having its principal office andmailing address at 225 Franklin Street, Boston, Massachusetts 02110, party of the second part. WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (hereinafter called the "Original Indenture") to secure, as provided therein, its bonds (in the Original Indenture and herein called the "Bonds"), not limited except as provided in Section 3.01 of the Original Indenture, to be known generally as its "First Mortgage and Collateral Trust Bonds", and to be issued in one or more series as provided in the Original Indenture; and WHEREAS, the Company has heretofore executed and delivered to the Trustee twenty-three indentures supplemental to the Original Indenture as follows: a First Supplemental Indenture dated as of February 1, 1953 (hereinafter sometimes called the "First Supplemental Indenture"), a Second Supplemental Indenture dated as of May 1, 1954 (hereinafter sometimes called the "Second Supplemental Indenture"), a Third Supplemental Indenture dated as of June 1, 1955 (hereinafter sometimes called the "Third Supplemental Indenture"), a Fourth Supplemental Indenture dated as of September 1, 1957 (hereinafter sometimes called the "Fourth Supplemental Indenture"), a Fifth Supplemental Indenture dated as of April 1, 1959 (hereinafter sometimes called the "Fifth Supplemental Indenture"), a Sixth Supplemental Indenture dated as of October 1, 1963 (hereinafter sometimes called the "Sixth Supplemental Indenture"), a Seventh Supplemental Indenture dated as of June 1, 1969 (hereinafter sometimes called the "Seventh Supplemental Indenture"), an Eighth Supplemental Indenture dated as of July 1, 1972 (hereinafter sometimes called the "Eighth Supplemental Indenture"), a Ninth Supplemental Indenture dated as of September 1, 1973 (hereinafter sometimes called the "Ninth Supplemental Indenture"), a Tenth Supplemental Indenture dated as of October 1, 1975 (hereinafter sometimes called the "Tenth Supplemental Indenture"), an Eleventh Supplemental Indenture dated as of January 1, 1979 (hereinafter sometimes called the "Eleventh Supplemental Indenture"), a Twelfth Supplemental Indenture dated as of October 1, 1980 (hereinafter sometimes called the "Twelfth Supplemental Indenture"), a Thirteenth Supplemental Indenture dated as of July 1, 1981 (hereinafter sometimes called the "Thirteenth Supplemental Indenture"), a Fourteenth Supplemental Indenture dated as of June 1, 1982 (hereinafter sometimes called the "Fourteenth Supplemental Indenture"), a Fifteenth Supplemental Indenture dated as of May 1, 1983 (hereinafter sometimes called the "Fifteenth Supplemental Indenture"), a Sixteenth Supplemental Indenture dated as of September 1, 1984 (hereinafter sometimes called the "Sixteenth Supplemental Indenture"), a Seventeenth Supplemental Indenture dated as of July 1, 1986 (hereinafter sometimes called the "Seventeenth Supplemental Indenture"), an Eighteenth Supplemental Indenture dated as of June 1, 1987 (hereinafter sometimes called the "Eighteenth Supplemental Indenture"), a Nineteenth Supplemental Indenture dated as of November 1, 1987 (hereinafter sometimes called the "Nineteenth Supplemental Indenture"), a Twentieth Supplemental Indenture dated as of May 1, 1988 (hereinafter sometimes called the "Twentieth Supplemental Indenture"), a Twenty-First Supplemental Indenture dated as of September 1, 1988 (hereinafter sometimes called the "Twenty-First Supplemental Indenture"), a Twenty-Second Supplemental Indenture dated as of December 1, 1990 (hereinafter sometimes called the "Twenty-Second Supplemental Indenture") and a Twenty-Third Supplemental Indenture dated of July 1, 1992 (hereinafter sometimes called the "Twenty-Third Supplemental Indenture") (the Original Indenture, as supplemented and modified by the First Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture and the Eleventh Supplemental Indenture and as supplemented by the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental Indenture, the Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture, the Twentieth Supplemental Indenture, the Twenty-First Supplemental Indenture, the Twenty-Second Supplemental Indenture, the Twenty-Third Supplemental Indenture and this Twenty-Fourth Supplemental Indenture, being herein sometimes called the "Indenture"); and WHEREAS, pursuant to the Original Indenture, as heretofore supplemented and modified, there have been executed, authenticated, delivered and issued and there are now outstanding First Mortgage and Collateral Trust Bonds of series and in principal amounts as follows: Title Issued Outstanding 4 1/2% Series due 1993 . . . . . 5,000,000 8.90% Series due 1995/Secured Medium Term Notes . . . . 10,000,000 6 1/2% Series due 1997 . . . . . 7,000,000 10 1/8% Second Series due 1997. . 35,000,000 9 7/8% Series due 1998 . . . . . 40,000,000 8 3/8% Series due 1999 . . . . . 5,000,000 7 7/8% Series due 2002 . . . . . 8,000,000 7.78% Second Series due 2002/ Secured Medium Term Notes 35,000,000 8 3/8% Series due 2003 . . . . . 10,000,000 9 5/8% Series due 2016 . . . . . 55,000,000 and WHEREAS, the Board of Directors of the Company has established under Section 3.02 of the Original Indenture, three new series of Bonds, the first to be designated First Mortgage and Collateral Trust Bonds, 5 7/8% Second Series due 1998 (hereinafter referred to as the "Bonds of the Second 1998 Series"), the second to be designated First Mortgage and Collateral Trust Bonds 6 7/8% Second Series due 2003 (hereinafter referred to as the "Bonds of the Second 2003 Series") and the third to be designated First Mortgage and Collateral Trust Bonds 8% Series due 2023 (hereinafter referred to as the "Bonds of the 2023 Series"), and has authorized the issue of said Bonds of the Second 1998 Series in the aggregate principal amount of Twenty Million Dollars ($20,000,000), the issue of said Bonds of the Second 2003 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000) and the issue of said Bonds of the 2023 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000), all pursuant to the provisions of Article Four of this Twenty-Fourth Supplemental Indenture; and WHEREAS, Article Eighteen of the Original Indenture provides, among other things, that the Company, when authorized by a resolution of the Board of Directors, and the Trustee, from time to time and at any time, subject to the restrictions in the Indenture contained, may, and when so required by the Indenture, shall, enter into indentures supplemental to the Original Indenture and which thereafter shall form a part thereof, for the purposes, among others, of (a) providing for the creation of a series of Bonds, designating the series to be created and specifying the form and provisions of the Bonds of such series, (b)adding to the Indenture other covenants and agreements to be thereafter observed by the Company, and (c)mortgaging, pledging, conveying, transferring or assigning to the Trustee, and subjecting to the lien of the Indenture, additional properties acquired by the Company; and WHEREAS, the Board of Directors of the Company (pursuant to authority granted by the stockholders of the Company entitled to vote thereon) by resolutions duly adopted authorized the execution of this Twenty-Fourth Supplemental Indenture for the purpose of (a) creating the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series, designating the series created and specifying the form and the provisions of the Bonds of such series, (b) adding to the Indenture certain covenants and agreements to be hereafter observed by the Company, and (c) subjecting to the lien of the Indenture additional properties acquired by the Company; WHEREAS, all acts and proceedings required by law and by the Certificate of Organization and Certificate of Incorporation and by-laws of the Company necessary to secure the payment of the principal of and interest and premium, if any, on the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series, to make the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series to be issued hereunder, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute the Indenture a valid and binding mortgage for the security of the Bonds, in accordance with its and their terms, have been done and taken; and the execution and delivery of this Twenty-Fourth Supplemental Indenture and the issue of the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series, have been in all respects duly authorized: NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and premium, if any, and interest on all Bonds at any time issued and outstanding under the Indenture, according to their tenor, purport and effect, to confirm the lien of the Indenture upon the mortgaged property mentioned therein including any and all property purchased, constructed or otherwise acquired by the Company since the date of execution of the Original Indenture and to secure the performance and observance of all the covenants and conditions in the Bonds and in the Indenture contained, and to declare the terms and conditions upon and subject to which the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series are to be issued and secured, and for and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series by the holders thereof, and of the sum of $10 duly paid to the Company by the Trustee, at or before the ensealing and delivery hereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Company has executed and delivered this Twenty-Fourth Supplemental Indenture, and by these presents, does grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto State Street Bank and Trust Company, Trustee, its successors in trust and its and their successors and assigns, all the property, rights, privileges and franchises (other than excepted property) of the character described in the Granting Clauses of the Original Indenture now owned of record or otherwise by the Company, whether or not constructed or acquired since the date of execution of the Original Indenture or which may hereafter be constructed or acquired by it, including without limiting the generality of the foregoing the property described in Article Four hereof, if any, but subject to all exceptions, reservations and matters of the character therein referred to, and expressly excepting and excluding from the lien and operation of the Indenture all properties of the character specifically excepted by Paragraphs B through H of Granting Clause VII of the Original Indenture and all property released or otherwise disposed of pursuant to the provisions of the Indenture. If, upon the happening of any default as defined in Article Twelve of the Original Indenture, the Trustee or a receiver or trustee shall enter upon and take possession of the trust estate, the Trustee or such receiver or trustee may, to the extent permitted by law, at the same time likewise take possession of any and all of the property of the character specifically excepted under the heading "Excepted Property" of Granting Clause VII of the Original Indenture, other than Paragraph F thereof, then on hand and use and administer the same to the same extent as if such property were part of the trust estate, unless and until such default shall be remedied or waived and possession of the trust estate restored to the Company. TO HAVE AND TO HOLD all of the property, real, personal and mixed, and all and singular the lands, properties, estates, rights, franchises, privileges and appurtenances hereby granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed, or intended so to be, unto the Trustee and its successors in trust and to its and their successors and assigns, forever. BUT IN TRUST, NEVERTHELESS, for the equal and proportionate use, benefit, security and protection of those who from time to time shall hold the Bonds and coupons, or any of them, authenticated and delivered under the Original Indenture, as heretofore and hereby supplemented and modified, and duly issued by the Company, without any discrimination, preference or priority of any one Bond or coupon over any other by reason of priority in the time of issue, sale or negotiation thereof or otherwise, except as provided in Section 12.28 of the Original Indenture, so that, subject to said Section 12.28, each and all of said Bonds and coupons shall have the same right, lien and privilege under the Original Indenture, as heretofore and hereby supplemented and modified, and shall be equally and proportionately secured thereby and hereby (except as any sinking, replacement or other analogous fund established in accordance with the provisions of the Indenture may afford additional security for the Bonds of any specific series), with the same effect as if all of the Bonds and coupons had been issued, sold and negotiated simultaneously on the date of the delivery of the Original Indenture. THE COMPANY HEREBY DECLARES that it holds and will hold and apply all property and rights of the character described in Paragraph F of Granting Clause VII of the Original Indenture as specifically reserved and excepted, upon the trusts set forth in the Original Indenture, as heretofore and hereby supplemented and modified, and as the Trustee (or any purchaser upon any sale of the mortgaged property) shall for such purpose direct from time to time, to the fullest extent permitted by law or in equity and by any instruments creating the same, as fully as if the same could be and had been hereby granted, conveyed, mortgaged, pledged, transferred and assigned to and vested in the Trustee. It is hereby covenanted, declared and agreed by and between the parties hereto that all Bonds and coupons, if any, are to be authenticated, delivered and issued and that all property subject to or to become subject to the Indenture is to be held, subject to the further covenants, conditions, uses and trusts set forth in the Indenture, and the Company for itself and its successors or assigns does hereby covenant and agree to and with the Trustee and its successor or successors in such trust, for the benefit of those who shall hold Bonds, or coupons, or any of them as follows: ARTICLE ONE Bonds of the Second 1998 Series and Certain Provisions Relating Thereto. Section 1.01. A. Terms of Bonds of the Second 1998 Series. There shall be, and hereby is, created a new series of Bonds, known as and entitled "First Mortgage and Collateral Trust Bonds, 5 7/8% Second Series due 1998". The principal amount of the Bonds of the Second 1998 Series shall not be limited except as provided in Section 3.01 of the Original Indenture and except as may be provided in any indenture supplemental thereto. The definitive Bonds of the Second 1998 Series shall be issued only as registered Bonds without coupons in denominations of $1,000 or any multiple thereof, numbered RZ1 upwards. May 1, 1993 shall be the date of the commencement of the first interest period for Bonds of the Second 1998 Series. All Bonds of the Second 1998 Series shall mature May 1, 1998, and shall bear interest at the rate of 5 7/8% per annum until the payment of the principal thereof, such interest to be payable semi-annually on May 1 and November 1 in each year commencing November 1, 1993. The principal of and the premium, if any, and interest on the Bonds of the Second 1998 Series shall be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal of and premium, if any, on Bonds of the Second 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Commonwealth of Massachusetts, of the Trustee, except that, in case of the redemption as a whole at any time of the Bonds of the Second 1998 Series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holders, Bonds of the Second 1998 Series may be surrendered for redemption and payment. Except as herein provided, interest on Bonds of the Second 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee, or at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, City and State of New York, in each case to the holder of record on the record date as hereinbelow defined. Interest on the Bonds of the Second 1998 Series shall, unless otherwise directed by the respective registered holders thereof, be paid by checks payable to the order of the respective holders entitled thereto, and mailed by the Trustee by first class mail, postage prepaid, to such holders at their respective registered addresses as shown on the Bond register for the Bonds of the Second 1998 Series. The definitive Bonds of the Second 1998 Series may be issued in the form of Bonds engraved, printed or lithographed on steel engraved borders. The person in whose name any Bond of the Second 1998 Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond of the Second 1998 Series upon any transfer or exchange thereof (including any exchange effected as an incident to a partial redemption thereof) subsequent to the record date and prior to such interest payment date, except that, if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, then the registered holders of Bonds of the Second 1998 Series on such record date shall have no further right to or claim in respect of such defaulted interest as such registered holders on such record date, and the persons entitled to receive payment of any defaulted interest thereafter payable or paid on any Bonds of the Second 1998 Series shall be the registered holders of such Bonds of the Second 1998 Series on the record date for payment of such defaulted interest. The term "record date" as used in this Section 1.01, and in the form of the Bonds of the Second 1998 Series, with respect to any interest payment date applicable to the Bonds of the Second 1998 Series, shall mean the April 15 next preceding a May 1 interest payment date or the October 15 next preceding a November 1 interest payment date, as the case may be, or such record date established for defaulted interest as hereinafter provided. In case of failure by the Company to pay any interest when due, the claim for such interest shall be deemed to have been transferred by transfer of any Bond of the Second 1998 Series registered on the books of the Company, and the Company, by not less than 10 days prior written notice to bondholders, may fix a subsequent record date for determination of holders entitled to payment of such interest. Such provision for establishment of a subsequent record date, however, shall in no way affect the rights of bondholders or of the Trustee consequent on any default. Except as provided in this Section 1.01, every Bond of the Second 1998 Series shall be dated as provided in Section 3.05 of the Original Indenture. However, so long as there is no existing default in the payment of interest on the Bonds of the Second 1998 Series, all Bonds of the Second 1998 Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall be dated such interest payment date and shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in the interest due on such interest payment date, then any such Bond of the Second 1998 Series shall bear interest from the May 1 or November 1, as the case may be, to which interest has been paid, unless such interest payment date is November 1, 1993, in which case from May 1, 1993. Notwithstanding the provisions of Section 3.11 of the Original Indenture, for any exchange of Bonds of the Second 1998 Series for other Bonds of the Second 1998 Series of different authorized denominations or for any transfer of Bonds of the Second 1998 Series the Company, at its option, may require the payment of a sum only sufficient to reimburse it for any stamp tax or other governmental charge incident thereto. The Trustee hereunder shall, by virtue of its office as such Trustee, be a paying agent of the Company for the purpose of the payment of the principal of and premium, if any, and interest on the Bonds of the Second 1998 Series and the registrar and transfer agent of the Company for the purpose of registering and transferring Bonds of the Second 1998 Series. Neither the Company nor the Trustee shall be required to make transfers or exchanges of Bonds of the Second 1998 Series for a period of ten days next preceding any date on which any Bonds of the Second 1998 Series are to be designated to be redeemed and neither the Company nor the Trustee shall be required to make transfers or exchanges of any Bonds designated in whole for redemption or that part of any Bond designated in part for redemption. B. Form of Bonds of the Second 1998 Series. The Bonds of the Second 1998 Series and the Trustee's authentication certificate to be executed on the Bonds of said Series, shall be in substantially the following form: No. RZ $_______________ EASTERN EDISON COMPANY FIRST MORTGAGE AND COLLATERAL TRUST BOND 5 7/8% SECOND SERIES DUE 1998 DUE May 1, 1998 Eastern Edison Company, a Massachusetts corporation (hereinafter sometimes called the "Company"), for value received, herebypromisestopay to or registered assigns, on May 1, 1998 or earlier as hereinafter provided and to pay to said payee, or registered assigns, interest hereon at the rate specified in the title of this bond, from the date hereof, as provided in the Twenty-Fourth Supplemental Indenture mentioned on the reverse hereof, payable semi-annually on the first days of May and November in each year until payment of the principal hereof. The interest so payable upon any May 1 or November 1 will, subject to certain exceptions described on the reverse hereof, be paid to the person in whose name this bond is registered at the close of business on the April 15 preceding such May 1 or the October 15 preceding such November 1, as the case may be. Principal of, premium, if any, and interest on this bond will be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal and premium will be payable at the principal corporate trust office in the City of Boston, Massachusetts of the Trustee under the Indenture mentioned on the reverse hereof, except that in case of the redemption as a whole at any time of the bonds of this series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holder, this bond may be surrendered for redemption and payment. Interest on this bond will be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee or, at the option of the holder hereof, at the office or agency of the Company in the Borough of Manhattan, City and State of New York; provided, however, that interest on this bond shall, unless otherwise directed by the registered holder hereof, be paid by check payable to the order of the registered holder entitled thereto and mailed by the Trustee by first class mail, postage prepaid to such holder at his address as shown on the bond register for the bonds of this series. This bond shall not become or be valid or obligatory for any purpose until the authentication certificate hereon shall have been signed by the Trustee. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, EASTERN EDISON COMPANY has caused these presents, which are intended to take effect as a sealed instrument, to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents under its corporate seal or a facsimile thereof, attested by the manual or facsimile signature of its Clerk or one of its Assistant Clerks, all as of the date set forth below. Dated:_____________________ EASTERN EDISON COMPANY By ______________________ President Attest ________________________ Clerk [FORM OF REVERSE OF BOND OF THE SECOND 1998 SERIES] This bond is one of the bonds, of the above designated series, of an authorized issue of bonds of the Company, known as First Mortgage and Collateral Trust Bonds, all issued or issuable in one or more series under and equally and proportionately secured (except insofar as any sinking fund, replacement fund or other fund established in accordance with the provisions of the Indenture hereinafter mentioned may afford additional security for the bonds of any specific series) by an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948, executed and delivered by the Company to State Street Trust Company (now State Street Bank and Trust Company), Boston, Massachusetts, as Trustee (herein with its successors under said Indenture sometimes called the "Trustee"), as supplemented and modified by the First Supplemental Indenture dated as of February1, 1953, by the Eighth Supplemental Indenture dated as of July1, 1972, by the Ninth Supplemental Indenture dated as of September1, 1973, by the Tenth Supplemental Indenture dated as of October1, 1975 and by the Eleventh Supplemental Indenture dated as of January1, 1979 and as supplemented by all other indentures supplemental thereto, executed and delivered by the Company to said Trustee, to which Indenture and all indentures supplemental thereto to which the Trustee shall be a party (herein sometimes called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged as security for said bonds, the nature and extent of the security, and the rights, duties and immunities thereunder of the Trustee, the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said bonds may be issued thereunder; but neither the foregoing reference to the Indenture nor any provision of this bond or of the Indenture or of any indenture supplemental thereto shall affect or permit any impairment of the obligation of the Company, which is absolute and unconditional, to pay at the stated or accelerated times herein provided, the principal of and the premium, if any, and the interest on this bond as herein provided. The bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth in the tabulation below under the heading "Regular Redemption Price" (provided, however, that such right of redemption shall be limited as provided in the Twenty-Fourth Supplemental Indenture); and (b)for the replacement fund provided for in the Indenture and by the application of proceeds of certain property subject to the lien thereof, upon payment of the applicable percentage of the called principal amount thereof set forth in said tabulation under the heading "Special Redemption Price": If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption May 1 Price Price 1993 105.469% 100% 1994 104.102% 100% 1995 102.734% 100% 1996 101.367% 100% 1997 100.000% 100% together in any case with interest accrued thereon to the redemption date, upon prior notice given by first class mail, postage prepaid, as provided in the Twenty-Fourth Supplemental Indenture to the holders of record of each bond affected not less than thirty days nor more than ninety days prior to the redemption date and subject to all other conditions and provisions of the Indenture. If this bond or any portion thereof ($1,000 or any multiple thereof) is duly designated for redemption, if payment of the principal hereof or of such portion with accrued interest and premium, if any, is provided for, and if notice of such redemption is duly given or provided for, all as specified in the Indenture, this bond or such portion shall cease to be entitled to the lien of the Indenture from and after the date such payment and notice are irrevocably so provided for and shall cease to bear interest from and after the date fixed for redemption. In the event of the selection for redemption of a portion only of the principal of this bond, payment of the redemption price will be made only (a) upon presentation of this bond for notation hereon of such payment of the portion of the principal of this bond so called for redemption, or (b) upon surrender of this bond in exchange for a bond or bonds (of authorized denominations of the same series) for the unredeemed balance of the principal amount of this bond. In the event of the redemption of this bond in whole, payment of the redemption price will be made only upon surrender of this bond. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding (determined as provided in the Indenture) including, if more than one series of bonds shall be at the time outstanding, not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding of each series affected, to effect, by an indenture supplemental to the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the bonds and coupons; provided, however, that no such modification or alteration shall be made without the consent of the registered owner hereof which will (a) extend the maturity of this bond or reduce the rate or extend or otherwise change the time of payment of interest hereon or reduce the amount of the principal hereof or reduce any premium payable on the redemption hereof, or (b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the Indenture, or alter the equal and proportionate security afforded by the lien of the Indenture for the bonds issued thereunder, or (c) reduce the number or percentage of the principal amount of the bonds upon the consent of the holders of which modifications or alterations may be made as aforesaid. This bond is transferable by the registered owner hereof in person or by his duly authorized attorney, on books of the Company kept for the purpose, at the principal corporate trust office of the Trustee upon surrender of this bond for cancellation and upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture, sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and thereupon a new registered bond or bonds of the same series of like aggregate principal amount will be issued to the transferee in exchange therefor. The registered owner of this bond at his option may surrender the same for cancellation at said office and receive in exchange therefor the same aggregate principal amount of registered bonds of the same series but of other authorized denominations, upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and subject to the terms and conditions therein set forth. Neither the Company nor the Trustee shall be required to make transfers or exchanges of bonds of this series for a period of ten days next preceding any designation of bonds of said series to be redeemed, and neither the Company nor the Trustee shall be required to make transfers or exchanges of any bonds designated in whole for redemption or that part of any bond designated in part for redemption. Subject to the provisions of the Twenty-Fourth Supplemental Indenture, if this bond is surrendered for any transfer or exchange between the record date for any interest payment date and such interest payment date, the new bond will be dated such interest payment date. The Twenty-Fourth Supplemental Indenture provides that in the event of any default in payment of the interest due on any interest payment date, such interest shall not be payable to the holder of this bond on the original record date but shall be paid to the registered holder of such bond on the subsequent record date established for payment of such defaulted interest. If a default as defined in the Indenture shall occur, the principal of this bond may become or be declared due and payable before maturity in the manner and with the effect provided in the Indenture. The holders, however, of certain specified percentages of the bonds at the time outstanding, including in certain cases specified percentages of bonds of particular series, may in the cases, to the extent and under the conditions provided in the Indenture, waive past defaults thereunder and the consequences of such defaults. No recourse shall be had for the payment of the principal of or the premium, if any, or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or such predecessor or successor corporation, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and as provided in the Indenture. The Company and the Trustee and any paying agent and any bond registrar may deem and treat the person in whose name this bond shall be registered upon the books of the Company as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of and interest on this bond and for all other purposes, whether or not this bond be overdue; and all such payments so made to such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon this bond to the extent of the sum or sums so paid and neither the Company nor the Trustee nor any paying agent nor any bond registrar shall be affected by any notice to the contrary. [FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] This is one of the bonds, of the series designated therein, described in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE, By__________________________________ Authorized Officer SECTION 1.02. Redemption Provisions for Bonds of the Second 1998 Series. The Bonds of the Second 1998 Series shall be subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Regular Redemption Price" in the tabulation in the form of the Bonds of the Second 1998 Series set forth in Section 1.01 hereof; provided, however, that no such redemption shall be made (except in connection with any consolidation or merger with any corporation other than an affiliate of the Company in which the Company shall not be the surviving corporation, or transfer or sale of all or substantially all of the property of the Company to any corporation other than an affiliate of the Company), directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness which has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with the indebtedness being incurred in such refunding operation) of less than the effective interest cost to the Company of the Bonds of the Second 1998 Series; and (b) upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Special Redemption Price" in the tabulation in the form of the Bonds of the Second 1998 Series set forth in Section 1.01 hereof, either, (i) through the application of cash deposited with the Trustee for the replacement fund provided for in Section 4.04 of the Original Indenture and in Section 1.03 hereof, or (ii) through the application pursuant to Section 8.05 of the Original Indenture of any trust moneys held by the Trustee received from the proceeds of property sold or taken pursuant to the provisions of Section 7.04 of the Original Indenture, together in any case with interest accrued thereon to the date fixed for redemption, upon not less than thirty days' nor more than ninety days' notice given by first class mail, postage prepaid, to the holder of record at the date of such notice of each Bond of the Second 1998 Series affected, at his address as shown on the books of the Company. Such notice shall be sufficiently given if deposited in the United States mail postage prepaid within such period. Neither the failure to mail such notice, nor any defect in any notice so mailed to any such holder, shall affect the sufficiency of such notice with respect to other holders. The foregoing provisions with respect to notice shall be subject to all other conditions and provisions of the Indenture not inconsistent herewith. SECTION 1.03. Replacement Fund. Notwithstanding the provisions of Section 4.06 of the Original Indenture, the Company hereby covenants that, so long as any of the Bonds of the Second 1998 Series shall remain outstanding, (a) the covenants made by the Company in Section 4.04 of the Original Indenture shall continue in full force and effect and (b) Bonds delivered, redeemed or purchased pursuant to said Section 4.04 and any amount of available Bond credits and all available Montaup Securities used as a credit in Item 8 of any replacement fund certificate shall be deemed to be funded, unless and until the same shall have been reinstated as provided in said Section 4.04 or in Section 2.07 of the Original Indenture. SECTION 1.04. Restriction on Payment of Dividends on Common Stock. The Company covenants that, so long as any Bonds of the Second 1998 Series remain outstanding, it will not (a) declare or pay any dividend or make any distribution on any shares of Common Stock (other than dividends payable in Common Stock of the Company) or (b) directly or indirectly through a subsidiary make any expenditures for the purchase, redemption or other retirement for a consideration of any shares of Common Stock of the Company (other than in exchange for, or from the proceeds of, other and new shares of Common Stock of the Company), if the aggregate amount of all such dividends, distributions and expenditures made after January 31, 1953 would exceed the aggregate amount of the Company's net income available for dividends on its Common Stock, accumulated after January 31, 1953. Net income of the Company available for dividends on its Common Stock for the purpose of this Section 1.04 shall be defined as in the second paragraph of Section 1.05 of the First Supplemental Indenture as modified by Section 7.02 of the Eleventh Supplemental Indenture. Nothing in this Section 1.04 shall affect the restrictions imposed by similar provisions in any previous Supplemental Indenture for the benefit of Bonds of any series. SECTION 1.05. Minimum Provision for Depreciation. Notwithstanding the provisions of Section 1.35 of the Original Indenture, the Company hereby covenants that the term "minimum provision for depreciation" shall have the meaning specified in such Section so long as any of the Bonds of the Second 1998 Series shall remain outstanding. SECTION 1.06. Continuation of Effectiveness of Term "funded". Property additions, net additions, Bonds and Montaup Securities which have or shall become funded to the extent provided in Paragraphs (1), (2), (3) and (4) of Section 1.36 of the Original Indenture as modified by Section 7.01 of the Eleventh Supplemental Indenture shall continue to be funded except to the extent that any provision of the Original Indenture or of any supplemental indenture expressly provides that property additions, net additions, Bonds or Montaup Securities shall be funded only so long as Bonds of particular series shall remain outstanding. SECTION 1.07. Duration of Effectiveness of Article One. This Article shall be in force and effect only so long as any of the Bonds of the Second 1998 Series are outstanding. ARTICLE TWO Bonds of the Second 2003 Series and Certain Provisions Relating Thereto. Section 2.01. A. Terms of Bonds of the Second 2003 Series. There shall be, and hereby is, created a new series of Bonds, known as and entitled "First Mortgage and Collateral Trust Bonds, 6 7/8% Second Series due 2003. The principal amount of the Bonds of the Second 2003 Series shall not be limited except as provided in Section 3.01 of the Original Indenture and except as may be provided in any indenture supplemental thereto. The definitive Bonds of the Second 2003 Series shall be issued only as registered Bonds without coupons in denominations of $1,000 or any multiple thereof, numbered RAA1 upwards. May 1, 1993 shall be the date of the commencement of the first interest period for Bonds of the Second 2003 Series. All Bonds of the Second 2003 Series shall mature May 1, 2003, and shall bear interest at the rate of 6 7/8% per annum until the payment of the principal thereof, such interest to be payable semi-annually on May 1 and November 1 in each year commencing November 1, 1993. The principal of and the premium, if any, and interest on the Bonds of the Second 2003 Series shall be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal of and premium, if any, on Bonds of the Second 2003 Series shall be payable at the principal corporate trust office in the City of Boston, Commonwealth of Massachusetts, of the Trustee, except that, in case of the redemption as a whole at any time of the Bonds of the Second 2003 Series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holders, Bonds of the Second 2003 Series may be surrendered for redemption and payment. Except as herein provided, interest on Bonds of the Second 2003 Series shall be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee, or at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, City and State of New York, in each case to the holder of record on the record date as hereinbelow defined. Interest on the Bonds of the Second 2003 Series shall, unless otherwise directed by the respective registered holders thereof, be paid by checks payable to the order of the respective holders entitled thereto, and mailed by the Trustee by first class mail, postage prepaid, to such holders at their respective registered addresses as shown on the Bond register for the Bonds of the Second 2003 Series. The definitive Bonds of the Second 2003 Series may be issued in the form of Bonds engraved, printed or lithographed on steel engraved borders. The person in whose name any Bond of the Second 2003 Series is registered at the close of business on any record date (as herein below defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond of the Second 2003 Series upon any transfer or exchange thereof (including any exchange effected as an incident to a partial redemption thereof) subsequent to the record date and prior to such interest payment date, except that, if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, then the registered holders of Bonds of the Second 2003 Series on such record date shall have no further right to or claim in respect of such defaulted interest as such registered holders on such record date, and the persons entitled to receive payment of any defaulted interest thereafter payable or paid on any Bonds of the Second 2003 Series shall be the registered holders of such Bonds of the Second 2003 Series on the record date for payment of such defaulted interest. The term "record date" as used in this Section 2.01, and in the form of the Bonds of the Second 2003 Series, with respect to any interest payment date applicable to the Bonds of the Second 2003 Series, shall mean the April 15 next preceding a May 1 interest payment date or the October 15 next preceding a November 1 interest payment date, as the case may be, or such record date established for defaulted interest as hereinafter provided. In case of failure by the Company to pay any interest when due, the claim for such interest shall be deemed to have been transferred by transfer of any Bond of the Second 2003 Series registered on the books of the Company, and the Company, by not less than 10 days prior written notice to bondholders, may fix a subsequent record date for determination of holders entitled to payment of such interest. Such provision for establishment of a subsequent record date, however, shall in no way affect the rights of bondholders or of the Trustee consequent on any default. Except as provided in this Section 2.01, every Bond of the Second 2003 Series shall be dated as provided in Section 3.05 of the Original Indenture. However, so long as there is no existing default in the payment of interest on the Bonds of the Second 2003 Series, all Bonds of the Second 2003 Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall be dated such interest payment date and shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in the interest due on such interest payment date, then any such Bond of the Second 2003 Series shall bear interest from the May 1 or November 1, as the case may be, to which interest has been paid, unless such interest payment date is November 1, 1993, in which case from May 1, 1993. Notwithstanding the provisions of Section 3.11 of the Original Indenture, for any exchange of Bonds of the Second 2003 Series for other Bonds of the Second 2003 Series of different authorized denominations or for any transfer of Bonds of the Second 2003 Series the Company, at its option, may require the payment of a sum only sufficient to reimburse it for any stamp tax or other governmental charge incident thereto. The Trustee hereunder shall, by virtue of its office as such Trustee, be a paying agent of the Company for the purpose of the payment of the principal of and premium, if any, and interest on the Bonds of the Second 2003 Series and the registrar and transfer agent of the Company for the purpose of registering and transferring Bonds of the 2003 Series. Neither the Company nor the Trustee shall be required to make transfers or exchanges of Bonds of the Second 2003 Series for a period of ten days next preceding any date on which any Bonds of the Second 2003 Series are to be designated to be redeemed and neither the Company nor the Trustee shall be required to make transfers or exchanges of any Bonds designated in whole for redemption or that part of any Bond designated in part for redemption. B. Form of Bonds of the Second 2003 Series. The Bonds of the Second 2003 Series and the Trustee's authentication certificate to be executed on the Bonds of said Series, shall be in substantially the following form: No. RAA $________________ EASTERN EDISON COMPANY FIRST MORTGAGE AND COLLATERAL TRUST BOND 6 7/8% SECOND SERIES DUE 2003 DUE May 1, 2003 Eastern Edison Company, a Massachusetts corporation (hereinafter sometimes called the "Company"), for value received, herebypromises to pay to or registered, assigns dollars on May 1, 2003 or earlier as hereinafter provided and to pay to said payee, or registered assigns, interest hereon at the rate specified in the title of this bond, from the date hereof, as provided in the Twenty-Fourth Supplemental Indenture mentioned on the reverse hereof, payable semi-annually on the first days of May and November in each year until payment of the principal hereof. The interest so payable upon any May 1 or November 1 will, subject to certain exceptions described on the reverse hereof, be paid to the person in whose name this bond is registered at the close of business on the April 15 preceding such May 1 or the October 15 preceding such November 1, as the case may be. Principal of, premium, if any, and interest on this bond will be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal and premium will be payable at the principal corporate trust office in the City of Boston, Massachusetts of the Trustee under the Indenture mentioned on the reverse hereof, except that in case of the redemption as a whole at any time of the bonds of this series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holder, this bond may be surrendered for redemption and payment. Interest on this bond will be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee or, at the option of the holder hereof, at the office or agency of the Company in the Borough of Manhattan, City and State of New York; provided, however, that interest on this bond shall, unless otherwise directed by the registered holder hereof, be paid by check payable to the order of the registered holder entitled thereto and mailed by the Trustee by first class mail, postage prepaid to such holder at his address as shown on the bond register for the bonds of this series. This bond shall not become or be valid or obligatory for any purpose until the authentication certificate hereon shall have been signed by the Trustee. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, EASTERN EDISON COMPANY has caused these presents, which are intended to take effect as a sealed instrument, to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents under its corporate seal or a facsimile thereof, attested by the manual or facsimile signature of its Clerk or one of its Assistant Clerks, all as of the date set forth below. Dated:_____________________ EASTERN EDISON COMPANY By_________________________ President Attest __________________________ Clerk *n* [FORM OF REVERSE OF BOND OF THE SECOND 2003 SERIES] This bond is one of the bonds, of the above designated series, of an authorized issue of bonds of the Company, known as First Mortgage and Collateral Trust Bonds, all issued or issuable in one or more series under and equally and proportionately secured (except insofar as any sinking fund, replacement fund or other fund established in accordance with the provisions of the Indenture hereinafter mentioned may afford additional security for the bonds of any specific series) by an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948, executed and delivered by the Company to State Street Trust Company (now State Street Bank and Trust Company), Boston, Massachusetts, as Trustee (herein with its successors under said Indenture sometimes called the "Trustee"), as supplemented and modified by the First Supplemental Indenture dated as of February1, 1953, by the Eighth Supplemental Indenture dated as of July1, 1972, by the Ninth Supplemental Indenture dated as of September1, 1973, by the Tenth Supplemental Indenture dated as of October1, 1975 and by the Eleventh Supplemental Indenture dated as of January1, 1979 and as supplemented by all other indentures supplemental thereto, executed and delivered by the Company to said Trustee, to which Indenture and all indentures supplemental thereto to which the Trustee shall be a party (herein sometimes called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged as security for said bonds, the nature and extent of the security, and the rights, duties and immunities thereunder of the Trustee, the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said bonds may be issued thereunder; but neither the foregoing reference to the Indenture nor any provision of this bond or of the Indenture or of any indenture supplemental thereto shall affect or permit any impairment of the obligation of the Company, which is absolute and unconditional, to pay at the stated or accelerated times herein provided, the principal of and the premium, if any, and the interest on this bond as herein provided. The bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth in the tabulation below under the heading "Regular Redemption Price" (provided, however, that such right of redemption shall be limited as provided in the Twenty-Fourth Supplemental Indenture); and (b)for the replacement fund provided for in the Indenture and by the application of proceeds of certain property subject to the lien thereof, upon payment of the applicable percentage of the called principal amount thereof set forth in said tabulation under the heading "Special Redemption Price": If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption May 1, Price Price 1993 106.375% 100% 1994 105.464 100% 1995 104.554% 100% 1996 103.643% 100% 1997 102.732% 100% 1998 101.822% 100% 1999 100.911% 100% 2000 100.000% 100% 2001 100.000% 100% 2002 100.000% 100% together in any case with interest accrued thereon to the redemption date, upon prior notice given by first class mail, postage prepaid, as provided in the Twenty-Fourth Supplemental Indenture to the holders of record of each bond affected not less than thirty days nor more than ninety days prior to the redemption date and subject to all other conditions and provisions of the Indenture. If this bond or any portion thereof ($1,000 or any multiple thereof) is duly designated for redemption, if payment of the principal hereof or of such portion with accrued interest and premium, if any, is provided for, and if notice of such redemption is duly given or provided for, all as specified in the Indenture, this bond or such portion shall cease to be entitled to the lien of the Indenture from and after the date such payment and notice are irrevocably so provided for and shall cease to bear interest from and after the date fixed for redemption. In the event of the selection for redemption of a portion only of the principal of this bond, payment of the redemption price will be made only (a) upon presentation of this bond for notation hereon of such payment of the portion of the principal of this bond so called for redemption, or (b) upon surrender of this bond in exchange for a bond or bonds (of authorized denominations of the same series) for the unredeemed balance of the principal amount of this bond. In the event of the redemption of this bond in whole, payment of the redemption price will be made only upon surrender of this bond. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding (determined as provided in the Indenture) including, if more than one series of bonds shall be at the time outstanding, not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding of each series affected, to effect, by an indenture supplemental to the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the bonds and coupons; provided, however, that no such modification or alteration shall be made without the consent of the registered owner hereof which will (a) extend the maturity of this bond or reduce the rate or extend or otherwise change the time of payment of interest hereon or reduce the amount of the principal hereof or reduce any premium payable on the redemption hereof, or (b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the Indenture, or alter the equal and proportionate security afforded by the lien of the Indenture for the bonds issued thereunder, or (c) reduce the number or percentage of the principal amount of the bonds upon the consent of the holders of which modifications or alterations may be made as aforesaid. This bond is transferable by the registered owner hereof in person or by his duly authorized attorney, on books of the Company kept for the purpose, at the principal corporate trust office of the Trustee upon surrender of this bond for cancellation and upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture, sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and thereupon a new registered bond or bonds of the same series of like aggregate principal amount will be issued to the transferee in exchange therefor. The registered owner of this bond at his option may surrender the same for cancellation at said office and receive in exchange therefor the same aggregate principal amount of registered bonds of the same series but of other authorized denominations, upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and subject to the terms and conditions therein set forth. Neither the Company nor the Trustee shall be required to make transfers or exchanges of bonds of this series for a period of ten days next preceding any designation of bonds of said series to be redeemed, and neither the Company nor the Trustee shall be required to make transfers or exchanges of any bonds designated in whole for redemption or that part of any bond designated in part for redemption. Subject to the provisions of the Twenty-Fourth Supplemental Indenture, if this bond is surrendered for any transfer or exchange between the record date for any interest payment date and such interest payment date, the new bond will be dated such interest payment date. The Twenty-Fourth Supplemental Indenture provides that in the event of any default in payment of the interest due on any interest payment date, such interest shall not be payable to the holder of this bond on the original record date but shall be paid to the registered holder of such bond on the subsequent record date established for payment of such defaulted interest. If a default as defined in the Indenture shall occur, the principal of this bond may become or be declared due and payable before maturity in the manner and with the effect provided in the Indenture. The holders, however, of certain specified percentages of the bonds at the time outstanding, including in certain cases specified percentages of bonds of particular series, may in the cases, to the extent and under the conditions provided in the Indenture, waive past defaults thereunder and the consequences of such defaults. No recourse shall be had for the payment of the principal of or the premium, if any, or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or such predecessor or successor corporation, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and as provided in the Indenture. The Company and the Trustee and any paying agent and any bond registrar may deem and treat the person in whose name this bond shall be registered upon the books of the Company as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of and interest on this bond and for all other purposes, whether or not this bond be overdue; and all such payments so made to such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon this bond to the extent of the sum or sums so paid and neither the Company nor the Trustee nor any paying agent nor any bond registrar shall be affected by any notice to the contrary. [FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] This is one of the bonds, of the series designated therein, described in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE, By__________________________________ Authorized Officer SECTION 2.02. Redemption Provisions for Bonds of the Second 2003 Series. The Bonds of the Second 2003 Series shall be subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Regular Redemption Price" in the tabulation in the form of the Bonds of the Second 2003 Series set forth in Section 2.01 hereof; provided, however, that no such redemption shall be made (except in connection with any consolidation or merger with any corporation other than an affiliate of the Company in which the Company shall not be the surviving corporation, or transfer or sale of all or substantially all of the property of the Company to any corporation other than an affiliate of the Company), directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness which has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with the indebtedness being incurred in such refunding operation) of less than the effective interest cost to the Company of the Bonds of the Second 2003 Series; and (b) upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Special Redemption Price" in the tabulation in the form of the Bonds of the Second 2003 Series set forth in Section 2.01 hereof, either, (i) through the application of cash deposited with the Trustee for the replacement fund provided for in Section 4.04 of the Original Indenture and in Section 2.03 hereof, or (ii) through the application pursuant to Section 8.05 of the Original Indenture of any trust moneys held by the Trustee received from the proceeds of property sold or taken pursuant to the provisions of Section 7.04 of the Original Indenture, together in any case with interest accrued thereon to the date fixed for redemption, upon not less than thirty days' nor more than ninety days' notice given by first class mail, postage prepaid, to the holder of record at the date of such notice of each Bond of the Second 2003 Series affected, at his address as shown on the books of the Company. Such notice shall be sufficiently given if deposited in the United States mail postage prepaid within such period. Neither the failure to mail such notice, nor any defect in any notice so mailed to any such holder, shall affect the sufficiency of such notice with respect to other holders. The foregoing provisions with respect to notice shall be subject to all other conditions and provisions of the Indenture not inconsistent herewith. SECTION 2.03. Replacement Fund. Notwithstanding the provisions of Section 4.06 of the Original Indenture, the Company hereby covenants that, so long as any of the Bonds of the Second 2003 Series shall remain outstanding, (a) the covenants made by the Company in Section 4.04 of the Original Indenture shall continue in full force and effect and (b) Bonds delivered, redeemed or purchased pursuant to said Section 4.04 and any amount of available Bond credits and all available Montaup Securities used as a credit in Item 8 of any replacement fund certificate shall be deemed to be funded, unless and until the same shall have been reinstated as provided in said Section 4.04 or in Section 2.07 of the Original Indenture. SECTION 2.04. Restriction on Payment of Dividends on Common Stock. The Company covenants that, so long as any Bonds of the Second 2003 Series remain outstanding, it will not (a) declare or pay any dividend or make any distribution on any shares of Common Stock (other than dividends payable in Common Stock of the Company) or (b) directly or indirectly through a subsidiary make any expenditures for the purchase, redemption or other retirement for a consideration of any shares of Common Stock of the Company (other than in exchange for, or from the proceeds of, other and new shares of Common Stock of the Company), if the aggregate amount of all such dividends, distributions and expenditures made after January 31, 1953 would exceed the aggregate amount of the Company's net income available for dividends on its Common Stock, accumulated after January 31, 1953. Net income of the Company available for dividends on its Common Stock for the purpose of this Section 2.04 shall be defined as in the second paragraph of Section 1.05 of the First Supplemental Indenture as modified by Section 7.02 of the Eleventh Supplemental Indenture. Nothing in this Section 2.04 shall affect the restrictions imposed by similar provisions in any previous Supplemental Indenture for the benefit of Bonds of any series. SECTION 2.05. Minimum Provision for Depreciation. Notwithstanding the provisions of Section 1.35 of the Original Indenture, the Company hereby covenants that the term "minimum provision for depreciation" shall have the meaning specified in such Section so long as any of the Bonds of the Second 2003 Series shall remain outstanding. SECTION 2.06. Continuation of Effectiveness of Term "funded". Property additions, net additions, Bonds and Montaup Securities which have or shall become funded to the extent provided in Paragraphs (1), (2), (3) and (4) of Section 1.36 of the Original Indenture as modified by Section 7.01 of the Eleventh Supplemental Indenture shall continue to be funded except to the extent that any provision of the Original Indenture or of any supplemental indenture expressly provides that property additions, net additions, Bonds or Montaup Securities shall be funded only so long as Bonds of particular series shall remain outstanding. SECTION 2.07. Duration of Effectiveness of Article Two. This Article shall be in force and effect only so long as any of the Bonds of the Second 2003 Series are outstanding. ARTICLE THREE Bonds of the 2023 Series and Certain Provisions Relating Thereto. Section 3.01. A. Terms of Bonds of the 2023 Series. There shall be, and hereby is, created a new series of Bonds, known as and entitled "First Mortgage and Collateral Trust Bonds, 8% Series due 2023". The principal amount of the Bonds of the 2023 Series shall not be limited except as provided in Section 3.01 of the Original Indenture and except as may be provided in any indenture supplemental thereto. The definitive Bonds of the 2023 Series shall be issued only as registered Bonds without coupons in denominations of $1,000 or any multiple thereof, numbered RAB1 upwards. May 1, 1993 shall be the date of the commencement of the first interest period for Bonds of the 2023 Series. All Bonds of the 2023 Series shall mature May 1, 2023, and shall bear interest at the rate of 8% per annum until the payment of the principal thereof, such interest to be payable semi-annually on May 1 and November 1 in each year commencing November 1, 1993. The principal of and the premium, if any, and interest on the Bonds of the 2023 Series shall be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal of and premium, if any, on Bonds of the 2023 Series shall be payable at the principal corporate trust office in the City of Boston, Commonwealth of Massachusetts, of the Trustee, except that, in case of the redemption as a whole at any time of the Bonds of the 2023 Series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holders, Bonds of the 2023 Series may be surrendered for redemption and payment. Except as herein provided, interest on Bonds of the 2023 Series shall be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee, or at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, City and State of New York, in each case to the holder of record on the record date as hereinbelow defined. Interest on the Bonds of the 2023 Series shall, unless otherwise directed by the respective registered holders thereof, be paid by checks payable to the order of the respective holders entitled thereto, and mailed by the Trustee by first class mail, postage prepaid, to such holders at their respective registered addresses as shown on the Bond register for the Bonds of the 2023 Series. The definitive Bonds of the 2023 Series may be issued in the form of Bonds engraved, printed or lithographed on steel engraved borders. The person in whose name any Bond of the 2023 Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond of the 2023 Series upon any transfer or exchange thereof (including any exchange effected as an incident to a partial redemption thereof) subsequent to the record date and prior to such interest payment date, except that, if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, then the registered holders of Bonds of the 2023 Series on such record date shall have no further right to or claim in respect of such defaulted interest as such registered holders on such record date, and the persons entitled to receive payment of any defaulted interest thereafter payable or paid on any Bonds of the 2023 Series shall be the registered holders of such Bonds of the 2023 Series on the record date for payment of such defaulted interest. The term "record date" as used in this Section 3.01, and in the form of the Bonds of the 2023 Series, with respect to any interest payment date applicable to the Bonds of the 2023 Series, shall mean the April 15 next preceding a May 1 interest payment date or the October 15 next preceding a November 1 interest payment date, as the case may be, or such record date established for defaulted interest as hereinafter provided. In case of failure by the Company to pay any interest when due, the claim for such interest shall be deemed to have been transferred by transfer of any Bond of the 2023 Series registered on the books of the Company, and the Company, by not less than 10 days prior written notice to bondholders, may fix a subsequent record date for determination of holders entitled to payment of such interest. Such provision for establishment of a subsequent record date, however, shall in no way affect the rights of bondholders or of the Trustee consequent on any default. Except as provided in this Section 3.01, every Bond of the 2023 Series shall be dated as provided in Section 3.05 of the Original Indenture. However, so long as there is no existing default in the payment of interest on the Bonds of the 2023 Series, all Bonds of the 2023 Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall be dated such interest payment date and shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in the interest due on such interest payment date, then any such Bond of the 2023 Series shall bear interest from the May 1 or November 1, as the case may be, to which interest has been paid, unless such interest payment date is November 1, 1993, in which case from May 1, 1993. Notwithstanding the provisions of Section 3.11 of the Original Indenture, for any exchange of Bonds of the 2023 Series for other Bonds of the 2023 Series of different authorized denominations or for any transfer of Bonds of the 2023 Series the Company, at its option, may require the payment of a sum only sufficient to reimburse it for any stamp tax or other governmental charge incident thereto. The Trustee hereunder shall, by virtue of its office as such Trustee, be a paying agent of the Company for the purpose of the payment of the principal of and premium, if any, and interest on the Bonds of the 2023 Series and the registrar and transfer agent of the Company for the purpose of registering and transferring Bonds of the 2023 Series. Neither the Company nor the Trustee shall be required to make transfers or exchanges of Bonds of the 2023 Series for a period of ten days next preceding any date on which any Bonds of the 2023 Series are to be designated to be redeemed and neither the Company nor the Trustee shall be required to make transfers or exchanges of any Bonds designated in whole for redemption or that part of any Bond designated in part for redemption. B. Form of Bonds of the 2023 Series. The Bonds of the 2023 Series and the Trustee's authentication certificate to be executed on the Bonds of said Series, shall be in substantially the following form: No. RAB $________________ EASTERN EDISON COMPANY FIRST MORTGAGE AND COLLATERAL TRUST BOND 8% SERIES DUE 2023 DUE May 1, 2023 Eastern Edison Company, a Massachusetts corporation (hereinafter sometimes called the "Company"), for value received, hereby promises to pay to or registered assigns, dollars on May 1, 2023 or earlier as hereinafter provided and to pay to said payee, or registered assigns, interest hereon at the rate specified in the title of this bond, from the date hereof, as provided in the Twenty-Fourth Supplemental Indenture mentioned on the reverse hereof, payable semi-annually on the first days of May and November in each year until payment of the principal hereof. The interest so payable upon any May 1 or November 1 will, subject to certain exceptions described on the reverse hereof, be paid to the person in whose name this bond is registered at the close of business on the April 15 preceding such May 1 or the October 15 preceding such November 1, as the case may be. Principal of, premium, if any, and interest on this bond will be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal and premium will be payable at the principal corporate trust office in the City of Boston, Massachusetts of the Trustee under the Indenture mentioned on the reverse hereof, except that in case of the redemption as a whole at any time of the bonds of this series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holder, this bond may be surrendered for redemption and payment. Interest on this bond will be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee or, at the option of the holder hereof, at the office or agency of the Company in the Borough of Manhattan, City and State of New York; provided, however, that interest on this bond shall, unless otherwise directed by the registered holder hereof, be paid by check payable to the order of the registered holder entitled thereto and mailed by the Trustee by first class mail, postage prepaid to such holder at his address as shown on the bond register for the bonds of this series. This bond shall not become or be valid or obligatory for any purpose until the authentication certificate hereon shall have been signed by the Trustee. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, EASTERN EDISON COMPANY has caused these presents, which are intended to take effect as a sealed instrument, to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents under its corporate seal or a facsimile thereof, attested by the manual or facsimile signature of its Clerk or one of its Assistant Clerks, all as of the date set forth below. Dated:_____________________ EASTERN EDISON COMPANY By__________________________ President Attest ________________________ Clerk [FORM OF REVERSE OF BOND OF THE 2023 SERIES] This bond is one of the bonds, of the above designated series, of an authorized issue of bonds of the Company, known as First Mortgage and Collateral Trust Bonds, all issued or issuable in one or more series under and equally and proportionately secured (except insofar as any sinking fund, replacement fund or other fund established in accordance with the provisions of the Indenture hereinafter mentioned may afford additional security for the bonds of any specific series) by an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948, executed and delivered by the Company to State Street Trust Company (now State Street Bank and Trust Company), Boston, Massachusetts, as Trustee (herein with its successors under said Indenture sometimes called the "Trustee"), as supplemented and modified by the First Supplemental Indenture dated as of February1, 1953, by the Eighth Supplemental Indenture dated as of July1, 1972, by the Ninth Supplemental Indenture dated as of September1, 1973, by the Tenth Supplemental Indenture dated as of October1, 1975 and by the Eleventh Supplemental Indenture dated as of January1, 1979 and as supplemented by all other indentures supplemental thereto, executed and delivered by the Company to said Trustee, to which Indenture and all indentures supplemental thereto to which the Trustee shall be a party (herein sometimes called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged as security for said bonds, the nature and extent of the security, and the rights, duties and immunities thereunder of the Trustee, the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said bonds may be issued thereunder; but neither the foregoing reference to the Indenture nor any provision of this bond or of the Indenture or of any indenture supplemental thereto shall affect or permit any impairment of the obligation of the Company, which is absolute and unconditional, to pay at the stated or accelerated times herein provided, the principal of and the premium, if any, and the interest on this bond as herein provided. The bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth in the tabulation below under the heading "Regular Redemption Price" (provided, however, that such right of redemption prior to May 1, 2003 shall be limited as provided in the Twenty-Fourth Supplemental Indenture); and (b)for the replacement fund provided for in the Indenture and by the application of proceeds of certain property subject to the lien thereof, upon payment of the applicable percentage of the called principal amount thereof set forth in said tabulation under the heading "Special Redemption Price": If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption May 1, Price Price 1993 106.880% 100% 1994 106.536% 100% 1995 106.192% 100% 1996 105.848% 100% 1997 105.504% 100% 1998 105.160% 100% 1999 104.816% 100% 2000 104.472% 100% 2001 104.128% 100% 2002 103.784% 100% 2003 103.440% 100% 2004 103.096% 100% *n* If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption May 1, Price Price 2005 102.752% 100% 2006 102.408% 100% 2007 102.064% 100% 2008 101.720% 100% 2009 101.376% 100% 2010 101.032% 100% 2011 100.688% 100% 2012 100.344% 100% 2013 100.000% 100% 2014 100.000% 100% 2015 100.000% 100% 2016 100.000% 100% 2017 100.000% 100% 2018 100.000% 100% 2019 100.000% 100% 2020 100.000% 100% 2021 100.000% 100% 2022 100.000% 100% together in any case with interest accrued thereon to the redemption date, upon prior notice given by first class mail, postage prepaid, as provided in the Twenty-Fourth Supplemental Indenture to the holders of record of each bond affected not less than thirty days nor more than ninety days prior to the redemption date and subject to all other conditions and provisions of the Indenture. If this bond or any portion thereof ($1,000 or any multiple thereof) is duly designated for redemption, if payment of the principal hereof or of such portion with accrued interest and premium, if any, is provided for, and if notice of such redemption is duly given or provided for, all as specified in the Indenture, this bond or such portion shall cease to be entitled to the lien of the Indenture from and after the date such payment and notice are irrevocably so provided for and shall cease to bear interest from and after the date fixed for redemption. In the event of the selection for redemption of a portion only of the principal of this bond, payment of the redemption price will be made only (a) upon presentation of this bond for notation hereon of such payment of the portion of the principal of this bond so called for redemption, or (b) upon surrender of this bond in exchange for a bond or bonds (of authorized denominations of the same series) for the unredeemed balance of the principal amount of this bond. In the event of the redemption of this bond in whole, payment of the redemption price will be made only upon surrender of this bond. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding (determined as provided in the Indenture) including, if more than one series of bonds shall be at the time outstanding, not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding of each series affected, to effect, by an indenture supplemental to the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the bonds and coupons; provided, however, that no such modification or alteration shall be made without the consent of the registered owner hereof which will (a) extend the maturity of this bond or reduce the rate or extend or otherwise change the time of payment of interest hereon or reduce the amount of the principal hereof or reduce any premium payable on the redemption hereof, or (b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the Indenture, or alter the equal and proportionate security afforded by the lien of the Indenture for the bonds issued thereunder, or (c) reduce the number or percentage of the principal amount of the bonds upon the consent of the holders of which modifications or alterations may be made as aforesaid. This bond is transferable by the registered owner hereof in person or by his duly authorized attorney, on books of the Company kept for the purpose, at the principal corporate trust office of the Trustee upon surrender of this bond for cancellation and upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture, sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and thereupon a new registered bond or bonds of the same series of like aggregate principal amount will be issued to the transferee in exchange therefor. The registered owner of this bond at his option may surrender the same for cancellation at said office and receive in exchange therefor the same aggregate principal amount of registered bonds of the same series but of other authorized denominations, upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fourth Supplemental Indenture sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and subject to the terms and conditions therein set forth. Neither the Company nor the Trustee shall be required to make transfers or exchanges of bonds of this series for a period of ten days next preceding any designation of bonds of said series to be redeemed, and neither the Company nor the Trustee shall be required to make transfers or exchanges of any bonds designated in whole for redemption or that part of any bond designated in part for redemption. Subject to the provisions of the Twenty-Fourth Supplemental Indenture, if this bond is surrendered for any transfer or exchange between the record date for any interest payment date and such interest payment date, the new bond will be dated such interest payment date. The Twenty-Fourth Supplemental Indenture provides that in the event of any default in payment of the interest due on any interest payment date, such interest shall not be payable to the holder of this bond on the original record date but shall be paid to the registered holder of such bond on the subsequent record date established for payment of such defaulted interest. If a default as defined in the Indenture shall occur, the principal of this bond may become or be declared due and payable before maturity in the manner and with the effect provided in the Indenture. The holders, however, of certain specified percentages of the bonds at the time outstanding, including in certain cases specified percentages of bonds of particular series, may in the cases, to the extent and under the conditions provided in the Indenture, waive past defaults thereunder and the consequences of such defaults. No recourse shall be had for the payment of the principal of or the premium, if any, or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or such predecessor or successor corporation, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and as provided in the Indenture. The Company and the Trustee and any paying agent and any bond registrar may deem and treat the person in whose name this bond shall be registered upon the books of the Company as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of and interest on this bond and for all other purposes, whether or not this bond be overdue; and all such payments so made to such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon this bond to the extent of the sum or sums so paid and neither the Company nor the Trustee nor any paying agent nor any bond registrar shall be affected by any notice to the contrary. [FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] This is one of the bonds, of the series designated therein, described in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE, By__________________________________ Authorized Officer SECTION 3.02. Redemption Provisions for Bonds of the 2023 Series. The Bonds of the 2023 Series shall be subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Regular Redemption Price" in the tabulation in the form of the Bonds of the 2023 Series set forth in Section 3.01 hereof; provided, however, that no such redemption shall be made prior to May 1, 2003 (except in connection with any consolidation or merger with any corporation other than an affiliate of the Company in which the Company shall not be the surviving corporation, or transfer or sale of all or substantially all of the property of the Company to any corporation other than an affiliate of the Company), directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness which has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with the indebtedness being incurred in such refunding operation) of less than the effective interest cost to the Company of the Bonds of the 2023 Series; and (b) upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Special Redemption Price" in the tabulation in the form of the Bonds of the 2023 Series set forth in Section 3.01 hereof, either, (ii) through the application of cash deposited with the Trustee for the replacement fund provided for in Section 4.04 of the Original Indenture and in Section 3.03 hereof, or (ii) through the application pursuant to Section 8.05 of the Original Indenture of any trust moneys held by the Trustee received from the proceeds of property sold or taken pursuant to the provisions of Section 7.04 of the Original Indenture, together in any case with interest accrued thereon to the date fixed for redemption, upon not less than thirty days' nor more than ninety days' notice given by first class mail, postage prepaid, to the holder of record at the date of such notice of each Bond of the 2023 Series affected, at his address as shown on the books of the Company. Such notice shall be sufficiently given if deposited in the United States mail postage prepaid within such period. Neither the failure to mail such notice, nor any defect in any notice so mailed to any such holder, shall affect the sufficiency of such notice with respect to other holders. The foregoing provisions with respect to notice shall be subject to all other conditions and provisions of the Indenture not inconsistent herewith. SECTION 3.03. Replacement Fund. Notwithstanding the provisions of Section 4.06 of the Original Indenture, the Company hereby covenants that, so long as any of the Bonds of the 2023 Series shall remain outstanding, (a) the covenants made by the Company in Section 4.04 of the Original Indenture shall continue in full force and effect and (b) Bonds delivered, redeemed or purchased pursuant to said Section 4.04 and any amount of available Bond credits and all available Montaup Securities used as a credit in Item 8 of any replacement fund certificate shall be deemed to be funded, unless and until the same shall have been reinstated as provided in said Section 4.04 or in Section 2.07 of the Original Indenture. SECTION 3.04. Restriction on Payment of Dividends on Common Stock. The Company covenants that, so long as any Bonds of the 2023 Series remain outstanding, it will not (a) declare or pay any dividend or make any distribution on any shares of Common Stock (other than dividends payable in Common Stock of the Company) or (b) directly or indirectly through a subsidiary make any expenditures for the purchase, redemption or other retirement for a consideration of any shares of Common Stock of the Company (other than in exchange for, or from the proceeds of, other and new shares of Common Stock of the Company), if the aggregate amount of all such dividends, distributions and expenditures made after January 31, 1953 would exceed the aggregate amount of the Company's net income available for dividends on its Common Stock, accumulated after January 31, 1953. Net income of the Company available for dividends on its Common Stock for the purpose of this Section 3.04 shall be defined as in the second paragraph of Section 1.05 of the First Supplemental Indenture as modified by Section 7.02 of the Eleventh Supplemental Indenture. Nothing in this Section 3.04 shall affect the restrictions imposed by similar provisions in any previous Supplemental Indenture for the benefit of Bonds of any series. SECTION 3.05. Minimum Provision for Depreciation. Notwithstanding the provisions of Section 1.35 of the Original Indenture, the Company hereby covenants that the term "minimum provision for depreciation" shall have the meaning specified in such Section so long as any of the Bonds of the 2023 Series shall remain outstanding. SECTION 3.06. Continuation of Effectiveness of Term "funded". Property additions, net additions, Bonds and Montaup Securities which have or shall become funded to the extent provided in Paragraphs (1), (2), (3) and (4) of Section 1.36 of the Original Indenture as modified by Section 7.01 of the Eleventh Supplemental Indenture shall continue to be funded except to the extent that any provision of the Original Indenture or of any supplemental indenture expressly provides that property additions, net additions, Bonds or Montaup Securities shall be funded only so long as Bonds of particular series shall remain outstanding. SECTION 3.07. Duration of Effectiveness of Article Three. This Article shall be in force and effect only so long as any of the Bonds of the 2023 Series are outstanding. ARTICLE FOUR PRINCIPAL AMOUNT PRESENTLY TO BE OUTSTANDING SECTION 4.01. The total aggregate principal amount of First Mortgage and Collateral Trust Bonds of the Company issued and outstanding and presently to be issued and outstanding under the provisions of and secured by the Indenture will be Three Hundred Ten Million Dollars ($310,000,000), namely Five Million Dollars ($5,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 4 1/2% Series due 1993 now issued and outstanding, Ten Million Dollars ($10,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8.90% Series due 1995/Secured Medium Term Notes now issued and outstanding, Seven Million Dollars ($7,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 1/2% Series due 1997 now issued and outstanding, Thirty-Five Million Dollars ($35,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 10 1/8% Second Series due 1997 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 9 7/8% due 1998 now issued and outstanding, Five Million Dollars ($5,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8 3/8% Series due 1999 now issued and outstanding, Eight Million Dollars ($8,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7 7/8% Series due 2002 now issued and outstanding, Thirty-Five Million Dollars ($35,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7.78% Second Series due 2002/Secured Medium Term Notes now issued and outstanding, Ten Million Dollars ($10,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8 3/8% Series due 2003 now issued and outstanding, Fifty-Five Million Dollars ($55,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 95/8% Series due 2016 now issued and outstanding, Twenty Million Dollars ($20,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 5 7/8% Series due 1998, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 7/8% Series due 2003, and Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8% Series due 2023. Additional Bonds of the 1993 Series, the 1995 Series, the Second 1997 Series, the 1998 Series, the 1999 Series, the 2002 Series, the Second 2002 Series, the 2003 Series, the 2016 Series, the Second 1998 Series, the Second 2003 Series and the 2023 Series, and of any other series established after the execution and delivery of this Twenty-Fourth Supplemental Indenture may from time to time be authenticated, delivered and issued pursuant to the terms of the Indenture. SECTION 4.02. Bonds of the Second 1998 Series in the aggregate principal amount of Twenty Million Dollars ($20,000,000), Bonds of the Second 2003 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000) and Bonds of the 2023 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000) may forthwith, upon the execution and delivery of this Twenty-Fourth Supplemental Indenture, or from time to time thereafter, and upon compliance by the Company with the provisions of Section 5.02 and any or all of Sections 5.03, 5.04, 5.05 and 5.06 of the Original Indenture, be executed by the Company and delivered to the Trustee and shall thereupon be authenticated and delivered by the Trustee to or upon the written order of the Company. ARTICLE FIVE MISCELLANEOUS Section 5.01. This Twenty-Fourth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture, as supplemented and modified, and shall form a part thereof, and the Original Indenture, as heretofore supplemented and modified (to the extent and when and as the same shall become and be effective as provided in the respective modifying supplemental indentures) and as hereby supplemented is hereby confirmed. Except to the extent inconsistent with the express terms thereof, all of the provisions, terms, covenants and conditions of the Original Indenture, as supplemented and modified, shall be applicable to the Bonds of the Second 1998 Series, the Bonds of the Second 2003 Series and the Bonds of the 2023 Series to the same extent as if specifically set forth herein. All terms used in this Twenty-Fourth Supplemental Indenture shall be taken to have the same meaning as in the Original Indenture, as supplemented and modified, except in cases where the context clearly indicates otherwise. SECTION 5.02. All recitals in this Twenty-Fourth Supplemental Indenture are made by the Company only and not by the Trustee; and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect hereof as fully and with like effect as if set forth herein in full. SECTION 5.03. The Company covenants that it is lawfully seized and possessed at the date of execution of this Twenty-Fourth Supplemental Indenture of all the trust estate described in this Twenty-Fourth Supplemental Indenture, except as specifically otherwise stated in this Twenty-Fourth Supplemental Indenture, and that all the trust estate so described is free and clear of any lien other than the lien of the Indenture and permitted encumbrances; that the Company will warrant and forever defend all the trust estate so described to the Trustee against the claims of all persons whomsoever except as in the Indenture specifically otherwise stated; that it will maintain and preserve the lien of the Indenture so long as any of the Bonds issued under the Indenture are outstanding; and that it has good right and lawful authority to subject all the trust estate so described to the lien of the Indenture as provided in and by the Original Indenture, as heretofore supplemented and modified and as supplemented by this Twenty-Fourth Supplemental Indenture. SECTION 5.04. This Twenty-Fourth Supplemental Indenture may be executed in several counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Company and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 5.05. Although this Twenty-Fourth Supplemental Indenture is dated for convenience and for the purpose of reference as of May 1, 1993, the actual date or dates of execution by the Company and by the Trustee are as indicated by their respective acknowledgments hereto annexed. *n* ARTICLE SIX SCHEDULE OF PROPERTY ACQUIRED SINCE DATE OF THE TWENTY-THIRD SUPPLEMENTAL INDENTURE NONE IN WITNESS WHEREOF, Eastern Edison Company has caused this Twenty-Fourth Supplemental Indenture to be signed in its corporate name and behalf by its President, either of its Vice Chairmen or one of its Vice Presidents and its corporate seal to be hereunto affixed and attested by its Clerk or one of its Assistant Clerks, and State Street Bank and Trust Company in token of its acceptance of the trust hereby created has caused this Twenty-Fourth Supplemental Indenture to be signed in its corporate name and behalf by one of its Assistant Vice Presidents, and its corporate seal to be hereunto affixed and attested by its Secretary or one of its Assistant Secretaries, all as of the day and year first above written. EASTERN EDISON COMPANY By /s/ Richard M. Burns Vice President Attest: /s/ Basil G. Pallone Assistant Clerk (CORPORATE SEAL) STATE STREET BANK AND TRUST COMPANY By /s/ Daniel Golden Assistant Vice President Attest: /s/ Andrew M. Sinasky Assistant Secretary (CORPORATE SEAL) *n* COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 30th day of April, 1993 before me appeared Richard M. Burns and Basil G. Pallone, to me personally known, who, being by me duly sworn, did say that they are a Vice President and an Assistant Clerk, respectively, of Eastern Edison Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Corporation, and that the said instrument was signed and sealed by them on behalf of said Corporation by authority of its Board of Directors, and each of said officers acknowledged said instrument to be the free act and deed of said Corporation. /s/ Elizabeth A. Erbland Notary Public My Commission Expires 2/19/99 (Notarial Seal) COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 30th day of April, 1993 before me appeared Daniel Golden and Andrew M. Sinasky, to me personally known, who being by me duly sworn, did say that they are an Assistant Vice President and an Assistant Secretary, respectively, of State Street Bank and Trust Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Trust Company, and that the said instrument was signed and sealed by them on behalf of said Trust Company by authority of its Board of Directors and each of said officers acknowledged said instrument to be the free act and deed of said Trust Company. /s/ Elizabeth A. Erbland Notary Public My Commission Expires 2/19/99 *n* Votes Certificate Execution Copy EASTERN EDISON COMPANY Directors' Votes I, Basil G. Pallone, DO HEREBY CERTIFY that I am Assistant Clerk of Eastern Edison Company (hereinafter called the "Corporation"), a Massachusetts corporation, and that attached hereto as ExhibitA is a true, correct and complete copy of certain votes duly adopted by the Special Committee of the Board of Directors, which Committee was duly elected by the Board of Directors pursuant to ArticleV of the By- laws of the Corporation, a true copy of which is attached hereto as ExhibitB, on April 28, 1993, at which meeting a quorum for the transaction of business was present and acting throughout. I further certify that said votes have not been amended or revoked and that the same are now in full force and effect. I further certify that RichardM. Burns is the duly elected Vice President of the Corporation. WITNESS my hand and seal of said Corporation, this 30th day of April, 1993. /s/ Basil G. Pallone Basil G. Pallone Assistant Clerk [SEAL] *n* Exhibit A VOTED - that this Corporation enter into that certain Purchase Agreement among this Corporation, Salomon Brothers Inc and PaineWebber Incorporated (the "Purchase Agreement") to be in substantially the form presented to this Committee with such changes therein as the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer, the Assistant Treasurer, the Clerk or the Assistant Clerk (the "Authorized Officers") executing such Purchase Agreement deems necessary or appropriate. VOTED - that this Corporation shall enter into that certain Twenty-Fourth Supplemental Indenture (the "Supplemental Indenture") between this Corporation and State Street Bank and Trust Company, as trustee (the "Trustee"), supplementing the Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (the "Mortgage") between this Corporation and the Trustee, as previously supplemented and modified, such Supplemental Indenture to be in substantially the form presented to this Committee with such changes therein as may be determined by the officer or officers executing the same on behalf of this Corporation to be necessary or convenient and in the best interests of this Corporation. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute, seal with this Corporation's seal, acknowledge, attest, file, register, record and deliver the Purchase Agreement, the Supplemental Indenture and the First Mortgage Bonds referred to in the preceding votes, such execution and delivery of such documents by such officers to evidence conclusively for all purposes that the Purchase Agreement, the Supplemental Indenture and the First Mortgage Bonds are authorized by these votes. *n* Exhibit B ARTICLE V Executive and Other Committees The board of directors may elect from their own number an executive committee to consist of not less than three nor more than seven members, which committee shall have and exercise the powers of the board of directors in the management of the business and affairs of the corporation when the board of directors is not in session. The executive committee shall report all action taken by it to the board of directors for approval. The executive committee may make rules for the notice, holding, conduct, and keeping of records of its meetings. COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 30th day of April 1993 before me appeared BasilG. Pallone, to me personally known, who, being by me duly sworn, did say that he is the Assistant Clerk of Eastern Edison Company, and that the seal affixed to the foregoing certificate is the corporate seal of said Corporation, and that the said certificate was signed and sealed by him on behalf of said Corporation by authority of its Board of Directors, and said Assistant Clerk acknowledged said certificate to be the free act and deed of said Corporation. /s/ Elizabeth A. Erbland Notary Public My Commission Expires: 2/19/99 (Notarial Seal) *n* STATE STREET BANK AND TRUST COMPANY BOSTON, MASSACHUSETTS, 02101 Certified Excerpt from Vote of Board of Directors VOTED: That officers and employees of STATE STREET BANK AND TRUST COMPANY are hereby authorized to exercise powers as hereinafter specified: 4. To accept, execute, seal, acknowledge and deliver mortgages, indentures or other instruments, running to this Company as trustee or in any other fiduciary capacity to secure bonds, notes or other obligations The Chairman of the Board A Vice Chairman of the Board The Chairman of the Executive Committee The President An Executive Vice President A First Vice President A Senior Vice President A Vice President The Treasurer The Secretary An Assistant Vice President I hereby certify that the foregoing is a true excerpt from a vote unanimously passed at a meeting of the Board of Directors of STATE STREET BANK AND TRUST COMPANY duly called and held on April14, 1961, as amended to date. I further certify that said vote, as so amended, is in full force and effect and that the person listed below was duly elected and held the above respective office on the date this instrument was executed. Name Title Signature Daniel Golden Assistant Vice President /s/ Daniel Golden ATTEST: /s/ Arthur J. MacDonald Assistant Secretary Date: April 30, 1993 Received & Recorded May 3, 1993 at 2 hrs. 39 min. P.M. Attest: /s/ John Gomes, Register 31584\052\big-ed.02 EX-99.C-34 4 25TH SUPP INDENTURE OF EECO EXHIBIT C-34 EASTERN EDISON COMPANY TO STATE STREET BANK AND TRUST COMPANY (formerly State Street Trust Company) BOSTON, MASSACHUSETTS, Trustee TWENTY-FIFTH SUPPLEMENTAL INDENTURE Dated as of July 1, 1993 Supplementing the Indenture of First Mortgage And Deed of Trust Dated As Of September 1, 1948 This is a Mortgage of Personal Property as well as a Mortgage upon Real Estate. *n* THIS TWENTY-FIFTH SUPPLEMENTAL INDENTURE, dated as of July 1, 1993 between Eastern Edison Company (formerly named Brockton Edison Company), as Debtor (its Federal tax number being 04-1123095), a corporation organized and existing under the laws of The Commonwealth of Massachusetts and having its principal place of business and mailing address at 110 Mulberry Street in the City of Brockton in said Commonwealth (hereinafter sometimes called the "Company"), party of the first part, and State Street Bank and Trust Company (formerly State Street Trust Company and hereinafter sometimes called the "Trustee"), as Secured Party (its Federal tax number being 04-1867445), a corporation duly organized and existing under the laws of The Commonwealth of Massachusetts, having its principal office andmailing address at 225 Franklin Street, Boston, Massachusetts 02110, party of the second part. WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (hereinafter called the "Original Indenture") to secure, as provided therein, its bonds (in the Original Indenture and herein called the "Bonds"), not limited except as provided in Section 3.01 of the Original Indenture, to be known generally as its "First Mortgage and Collateral Trust Bonds", and to be issued in one or more series as provided in the Original Indenture; and WHEREAS, the Company has heretofore executed and delivered to the Trustee twenty-four indentures supplemental to the Original Indenture as follows: a First Supplemental Indenture dated as of February 1, 1953 (hereinafter sometimes called the "First Supplemental Indenture"), a Second Supplemental Indenture dated as of May 1, 1954 (hereinafter sometimes called the "Second Supplemental Indenture"), a Third Supplemental Indenture dated as of June 1, 1955 (hereinafter sometimes called the "Third Supplemental Indenture"), a Fourth Supplemental Indenture dated as of September 1, 1957 (hereinafter sometimes called the "Fourth Supplemental Indenture"), a Fifth Supplemental Indenture dated as of April 1, 1959 (hereinafter sometimes called the "Fifth Supplemental Indenture"), a Sixth Supplemental Indenture dated as of October 1, 1963 (hereinafter sometimes called the "Sixth Supplemental Indenture"), a Seventh Supplemental Indenture dated as of June 1, 1969 (hereinafter sometimes called the "Seventh Supplemental Indenture"), an Eighth Supplemental Indenture dated as of July 1, 1972 (hereinafter sometimes called the "Eighth Supplemental Indenture"), a Ninth Supplemental Indenture dated as of September 1, 1973 (hereinafter sometimes called the "Ninth Supplemental Indenture"), a Tenth Supplemental Indenture dated as of October 1, 1975 (hereinafter sometimes called the "Tenth Supplemental Indenture"), an Eleventh Supplemental Indenture dated as of January 1, 1979 (hereinafter sometimes called the "Eleventh Supplemental Indenture"), a Twelfth Supplemental Indenture dated as of October 1, 1980 (hereinafter sometimes called the "Twelfth Supplemental Indenture"), a Thirteenth Supplemental Indenture dated as of July 1, 1981 (hereinafter sometimes called the "Thirteenth Supplemental Indenture"), a Fourteenth Supplemental Indenture dated as of June 1, 1982 (hereinafter sometimes called the "Fourteenth Supplemental Indenture"), a Fifteenth Supplemental Indenture dated as of May 1, 1983 (hereinafter sometimes called the "Fifteenth Supplemental Indenture"), a Sixteenth Supplemental Indenture dated as of September 1, 1984 (hereinafter sometimes called the "Sixteenth Supplemental Indenture"), a Seventeenth Supplemental Indenture dated as of July 1, 1986 (hereinafter sometimes called the "Seventeenth Supplemental Indenture"), an Eighteenth Supplemental Indenture dated as of June 1, 1987 (hereinafter sometimes called the "Eighteenth Supplemental Indenture"), a Nineteenth Supplemental Indenture dated as of November 1, 1987 (hereinafter sometimes called the "Nineteenth Supplemental Indenture"), a Twentieth Supplemental Indenture dated as of May 1, 1988 (hereinafter sometimes called the "Twentieth Supplemental Indenture"), a Twenty-First Supplemental Indenture dated as of September 1, 1988 (hereinafter sometimes called the "Twenty-First Supplemental Indenture"), a Twenty-Second Supplemental Indenture dated as of December 1, 1990 (hereinafter sometimes called the "Twenty-Second Supplemental Indenture"), a Twenty- Third Supplemental Indenture dated as of July 1, 1992 (hereinafter sometimes called the "Twenty-Third Supplemental Indenture") and a Twenty-Fourth Supplemental Indenture dated as of May 1, 1993 (hereinafter sometimes called the Twenty- Fourth Supplemental Indenture) (the Original Indenture, as supplemented and modified by the First Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture and the Eleventh Supplemental Indenture and as supplemented by the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental Indenture, the Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture, the Twentieth Supplemental Indenture, the Twenty-First Supplemental Indenture, the Twenty-Second Supplemental Indenture, the Twenty-Third Supplemental Indenture, the Twenty-Fourth Supplemental Indenture and this Twenty-Fifth Supplemental Indenture, being herein sometimes called the "Indenture"); and WHEREAS, pursuant to the Original Indenture, as heretofore supplemented and modified, there have been executed, authenticated, delivered and issued and there are now outstanding First Mortgage and Collateral Trust Bonds of series and in principal amounts as follows: Title Issued Outstanding 4 1/2% Series due 1993 . . . . . 5,000,000 8.90% Series due 1995/Secured Medium Term Notes . . . . 10,000,000 6 1/2% Series due 1997 . . . . . 7,000,000 9 7/8% Series due 1998 . . . . . 40,000,000 5 7/8% Second Series due 1998. . 20,000,000 7 7/8% Series due 2002 . . . . . 8,000,000 7.78% Second Series due 2002/ Secured Medium Term Notes 35,000,000 6 7/8% Second Series due 2003. . 40,000,000 8 % Series due 2023 . . . . . 40,000,000 and WHEREAS, the Board of Directors of the Company has established under Section 3.02 of the Original Indenture, a new series of Bonds, to be designated First Mortgage and Collateral Trust Bonds, 5 3/4% Third Series due 1998 (hereinafter referred to as the "Bonds of the Third 1998 Series"), and has authorized the issue of said Bonds of the Third 1998 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000), pursuant to the provisions of Article Two of this Twenty-Fifth Supplemental Indenture; and WHEREAS, Article Eighteen of the Original Indenture provides, among other things, that the Company, when authorized by a resolution of the Board of Directors, and the Trustee, from time to time and at any time, subject to the restrictions in the Indenture contained, may, and when so required by the Indenture, shall, enter into indentures supplemental to the Original Indenture and which thereafter shall form a part thereof, for the purposes, among others, of (a)providing for the creation of a series of Bonds, designating the series to be created and specifying the form and provisions of the Bonds of such series, (b)adding to the Indenture other covenants and agreements to be thereafter observed by the Company, and (c)mortgaging, pledging, conveying, transferring or assigning to the Trustee, and subjecting to the lien of the Indenture, additional properties acquired by the Company; and WHEREAS, the Board of Directors of the Company (pursuant to authority granted by the stockholders of the Company entitled to vote thereon) by resolutions duly adopted authorized the execution of this Twenty-Fifth Supplemental Indenture for the purpose of (a) creating the Bonds of the Third 1998 Series, designating the series created and specifying the form and the provisions of the Bonds of such series, (b) adding to the Indenture certain covenants and agreements to be hereafter observed by the Company, and (c) subjecting to the lien of the Indenture additional properties acquired by the Company; WHEREAS, all acts and proceedings required by law and by the Certificate of Organization and Certificate of Incorporation and by-laws of the Company necessary to secure the payment of the principal of and interest and premium, if any, on the Bonds of the Third 1998 Series, to make the Bonds of the Third 1998 Series to be issued hereunder, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute the Indenture a valid and binding mortgage for the security of the Bonds, in accordance with its and their terms, have been done and taken; and the execution and delivery of this Twenty-Fifth Supplemental Indenture and the issue of the Bonds of the Third 1998 Series, have been in all respects duly authorized: NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and premium, if any, and interest on all Bonds at any time issued and outstanding under the Indenture, according to their tenor, purport and effect, to confirm the lien of the Indenture upon the mortgaged property mentioned therein including any and all property purchased, constructed or otherwise acquired by the Company since the date of execution of the Original Indenture and to secure the performance and observance of all the covenants and conditions in the Bonds and in the Indenture contained, and to declare the terms and conditions upon and subject to which the Bonds of the Third 1998 Series are to be issued and secured, and for and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds of the Third 1998 Series by the holders thereof, and of the sum of $10 duly paid to the Company by the Trustee, at or before the ensealing and delivery hereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Company has executed and delivered this Twenty-Fifth Supplemental Indenture, and by these presents, does grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto State Street Bank and Trust Company, Trustee, its successors in trust and its and their successors and assigns, all the property, rights, privileges and franchises (other than excepted property) of the character described in the Granting Clauses of the Original Indenture now owned of record or otherwise by the Company, whether or not constructed or acquired since the date of execution of the Original Indenture or which may hereafter be constructed or acquired by it, including without limiting the generality of the foregoing the property described in Article Four hereof, if any, but subject to all exceptions, reservations and matters of the character therein referred to, and expressly excepting and excluding from the lien and operation of the Indenture all properties of the character specifically excepted by Paragraphs B through H of Granting Clause VII of the Original Indenture and all property released or otherwise disposed of pursuant to the provisions of the Indenture. If, upon the happening of any default as defined in Article Twelve of the Original Indenture, the Trustee or a receiver or trustee shall enter upon and take possession of the trust estate, the Trustee or such receiver or trustee may, to the extent permitted by law, at the same time likewise take possession of any and all of the property of the character specifically excepted under the heading "Excepted Property" of Granting Clause VII of the Original Indenture, other than Paragraph F thereof, then on hand and use and administer the same to the same extent as if such property were part of the trust estate, unless and until such default shall be remedied or waived and possession of the trust estate restored to the Company. TO HAVE AND TO HOLD all of the property, real, personal and mixed, and all and singular the lands, properties, estates, rights, franchises, privileges and appurtenances hereby granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed, or intended so to be, unto the Trustee and its successors in trust and to its and their successors and assigns, forever. BUT IN TRUST, NEVERTHELESS, for the equal and proportionate use, benefit, security and protection of those who from time to time shall hold the Bonds and coupons, or any of them, authenticated and delivered under the Original Indenture, as heretofore and hereby supplemented and modified, and duly issued by the Company, without any discrimination, preference or priority of any one Bond or coupon over any other by reason of priority in the time of issue, sale or negotiation thereof or otherwise, except as provided in Section 12.28 of the Original Indenture, so that, subject to said Section 12.28, each and all of said Bonds and coupons shall have the same right, lien and privilege under the Original Indenture, as heretofore and hereby supplemented and modified, and shall be equally and proportionately secured thereby and hereby (except as any sinking, replacement or other analogous fund established in accordance with the provisions of the Indenture may afford additional security for the Bonds of any specific series), with the same effect as if all of the Bonds and coupons had been issued, sold and negotiated simultaneously on the date of the delivery of the Original Indenture. THE COMPANY HEREBY DECLARES that it holds and will hold and apply all property and rights of the character described in Paragraph F of Granting Clause VII of the Original Indenture as specifically reserved and excepted, upon the trusts set forth in the Original Indenture, as heretofore and hereby supplemented and modified, and as the Trustee (or any purchaser upon any sale of the mortgaged property) shall for such purpose direct from time to time, to the fullest extent permitted by law or in equity and by any instruments creating the same, as fully as if the same could be and had been hereby granted, conveyed, mortgaged, pledged, transferred and assigned to and vested in the Trustee. It is hereby covenanted, declared and agreed by and between the parties hereto that all Bonds and coupons, if any, are to be authenticated, delivered and issued and that all property subject to or to become subject to the Indenture is to be held, subject to the further covenants, conditions, uses and trusts set forth in the Indenture, and the Company for itself and its successors or assigns does hereby covenant and agree to and with the Trustee and its successor or successors in such trust, for the benefit of those who shall hold Bonds, or coupons, or any of them as follows: ARTICLE ONE Bonds of the Third 1998 Series and Certain Provisions Relating Thereto. Section 1.01. A. Terms of Bonds of the Third 1998 Series. There shall be, and hereby is, created a new series of Bonds, known as and entitled "First Mortgage and Collateral Trust Bonds, 5 3/4% Third Series due 1998". The principal amount of the Bonds of the Third 1998 Series shall not be limited except as provided in Section 3.01 of the Original Indenture and except as may be provided in any indenture supplemental thereto. The definitive Bonds of the Third 1998 Series shall be issued only as registered Bonds without coupons in denominations of $1,000 or any multiple thereof, numbered RAC upwards. July 27, 1993 shall be the date of the commencement of the first interest period for Bonds of the Third 1998 Series. All Bonds of the Third 1998 Series shall mature July 1, 1998, and shall bear interest at the rate of 5 3/4% per annum until the payment of the principal thereof, such interest to be payable semi-annually on January 1 and July 1 in each year commencing January 1, 1994. The principal of and the premium, if any, and interest on the Bonds of the Third 1998 Series shall be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal of and premium, if any, on Bonds of the Third 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Commonwealth of Massachusetts, of the Trustee, except that, in case of the redemption as a whole at any time of the Bonds of the Third 1998 Series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holders, Bonds of the Third 1998 Series may be surrendered for redemption and payment. Except as herein provided, interest on Bonds of the Third 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee, or at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, City and State of New York, in each case to the holder of record on the record date as hereinbelow defined. Interest on the Bonds of the Third 1998 Series shall, unless otherwise directed by the respective registered holders thereof, be paid by checks payable to the order of the respective holders entitled thereto, and mailed by the Trustee by first class mail, postage prepaid, to such holders at their respective registered addresses as shown on the Bond register for the Bonds of the Third 1998 Series. The definitive Bonds of the Third 1998 Series may be issued in the form of Bonds engraved, printed or lithographed on steel engraved borders. The person in whose name any Bond of the Third 1998 Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond of the Third 1998 Series upon any transfer or exchange thereof (including any exchange effected as an incident to a partial redemption thereof) subsequent to the record date and prior to such interest payment date, except that, if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, then the registered holders of Bonds of the Third 1998 Series on such record date shall have no further right to or claim in respect of such defaulted interest as such registered holders on such record date, and the persons entitled to receive payment of any defaulted interest thereafter payable or paid on any Bonds of the Third 1998 Series shall be the registered holders of such Bonds of the Third 1998 Series on the record date for payment of such defaulted interest. The term "record date" as used in this Section 1.01, and in the form of the Bonds of the Third 1998 Series, with respect to any interest payment date applicable to the Bonds of the Third 1998 Series, shall mean the December 15 next preceding a January 1 interest payment date or the June 15 next preceding a July 1 interest payment date, as the case may be, or such record date established for defaulted interest as hereinafter provided. In case of failure by the Company to pay any interest when due, the claim for such interest shall be deemed to have been transferred by transfer of any Bond of the Third 1998 Series registered on the books of the Company, and the Company, by not less than 10 days prior written notice to bondholders, may fix a subsequent record date for determination of holders entitled to payment of such interest. Such provision for establishment of a subsequent record date, however, shall in no way affect the rights of bondholders or of the Trustee consequent on any default. Except as provided in this Section 1.01, every Bond of the Third 1998 Series shall be dated as provided in Section 3.05 of the Original Indenture. However, so long as there is no existing default in the payment of interest on the Bonds of the Third 1998 Series, all Bonds of the Third 1998 Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall be dated such interest payment date and shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in the interest due on such interest payment date, then any such Bond of the Third 1998 Series shall bear interest from the January 1 or July 1, as the case may be, to which interest has been paid, unless such interest payment date is January 1, 1994, in which case from July 27, 1993. Notwithstanding the provisions of Section 3.11 of the Original Indenture, for any exchange of Bonds of the Third 1998 Series for other Bonds of the Third 1998 Series of different authorized denominations or for any transfer of Bonds of the Third 1998 Series the Company, at its option, may require the payment of a sum only sufficient to reimburse it for any stamp tax or other governmental charge incident thereto. The Trustee hereunder shall, by virtue of its office as such Trustee, be a paying agent of the Company for the purpose of the payment of the principal of and premium, if any, and interest on the Bonds of the Third 1998 Series and the registrar and transfer agent of the Company for the purpose of registering and transferring Bonds of the Third 1998 Series. Neither the Company nor the Trustee shall be required to make transfers or exchanges of Bonds of the Third 1998 Series for a period of ten days next preceding any date on which any Bonds of the Third 1998 Series are to be designated to be redeemed and neither the Company nor the Trustee shall be required to make transfers or exchanges of any Bonds designated in whole for redemption or that part of any Bond designated in part for redemption. B. Form of Bonds of the Third 1998 Series. The Bonds of the Third 1998 Series and the Trustee's authentication certificate to be executed on the Bonds of said Series, shall be in substantially the following form: *n* No. RAC $____________________ EASTERN EDISON COMPANY FIRST MORTGAGE AND COLLATERAL TRUST BOND 5 3/4% THIRD SERIES DUE 1998 DUE July 1, 1998 Eastern Edison Company, a Massachusetts corporation (hereinafter sometimes called the "Company"), for value received, hereby promises to pay to or registered assigns, dollars on July 1, 1998 or earlier as hereinafter provided and to pay to said payee, or registered assigns, interest hereon at the rate specified in the title of this bond, from July 27, 1993, as provided in the Twenty-Fifth Supplemental Indenture mentioned on the reverse hereof, payable semi-annually on the first days of January and July in each year until payment of the principal hereof. The interest so payable upon any January 1 or July 1 will, subject to certain exceptions described on the reverse hereof, be paid to the person in whose name this bond is registered at the close of business on the December 15 preceding such January 1 or the June 15 preceding such July 1, as the case may be. Principal of, premium, if any, and interest on this bond will be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal and premium will be payable at the principal corporate trust office in the City of Boston, Massachusetts of the Trustee under the Indenture mentioned on the reverse hereof, except that in case of the redemption as a whole at any time of the bonds of this series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holder, this bond may be surrendered for redemption and payment. Interest on this bond will be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee or, at the option of the holder hereof, at the office or agency of the Company in the Borough of Manhattan, City and State of New York; provided, however, that interest on this bond shall, unless otherwise directed by the registered holder hereof, be paid by check payable to the order of the registered holder entitled thereto and mailed by the Trustee by first class mail, postage prepaid to such holder at his address as shown on the bond register for the bonds of this series. This bond shall not become or be valid or obligatory for any purpose until the authentication certificate hereon shall have been signed by the Trustee. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, EASTERN EDISON COMPANY has caused these presents, which are intended to take effect as a sealed instrument, to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents under its corporate seal or a facsimile thereof, attested by the manual or facsimile signature of its Clerk or one of its Assistant Clerks, all as of the date set forth below. Dated:_____________________ EASTERN EDISON COMPANY By_________________________ President Attest ________________________ Clerk *n* [FORM OF REVERSE OF BOND OF THE THIRD 1998 SERIES] This bond is one of the bonds, of the above designated series, of an authorized issue of bonds of the Company, known as First Mortgage and Collateral Trust Bonds, all issued or issuable in one or more series under and equally and proportionately secured (except insofar as any sinking fund, replacement fund or other fund established in accordance with the provisions of the Indenture hereinafter mentioned may afford additional security for the bonds of any specific series) by an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948, executed and delivered by the Company to State Street Trust Company (now State Street Bank and Trust Company), Boston, Massachusetts, as Trustee (herein with its successors under said Indenture sometimes called the "Trustee"), as supplemented and modified by the First Supplemental Indenture dated as of February1, 1953, by the Eighth Supplemental Indenture dated as of July1, 1972, by the Ninth Supplemental Indenture dated as of September1, 1973, by the Tenth Supplemental Indenture dated as of October1, 1975 and by the Eleventh Supplemental Indenture dated as of January1, 1979 and as supplemented by all other indentures supplemental thereto, executed and delivered by the Company to said Trustee, to which Indenture and all indentures supplemental thereto to which the Trustee shall be a party (herein sometimes called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged as security for said bonds, the nature and extent of the security, and the rights, duties and immunities thereunder of the Trustee, the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said bonds may be issued thereunder; but neither the foregoing reference to the Indenture nor any provision of this bond or of the Indenture or of any indenture supplemental thereto shall affect or permit any impairment of the obligation of the Company, which is absolute and unconditional, to pay at the stated or accelerated times herein provided, the principal of and the premium, if any, and the interest on this bond as herein provided. The bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth in the tabulation below under the heading "Regular Redemption Price" (provided, however, that such right of redemption shall be limited as provided in the Twenty-Fifth Supplemental Indenture); and (b)for the replacement fund provided for in the Indenture and by the application of proceeds of certain property subject to the lien thereof, upon payment of the applicable percentage of the called principal amount thereof set forth in said tabulation under the heading "Special Redemption Price": If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption July 1 Price Price 1993 105.290% 100% 1994 103.978% 100% 1995 102.645% 100% 1996 101.323% 100% 1997 100.000% 100% together in any case with interest accrued thereon to the redemption date, upon prior notice given by first class mail, postage prepaid, as provided in the Twenty-Fifth Supplemental Indenture to the holders of record of each bond affected not less than thirty days nor more than ninety days prior to the redemption date and subject to all other conditions and provisions of the Indenture. If this bond or any portion thereof ($1,000 or any multiple thereof) is duly designated for redemption, if payment of the principal hereof or of such portion with accrued interest and premium, if any, is provided for, and if notice of such redemption is duly given or provided for, all as specified in the Indenture, this bond or such portion shall cease to be entitled to the lien of the Indenture from and after the date such payment and notice are irrevocably so provided for and shall cease to bear interest from and after the date fixed for redemption. In the event of the selection for redemption of a portion only of the principal of this bond, payment of the redemption price will be made only (a) upon presentation of this bond for notation hereon of such payment of the portion of the principal of this bond so called for redemption, or (b) upon surrender of this bond in exchange for a bond or bonds (of authorized denominations of the same series) for the unredeemed balance of the principal amount of this bond. In the event of the redemption of this bond in whole, payment of the redemption price will be made only upon surrender of this bond. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding (determined as provided in the Indenture) including, if more than one series of bonds shall be at the time outstanding, not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding of each series affected, to effect, by an indenture supplemental to the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the bonds and coupons; provided, however, that no such modification or alteration shall be made without the consent of the registered owner hereof which will (a) extend the maturity of this bond or reduce the rate or extend or otherwise change the time of payment of interest hereon or reduce the amount of the principal hereof or reduce any premium payable on the redemption hereof, or (b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the Indenture, or alter the equal and proportionate security afforded by the lien of the Indenture for the bonds issued thereunder, or (c) reduce the number or percentage of the principal amount of the bonds upon the consent of the holders of which modifications or alterations may be made as aforesaid. This bond is transferable by the registered owner hereof in person or by his duly authorized attorney, on books of the Company kept for the purpose, at the principal corporate trust office of the Trustee upon surrender of this bond for cancellation and upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fifth Supplemental Indenture, sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and thereupon a new registered bond or bonds of the same series of like aggregate principal amount will be issued to the transferee in exchange therefor. The registered owner of this bond at his option may surrender the same for cancellation at said office and receive in exchange therefor the same aggregate principal amount of registered bonds of the same series but of other authorized denominations, upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fifth Supplemental Indenture sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and subject to the terms and conditions therein set forth. Neither the Company nor the Trustee shall be required to make transfers or exchanges of bonds of this series for a period of ten days next preceding any designation of bonds of said series to be redeemed, and neither the Company nor the Trustee shall be required to make transfers or exchanges of any bonds designated in whole for redemption or that part of any bond designated in part for redemption. Subject to the provisions of the Twenty-Fifth Supplemental Indenture, if this bond is surrendered for any transfer or exchange between the record date for any interest payment date and such interest payment date, the new bond will be dated such interest payment date. The Twenty-Fifth Supplemental Indenture provides that in the event of any default in payment of the interest due on any interest payment date, such interest shall not be payable to the holder of this bond on the original record date but shall be paid to the registered holder of such bond on the subsequent record date established for payment of such defaulted interest. If a default as defined in the Indenture shall occur, the principal of this bond may become or be declared due and payable before maturity in the manner and with the effect provided in the Indenture. The holders, however, of certain specified percentages of the bonds at the time outstanding, including in certain cases specified percentages of bonds of particular series, may in the cases, to the extent and under the conditions provided in the Indenture, waive past defaults thereunder and the consequences of such defaults. No recourse shall be had for the payment of the principal of or the premium, if any, or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or such predecessor or successor corporation, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and as provided in the Indenture. The Company and the Trustee and any paying agent and any bond registrar may deem and treat the person in whose name this bond shall be registered upon the books of the Company as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of and interest on this bond and for all other purposes, whether or not this bond be overdue; and all such payments so made to such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon this bond to the extent of the sum or sums so paid and neither the Company nor the Trustee nor any paying agent nor any bond registrar shall be affected by any notice to the contrary. *n* [FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] This is one of the bonds, of the series designated therein, described in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE, By__________________________________ Authorized Officer SECTION 1.02. Redemption Provisions for Bonds of the Third 1998 Series. The Bonds of the Third 1998 Series shall be subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Regular Redemption Price" in the tabulation in the form of the Bonds of the Third 1998 Series set forth in Section 1.01 hereof; provided, however, that no such redemption shall be made (except in connection with any consolidation or merger with any corporation other than an affiliate of the Company in which the Company shall not be the surviving corporation, or transfer or sale of all or substantially all of the property of the Company to any corporation other than an affiliate of the Company), directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness which has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with the indebtedness being incurred in such refunding operation) of less than the effective interest cost to the Company of the Bonds of the Third 1998 Series; and (b) upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Special Redemption Price" in the tabulation in the form of the Bonds of the Third 1998 Series set forth in Section 1.01 hereof, either, (i) through the application of cash deposited with the Trustee for the replacement fund provided for in Section 4.04 of the Original Indenture and in Section 1.03 hereof, or (ii) through the application pursuant to Section 8.05 of the Original Indenture of any trust moneys held by the Trustee received from the proceeds of property sold or taken pursuant to the provisions of Section 7.04 of the Original Indenture, together in any case with interest accrued thereon to the date fixed for redemption, upon not less than thirty days' nor more than ninety days' notice given by first class mail, postage prepaid, to the holder of record at the date of such notice of each Bond of the Third 1998 Series affected, at his address as shown on the books of the Company. Such notice shall be sufficiently given if deposited in the United States mail postage prepaid within such period. Neither the failure to mail such notice, nor any defect in any notice so mailed to any such holder, shall affect the sufficiency of such notice with respect to other holders. The foregoing provisions with respect to notice shall be subject to all other conditions and provisions of the Indenture not inconsistent herewith. SECTION 1.03. Replacement Fund. Notwithstanding the provisions of Section 4.06 of the Original Indenture, the Company hereby covenants that, so long as any of the Bonds of the Third 1998 Series shall remain outstanding, (a) the covenants made by the Company in Section 4.04 of the Original Indenture shall continue in full force and effect and (b) Bonds delivered, redeemed or purchased pursuant to said Section 4.04 and any amount of available Bond credits and all available Montaup Securities used as a credit in Item 8 of any replacement fund certificate shall be deemed to be funded, unless and until the same shall have been reinstated as provided in said Section 4.04 or in Section 2.07 of the Original Indenture. SECTION 1.04. Restriction on Payment of Dividends on Common Stock. The Company covenants that, so long as any Bonds of the Third 1998 Series remain outstanding, it will not (a) declare or pay any dividend or make any distribution on any shares of Common Stock (other than dividends payable in Common Stock of the Company) or (b) directly or indirectly through a subsidiary make any expenditures for the purchase, redemption or other retirement for a consideration of any shares of Common Stock of the Company (other than in exchange for, or from the proceeds of, other and new shares of Common Stock of the Company), if the aggregate amount of all such dividends, distributions and expenditures made after January 31, 1953 would exceed the aggregate amount of the Company's net income available for dividends on its Common Stock, accumulated after January 31, 1953. Net income of the Company available for dividends on its Common Stock for the purpose of this Section 1.04 shall be defined as in the second paragraph of Section 1.05 of the First Supplemental Indenture as modified by Section 7.02 of the Eleventh Supplemental Indenture. Nothing in this Section 1.04 shall affect the restrictions imposed by similar provisions in any previous Supplemental Indenture for the benefit of Bonds of any series. SECTION 1.05. Minimum Provision for Depreciation. Notwithstanding the provisions of Section 1.35 of the Original Indenture, the Company hereby covenants that the term "minimum provision for depreciation" shall have the meaning specified in such Section so long as any of the Bonds of the Third 1998 Series shall remain outstanding. SECTION 1.06. Continuation of Effectiveness of Term "funded". Property additions, net additions, Bonds and Montaup Securities which have or shall become funded to the extent provided in Paragraphs (1), (2), (3) and (4) of Section 1.36 of the Original Indenture as modified by Section 7.01 of the Eleventh Supplemental Indenture shall continue to be funded except to the extent that any provision of the Original Indenture or of any supplemental indenture expressly provides that property additions, net additions, Bonds or Montaup Securities shall be funded only so long as Bonds of particular series shall remain outstanding. SECTION 1.07. Duration of Effectiveness of Article One. This Article shall be in force and effect only so long as any of the Bonds of the Third 1998 Series are outstanding. ARTICLE TWO PRINCIPAL AMOUNT PRESENTLY TO BE OUTSTANDING SECTION 2.01. The total aggregate principal amount of First Mortgage and Collateral Trust Bonds of the Company issued and outstanding and presently to be issued and outstanding under the provisions of and secured by the Indenture will be Two Hundred Forty-Five Million Dollars ($245,000,000), namely Five Million Dollars ($5,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 4 1/2% Series due 1993 now issued and outstanding, Ten Million Dollars ($10,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8.90% Series due 1995/Secured Medium Term Notes now issued and outstanding, Seven Million Dollars ($7,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 1/2% Series due 1997 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 9 7/8% Series due 1998 now issued and outstanding, Twenty Million Dollars ($20,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 5 7/8%, Second Series due 1998 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds 5 3/4% Third Series presently to be issued and outstanding, Eight Million Dollars ($8,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7 7/8% Series due 2002 now issued and outstanding, Thirty-Five Million Dollars ($35,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7.78% Second Series due 2002/Secured Medium Term Notes now issued and outstanding, and Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 7/8% Series due 2003 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8% Series due 2023 now issued and outstanding. Additional Bonds of the 1993 Series, the 1995 Series, the 1998 Series, the Second 1998 Series, the Third 1998 Series, the 1999 Series, the 2002 Series, the Second 2002 Series, the Second 2003 Series, and the 2023 Series, and of any other series established after the execution and delivery of this Twenty-Fifth Supplemental Indenture may from time to time be authenticated, delivered and issued pursuant to the terms of the Indenture. SECTION 2.02. Bonds of the Third 1998 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000) may forthwith, upon the execution and delivery of this Twenty-Fifth Supplemental Indenture, or from time to time thereafter, and upon compliance by the Company with the provisions of Section 5.02 and any or all of Sections 5.03, 5.04, 5.05 and 5.06 of the Original Indenture, be executed by the Company and delivered to the Trustee and shall thereupon be authenticated and delivered by the Trustee to or upon the written order of the Company. ARTICLE THREE MISCELLANEOUS Section 3.01. This Twenty-Fifth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture, as supplemented and modified, and shall form a part thereof, and the Original Indenture, as heretofore supplemented and modified (to the extent and when and as the same shall become and be effective as provided in the respective modifying supplemental indentures) and as hereby supplemented is hereby confirmed. Except to the extent inconsistent with the express terms thereof, all of the provisions, terms, covenants and conditions of the Original Indenture, as supplemented and modified, shall be applicable to the Bonds of the Third 1998 Series, to the same extent as if specifically set forth herein. All terms used in this Twenty-Fifth Supplemental Indenture shall be taken to have the same meaning as in the Original Indenture, as supplemented and modified, except in cases where the context clearly indicates otherwise. SECTION 3.02. All recitals in this Twenty-Fifth Supplemental Indenture are made by the Company only and not by the Trustee; and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect hereof as fully and with like effect as if set forth herein in full. SECTION 3.03. The Company covenants that it is lawfully seized and possessed at the date of execution of this Twenty-Fifth Supplemental Indenture of all the trust estate described in this Twenty-Fifth Supplemental Indenture, except as specifically otherwise stated in this Twenty-Fifth Supplemental Indenture, and that all the trust estate so described is free and clear of any lien other than the lien of the Indenture and permitted encumbrances; that the Company will warrant and forever defend all the trust estate so described to the Trustee against the claims of all persons whomsoever except as in the Indenture specifically otherwise stated; that it will maintain and preserve the lien of the Indenture so long as any of the Bonds issued under the Indenture are outstanding; and that it has good right and lawful authority to subject all the trust estate so described to the lien of the Indenture as provided in and by the Original Indenture, as heretofore supplemented and modified and as supplemented by this Twenty-Fifth Supplemental Indenture. SECTION 3.04. This Twenty-Fifth Supplemental Indenture may be executed in several counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Company and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 3.05. Although this Twenty-Fifth Supplemental Indenture is dated for convenience and for the purpose of reference as of July 1, 1993, the actual date or dates of execution by the Company and by the Trustee are as indicated by their respective acknowledgments hereto annexed. ARTICLE FOUR SCHEDULE OF PROPERTY ACQUIRED SINCE DATE OF THE TWENTY-FOURTH SUPPLEMENTAL INDENTURE None. IN WITNESS WHEREOF, Eastern Edison Company has caused this Twenty-Fifth Supplemental Indenture to be signed in its corporate name and behalf by its President, either of its Vice Chairmen or one of its Vice Presidents and its corporate seal to be hereunto affixed and attested by its Treasurer, and State Street Bank and Trust Company in token of its acceptance of the trust hereby created has caused this Twenty-Fifth Supplemental Indenture to be signed in its corporate name and behalf by one of its Assistant Vice Presidents, and its corporate seal to be hereunto affixed and attested by its Secretary or one of its Assistant Secretaries, all as of the day and year first above written. EASTERN EDISON COMPANY By /s/ Richard M. Burns Vice President Attest: /s/ Clifford J. Hebert, Jr. Treasurer (CORPORATE SEAL) STATE STREET BANK AND TRUST COMPANY By /s/ Daniel Golden Assistant Vice President Attest: /s/ Andrew M. Sinasky Assistant Secretary (CORPORATE SEAL) *n* COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 21st day of July, 1993 before me appeared Richard M. Burns and Clifford J. Hebert, Jr., to me personally known, who, being by me duly sworn, did say that they are a Vice President and a Treasurer, respectively, of Eastern Edison Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Corporation, and that the said instrument was signed and sealed by them on behalf of said Corporation by authority of its Board of Directors, and each of said officers acknowledged said instrument to be the free act and deed of said Corporation. /s/ Cheryl Ann Nobile Notary Public My Commission Expires 3/20/98 (Notarial Seal) COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 21st day of July, 1993 before me appeared Daniel Golden and Andrew M. Sinasky, to me personally known, who being by me duly sworn, did say that they are an Assistant Vice President and an Assistant Secretary, respectively, of State Street Bank and Trust Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Trust Company, and that the said instrument was signed and sealed by them on behalf of said Trust Company by authority of its Board of Directors and each of said officers acknowledged said instrument to be the free act and deed of said Trust Company. /s/ Cheryl Anne Nobile Notary Public My Commission Expires 3/20/98 (Notarial Seal) *n* Assistant Clerk's Certificate Certifying Votes Responsive to Subsection B of 5.02 and Section 18.01 of the Indenture EASTERN EDISON COMPANY I, Richard M. Burns, DO HEREBY CERTIFY that I am an Assistant Clerk of Eastern Edison Company (hereinafter called the "Corporation"), a Massachusetts corporation, and that attached hereto are true, correct and complete copies of certain votes duly adopted by the Board of Directors of the Corporation at Meetings of said Board duly convened and held on February 23, 1993 and on July 20, 1993, at each of which meetings a quorum for the transaction of business was present and acting throughout. I further certify that said votes have not been amended or revoked and that the same are now in full force and effect. WITNESS my hand and the seal of said Corporation, this 21st day of July, 1993. ___________________________ Richard M. Burns Assistant Clerk (SEAL) *n* VOTES TAKEN AT A MEETING OF THE BOARD OF DIRECTORS OF EASTERN EDISON COMPANY HELD ON FEBRUARY 23, 1993 VOTED - that the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer or the Assistant Treasurer (the "Authorized Officers") of this Corporation be, and each of them hereby are, authorized (a) to issue and sell, or cause to be issued and sold, on behalf of this Corporation, from time to time, on a competitive bid or negotiated basis, up to $215,000,000 aggregate principal amount of any combination of one or more new series of First Mortgage and Collateral Trust Bonds, medium term securities (consisting of one or more series of first mortgage bonds or unsecured notes), unsecured notes and tax-exempt pollution control revenue bonds (collectively referred to hereinafter as the "Debt") and one or more series of new classes of cumulative Preferred Stock (the "New Preferred Stock") up to an aggregate of 400,000 shares, each such share to have a par value of $100 per share and all such shares to have an aggregate par value of $40,000,000, (b) to execute and deliver on behalf of this Corporation loan and trust agreements, letters of credit, reimbursement agreements, remarketing agreements or any other agreement or instrument necessary or appropriate to effect the issuance and sale of such tax-exempt pollution control revenue bonds the proceeds of which will be loaned to this Corporation and (c) to use the proceeds from the sale of the Debt and the New Preferred Stock for (i) the retirement or redemption of outstanding long-term debt and preferred stock and any premiums paid in connection with such retirements and redemptions, (ii) the repayment of short-term borrowings, (iii) the payment of underwriting expenses and other issuance expenses and (iv) for general corporate purposes including (a) payment for construction of capital additions and improvements to plant and system, (b) working capital needs and the repayment of short-term borrowings incurred for such purposes, and (c) sinking fund payments and the retirement or redemption of outstanding securities; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents as the officer signing any such documents may deem necessary or desirable, for requisite authority for the issuance and sale of the Debt, the New Preferred Stock and related transactions. VOTED - that the execution and filing of an amended application by the Authorized Officers of this Corporation in the form presented at this meeting with the Massachusetts Department of Public Utilities (the "MDPU") requesting authorization to issue and sell the New Preferred Stock and up to $175,000,000 of the Debt as set forth in said application be and hereby is, ratified, approved and confirmed. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to file an application relating to the issuance and sale of the remaining $40,000,000 of the Debt with the MDPU, in such form as the signing officer deems necessary or appropriate; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents, together with any and all such amendments to such application as the officer signing such amendment deems necessary or appropriate for requisite authority for the issuance and sale of the $40,000,000 of the Debt and related transactions. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to file an application-declaration on Form U-1 relating to the issuance and sale of all or a portion of the Debt and the New Preferred Stock with the Securities and Exchange Commission (the "SEC") under the Public Utility Holding Company Act of 1935, as amended, in such form as the signing officer deems necessary or appropriate; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents, together with any and all such amendments to such application-declaration as the officer signing such amendment deems necessary or appropriate for requisite authority for the issuance and sale of the Debt, the New Preferred Stock and related transactions. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file one or more registration statements with the SEC (the "Registration Statements") to provide for the issuance and sale of all or any portion of the Debt and the New Preferred Stock, in such form as the signing officer or officers deem necessary or appropriate; that the execution thereof by the Authorized Officers, as required by the Rules and Regulations of the SEC, be, and hereby is, authorized and approved; provided, however, that the Authorized Officers be, and each of them hereby is, authorized to sign said Registration Statements (whether on behalf of this Corporation, or as an officer or otherwise) through Donald G. Pardus, John R. Stevens, Richard M. Burns and Clifford J. Hebert, Jr., or any of them, as duly authorized attorneys or attorney; that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation and individually as officers to execute in like manner such further amendments to said Registration Statements as may be required or deemed by them advisable and to cause the same to be filed with the SEC; provided that each Authorized Officer be, and hereby is, authorized to sign any such amendments (whether on behalf of this Corporation, or as an officer or otherwise) through Donald G. Pardus, John R. Stevens, Richard M. Burns and Clifford J. Hebert, Jr., or any of them, as duly authorized attorneys or attorney. VOTED - that John R. Stevens and Clifford J. Hebert, Jr. be, and each of them hereby is, designated as agent for service with respect to the Registration Statements with all the powers provided in the Rules and Regulations of the SEC with respect to agents for service. VOTED - that the firm of McDermott, Will & Emery of Boston, Massachusetts, be employed as principal counsel by this Corporation to act for it in all matters in connection with the proposed issue and sale of the Debt and the New Preferred Stock, including giving any opinion or opinions as to titles to real estate and as to franchises of this Corporation which may appear desirable in connection with the proposed issue and sale of the Debt and New Preferred Stock. VOTED - that the following individuals hereby are elected to a Special Committee, a majority of which shall have the powers of this Corporation's Board of Directors with respect to all aspects of the issuance and sale of the Debt and the New Preferred Stock when the Board is not in session, including approval of the pricing and all other terms and conditions under which the Debt shall be issued and the approval of, and grant of authority to the officers of this Corporation to execute, any and all documents and instruments or to do such other acts and things necessary for (i) the issuance and sale of the Debt and the New Preferred Stock and (ii) the retirement or redemption of this Corporation's outstanding debt and preferred stock in accordance with the terms of such debt and preferred stock for the purposes of refinancing such debt and preferred stock: Donald G. Pardus Donald H. Ramsbottom John R. Stevens VOTED - that the officers of this Corporation be, and each them hereby is, authorized to execute all such agreements and other instruments, make all such payments, and do all such other acts and things as in their opinion or in the opinion of any of them may be necessary or desirable in order to carry out the intent and purposes of the foregoing votes, including, without limitation, (i) the giving of the Corporation's agreement as called for by the second paragraph of Article VI of the Montaup contract, so called, dated September 11, 1923, as amended, the present parties to which are Montaup Electric Company, Blackstone Valley Electric Company and this Corporation, in connection with the proposed increase of this Corporation's investment in Montaup Electric Company and (ii) the pledging of any additional securities of Montaup Electric Company, when acquired by this Corporation, to State Street Bank and Trust Company, as Trustee under this Corporation's Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 as supplemented and modified, securing this Corporation's First Mortgage and Collateral Trust Bonds. *n* VOTES TAKEN AT A MEETING OF THE BOARD OF DIRECTORS OF EASTERN EDISON COMPANY HELD ON JULY 20, 1993 1. VOTED - that this Corporation enter into a Purchase Agreement among this Corporation, Salomon Brothers Inc and PaineWebber Incorporated (the "Purchase Agreement") to be substantially on the terms and conditions presented to this Committee with such changes as the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer, the Assistant Treasurer, the Clerk or the Assistant Clerk (the "Authorized Officers") executing such Purchase Agreement deems necessary or appropriate. 2. VOTED - that this Corporation shall enter into that certain Twenty-Fifth Supplemental Indenture (the "Supplemental Indenture") between this Corporation and State Street Bank and Trust Company, as trustee (the "Trustee"), supplementing the Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (the "Mortgage") between this Corporation and the Trustee, as previously supplemented and modified, such Supplemental Indenture to be in substantially the form presented to this Committee with such changes therein as may be determined by the officer or officers executing the same on behalf of this Corporation to be necessary or convenient and in the best interests of this Corporation. 3. VOTED - that this Corporation shall issue and sell pursuant to the Purchase Agreement up to an aggregate principal amount of $40,000,000 of First Mortgage and Collateral Trust Bonds (the "First Mortgage Bonds"), in one series with a maturity of not longer than five years from the date of issuance; such First Mortgage Bonds to be issued under the Supplemental Indenture, and to be in substantially the form, and upon substantially the terms and conditions, provided for in the Supplemental Indenture with such changes therein as may be determined by the officer or officers executing the same on behalf of this Corporation to be necessary or convenient and in the best interests of this Corporation. 4. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation, to fix the interest rate at which such First Mortgage Bonds referred to in the preceding vote may be sold to the purchasers thereof at 5 3/4%; provided further, that this Corporation will not undertake to issue or sell the First Mortgage Bonds if it does not believe that the estimated net present value of the interest cost savings to be derived from the net difference between interest on the First Mortgage Bonds and any outstanding securities to be redeemed or retired with the proceeds from the First Mortgage Bonds would, on an after-tax basis, be greater than the present value of all redemption and issuance costs, including any tendering and premium costs and credit enhancement expenses, assuming an appropriate discount rate. 5. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute, seal with this Corporation's seal, acknowledge, attest, file, register, record and deliver the Purchase Agreement and the First Mortgage Bonds referred to in the preceding votes, such execution and delivery of such documents by such officers to evidence conclusively for all purposes that the Purchase Agreement and the First Mortgage Bonds are authorized by these votes. 6. VOTED - that State Street Bank and Trust Company, N.A. hereby is designated as paying agent for the First Mortgage Bonds. 7. VOTED - that Authorized Officers be and each of them hereby is authorized and empowered by and on behalf of this Corporation to redeem or retire all or any part of this Corporation's outstanding securities in accordance with the terms thereof and that each of the Authorized Officers is hereby further authorized and empowered to execute any and all documents which they or any of them deem necessary or advisable to effect the transactions set forth in this vote, such execution to be conclusive evidence of approval of the actions of the Authorized Officers. 8. VOTED - that Authorized Officers be and each of them hereby is authorized and empowered by and on behalf of this Corporation to use (i) the proceeds from the issuance of the First Mortgage Bonds authorized in the preceding votes and (ii) other available cash to make the redemptions or retirements of the outstanding securities of this Corporation referred to in the foregoing vote, and that each of the Authorized Officers is hereby further authorized and empowered to execute any and all documents which they or any of them deem necessary or advisable to effect the transactions set forth in this vote, such execution to be conclusive evidence of approval of the actions of the Authorized Officers. 9. VOTED - that the Authorized Officers of this Corporation be, and each them hereby is, authorized to execute all such agreements and other instruments, make all such payments, and do all such other acts and things as in their opinion or in the opinion of any of them may be necessary or desirable in order to carry out the intent and purposes of the foregoing votes. *n* STATE STREET BANK AND TRUST COMPANY BOSTON, MASSACHUSETTS, 02101 Certified Excerpt from Vote of Board of Directors VOTED: That officers and employees of STATE STREET BANK AND TRUST COMPANY are hereby authorized to exercise powers as hereinafter specified: 4. To accept, execute, seal, acknowledge and deliver mortgages, indentures or other instruments, running to this Company as trustee or in any other fiduciary capacity to secure bonds, notes or other obligations The Chairman of the Board A Vice Chairman of the Board The Chairman of the Executive Committee The President An Executive Vice President A First Vice President A Senior Vice President A Vice President The Treasurer The Secretary An Assistant Vice President I hereby certify that the foregoing is a true excerpt from a vote unanimously passed at a meeting of the Board of Directors of STATE STREET BANK AND TRUST COMPANY duly called and held on April14, 1961, as amended to date. I further certify that said vote, as so amended, is in full force and effect and that the person listed below was duly elected and held the above respective office on the date this instrument was executed. Name Ti tle Signature Daniel Golden Assistant Vice President /s/ Daniel Golden ATTEST: /s/ Clare M. O'Brien Assistant Secretary Date: July 21, 1993 *n* COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss .: At Boston on this 21st day of July 1993 before me appeared Richard M. Burns, to me personally known, who, being by me duly sworn, did say that he is the Assistant Clerk of Eastern Edison Company, and that the seal affixed to the foregoing certificate is the corporate seal of said Corporation, and that the said certificate was signed and sealed by him on behalf of said Corporation by authority of its Board of Directors, and said Assistant Clerk acknowledged said certificate to be the free act and deed of said Corporation. /s/ Cheryl Ann Nobile Notary Public My Commission Expires: 3/20/98 (Notarial Seal) Received & Recorded July 23, 1993 at 12 hrs. 16 min. P.M. Attest: /s/ John Gomes, Register 31584\052\big-ed.03 EX-99.C-35 5 25TH SUPPL INDENTURE OF EECO EXHIBIT C-35 EASTERN EDISON COMPANY TO STATE STREET BANK AND TRUST COMPANY (formerly State Street Trust Company) BOSTON, MASSACHUSETTS, Trustee TWENTY-FIFTH SUPPLEMENTAL INDENTURE Dated as of July 1, 1993 Supplementing the Indenture of First Mortgage And Deed of Trust Dated As Of September 1, 1948 This is a Mortgage of Personal Property as well as a Mortgage upon Real Estate. *n* THIS TWENTY-FIFTH SUPPLEMENTAL INDENTURE, dated as of July 1, 1993 between Eastern Edison Company (formerly named Brockton Edison Company), as Debtor (its Federal tax number being 04-1123095), a corporation organized and existing under the laws of The Commonwealth of Massachusetts and having its principal place of business and mailing address at 110 Mulberry Street in the City of Brockton in said Commonwealth (hereinafter sometimes called the "Company"), party of the first part, and State Street Bank and Trust Company (formerly State Street Trust Company and hereinafter sometimes called the "Trustee"), as Secured Party (its Federal tax number being 04-1867445), a corporation duly organized and existing under the laws of The Commonwealth of Massachusetts, having its principal office andmailing address at 225 Franklin Street, Boston, Massachusetts 02110, party of the second part. WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (hereinafter called the "Original Indenture") to secure, as provided therein, its bonds (in the Original Indenture and herein called the "Bonds"), not limited except as provided in Section 3.01 of the Original Indenture, to be known generally as its "First Mortgage and Collateral Trust Bonds", and to be issued in one or more series as provided in the Original Indenture; and WHEREAS, the Company has heretofore executed and delivered to the Trustee twenty-four indentures supplemental to the Original Indenture as follows: a First Supplemental Indenture dated as of February 1, 1953 (hereinafter sometimes called the "First Supplemental Indenture"), a Second Supplemental Indenture dated as of May 1, 1954 (hereinafter sometimes called the "Second Supplemental Indenture"), a Third Supplemental Indenture dated as of June 1, 1955 (hereinafter sometimes called the "Third Supplemental Indenture"), a Fourth Supplemental Indenture dated as of September 1, 1957 (hereinafter sometimes called the "Fourth Supplemental Indenture"), a Fifth Supplemental Indenture dated as of April 1, 1959 (hereinafter sometimes called the "Fifth Supplemental Indenture"), a Sixth Supplemental Indenture dated as of October 1, 1963 (hereinafter sometimes called the "Sixth Supplemental Indenture"), a Seventh Supplemental Indenture dated as of June 1, 1969 (hereinafter sometimes called the "Seventh Supplemental Indenture"), an Eighth Supplemental Indenture dated as of July 1, 1972 (hereinafter sometimes called the "Eighth Supplemental Indenture"), a Ninth Supplemental Indenture dated as of September 1, 1973 (hereinafter sometimes called the "Ninth Supplemental Indenture"), a Tenth Supplemental Indenture dated as of October 1, 1975 (hereinafter sometimes called the "Tenth Supplemental Indenture"), an Eleventh Supplemental Indenture dated as of January 1, 1979 (hereinafter sometimes called the "Eleventh Supplemental Indenture"), a Twelfth Supplemental Indenture dated as of October 1, 1980 (hereinafter sometimes called the "Twelfth Supplemental Indenture"), a Thirteenth Supplemental Indenture dated as of July 1, 1981 (hereinafter sometimes called the "Thirteenth Supplemental Indenture"), a Fourteenth Supplemental Indenture dated as of June 1, 1982 (hereinafter sometimes called the "Fourteenth Supplemental Indenture"), a Fifteenth Supplemental Indenture dated as of May 1, 1983 (hereinafter sometimes called the "Fifteenth Supplemental Indenture"), a Sixteenth Supplemental Indenture dated as of September 1, 1984 (hereinafter sometimes called the "Sixteenth Supplemental Indenture"), a Seventeenth Supplemental Indenture dated as of July 1, 1986 (hereinafter sometimes called the "Seventeenth Supplemental Indenture"), an Eighteenth Supplemental Indenture dated as of June 1, 1987 (hereinafter sometimes called the "Eighteenth Supplemental Indenture"), a Nineteenth Supplemental Indenture dated as of November 1, 1987 (hereinafter sometimes called the "Nineteenth Supplemental Indenture"), a Twentieth Supplemental Indenture dated as of May 1, 1988 (hereinafter sometimes called the "Twentieth Supplemental Indenture"), a Twenty-First Supplemental Indenture dated as of September 1, 1988 (hereinafter sometimes called the "Twenty-First Supplemental Indenture"), a Twenty-Second Supplemental Indenture dated as of December 1, 1990 (hereinafter sometimes called the "Twenty-Second Supplemental Indenture"), a Twenty- Third Supplemental Indenture dated as of July 1, 1992 (hereinafter sometimes called the "Twenty-Third Supplemental Indenture") and a Twenty-Fourth Supplemental Indenture dated as of May 1, 1993 (hereinafter sometimes called the Twenty- Fourth Supplemental Indenture) (the Original Indenture, as supplemented and modified by the First Supplemental Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture and the Eleventh Supplemental Indenture and as supplemented by the Second Supplemental Indenture, the Third Supplemental Indenture, the Fourth Supplemental Indenture, the Fifth Supplemental Indenture, the Sixth Supplemental Indenture, the Seventh Supplemental Indenture, the Twelfth Supplemental Indenture, the Thirteenth Supplemental Indenture, the Fourteenth Supplemental Indenture, the Fifteenth Supplemental Indenture, the Sixteenth Supplemental Indenture, the Seventeenth Supplemental Indenture, the Eighteenth Supplemental Indenture, the Nineteenth Supplemental Indenture, the Twentieth Supplemental Indenture, the Twenty-First Supplemental Indenture, the Twenty-Second Supplemental Indenture, the Twenty-Third Supplemental Indenture, the Twenty-Fourth Supplemental Indenture and this Twenty-Fifth Supplemental Indenture, being herein sometimes called the "Indenture"); and WHEREAS, pursuant to the Original Indenture, as heretofore supplemented and modified, there have been executed, authenticated, delivered and issued and there are now outstanding First Mortgage and Collateral Trust Bonds of series and in principal amounts as follows: Title Issued Outstanding 4 1/2% Series due 1993 . . . . . 5,000,000 8.90% Series due 1995/Secured Medium Term Notes . . . . 10,000,000 6 1/2% Series due 1997 . . . . . 7,000,000 9 7/8% Series due 1998 . . . . . 40,000,000 5 7/8% Second Series due 1998. . 20,000,000 7 7/8% Series due 2002 . . . . . 8,000,000 7.78% Second Series due 2002/ Secured Medium Term Notes 35,000,000 6 7/8% Second Series due 2003. . 40,000,000 8 % Series due 2023 . . . . . 40,000,000 and WHEREAS, the Board of Directors of the Company has established under Section 3.02 of the Original Indenture, a new series of Bonds, to be designated First Mortgage and Collateral Trust Bonds, 5 3/4% Third Series due 1998 (hereinafter referred to as the "Bonds of the Third 1998 Series"), and has authorized the issue of said Bonds of the Third 1998 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000), pursuant to the provisions of Article Two of this Twenty-Fifth Supplemental Indenture; and WHEREAS, Article Eighteen of the Original Indenture provides, among other things, that the Company, when authorized by a resolution of the Board of Directors, and the Trustee, from time to time and at any time, subject to the restrictions in the Indenture contained, may, and when so required by the Indenture, shall, enter into indentures supplemental to the Original Indenture and which thereafter shall form a part thereof, for the purposes, among others, of (a)providing for the creation of a series of Bonds, designating the series to be created and specifying the form and provisions of the Bonds of such series, (b)adding to the Indenture other covenants and agreements to be thereafter observed by the Company, and (c)mortgaging, pledging, conveying, transferring or assigning to the Trustee, and subjecting to the lien of the Indenture, additional properties acquired by the Company; and WHEREAS, the Board of Directors of the Company (pursuant to authority granted by the stockholders of the Company entitled to vote thereon) by resolutions duly adopted authorized the execution of this Twenty-Fifth Supplemental Indenture for the purpose of (a) creating the Bonds of the Third 1998 Series, designating the series created and specifying the form and the provisions of the Bonds of such series, (b) adding to the Indenture certain covenants and agreements to be hereafter observed by the Company, and (c) subjecting to the lien of the Indenture additional properties acquired by the Company; WHEREAS, all acts and proceedings required by law and by the Certificate of Organization and Certificate of Incorporation and by-laws of the Company necessary to secure the payment of the principal of and interest and premium, if any, on the Bonds of the Third 1998 Series, to make the Bonds of the Third 1998 Series to be issued hereunder, when executed by the Company, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal obligations of the Company, and to constitute the Indenture a valid and binding mortgage for the security of the Bonds, in accordance with its and their terms, have been done and taken; and the execution and delivery of this Twenty-Fifth Supplemental Indenture and the issue of the Bonds of the Third 1998 Series, have been in all respects duly authorized: NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and premium, if any, and interest on all Bonds at any time issued and outstanding under the Indenture, according to their tenor, purport and effect, to confirm the lien of the Indenture upon the mortgaged property mentioned therein including any and all property purchased, constructed or otherwise acquired by the Company since the date of execution of the Original Indenture and to secure the performance and observance of all the covenants and conditions in the Bonds and in the Indenture contained, and to declare the terms and conditions upon and subject to which the Bonds of the Third 1998 Series are to be issued and secured, and for and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds of the Third 1998 Series by the holders thereof, and of the sum of $10 duly paid to the Company by the Trustee, at or before the ensealing and delivery hereof, and for other valuable consideration, the receipt whereof is hereby acknowledged, the Company has executed and delivered this Twenty-Fifth Supplemental Indenture, and by these presents, does grant, bargain, sell, alien, remise, release, convey, assign, transfer, mortgage, pledge, set over and confirm unto State Street Bank and Trust Company, Trustee, its successors in trust and its and their successors and assigns, all the property, rights, privileges and franchises (other than excepted property) of the character described in the Granting Clauses of the Original Indenture now owned of record or otherwise by the Company, whether or not constructed or acquired since the date of execution of the Original Indenture or which may hereafter be constructed or acquired by it, including without limiting the generality of the foregoing the property described in Article Four hereof, if any, but subject to all exceptions, reservations and matters of the character therein referred to, and expressly excepting and excluding from the lien and operation of the Indenture all properties of the character specifically excepted by Paragraphs B through H of Granting Clause VII of the Original Indenture and all property released or otherwise disposed of pursuant to the provisions of the Indenture. If, upon the happening of any default as defined in Article Twelve of the Original Indenture, the Trustee or a receiver or trustee shall enter upon and take possession of the trust estate, the Trustee or such receiver or trustee may, to the extent permitted by law, at the same time likewise take possession of any and all of the property of the character specifically excepted under the heading "Excepted Property" of Granting Clause VII of the Original Indenture, other than Paragraph F thereof, then on hand and use and administer the same to the same extent as if such property were part of the trust estate, unless and until such default shall be remedied or waived and possession of the trust estate restored to the Company. TO HAVE AND TO HOLD all of the property, real, personal and mixed, and all and singular the lands, properties, estates, rights, franchises, privileges and appurtenances hereby granted, bargained, sold, aliened, remised, released, conveyed, assigned, transferred, mortgaged, pledged, set over or confirmed, or intended so to be, unto the Trustee and its successors in trust and to its and their successors and assigns, forever. BUT IN TRUST, NEVERTHELESS, for the equal and proportionate use, benefit, security and protection of those who from time to time shall hold the Bonds and coupons, or any of them, authenticated and delivered under the Original Indenture, as heretofore and hereby supplemented and modified, and duly issued by the Company, without any discrimination, preference or priority of any one Bond or coupon over any other by reason of priority in the time of issue, sale or negotiation thereof or otherwise, except as provided in Section 12.28 of the Original Indenture, so that, subject to said Section 12.28, each and all of said Bonds and coupons shall have the same right, lien and privilege under the Original Indenture, as heretofore and hereby supplemented and modified, and shall be equally and proportionately secured thereby and hereby (except as any sinking, replacement or other analogous fund established in accordance with the provisions of the Indenture may afford additional security for the Bonds of any specific series), with the same effect as if all of the Bonds and coupons had been issued, sold and negotiated simultaneously on the date of the delivery of the Original Indenture. THE COMPANY HEREBY DECLARES that it holds and will hold and apply all property and rights of the character described in Paragraph F of Granting Clause VII of the Original Indenture as specifically reserved and excepted, upon the trusts set forth in the Original Indenture, as heretofore and hereby supplemented and modified, and as the Trustee (or any purchaser upon any sale of the mortgaged property) shall for such purpose direct from time to time, to the fullest extent permitted by law or in equity and by any instruments creating the same, as fully as if the same could be and had been hereby granted, conveyed, mortgaged, pledged, transferred and assigned to and vested in the Trustee. It is hereby covenanted, declared and agreed by and between the parties hereto that all Bonds and coupons, if any, are to be authenticated, delivered and issued and that all property subject to or to become subject to the Indenture is to be held, subject to the further covenants, conditions, uses and trusts set forth in the Indenture, and the Company for itself and its successors or assigns does hereby covenant and agree to and with the Trustee and its successor or successors in such trust, for the benefit of those who shall hold Bonds, or coupons, or any of them as follows: ARTICLE ONE Bonds of the Third 1998 Series and Certain Provisions Relating Thereto. Section 1.01. A. Terms of Bonds of the Third 1998 Series. There shall be, and hereby is, created a new series of Bonds, known as and entitled "First Mortgage and Collateral Trust Bonds, 5 3/4% Third Series due 1998". The principal amount of the Bonds of the Third 1998 Series shall not be limited except as provided in Section 3.01 of the Original Indenture and except as may be provided in any indenture supplemental thereto. The definitive Bonds of the Third 1998 Series shall be issued only as registered Bonds without coupons in denominations of $1,000 or any multiple thereof, numbered RAC upwards. July 27, 1993 shall be the date of the commencement of the first interest period for Bonds of the Third 1998 Series. All Bonds of the Third 1998 Series shall mature July 1, 1998, and shall bear interest at the rate of 5 3/4% per annum until the payment of the principal thereof, such interest to be payable semi-annually on January 1 and July 1 in each year commencing January 1, 1994. The principal of and the premium, if any, and interest on the Bonds of the Third 1998 Series shall be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal of and premium, if any, on Bonds of the Third 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Commonwealth of Massachusetts, of the Trustee, except that, in case of the redemption as a whole at any time of the Bonds of the Third 1998 Series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holders, Bonds of the Third 1998 Series may be surrendered for redemption and payment. Except as herein provided, interest on Bonds of the Third 1998 Series shall be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee, or at the option of the holder, at the office or agency of the Company in the Borough of Manhattan, City and State of New York, in each case to the holder of record on the record date as hereinbelow defined. Interest on the Bonds of the Third 1998 Series shall, unless otherwise directed by the respective registered holders thereof, be paid by checks payable to the order of the respective holders entitled thereto, and mailed by the Trustee by first class mail, postage prepaid, to such holders at their respective registered addresses as shown on the Bond register for the Bonds of the Third 1998 Series. The definitive Bonds of the Third 1998 Series may be issued in the form of Bonds engraved, printed or lithographed on steel engraved borders. The person in whose name any Bond of the Third 1998 Series is registered at the close of business on any record date (as hereinbelow defined) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such Bond of the Third 1998 Series upon any transfer or exchange thereof (including any exchange effected as an incident to a partial redemption thereof) subsequent to the record date and prior to such interest payment date, except that, if and to the extent that the Company shall default in the payment of the interest due on such interest payment date, then the registered holders of Bonds of the Third 1998 Series on such record date shall have no further right to or claim in respect of such defaulted interest as such registered holders on such record date, and the persons entitled to receive payment of any defaulted interest thereafter payable or paid on any Bonds of the Third 1998 Series shall be the registered holders of such Bonds of the Third 1998 Series on the record date for payment of such defaulted interest. The term "record date" as used in this Section 1.01, and in the form of the Bonds of the Third 1998 Series, with respect to any interest payment date applicable to the Bonds of the Third 1998 Series, shall mean the December 15 next preceding a January 1 interest payment date or the June 15 next preceding a July 1 interest payment date, as the case may be, or such record date established for defaulted interest as hereinafter provided. In case of failure by the Company to pay any interest when due, the claim for such interest shall be deemed to have been transferred by transfer of any Bond of the Third 1998 Series registered on the books of the Company, and the Company, by not less than 10 days prior written notice to bondholders, may fix a subsequent record date for determination of holders entitled to payment of such interest. Such provision for establishment of a subsequent record date, however, shall in no way affect the rights of bondholders or of the Trustee consequent on any default. Except as provided in this Section 1.01, every Bond of the Third 1998 Series shall be dated as provided in Section 3.05 of the Original Indenture. However, so long as there is no existing default in the payment of interest on the Bonds of the Third 1998 Series, all Bonds of the Third 1998 Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall be dated such interest payment date and shall bear interest from such interest payment date; provided, however, that if and to the extent that the Company shall default in the interest due on such interest payment date, then any such Bond of the Third 1998 Series shall bear interest from the January 1 or July 1, as the case may be, to which interest has been paid, unless such interest payment date is January 1, 1994, in which case from July 27, 1993. Notwithstanding the provisions of Section 3.11 of the Original Indenture, for any exchange of Bonds of the Third 1998 Series for other Bonds of the Third 1998 Series of different authorized denominations or for any transfer of Bonds of the Third 1998 Series the Company, at its option, may require the payment of a sum only sufficient to reimburse it for any stamp tax or other governmental charge incident thereto. The Trustee hereunder shall, by virtue of its office as such Trustee, be a paying agent of the Company for the purpose of the payment of the principal of and premium, if any, and interest on the Bonds of the Third 1998 Series and the registrar and transfer agent of the Company for the purpose of registering and transferring Bonds of the Third 1998 Series. Neither the Company nor the Trustee shall be required to make transfers or exchanges of Bonds of the Third 1998 Series for a period of ten days next preceding any date on which any Bonds of the Third 1998 Series are to be designated to be redeemed and neither the Company nor the Trustee shall be required to make transfers or exchanges of any Bonds designated in whole for redemption or that part of any Bond designated in part for redemption. B. Form of Bonds of the Third 1998 Series. The Bonds of the Third 1998 Series and the Trustee's authentication certificate to be executed on the Bonds of said Series, shall be in substantially the following form: *n* No. RAC $____________________ EASTERN EDISON COMPANY FIRST MORTGAGE AND COLLATERAL TRUST BOND 5 3/4% THIRD SERIES DUE 1998 DUE July 1, 1998 Eastern Edison Company, a Massachusetts corporation (hereinafter sometimes called the "Company"), for value received, hereby promises to pay to or registered assigns, dollars on July 1, 1998 or earlier as hereinafter provided and to pay to said payee, or registered assigns, interest hereon at the rate specified in the title of this bond, from July 27, 1993, as provided in the Twenty-Fifth Supplemental Indenture mentioned on the reverse hereof, payable semi-annually on the first days of January and July in each year until payment of the principal hereof. The interest so payable upon any January 1 or July 1 will, subject to certain exceptions described on the reverse hereof, be paid to the person in whose name this bond is registered at the close of business on the December 15 preceding such January 1 or the June 15 preceding such July 1, as the case may be. Principal of, premium, if any, and interest on this bond will be paid in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Principal and premium will be payable at the principal corporate trust office in the City of Boston, Massachusetts of the Trustee under the Indenture mentioned on the reverse hereof, except that in case of the redemption as a whole at any time of the bonds of this series then outstanding, the Company may designate in the redemption notice other offices or agencies at which, at the option of the registered holder, this bond may be surrendered for redemption and payment. Interest on this bond will be payable at the principal corporate trust office in the City of Boston, Massachusetts, of the Trustee or, at the option of the holder hereof, at the office or agency of the Company in the Borough of Manhattan, City and State of New York; provided, however, that interest on this bond shall, unless otherwise directed by the registered holder hereof, be paid by check payable to the order of the registered holder entitled thereto and mailed by the Trustee by first class mail, postage prepaid to such holder at his address as shown on the bond register for the bonds of this series. This bond shall not become or be valid or obligatory for any purpose until the authentication certificate hereon shall have been signed by the Trustee. The provisions of this bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, EASTERN EDISON COMPANY has caused these presents, which are intended to take effect as a sealed instrument, to be executed in its corporate name by the manual or facsimile signature of its President or one of its Vice Presidents under its corporate seal or a facsimile thereof, attested by the manual or facsimile signature of its Clerk or one of its Assistant Clerks, all as of the date set forth below. Dated:_____________________ EASTERN EDISON COMPANY By_________________________ President Attest ________________________ Clerk *n* [FORM OF REVERSE OF BOND OF THE THIRD 1998 SERIES] This bond is one of the bonds, of the above designated series, of an authorized issue of bonds of the Company, known as First Mortgage and Collateral Trust Bonds, all issued or issuable in one or more series under and equally and proportionately secured (except insofar as any sinking fund, replacement fund or other fund established in accordance with the provisions of the Indenture hereinafter mentioned may afford additional security for the bonds of any specific series) by an Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948, executed and delivered by the Company to State Street Trust Company (now State Street Bank and Trust Company), Boston, Massachusetts, as Trustee (herein with its successors under said Indenture sometimes called the "Trustee"), as supplemented and modified by the First Supplemental Indenture dated as of February1, 1953, by the Eighth Supplemental Indenture dated as of July1, 1972, by the Ninth Supplemental Indenture dated as of September1, 1973, by the Tenth Supplemental Indenture dated as of October1, 1975 and by the Eleventh Supplemental Indenture dated as of January1, 1979 and as supplemented by all other indentures supplemental thereto, executed and delivered by the Company to said Trustee, to which Indenture and all indentures supplemental thereto to which the Trustee shall be a party (herein sometimes called the "Indenture") reference is hereby made for a description of the property mortgaged and pledged as security for said bonds, the nature and extent of the security, and the rights, duties and immunities thereunder of the Trustee, the rights of the holders of said bonds and of the Trustee and of the Company in respect of such security, and the terms upon which said bonds may be issued thereunder; but neither the foregoing reference to the Indenture nor any provision of this bond or of the Indenture or of any indenture supplemental thereto shall affect or permit any impairment of the obligation of the Company, which is absolute and unconditional, to pay at the stated or accelerated times herein provided, the principal of and the premium, if any, and the interest on this bond as herein provided. The bonds of this series are subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth in the tabulation below under the heading "Regular Redemption Price" (provided, however, that such right of redemption shall be limited as provided in the Twenty-Fifth Supplemental Indenture); and (b)for the replacement fund provided for in the Indenture and by the application of proceeds of certain property subject to the lien thereof, upon payment of the applicable percentage of the called principal amount thereof set forth in said tabulation under the heading "Special Redemption Price": If Redemption Date is during Twelve Months' Regular Special Period Beginning Redemption Redemption July 1 Price Price 1993 105.290% 100% 1994 103.978% 100% 1995 102.645% 100% 1996 101.323% 100% 1997 100.000% 100% together in any case with interest accrued thereon to the redemption date, upon prior notice given by first class mail, postage prepaid, as provided in the Twenty-Fifth Supplemental Indenture to the holders of record of each bond affected not less than thirty days nor more than ninety days prior to the redemption date and subject to all other conditions and provisions of the Indenture. If this bond or any portion thereof ($1,000 or any multiple thereof) is duly designated for redemption, if payment of the principal hereof or of such portion with accrued interest and premium, if any, is provided for, and if notice of such redemption is duly given or provided for, all as specified in the Indenture, this bond or such portion shall cease to be entitled to the lien of the Indenture from and after the date such payment and notice are irrevocably so provided for and shall cease to bear interest from and after the date fixed for redemption. In the event of the selection for redemption of a portion only of the principal of this bond, payment of the redemption price will be made only (a) upon presentation of this bond for notation hereon of such payment of the portion of the principal of this bond so called for redemption, or (b) upon surrender of this bond in exchange for a bond or bonds (of authorized denominations of the same series) for the unredeemed balance of the principal amount of this bond. In the event of the redemption of this bond in whole, payment of the redemption price will be made only upon surrender of this bond. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding (determined as provided in the Indenture) including, if more than one series of bonds shall be at the time outstanding, not less than sixty-six and two-thirds per cent (66 2/3%) in principal amount of the bonds at the time outstanding of each series affected, to effect, by an indenture supplemental to the Indenture, modifications or alterations of the Indenture and of the rights and obligations of the Company and of the holders of the bonds and coupons; provided, however, that no such modification or alteration shall be made without the consent of the registered owner hereof which will (a) extend the maturity of this bond or reduce the rate or extend or otherwise change the time of payment of interest hereon or reduce the amount of the principal hereof or reduce any premium payable on the redemption hereof, or (b) permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the Indenture, or alter the equal and proportionate security afforded by the lien of the Indenture for the bonds issued thereunder, or (c) reduce the number or percentage of the principal amount of the bonds upon the consent of the holders of which modifications or alterations may be made as aforesaid. This bond is transferable by the registered owner hereof in person or by his duly authorized attorney, on books of the Company kept for the purpose, at the principal corporate trust office of the Trustee upon surrender of this bond for cancellation and upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fifth Supplemental Indenture, sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and thereupon a new registered bond or bonds of the same series of like aggregate principal amount will be issued to the transferee in exchange therefor. The registered owner of this bond at his option may surrender the same for cancellation at said office and receive in exchange therefor the same aggregate principal amount of registered bonds of the same series but of other authorized denominations, upon payment, if the Company shall so require, of the charges provided for in the Twenty-Fifth Supplemental Indenture sufficient to reimburse the Company for any stamp tax or other governmental charge incident thereto and subject to the terms and conditions therein set forth. Neither the Company nor the Trustee shall be required to make transfers or exchanges of bonds of this series for a period of ten days next preceding any designation of bonds of said series to be redeemed, and neither the Company nor the Trustee shall be required to make transfers or exchanges of any bonds designated in whole for redemption or that part of any bond designated in part for redemption. Subject to the provisions of the Twenty-Fifth Supplemental Indenture, if this bond is surrendered for any transfer or exchange between the record date for any interest payment date and such interest payment date, the new bond will be dated such interest payment date. The Twenty-Fifth Supplemental Indenture provides that in the event of any default in payment of the interest due on any interest payment date, such interest shall not be payable to the holder of this bond on the original record date but shall be paid to the registered holder of such bond on the subsequent record date established for payment of such defaulted interest. If a default as defined in the Indenture shall occur, the principal of this bond may become or be declared due and payable before maturity in the manner and with the effect provided in the Indenture. The holders, however, of certain specified percentages of the bonds at the time outstanding, including in certain cases specified percentages of bonds of particular series, may in the cases, to the extent and under the conditions provided in the Indenture, waive past defaults thereunder and the consequences of such defaults. No recourse shall be had for the payment of the principal of or the premium, if any, or the interest on this bond, or for any claim based hereon or otherwise in respect hereof or of the Indenture, against any incorporator, stockholder, director or officer, past, present or future, as such, of the Company or of any predecessor or successor corporation, either directly or through the Company or such predecessor or successor corporation, under any constitution or statute or rule of law, or by the enforcement of any assessment or penalty, or otherwise, all such liability of incorporators, stockholders, directors and officers, as such, being waived and released by the holder and owner hereof by the acceptance of this bond and as provided in the Indenture. The Company and the Trustee and any paying agent and any bond registrar may deem and treat the person in whose name this bond shall be registered upon the books of the Company as the absolute owner of such bond for the purpose of receiving payment of or on account of the principal of and interest on this bond and for all other purposes, whether or not this bond be overdue; and all such payments so made to such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon this bond to the extent of the sum or sums so paid and neither the Company nor the Trustee nor any paying agent nor any bond registrar shall be affected by any notice to the contrary. *n* [FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE] This is one of the bonds, of the series designated therein, described in the within mentioned Indenture. STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE, By__________________________________ Authorized Officer SECTION 1.02. Redemption Provisions for Bonds of the Third 1998 Series. The Bonds of the Third 1998 Series shall be subject to redemption prior to maturity as a whole at any time or in part from time to time, (a) at the option of the Company, upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Regular Redemption Price" in the tabulation in the form of the Bonds of the Third 1998 Series set forth in Section 1.01 hereof; provided, however, that no such redemption shall be made (except in connection with any consolidation or merger with any corporation other than an affiliate of the Company in which the Company shall not be the surviving corporation, or transfer or sale of all or substantially all of the property of the Company to any corporation other than an affiliate of the Company), directly or indirectly as a part of, or in anticipation of, any refunding operation involving the incurring of indebtedness which has an effective interest cost to the Company (calculated after adjustment, in accordance with generally accepted financial practice, for any premium received or discount granted in connection with the indebtedness being incurred in such refunding operation) of less than the effective interest cost to the Company of the Bonds of the Third 1998 Series; and (b) upon payment of the applicable percentage of the called principal amount thereof during the respective periods set forth under the heading "Special Redemption Price" in the tabulation in the form of the Bonds of the Third 1998 Series set forth in Section 1.01 hereof, either, (i) through the application of cash deposited with the Trustee for the replacement fund provided for in Section 4.04 of the Original Indenture and in Section 1.03 hereof, or (ii) through the application pursuant to Section 8.05 of the Original Indenture of any trust moneys held by the Trustee received from the proceeds of property sold or taken pursuant to the provisions of Section 7.04 of the Original Indenture, together in any case with interest accrued thereon to the date fixed for redemption, upon not less than thirty days' nor more than ninety days' notice given by first class mail, postage prepaid, to the holder of record at the date of such notice of each Bond of the Third 1998 Series affected, at his address as shown on the books of the Company. Such notice shall be sufficiently given if deposited in the United States mail postage prepaid within such period. Neither the failure to mail such notice, nor any defect in any notice so mailed to any such holder, shall affect the sufficiency of such notice with respect to other holders. The foregoing provisions with respect to notice shall be subject to all other conditions and provisions of the Indenture not inconsistent herewith. SECTION 1.03. Replacement Fund. Notwithstanding the provisions of Section 4.06 of the Original Indenture, the Company hereby covenants that, so long as any of the Bonds of the Third 1998 Series shall remain outstanding, (a) the covenants made by the Company in Section 4.04 of the Original Indenture shall continue in full force and effect and (b) Bonds delivered, redeemed or purchased pursuant to said Section 4.04 and any amount of available Bond credits and all available Montaup Securities used as a credit in Item 8 of any replacement fund certificate shall be deemed to be funded, unless and until the same shall have been reinstated as provided in said Section 4.04 or in Section 2.07 of the Original Indenture. SECTION 1.04. Restriction on Payment of Dividends on Common Stock. The Company covenants that, so long as any Bonds of the Third 1998 Series remain outstanding, it will not (a) declare or pay any dividend or make any distribution on any shares of Common Stock (other than dividends payable in Common Stock of the Company) or (b) directly or indirectly through a subsidiary make any expenditures for the purchase, redemption or other retirement for a consideration of any shares of Common Stock of the Company (other than in exchange for, or from the proceeds of, other and new shares of Common Stock of the Company), if the aggregate amount of all such dividends, distributions and expenditures made after January 31, 1953 would exceed the aggregate amount of the Company's net income available for dividends on its Common Stock, accumulated after January 31, 1953. Net income of the Company available for dividends on its Common Stock for the purpose of this Section 1.04 shall be defined as in the second paragraph of Section 1.05 of the First Supplemental Indenture as modified by Section 7.02 of the Eleventh Supplemental Indenture. Nothing in this Section 1.04 shall affect the restrictions imposed by similar provisions in any previous Supplemental Indenture for the benefit of Bonds of any series. SECTION 1.05. Minimum Provision for Depreciation. Notwithstanding the provisions of Section 1.35 of the Original Indenture, the Company hereby covenants that the term "minimum provision for depreciation" shall have the meaning specified in such Section so long as any of the Bonds of the Third 1998 Series shall remain outstanding. SECTION 1.06. Continuation of Effectiveness of Term "funded". Property additions, net additions, Bonds and Montaup Securities which have or shall become funded to the extent provided in Paragraphs (1), (2), (3) and (4) of Section 1.36 of the Original Indenture as modified by Section 7.01 of the Eleventh Supplemental Indenture shall continue to be funded except to the extent that any provision of the Original Indenture or of any supplemental indenture expressly provides that property additions, net additions, Bonds or Montaup Securities shall be funded only so long as Bonds of particular series shall remain outstanding. SECTION 1.07. Duration of Effectiveness of Article One. This Article shall be in force and effect only so long as any of the Bonds of the Third 1998 Series are outstanding. ARTICLE TWO PRINCIPAL AMOUNT PRESENTLY TO BE OUTSTANDING SECTION 2.01. The total aggregate principal amount of First Mortgage and Collateral Trust Bonds of the Company issued and outstanding and presently to be issued and outstanding under the provisions of and secured by the Indenture will be Two Hundred Forty-Five Million Dollars ($245,000,000), namely Five Million Dollars ($5,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 4 1/2% Series due 1993 now issued and outstanding, Ten Million Dollars ($10,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8.90% Series due 1995/Secured Medium Term Notes now issued and outstanding, Seven Million Dollars ($7,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 1/2% Series due 1997 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 9 7/8% Series due 1998 now issued and outstanding, Twenty Million Dollars ($20,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 5 7/8%, Second Series due 1998 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds 5 3/4% Third Series presently to be issued and outstanding, Eight Million Dollars ($8,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7 7/8% Series due 2002 now issued and outstanding, Thirty-Five Million Dollars ($35,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 7.78% Second Series due 2002/Secured Medium Term Notes now issued and outstanding, and Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 6 7/8% Series due 2003 now issued and outstanding, Forty Million Dollars ($40,000,000) principal amount of First Mortgage and Collateral Trust Bonds, 8% Series due 2023 now issued and outstanding. Additional Bonds of the 1993 Series, the 1995 Series, the 1998 Series, the Second 1998 Series, the Third 1998 Series, the 1999 Series, the 2002 Series, the Second 2002 Series, the Second 2003 Series, and the 2023 Series, and of any other series established after the execution and delivery of this Twenty-Fifth Supplemental Indenture may from time to time be authenticated, delivered and issued pursuant to the terms of the Indenture. SECTION 2.02. Bonds of the Third 1998 Series in the aggregate principal amount of Forty Million Dollars ($40,000,000) may forthwith, upon the execution and delivery of this Twenty-Fifth Supplemental Indenture, or from time to time thereafter, and upon compliance by the Company with the provisions of Section 5.02 and any or all of Sections 5.03, 5.04, 5.05 and 5.06 of the Original Indenture, be executed by the Company and delivered to the Trustee and shall thereupon be authenticated and delivered by the Trustee to or upon the written order of the Company. ARTICLE THREE MISCELLANEOUS Section 3.01. This Twenty-Fifth Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture, as supplemented and modified, and shall form a part thereof, and the Original Indenture, as heretofore supplemented and modified (to the extent and when and as the same shall become and be effective as provided in the respective modifying supplemental indentures) and as hereby supplemented is hereby confirmed. Except to the extent inconsistent with the express terms thereof, all of the provisions, terms, covenants and conditions of the Original Indenture, as supplemented and modified, shall be applicable to the Bonds of the Third 1998 Series, to the same extent as if specifically set forth herein. All terms used in this Twenty-Fifth Supplemental Indenture shall be taken to have the same meaning as in the Original Indenture, as supplemented and modified, except in cases where the context clearly indicates otherwise. SECTION 3.02. All recitals in this Twenty-Fifth Supplemental Indenture are made by the Company only and not by the Trustee; and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect hereof as fully and with like effect as if set forth herein in full. SECTION 3.03. The Company covenants that it is lawfully seized and possessed at the date of execution of this Twenty-Fifth Supplemental Indenture of all the trust estate described in this Twenty-Fifth Supplemental Indenture, except as specifically otherwise stated in this Twenty-Fifth Supplemental Indenture, and that all the trust estate so described is free and clear of any lien other than the lien of the Indenture and permitted encumbrances; that the Company will warrant and forever defend all the trust estate so described to the Trustee against the claims of all persons whomsoever except as in the Indenture specifically otherwise stated; that it will maintain and preserve the lien of the Indenture so long as any of the Bonds issued under the Indenture are outstanding; and that it has good right and lawful authority to subject all the trust estate so described to the lien of the Indenture as provided in and by the Original Indenture, as heretofore supplemented and modified and as supplemented by this Twenty-Fifth Supplemental Indenture. SECTION 3.04. This Twenty-Fifth Supplemental Indenture may be executed in several counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts, or as many of them as the Company and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. SECTION 3.05. Although this Twenty-Fifth Supplemental Indenture is dated for convenience and for the purpose of reference as of July 1, 1993, the actual date or dates of execution by the Company and by the Trustee are as indicated by their respective acknowledgments hereto annexed. ARTICLE FOUR SCHEDULE OF PROPERTY ACQUIRED SINCE DATE OF THE TWENTY-FOURTH SUPPLEMENTAL INDENTURE None. IN WITNESS WHEREOF, Eastern Edison Company has caused this Twenty-Fifth Supplemental Indenture to be signed in its corporate name and behalf by its President, either of its Vice Chairmen or one of its Vice Presidents and its corporate seal to be hereunto affixed and attested by its Treasurer, and State Street Bank and Trust Company in token of its acceptance of the trust hereby created has caused this Twenty-Fifth Supplemental Indenture to be signed in its corporate name and behalf by one of its Assistant Vice Presidents, and its corporate seal to be hereunto affixed and attested by its Secretary or one of its Assistant Secretaries, all as of the day and year first above written. EASTERN EDISON COMPANY By /s/ Richard M. Burns Vice President Attest: /s/ Clifford J. Hebert, Jr. Treasurer (CORPORATE SEAL) STATE STREET BANK AND TRUST COMPANY By /s/ Daniel Golden Assistant Vice President Attest: /s/ Andrew M. Sinasky Assistant Secretary (CORPORATE SEAL) *n* COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 21st day of July, 1993 before me appeared Richard M. Burns and Clifford J. Hebert, Jr., to me personally known, who, being by me duly sworn, did say that they are a Vice President and a Treasurer, respectively, of Eastern Edison Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Corporation, and that the said instrument was signed and sealed by them on behalf of said Corporation by authority of its Board of Directors, and each of said officers acknowledged said instrument to be the free act and deed of said Corporation. /s/ Cheryl Ann Nobile Notary Public My Commission Expires 3/20/98 (Notarial Seal) COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss.: At Boston on this 21st day of July, 1993 before me appeared Daniel Golden and Andrew M. Sinasky, to me personally known, who being by me duly sworn, did say that they are an Assistant Vice President and an Assistant Secretary, respectively, of State Street Bank and Trust Company, and that the seal affixed to the foregoing instrument is the corporate seal of said Trust Company, and that the said instrument was signed and sealed by them on behalf of said Trust Company by authority of its Board of Directors and each of said officers acknowledged said instrument to be the free act and deed of said Trust Company. /s/ Cheryl Anne Nobile Notary Public My Commission Expires 3/20/98 (Notarial Seal) *n* Assistant Clerk's Certificate Certifying Votes Responsive to Subsection B of 5.02 and Section 18.01 of the Indenture EASTERN EDISON COMPANY I, Richard M. Burns, DO HEREBY CERTIFY that I am an Assistant Clerk of Eastern Edison Company (hereinafter called the "Corporation"), a Massachusetts corporation, and that attached hereto are true, correct and complete copies of certain votes duly adopted by the Board of Directors of the Corporation at Meetings of said Board duly convened and held on February 23, 1993 and on July 20, 1993, at each of which meetings a quorum for the transaction of business was present and acting throughout. I further certify that said votes have not been amended or revoked and that the same are now in full force and effect. WITNESS my hand and the seal of said Corporation, this 21st day of July, 1993. ___________________________ Richard M. Burns Assistant Clerk (SEAL) *n* VOTES TAKEN AT A MEETING OF THE BOARD OF DIRECTORS OF EASTERN EDISON COMPANY HELD ON FEBRUARY 23, 1993 VOTED - that the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer or the Assistant Treasurer (the "Authorized Officers") of this Corporation be, and each of them hereby are, authorized (a) to issue and sell, or cause to be issued and sold, on behalf of this Corporation, from time to time, on a competitive bid or negotiated basis, up to $215,000,000 aggregate principal amount of any combination of one or more new series of First Mortgage and Collateral Trust Bonds, medium term securities (consisting of one or more series of first mortgage bonds or unsecured notes), unsecured notes and tax-exempt pollution control revenue bonds (collectively referred to hereinafter as the "Debt") and one or more series of new classes of cumulative Preferred Stock (the "New Preferred Stock") up to an aggregate of 400,000 shares, each such share to have a par value of $100 per share and all such shares to have an aggregate par value of $40,000,000, (b) to execute and deliver on behalf of this Corporation loan and trust agreements, letters of credit, reimbursement agreements, remarketing agreements or any other agreement or instrument necessary or appropriate to effect the issuance and sale of such tax-exempt pollution control revenue bonds the proceeds of which will be loaned to this Corporation and (c) to use the proceeds from the sale of the Debt and the New Preferred Stock for (i) the retirement or redemption of outstanding long-term debt and preferred stock and any premiums paid in connection with such retirements and redemptions, (ii) the repayment of short-term borrowings, (iii) the payment of underwriting expenses and other issuance expenses and (iv) for general corporate purposes including (a) payment for construction of capital additions and improvements to plant and system, (b) working capital needs and the repayment of short-term borrowings incurred for such purposes, and (c) sinking fund payments and the retirement or redemption of outstanding securities; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents as the officer signing any such documents may deem necessary or desirable, for requisite authority for the issuance and sale of the Debt, the New Preferred Stock and related transactions. VOTED - that the execution and filing of an amended application by the Authorized Officers of this Corporation in the form presented at this meeting with the Massachusetts Department of Public Utilities (the "MDPU") requesting authorization to issue and sell the New Preferred Stock and up to $175,000,000 of the Debt as set forth in said application be and hereby is, ratified, approved and confirmed. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to file an application relating to the issuance and sale of the remaining $40,000,000 of the Debt with the MDPU, in such form as the signing officer deems necessary or appropriate; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents, together with any and all such amendments to such application as the officer signing such amendment deems necessary or appropriate for requisite authority for the issuance and sale of the $40,000,000 of the Debt and related transactions. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to file an application-declaration on Form U-1 relating to the issuance and sale of all or a portion of the Debt and the New Preferred Stock with the Securities and Exchange Commission (the "SEC") under the Public Utility Holding Company Act of 1935, as amended, in such form as the signing officer deems necessary or appropriate; and that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file such other appropriate documents, together with any and all such amendments to such application-declaration as the officer signing such amendment deems necessary or appropriate for requisite authority for the issuance and sale of the Debt, the New Preferred Stock and related transactions. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute and file one or more registration statements with the SEC (the "Registration Statements") to provide for the issuance and sale of all or any portion of the Debt and the New Preferred Stock, in such form as the signing officer or officers deem necessary or appropriate; that the execution thereof by the Authorized Officers, as required by the Rules and Regulations of the SEC, be, and hereby is, authorized and approved; provided, however, that the Authorized Officers be, and each of them hereby is, authorized to sign said Registration Statements (whether on behalf of this Corporation, or as an officer or otherwise) through Donald G. Pardus, John R. Stevens, Richard M. Burns and Clifford J. Hebert, Jr., or any of them, as duly authorized attorneys or attorney; that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation and individually as officers to execute in like manner such further amendments to said Registration Statements as may be required or deemed by them advisable and to cause the same to be filed with the SEC; provided that each Authorized Officer be, and hereby is, authorized to sign any such amendments (whether on behalf of this Corporation, or as an officer or otherwise) through Donald G. Pardus, John R. Stevens, Richard M. Burns and Clifford J. Hebert, Jr., or any of them, as duly authorized attorneys or attorney. VOTED - that John R. Stevens and Clifford J. Hebert, Jr. be, and each of them hereby is, designated as agent for service with respect to the Registration Statements with all the powers provided in the Rules and Regulations of the SEC with respect to agents for service. VOTED - that the firm of McDermott, Will & Emery of Boston, Massachusetts, be employed as principal counsel by this Corporation to act for it in all matters in connection with the proposed issue and sale of the Debt and the New Preferred Stock, including giving any opinion or opinions as to titles to real estate and as to franchises of this Corporation which may appear desirable in connection with the proposed issue and sale of the Debt and New Preferred Stock. VOTED - that the following individuals hereby are elected to a Special Committee, a majority of which shall have the powers of this Corporation's Board of Directors with respect to all aspects of the issuance and sale of the Debt and the New Preferred Stock when the Board is not in session, including approval of the pricing and all other terms and conditions under which the Debt shall be issued and the approval of, and grant of authority to the officers of this Corporation to execute, any and all documents and instruments or to do such other acts and things necessary for (i) the issuance and sale of the Debt and the New Preferred Stock and (ii) the retirement or redemption of this Corporation's outstanding debt and preferred stock in accordance with the terms of such debt and preferred stock for the purposes of refinancing such debt and preferred stock: Donald G. Pardus Donald H. Ramsbottom John R. Stevens VOTED - that the officers of this Corporation be, and each them hereby is, authorized to execute all such agreements and other instruments, make all such payments, and do all such other acts and things as in their opinion or in the opinion of any of them may be necessary or desirable in order to carry out the intent and purposes of the foregoing votes, including, without limitation, (i) the giving of the Corporation's agreement as called for by the second paragraph of Article VI of the Montaup contract, so called, dated September 11, 1923, as amended, the present parties to which are Montaup Electric Company, Blackstone Valley Electric Company and this Corporation, in connection with the proposed increase of this Corporation's investment in Montaup Electric Company and (ii) the pledging of any additional securities of Montaup Electric Company, when acquired by this Corporation, to State Street Bank and Trust Company, as Trustee under this Corporation's Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 as supplemented and modified, securing this Corporation's First Mortgage and Collateral Trust Bonds. *n* VOTES TAKEN AT A MEETING OF THE BOARD OF DIRECTORS OF EASTERN EDISON COMPANY HELD ON JULY 20, 1993 1. VOTED - that this Corporation enter into a Purchase Agreement among this Corporation, Salomon Brothers Inc and PaineWebber Incorporated (the "Purchase Agreement") to be substantially on the terms and conditions presented to this Committee with such changes as the Chairman of the Board, the Vice Chairman of the Board, the President, any Vice President, the Treasurer, the Assistant Treasurer, the Clerk or the Assistant Clerk (the "Authorized Officers") executing such Purchase Agreement deems necessary or appropriate. 2. VOTED - that this Corporation shall enter into that certain Twenty-Fifth Supplemental Indenture (the "Supplemental Indenture") between this Corporation and State Street Bank and Trust Company, as trustee (the "Trustee"), supplementing the Indenture of First Mortgage and Deed of Trust dated as of September 1, 1948 (the "Mortgage") between this Corporation and the Trustee, as previously supplemented and modified, such Supplemental Indenture to be in substantially the form presented to this Committee with such changes therein as may be determined by the officer or officers executing the same on behalf of this Corporation to be necessary or convenient and in the best interests of this Corporation. 3. VOTED - that this Corporation shall issue and sell pursuant to the Purchase Agreement up to an aggregate principal amount of $40,000,000 of First Mortgage and Collateral Trust Bonds (the "First Mortgage Bonds"), in one series with a maturity of not longer than five years from the date of issuance; such First Mortgage Bonds to be issued under the Supplemental Indenture, and to be in substantially the form, and upon substantially the terms and conditions, provided for in the Supplemental Indenture with such changes therein as may be determined by the officer or officers executing the same on behalf of this Corporation to be necessary or convenient and in the best interests of this Corporation. 4. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation, to fix the interest rate at which such First Mortgage Bonds referred to in the preceding vote may be sold to the purchasers thereof at 5 3/4%; provided further, that this Corporation will not undertake to issue or sell the First Mortgage Bonds if it does not believe that the estimated net present value of the interest cost savings to be derived from the net difference between interest on the First Mortgage Bonds and any outstanding securities to be redeemed or retired with the proceeds from the First Mortgage Bonds would, on an after-tax basis, be greater than the present value of all redemption and issuance costs, including any tendering and premium costs and credit enhancement expenses, assuming an appropriate discount rate. 5. VOTED - that the Authorized Officers be, and each of them hereby is, authorized and empowered by and on behalf of this Corporation to execute, seal with this Corporation's seal, acknowledge, attest, file, register, record and deliver the Purchase Agreement and the First Mortgage Bonds referred to in the preceding votes, such execution and delivery of such documents by such officers to evidence conclusively for all purposes that the Purchase Agreement and the First Mortgage Bonds are authorized by these votes. 6. VOTED - that State Street Bank and Trust Company, N.A. hereby is designated as paying agent for the First Mortgage Bonds. 7. VOTED - that Authorized Officers be and each of them hereby is authorized and empowered by and on behalf of this Corporation to redeem or retire all or any part of this Corporation's outstanding securities in accordance with the terms thereof and that each of the Authorized Officers is hereby further authorized and empowered to execute any and all documents which they or any of them deem necessary or advisable to effect the transactions set forth in this vote, such execution to be conclusive evidence of approval of the actions of the Authorized Officers. 8. VOTED - that Authorized Officers be and each of them hereby is authorized and empowered by and on behalf of this Corporation to use (i) the proceeds from the issuance of the First Mortgage Bonds authorized in the preceding votes and (ii) other available cash to make the redemptions or retirements of the outstanding securities of this Corporation referred to in the foregoing vote, and that each of the Authorized Officers is hereby further authorized and empowered to execute any and all documents which they or any of them deem necessary or advisable to effect the transactions set forth in this vote, such execution to be conclusive evidence of approval of the actions of the Authorized Officers. 9. VOTED - that the Authorized Officers of this Corporation be, and each them hereby is, authorized to execute all such agreements and other instruments, make all such payments, and do all such other acts and things as in their opinion or in the opinion of any of them may be necessary or desirable in order to carry out the intent and purposes of the foregoing votes. *n* STATE STREET BANK AND TRUST COMPANY BOSTON, MASSACHUSETTS, 02101 Certified Excerpt from Vote of Board of Directors VOTED: That officers and employees of STATE STREET BANK AND TRUST COMPANY are hereby authorized to exercise powers as hereinafter specified: 4. To accept, execute, seal, acknowledge and deliver mortgages, indentures or other instruments, running to this Company as trustee or in any other fiduciary capacity to secure bonds, notes or other obligations The Chairman of the Board A Vice Chairman of the Board The Chairman of the Executive Committee The President An Executive Vice President A First Vice President A Senior Vice President A Vice President The Treasurer The Secretary An Assistant Vice President I hereby certify that the foregoing is a true excerpt from a vote unanimously passed at a meeting of the Board of Directors of STATE STREET BANK AND TRUST COMPANY duly called and held on April14, 1961, as amended to date. I further certify that said vote, as so amended, is in full force and effect and that the person listed below was duly elected and held the above respective office on the date this instrument was executed. Name Title Signature Daniel Golden Assistant Vice President /s/ Daniel Golden ATTEST: /s/ Clare M. O'Brien Assistant Secretary Date: July 21, 1993 *n* COMMONWEALTH OF MASSACHUSETTS ) COUNTY OF SUFFOLK ) ss .: At Boston on this 21st day of July 1993 before me appeared Richard M. Burns, to me personally known, who, being by me duly sworn, did say that he is the Assistant Clerk of Eastern Edison Company, and that the seal affixed to the foregoing certificate is the corporate seal of said Corporation, and that the said certificate was signed and sealed by him on behalf of said Corporation by authority of its Board of Directors, and said Assistant Clerk acknowledged said certificate to be the free act and deed of said Corporation. /s/ Cheryl Ann Nobile Notary Public My Commission Expires: 3/20/98 (Notarial Seal) Received & Recorded July 23, 1993 at 12 hrs. 16 min. P.M. Attest: /s/ John Gomes, Register 31584\052\big-ed.03 EX-99.D 6 TAX ALLOCATION AGREEMENT FOR 1994 Exhibit D EASTERN UTILITIES ASSOCIATES AND AFFILIATED CORPORATIONS Federal_Income_Tax_Allocation_Agreement Pursuant_to_Rule_45(c)._Public_Utility_Holding Company_Act_of_1935_and_I.R.C._Regulation_Section 1.1552-1(A)_(1)_and_Section_1.1502-33(d)_(2)_(ii) This agreement made as of April 30, 1994, among Eastern Utilities Associates (the designation of the trustees for the time being under a Declaration of Trust dated April 2, 1928, as amended) (EUA); Eastern Edison Company, a Massachusetts corporation (Eastern); Blackstone Valley Electric Company, a Rhode Island corporation (Blackstone); Newport Electric Corporation, a Rhode Island corporation (Newport); Montaup Electric Company, a Massachusetts corporation (Montaup); EUA Service Corporation, a Massachusetts corporation (EUA Service); EUA Cogenex Corporation, a Massachusetts corporation (Cogenex); EUA Energy Investment Corporation, a Massachusetts corporation (EUA Energy); EUA Ocean State Corporation, a Rhode Island corporation (Ocean State); Eastern Unicord Corporation, a Massachusetts corporation (Unicord); Northeast Energy Management, Inc., a Massachusetts corporation (NEM); and EUA Transcapacity, Inc., a Massachusetts corporation (Transcapacity). W I T N E S S E T H T H A T : WHEREAS, the term "AFFILIATES" as used herein shall be deemed to refer to Eastern, Blackstone, Newport, Montaup, EUA Service, Cogenex, EUA Energy, Ocean State, Unicord, NEM, and Transcapacity, the AFFILIATES together with EUA, and the CONSOLIDATED AFFILIATES as a collective taxpaying unit is sometimes referred to as the "GROUP" and WHEREAS, EUA owns directly or indirectly at least 80 percent of the issued and outstanding shares of each class of voting common stock of each of the AFFILIATES; each of the CONSOLIDATED AFFILIATES is a member of an affiliated group within the meaning of Section 1504 of the Internal Revenue Code of 1954, as mended (the "Code"), of which EUA is the common parent; and the GROUP presently participates in the filing of a consolidated income tax return. Definitions A. Corporate Tax Benefit - The amount by which the consolidated tax is reduced by including a net corporate tax loss or other net tax benefit in the consolidated return. The value of the benefit of the operating loss shall be determined by applying the then current corporate income tax rate to the amount of the loss. The value of a credit is the actual tax savings (100%). The value of capital losses used to offset capital gains shall be computed at the then current tax rate applicable to capital gains for corporations. The value of any corporate tax benefit to be reimbursed to a member shall be reduced by the amount of any alternate minimum tax attributable to such member. B. Separate Return Tax - The tax on the corporate taxable income of an associate company computed as though such company were not a member of the consolidated group. C. Excess Tax Credits - The investment tax credit, alternate minimum tax credit, energy tax credit or other similar credit that would be allowable in the consolidation (were it not for a limitation provided by law) in excess of the amount of such credits which could be utilized on a separate return basis with regard to such limitations. EUA and the AFFILIATES agree as follows: Allocation_Procedures_in_Accordance_with_I.R.C_Regulation Sections_1.1552-1(A)_(I)_and_1.1502-33(d)_(2)_(ii) A. General_Rule Step 1 - The consolidated tax liability shall be apportioned among the companies in the ratio that each member's separate taxable income bears to the sum of the separate taxable incomes of all members having taxable income. Step 2 - An additional amount will be allocated to the members at 100% of the excess of the member's separate tax liability over the consolidated tax liability allocated to the member under Step 1. Under no circumstances shall the tax allocated to a member exceed its separate tax liability. Step 3 - The total of the amounts allocated under Step 2 is credited to those members who had "corporate tax benefits" as follows: (a) Those members having a negative allocation under Step 2; (b) If the total of the "corporate tax benefits" is greater than the total reduction in the consolidated tax, then the benefits arising from the inclusion of negative taxable incomes in the consolidated return shall be recognized and paid prior to the benefits arising from excess tax credits. (c) If the total benefits attributable to the negative taxable incomes of the members are not absorbed in the consolidated return, the benefit allocated to each company shall be in proportion to their re spective negative taxable incomes. (d) If the total benefits attributable to the excess tax credits are not applied in the consolidated return, the benefit allocated to each company shall be in proportion to their respective excess tax credits. Step 4 - If the total consolidated tax liability shall result in an "Alternative Minimum Tax" liability position then an additional amount will be added to Steps 1 and 2. This additional amount will be allocated to the members based upon their proportionate amounts of alternate minimum taxable income until such time as the proposed amendments to the income tax regulations under Sections 53 to 59, 1502 and 1552 of the Internal Revenue Code become effective. Subsequent to the effective date of the new regulations, the alternate minimum tax liability will be allocated in accordance with the approved regulations provided that such regulations prohibit the use of the net positive alternate minimum taxable income allocation method. Step 5 - Reimbursement - Benefiting members will reimburse the others no later than 90 days after the filing of the consolidated tax return. B. Unused_Corporate_Tax_Benefits A member that is entitled to payment for a tax benefit, but does not receive such payment because of the rules in Step 3 shall retain such right for the future to the extent that such benefit can be applied against the consolidated tax liability. Uncompensated corporate tax benefits arising from negative taxable income shall have priority over the benefits attributable to excess tax credits. C. Tax_Adjustments In the event of any adjustments to the tax returns of any of the CONSOLIDATED AFFILIATES filed (by reason of an amended return, a claim for refund or an audit by the Internal Revenue Service), the liability, if any, of each of the AFFILIATES under Section A shall be redetermined to give effect to any such adjustment as if it had been made as part of the original computation of tax liability, and payments between EUA and the appropriate AFFILIATES shall be made within 120 days after any such payments are made or refunds are received, or, in the case of contested proceedings, within 120 days after a final determination of the contest. Interest and penalties, if any, attributable to such an adjustment shall be paid by each AFFILIATE to EUA in proportion to the increase in such AFFILIATE's separate return tax liability computed under Section A of this Agreement that is required to be paid to EUA. In any situation in which the Group's tax liability is adjusted by a revenue agent's report or a court settlement and an item-by-item modification is not made, the Group shall consult its accountants for assistance in determining a fair allocation of the adjusted liability. D. Subsidiaries_of_Affiliates If at any time, any of the AFFILIATES acquires or creates one or more subsidiary corporations that are includible corporations of the Group, they shall be subject to this Agreement and all references to the AFFILIATES herein shall be interpreted to include such subsidiaries as a group. E. Successors This Agreement shall be binding on and insure to the benefit of any successor, by merger, acquisition of assets or otherwise, to any of the parties hereto (including but not limited to any successor of EUA or any of the AFFILIATES succeeding to the tax attributes of such corporation under Section 381 of the Code) to the same extent as if such successor had been an original party to this agreement. *NEW PAGE* F. Special_Rule In making the tax allocations provided for in this agreement, notwithstanding any of the foregoing, no corporate tax benefits shall be allocated to EUA. Although the separate corporate taxable income or taxable loss of EUA and any tax credits attributable to EUA will be included in the consolidated return, only the tax savings attributable to such items shall be allocated to the other AFFILIATES as if EUA were not a member of the Group. In making this allocation, the tax savings of EUA shall be allocated only to members of the Group having taxable income. Also, in making the tax allocations, only those tax consequences attributable to non-affiliated transactions shall be allocated to EUA Service Corporation in accordance with Section A of this Agreement. All others will be allocated to the other AFFILIATES as if EUA Service Corporation were not a member of the Group. G. Termination Clause This Agreement shall apply to the taxable year ending December 31, 1994, unless all of the members of the Group agree in writing to terminate the Agreement prior to the end of the taxable year. The Agreement shall be renewable on a year to year basis for subsequent taxable years, provided all of the members of the Group agree in writing, prior to the end of the immediately preceding taxable year, to extend the Agreement one additional year. Notwithstanding any termination, this Agreement shall continue in effect with respect to any payment or refunds due for all taxable periods prior to termination. *NEW PAGE* IN WITNESS WHEREOF, the duly authorized representatives of the parties have set their hands this 30th day of April, 1994. EASTERN UTILITIES ASSOCIATES By /s/ Donald G. Pardus --------------------- Title: Chairman of the Board EASTERN EDISON COMPANY EUA COGENEX CORPORATION By /s/ John D. Carney By /s/ Joseph S. Fitzpatrick ------------------- ------------------------- Title: President Title: President BLACKSTONE VALLEY ELECTRIC COMPANY EUA ENERGY INVESTMENT CORPORATION By /s/ David H. Gulvin By /s/ Richard M. Burns ------------------ -------------------- Title: President Title: Vice President MONTAUP ELECTRIC COMPANY EUA OCEAN STATE CORPORATION By /s/ Arthur A. Hatch By /s/ Clifford J. Hebert, Jr. ------------------- -------------------------- Title: Executive Vice President Title: Treasurer EUA SERVICE CORPORATION EUA UNICORD CORPORATION By /s/ John R. Stevens By /s/ William F. O'Connor ------------------- ----------------------- Title: President Title: Clerk NEWPORT ELECTRIC COMPANY NORTHEAST ENERGY MANAGEMENT, INC. By /s/ David H. Gulvin By /s/ Basil G. Pallone ------------------- -------------------- Title: President Title: Vice President EUA TRANSCAPACITY, INC. By /s/ Robert G. Powderly ---------------------- Title: Vice President EX-27.F 7 FINANCIAL DATA SCHED WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. EXHIBIT F-1 EASTERN UTILITIES ASSOCIATES Schedule V (In thousands) PROPERTY PLANT AND EQUIPMENT ----------
Montaup Eastern Eastern Blackstone EUA EUA EUA Newport Electric Edison Edison Electric Service Cogenex Ocean Electric EUA Classification Company Electric Consold. Company Corp. Company State Corporation Consolidated - ------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Beg. Balance December 31, 1992 Production Nuclear........... $367,193 $0 $367,193 $0 $0 $0 $0 $0 367,193 Production -- Steam.......... 124,377 0 124,377 0 0 0 0 1,292 125,669 Production -- Hydraulic...... 0 0 7,083 0 0 0 0 7,083 Production -- Other.......... 4,571 0 4,571 0 0 0 0 3,097 7,668 Transmission and Distribution 46,085 193,694 239,779 114,504 0 0 0 58,222 412,505 General Plant................ 5,918 13,143 19,061 3,883 30,301 0 0 6,665 59,910 Intangible Plant............. 273 0 273 22 0 0 0 313 608 Electric Prop. Held for Future 605 0 605 0 0 0 0 216 821 Nuclear Fuel in Service...... 20,358 0 20,358 0 0 0 0 0 20,358 Construction Work in Progress 2,210 964 3,174 376 160 0 0 1,233 4,943 Nuclear Fuel in Process...... 903 0 903 0 0 0 0 0 903 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Total Utility Plant........... $572,493 $207,801 $780,294 $125,868 $30,461 $0 $0 $71,038 $1,007,661 Non-Utility Property $2,609 $106 $2,715 $70 $0 $103,008 $0 $0 $105,793 ========== ========== ========== ========== ========== ========== ========== ========== = ========== Additions at Cost Production Nuclear........... $492 $492 $492 Production -- Steam.......... 3,578 3,578 4 3,582 Production -- Hydraulic....... 0 Production -- Other.......... 1 1 1 Transmission and Distribution 626 9,565 10,191 4,125 3,679 17,995 General Plant................ 224 229 453 151 364 228 1,196 Intangible Plant.............. 0 Electric Property Held for Future Use... 0 Nuclear Fuel in Service...... 2,347 2,347 2,347 Construction Work in Progress 3,301 304 3,605 326 12 (158) 3,785 Nuclear Fuel in Process...... (216) (216) (216) ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Total Utility Plant........... $10,353 $10,098 $20,451 $4,602 $376 $0 $0 $3,753 $29,182 Non-Utility Property $0 $0 $0 $29,993 $0 $29,993 ========== ========== ========== ========== ========== ========== ========== ========== = ========== Retirements/Sales Production Nuclear........... $498 $498 $498 Production -- Steam.......... 894 894 0 894 Production -- Hydraulic........ 0 Production -- Other........... 2 2 Transmission and Distribution 82 2,993 3,075 1,137 1080 5,292 General Plant................ 22 253 275 1 28 132 436 Intangible Plant.............. 0 Electric Property Held for Future Use... 0 0 Nuclear Fuel in Service...... 4,512 4,512 4,512 Construction Work in Progress... 0 Nuclear Fuel in Process........ 0 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Total Utility Plant........... $6,008 $3,246 $9,254 $1,138 $28 $0 $0 $1,214 $11,634 Non-Utility Property $0 $0 $0 $14,153 $0 $14,153 ========== ========== ========== ========== ========== ========== ========== ========== = ========== Other Charges (a) (b) Production Nuclear........... ($48) (48) ($48) Production -- Steam..................... 0 Production -- Hydraulic................. 0 Production -- Other..................... 0 Transmission and Distribution........... 0 0 General Plant........................... 0 20 20 Intangible Plant........................ 0 Electric Property Held for Future Use... 0 Nuclear Fuel in Service................. 0 Construction Work in Progress........... 0 Nuclear Fuel in Process................. 0 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Total Utility Plant........... ($48) $0 ($48) $0 $20 $0 $0 $0 ($28) Non-Utility Property $0 $1,477 (c) $1,477 ========== ========== ========== ========== ========== ========== ========== ========== = ========== Ending Balance 12/31/93 Production Nuclear........... $367,139 $0 $367,139 $0 $0 $0 $0 $0 $367,139 Production -- Steam.......... 127,061 0 127,061 0 0 0 0 1,296 128,357 Production -- Hydraulic...... 0 0 0 7,083 0 0 0 0 7,083 Production -- Other.......... 4,572 0 4,572 0 0 0 0 3,095 7,667 Transmission and Distribution 46,629 200,266 246,895 117,492 0 0 0 60,821 425,208 General Plant................ 6,120 13,119 19,239 4,033 30,657 0 0 6,761 60,690 Intangible Plant............. 273 0 273 22 0 0 0 313 608 Electric Property Held for Fu 605 0 605 0 0 0 0 216 821 Nuclear Fuel in Service...... 18,193 0 18,193 0 0 0 0 0 18,193 Construction Work in Progress 5,511 1,268 6,779 702 172 0 0 1,075 8,728 Nuclear Fuel in Process...... 687 0 687 0 0 0 0 0 687 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- - ---------- Total Utility Plant........... $576,790 $214,653 $791,443 $129,332 $30,829 $0 $0 $73,577 $1,025,181 ========== ========== ========== ========== ========== ========== ========== ========== = ========== Non-Utility Property $2,609 $106 $2,715 $70 $0 $120,325 $0 $0 $123,110 ========== ========== ========== ========== ========== ========== ========== ========== = ========== (a) Millstone Sales Tax Refund received for years 1982-1986. (b) Adjustment made directly to plant for EUASC Voucher incorrectly classified. (c) EUA /DAY @11/30/93
EX-27.F1 8 FINANCIAL DATA SCHEDULE WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE. EXHIBIT F-2 EASTERN UTILITIES ASSOCIATES Schedule VI ACCUMULATED DEPRECIATION,DEPLETION AND AMORTIZATION OF ---------- (In Thousands) PROPERTY PLANT AND EQUIPMENT - ----------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- - ----------
Montaup Eastern Eastern Blackston EUA EUA EUA Newport Electric Edison Edison Electric Service Cogenex Ocean Electric EUA Classification Company Electric Consold. Company Corp. Company State Corp. Consolidated - ----------------------------------- --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Beginning Balance December 31, 1992 Accumulated Depreciation, Depletion and Amortization................. $137,477 $62,147 $199,624 $37,552 $8,746 19,053 $264,975 Nuclear Fuel ..................... $9,750 9,750 9,750 --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Total Utility Reserve.............. $147,227 $62,147 $209,374 $37,552 $8,746 $0 $0 $19,053 $274,725 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Non-Utility Depr.& Amort.Reserve... $0 $10 $10 $20 $0 $18,488 $0 $0 $18,518 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Additions to Utility Plant Reserve Depreciation and Amortization..... $15,466 $8,530 $23,996 $4,972 $1,345 $2,475 $32,788 Amort.-Nuclear Fuel............... 5,135 5,135 5,135 --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Total Additions to Reserve......... $20,601 $8,530 $29,131 $4,972 $1,345 $0 $0 $2,475 $37,923 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Additions to Non-Utility Reserve... $0 $0 $1 $7,726 $0 $7,727 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Retirements Book Value of Property Retired.... $1,496 $3,246 $4,742 1,139 $28 1214 $7,123 Cost of Removal................... 1,536 1,749 3,285 881 0 553 4,719 (Salvage)......................... (25) (456) (481) (96) (16) (164) (757) Nuclear Fuel...................... 4,511 4,511 4,511 --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Net Utility Plant Retirements...... $7,518 $4,539 $12,057 $1,924 $12 $0 $0 $1,603 $15,596 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Net Non-Utility Plant Retirements.. $0 $0 $3,516 $3,516 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Other Charges to Reserve Explaination: SALE on RWH 0 0 FERC Order Adjustment (57) (57) (57) NEMAL Buy Out 0 0 --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Total Other Charges to Utility Plan $0 ($57) ($57) $0 $0 $0 $0 $0 ($57) ========= ========= ========= ========= ========= ========= ========= ========= = ========== Total Other Chrgs. to Non-Utility Plant Reserve... $0 $591 (a) $591 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Ending Balance 12/31/93 Accumulated Depreciation, Depletion and Amortization Reserve......... $149,936 $66,081 $216,017 $40,600 $10,079 $0 $0 $19,925 $286,621 Amortization Nuclear Fuel......... $10,374 $10,374 $10,374 --------- --------- --------- --------- --------- --------- --------- --------- - ---------- Total Utility Plant................ $160,310 $66,081 $226,391 $40,600 $10,079 $0 $0 $19,925 $296,995 ========= ========= ========= ========= ========= ========= ========= ========= = ========== Non-Utility Property $0 $10 $10 $21 $0 $23,289 $0 $0 $23,320 ========= ========= ========= ========= ========= ========= ========= ========= = ========== (a) EUA/DAY acquisition 11/30/93
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