ML20127C489

Forwards Fourth Amended Disclosure Statement for Bondholders Committee Fifth Amended Plan of Reorganization Dtd 921221, Before Us Bankruptcy Court in District of Nh on Behalf of Eua Power Corp

ML20127C489
Person / Time
Site:	Seabrook
Issue date:	01/12/1993
From:	Ritsher J ROPES & GRAY
To:	NRC OFFICE OF INFORMATION RESOURCES MANAGEMENT (IRM)
References
NUDOCS 9301140233
Download: ML20127C489 (225)

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I' ROPES & GRAY ON E INTERN ATIONAL PLACE DOSTON, MASSACHUSE1TS O2 tio 2G24 so n wurov eta 2A (ei7) 95n1000 su>nisoosours

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(4 or) a s o d4co Trtccomta (ci?) 95i 705o * *S"'NGT ON. D C 2000d (zoe) cre a900 uutomt a. (4oi) ass -440' u m omen-(2o2;n,n a ge, January 12, 1993 U.S. Nuclotr Regulatory ommission one White Flint 11555 Rockville Pike Rockville, Maryland 20852 ATTN: Document Control Desk Refe.*ences: (a) Letter, dated November 19, 1992, J.A.Ritsher to T.E. Murley (b) Telephone conversation on November 24, 1992, G.E. Edison, Sr. to T. Harpster (c) Letter, dated November 25, 1992, J.A. Ritsher to G.E. Edison, Sr.

(d) Letter, dated December 2, 1992, J.A. Ritsher to NRC (e) Letter, dated December 9, 1992, J.A. Ritsher to NRC (f) Letter, dated December 29, 1992, W.R. Butler to T.C. Feigenbaum Re: Docket No. 50-443, Seabrook Station Unit 1; J'OA Power Corporation Bankruntcy Proceedind

Dear Sir:

On November 10, 1992 (Ref. (a)), on behalf of North Atlantic Energy Service Corporation ("NAESCO"), acting for itself and the other license :. and on behalf of the Official Bondholders' Cotnmittee of NA Power Corporation (the " Committee"), we notified you of a contemplated redemption of all of EUA Power q Corporation's ("EUAP") preferred and common stock which was to be consummated under the aegis of the Bankraptcy Court. As then explained, the redemption was to be an 11terim step toward the anticipated approval of a Plan of Reorganization for EUAP. bt that time we also requested Commission consent to the redemption as an indirect transfer of control of an interest in a license under 10 CFR 950.80. The subsequent communh:aticms with the NRC Staff, and in particular the letter of Decamber 29, 1992 (Ref.

I Chapter 11 Case No. 91-10525, Bankruptcy Court, District of New Hampshire.

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Ropts & GR AY (f)) and the discussion with representatives of the Staff at the meeting in Rockville on January 6, 1993, have suggested. that our request was, indeed, " premature" and that Commission consideration of any " indirect transfer of control" should more properly be deferred until the specifica pf such transfer and the qualifications of the proposed transferee can be fully disclosed to, and evaluated by, the Commission. In the alternative, because of the unique circumstances surrounding the proposed redemption of stock in the context of the EUAP bankruptcy proceeding which are more fully discussed below, we submit that the redemption in and of itself does not rise to the level of an

" indirect transfer of control" within the contemplation of 10 CFR 550.80. Therefore, we withdraw the earlier request (Ref. (a))

and, rather, request at this time that the Commission disclaim any jurisdiction with respect to the redemption and await the filing of a formal application (which we anticipate should occur in the spring of thin year) before engaging in an evaluation of the qualifications of the entity which ultimately will emerge from the EUAP bankruptcy proceeding to become a licensee of Seabrook. The reasoning in support of this position and other pertinent information are set forth below.

Notwithstanding this present request for disclaimer, both NAESCO and the Committee acknowledge that the Commission's consent is required before the transfer inherent in the Plan of Reorganization can become effective.

I. Background.

As a preliminary matter we should summarize the relevant background. EUAP was originally organized in 1986 as a subsidiary of a registered holding company, Eastern Utilities Associates ("EUA"), for the purpose of acquiring the interests of five participants in Seabrook which had been ordered by their state regulators to divest themselves of any interest in Seabrook. That organization and all subsequent financings for EUAP, as well as its interactions with its parent and affiliates, were conducted in conformity with the Public Utility Holding Company Act of 1935', as amended ("PUHCA"), and under the 2

These details will not become fully available until after the initial confirmation by the Bankruptcy Court of the Plan of Rec'ganization permits the necessary negotiations to proceed.

3 At that time EUAP was capitalized with $10,000 of common stock and $44,990,000 of preferred stock, both supplied by EUA.

It subsequently raised an additional $180 million by the sale of Secured Notes and issued an additional $99.6 million of Secured Notes in lieu of interest.

15 U.S.C. 5579 et seq.

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Ropts&GnAv surveillance of the Securities and Exchange Commission ("SEC") .5 The acquisition of the Seabrook interests by EUAP was approved by the Commission.' The operating license for Seabrook, which had been considered reasonably imminent at the time of EUAP's acquisition, was further delayed while emergency response issues were resolved before the Commission and did not issue until March 15, 1990. The effect of this delay, together with an unanticipated down turn in the power needs in New England, resulted in the exhaustion of EUAP's considerable liquid assets and a reduction of its income flow from the sale of power, which together eventually led to a voluntary filing by EyAP for protection under Chapter 11 of the Bankruptcy Code on February 28, 1991. At that time, EUAP owed approximately $320 million to creditors, of which $294 million was owed to the holders of publicly issued bonds, and had no liquid assets. With that filing the Bankruptcy Court assumed control of EUAP which has since operated as a debtor-in-possession under the jurisdiction of the Court. As an integral step in that proceeding, the Committee was appointed on March 14, 1991 to represent the interests of the secured creditors of EUAP.

In the intervening 23 months the Committee has been working diligently toward formulation of a Plan of Reorganization which, with the approval of the Court and the Commission, will permit the reorganized debtor to emerge from bankruptcy with reasonable assurance that it can carry on its business of owning and marketing the output of its portion of Seabrook.a The Committee's Plan of Reorganization was completed and was initielly proffered in July of 1992 (as amended, the " Plan"). At that time there was significant uncertainty relating to the resolution of the numerous claims made on behalf of the debtor against EUA and the claims made by EUA against the debtor's estate, which collectively involved substantial millions of dollars. The Committee was able to negotiate a resolution of these claims which it deemed favorable to the debtor's estate which was evidenced by the Settlement Agreement dated as of November 18, 1992. After full notice to all creditors and a detailed hearing, the Settlement Agreement was approved by the 5

See Section III below.

6 Amendment No. 9, dated September 12, 1986, to Construction Permit No. CPPR-135 in the above docket.

I 11 U.S.C. 55101 et seg.

8 This finding required of the Bankruptcy Court is wholly consistent with the finding to be made by the Commission under 10 CFR 550.33(fi(2).

A copy of the Settlement Agreement was filed with Ref. c.

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Ropes & GR AY Bankruptcy Court on December 8, 1992," as being beneficial to EUAP and-its creditors. Thereafter, it was approved" by order of the_ Securities and Exchange Commission on December 29, 1992 and was consummated on December 30, 1992. The result was to free the bankruptcy proceeding of many contested issues which could have delayed matters for considerable time and to increase the debtor's estate by an infusion of $20 million in cash and the affirmation of a $10,000,000 decommissioning fund guarantee by EUA.

The only remaining issues are finances. The Committee is presently obtaining interim financing to augment the proceeds of spot market sales by EUAP so it can continue to meet its share of the Seabro completed',ok andoperating costs its must complete while the bankruptcy negotiation of a proceeding post-Chapteris 11 longer term financing vehicle to meet the reorganized debtor's operating expenses after the debtor emerges from bankruptcy _and until it is able to consummate long term power contracts in the latter part of this decado, when the Committee's financial advisors-anticipate increasing demand for power. In July of 1992 the Bankruptcy Court ruled that it would not permit the Committee to obtain a commitment for the longer term financing until an order confirming the Plan has been entereg. With the 4

consummation of the Settlement Agreement, the Committee believes that the-time is ripe to have the Plan confirmed. A Bankruptcy Court hearing for that purpose has been scheduled for March 5, 1993 with a mailing of the Disclosure Statement soliciting bondholder consents scheduled-for February 5, 1993.

If the Plan is confirmed on that schedule, the Court will retain full jurisdiction over the debtor for an indeterminate period thereafter while the long term financing vehicle is put in place and the necessary regulatory approvals (including that of the Commission) are obtained.

" A copy of the Court's order is attached as-Attachment 1.

" Except for the requested approval of the stock redemption, as to which jurisdiction was reserved. A copy of the

-SEC's order-is attached as Attachment 2.

12 After initial confirmation of the Plan, there will be a period during which EUAP remalfs under the jurisdiction of the Court _while it and the Committ99 seek _to obtain all requisite regulatory approvals and the Samittee attempts to place its proposed longer term permanent financing, during which interim financing may be necessary.

'3 Except for the redemption as to which the SEC has retained jurisdiction. See Attachment 2.

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Ropts & GRAY II. Proposal to Redeem EUAP Stock.

Given this background, it is appropriate at this juncture to analyze the substance of the proposed redemption of EUAP stock and determine its effect and regulatory consequences. As previously explained (Refs. a & c), the redemption was proposed and included in the Settlement Agreement as an interim step which, by circumventing a jurisdictional obstacle, would greatly expedite the timing of initial confirmation of the Plan and the ultimate effectiveness of the Plan. The jurisdictional obstacle is created by th'e interaction of the Bankruptcy code and Sections 11(f) and ll(g) of the PUHCA. The former requires Bankruptcy Court confirmation of any plan of reorganization, while.the latter require the SEC, after opportunity for hearing, to issue a report on and approve any reorganization plan involving a subsidiary of a registered holding company before the Court acts upon confirmation of such plan. It should be emphasized that there are only ten registered holding company systems (of which EUA's is one) in the United States to which these provisions of PUHCA apply; if this proceeding involved any of the other major utilities in the country, the SEC would not have jurisdiction with respect to the Plan.

In the present instance, prior to the consummation of the Settlement Agreement, those statutory provisions portended a prolonged, contested proceeding before the SEC, during which time interim financing was questionable and any progress on the long term financing was impossible. Therefore, the redemption of stock was conceived as a way to eliminate any further SEC jurisdiction with respect to the Plan and further delay in effecting the Plan. By accomplishing the redemption while the debtor remained under the supervision of the Court and after obtaining any requisite regulatory approvals, the status of EUAP as a subsidiary of a registered holding company would be terminated, thus ending any further jurisdiction of the SEC with respect to the Plan. This change of status would therefore eliminate all potential for delay while an SEC hearing was held.

While consummation of the Settlement Agreement has eliminated the possibility of a hearing before the SEC contested by EUA, so long as EUAP in a regulated subsidiary, there remains the statutory requirement of an opportunity for an SEC hearing and the.

procedural delays which inevitably follow. Such delays could still allow time for the financial markets to weaken, jeopardizing the viability of the long term financing for the debtor which is essential to ultimate approval of the Plan by the Court and all agencies having jurisdiction. Therefore, the redemption remains a crucial interim step toward the goal of early effectiveness of the Plan.

" 15 U.S.C. f S79 (k) (f) and (g).

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RoPcs & GRAY Which raises the question of the substantive effect of the redemption in the relevant forums and what approvals are required?

(1) As proposed to, and viewed by, the Bankruptcy Court, the redemption involves the acquisition by a debtor-in-possession of its outstanding capital stock. Given the magnitude of the creditors' claims against the debtor and the value of the debtor's assets no value could be attributed to that capital stock and the parties to the Settlement Agreement have so stipulated with the approval of the Bankruptcy Court.

Furthermore, prior to the redemption the debtor-in-possession is fully subject to the jurisdiction and control of the Court and, after the redemption, the debtor-in-possession will continue subject to that jurisdiction and control until some Plan of Reorganization becomes effective or, in the absence thereof, the debtor is liquidated. Therefore, in the Court's perception the redemption is merely a procedural formality which was designed solely to avoid the regulatory obstacle described above and which has no substantive effect on the matters otherwise before the Court. As part of a settlement agreement to compromise controversies it did require court approval pursuant to the Federal Rules of Bankruptcy Procedure 59019(a). Enclosed herewith as Enclosure 1 is a legal memorandum claborating on this analysis.

(2) For purposes of the SEC's jurisdiction under PURCA, the redemption would be characterized as the acquisition by EUAP, a subsidiary of a registered holding company, of all of its outstanding capital stock. PUHCA gives the SEC jurisdiction over such a transaction," application has been made for the requisite approval and the SEC has retained jurisdiction with respect to that issue. Furthermore, the SEC Staff has indicated that they would act favorably on the pending application as soon as any other requisite regulatory approvals are obtained."

(3) Given the actuality of the Bankruptcy Court's jurisdiction over EUAP, how should the redemption of stock by EUAP be characterized for the Commission's purposes? We submit that, in the unique circumstances presented in the pending EUAP bankruptcy proceeding, the redemption by itself does not merit any further attention by the Commission. First, the redemption by itself does not involve any amendment to the Seabrook

" 15 U.S.C. 5579(j) and 79(k); Rules 42, 43 and 44 thereunder.

" In addition to the requested disclaimer by the Commission, the New Hampshire Public Utilities Commission and the Federal Energy Regulatory Commission have disclaimed jurisdiction.

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Ropts & GRAY Operating License, because the identity of the licensee, EUAP, is not being changed in any way by the redemption. Second, the redemption does not affect in any way the ability of EUAP to continue to perform its obligations as a licensee or owner of Seabrook." Those obligations do not affect the operation or management of the facility, but are primarily financial in nature because the operation of Seabrook is, by explicit license provision, delegated only to NAESCO. Even though EUAP's financial condition has been extremely _difficul;, it has to date been able to obtain financial support from other sources" which permitted it to keep current on its financial commitments to Seabrook, including its pro rata contributions to the decommissioning fund. Until the Plan becomes effective, there is no intent to alter EUAP's representation on com:v h. ee's under the Joint Ownership Committee. Third, the redemption ty itself does not effect a " direct or indirect transfer of control" of the license. As explained above and in Enclosure 1, EUAP and the conduct of its business have been under the exclusive control of the Bankruptcy Court since February 28, 1991 and will continue under that control until EUAP emerges from bankruptcy or is liquidated. The redemption in no way alters that fact. The Court remains the ultimate decision maker with respect to EUAP's business and assets - its interest in Seabrook and in the Seabrook license being the only significant assets - until a Plan of Reorganization becomes effective. Thus, before the redemption EUAP could not have taken any definitive action with respect to its interest in the Seabrook license without the Court's approval and the same will be true after the redemption.

The Commission's precedents, while few, are clear in equating " transfer of control of [a] license" uith transfer of the authority to direct the licensed activities. Thus in ALAB-931 the Appeal Board held that, for purposes of determining whether a transfer of control of a license has occurred, " control

" It is worth emphasizing again that those. obligations-have to date been performed without default of any kind.

" On September 29, 1991, the_ Court approved an agreement between EUAP and two Seabrook Joint Owners, CL&P and UI, providing for a one-year line of credit up to a maxim'm at any time outstanding of $15 million, for the purpose of meeting EUAP's operating expenses for Seabrook. In September, 1992, this-agreement was extended on a .nonth to month basis and at the same time increased to a maximum of $22 million. On December 29, 1992, the outstanding balance of $14.5 million was paid off with some of the proceeds of the Settlement Agreement. While that facility remains available on a month to month basis, those parties are currently negotiating a similar arrangement of up to

$20 million over one year, which would cover the period until the Plan becomes effective.

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I RoPCs & GnAv is to be found in the person or persons who, because of ownership or authority explicitly delegated by the owners, possess the power to determine corporate policy and thus the direction of the activities under the license." Safety Licht Carp 1 (Bloomsburg Site Decontamination), A LAB-9 31, 31 NRC 350, 367 (1990). In that case, the corporation holding a Part 30 by-product materials license was restructured so that the named licensee became a separate, subsidiary corporation, and then all the stock in that subsidiary was sold to three officers of the corporation. The Appeal Board emphatically rejected the argument that no transfer of control had occurred because the nominal identitv of the licensee had not changed. Rather, the Appeal Board looked beyond the corporate formalities and determined that the actual power to control the license had been transferred. Regardless of what was done or not done with the corporation's stock, "[t]he authority to make the crucial policy determinations thus being the pivotal factor, it would appear to follow, as a general matter, that control of a license is in the hands of the person or persons who are empowered to decide when and how that license will be used."

Id. at 364-65 n.46 (emphasis added)."

Likewise the NRC, in arguments made on its behalf by the Justice Department in the recent El Paso Electric bankruptcy proceedings, focused upon power over the licensed activities as the key in determining whether a transfer of control triggering NRC jurisdiction had occurred. The NRC's briefs in the El Paso matter reference two contrasting cases with respect to control of the licensed activities. At one extreme, a licensee which was managing agent of a plant for a group of joint owners sought to transfer its rights and obligations as managing agent to a separate, free-standing corporation, and the Court hearing the matter rightly noted in passing that such a transfer of control over operation of the plant would require NRC approval. In re Eublic service Company of New Hampshire, 90 B.R. 575, 582 (Bankr. _

D.N.H. 1988). By way of contrast, when " bare title" to an ownership interest in a plant was transferred, for financing purposes in a sale-leaseback, while the " traditional indicia of ownership such as possession, control and influence" remained with the original licensee, then there is no transfer of control requiring licensing action with respect to the new " owners".

SECY-85-367 at 4-5, 8. The Commission noted with respect to the first such sale-leaseback that "this financial transaction shall have no effect on the license for the Palo Verde nuclear facility throughout the term of the license." Arizona Public Service Co.

" The same reasoning is applicable to EUAP's interest in the Seabrook license. The Appeal Board noted that there is "no cause to suppose . . . that the Commission perceives fundamental differences in the concept of control of a Part 50 license, as compared to a Part 30 license." Id. at 367.

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EUA's situation, so far as its power over.the licensed activities is concerned, is analogous to " owners" in the sale-leaseback situation. As a result of EUAP's bankruptcy, EUA; retains only " bare title" to the now-worthless stock of EUAP, Following the Safety Licht injunction to look beyond corporate formalities and determine where the ability to control the license lies, it is clear that the Bankruptcy Court holds the power to decide "when and how (the) license will be used." EUA's stock ownership is vestigial, and unrelated to either the present activities under or the future disposition of EUAP's license --

except to the extent that it creates a procedural roadblock to EUAP's reorganization, as discussed above. EUA's relinquishment of its nominal ownership, through the proposed stock redemption, "shall have no effect on the license," as noted above. The Staff-has observed that other federal agencies have disclaimed jurisdiction in sale-leaseback situations where, as here, nominal ownership entails no actual control. SECY-85-367 at 8 n. 5. Tpe same abstention by other agencies has occurred in this instance and seems appropriate for the Commission here.

Finally, as underscored in the original request (Ref. (a))

and reinforced by the evaluation in the context of the three criteria set forth in 10 CFR 550.92(c) (Ref. (e)), the-redemption does not affect the operation of Seabrook and does not involve any significant hazards consideration. Those facts together with the information heretofore and herewith provided to the NRC Staff provide ample assurance that no aspect of the public health and safety will be adversely affected by the Commission's acting affirmatively on our request.

Thus, we respectfully submit that the Commission should disclaim any jurisdiction over the proposed redemption of the EUAP stock. That disclaimer would permit the SEC to act forthwith upon the pending application for its approval of the stock redemption and would obviate the need for the SEC's protracted hearing schedule on the Plan of Reorganization. That, in turn, would-allow the redemption to go forward, the

-confirmation process with respect to the Plan to proceed, and would prepare the way for a formal application with respect to the Plan to be filed with the Commission in connection with which the comprehensive review-of the qualifications of the license transferee could be undertaken.

While not binding on the Commission, it may be-helpful to note that to confirm the Plan the Bankruptcy Court must make a finding, inter alia, that the Plan (including the proposed longer 20 See note 16, supra.

unncu.n ROPES & GRAY term financing) is feasible. Thereafter, in reviewing the application for consent to the transfer inherent in the Plan, the commission will have its own, independent opportunity to examine the comparable issues with respect to the qualifications of the proposed transferce.

III. Relations between EUAP and its Parent.

As alluded to above, the relations between EUAP and its parent and affiliates are rigorously regulated and supervised by the SEC under PUHCA. PUHCA was enacted in 1935 to counter the abuses which had previously existed in the utility field. PUHCA contains stringent constraints upon the conduct of affairs between registered holding companies and the companies in their systems. The SEC has been delegated the authority and responsibility for overseeing the enforcement of those provisions, a responsibility which it scrupulously fulfills.

Enclosure 2 is a memorandum outlining the SEC proceedings and other regulatory oversight which have occurred with respect to EUAP since its organization and providing an accurate picture of the thoroughness of such supervision during that peric3.

We have inferred from the NRC Staff's communications (see, e.a. Ref. f) that some of the Staff's hesitancy to act in this particular instance may be attributable to a concern that by taking any affirmative action the Commission might be abandoning some undefined rights which the Commission might hereafter wish to assert on behalf of EUAP, or perhaps in its own right, against EUA, as the sole stockholder of EUAP and as the result of allegedly wrongful conduct by EUA in that capacity. While we strongly deny that any basis now exists for any such action, we can understand the reluctance of any regulatory agency to take action which could be interpreted as a surrender of any of its rights. However, we would submit and concede that the requested action, if granted, could not be argued to have such a result.

Whatever rights the Staff may believe exist at this time have necessarily arisen from the conduct of the relevant parties prior to this date. The fact of that conduct will not be altered in any way by consummation of the redemption of EUAP's stock. If the need should arise at some future date for the Commission to assert those perceived rights, it will still be able to attempt to do so, whether or not the redemption of stock has intervened.

As a counterweight to the Staff's perception of these undefinable rights of action, we would merely at this time reiterate that to date the relations between EUAP and its parent and affiliates have been closely regulated and approved by the Commission's sister agency, the SEC, to whose expertise deference is due. We would also point out that at the moment EUAP is not, and has not been, derelict with respect to any of its responsibilities as a licensee of the Commission and so as far as we can ascertain there is no present claim to be asserted by the JARE CW.n _ _ ______- __ -______ - __ - _ -

ROPts & GRAY Commission. Finally, we would note that, to the extent the Commission were to conclude that such a claim arises-because of the occurrence of some unanticipated event in the future, it would face the unenviable burden of attempting to demonstrate that EUAP's parent bore any responsibility for that event or EUAP's role therein, given the unassailable fact that EUAP's parent can be shown to have had no control over, or role in, the business decisions of EUAP since at least February 28, 1991, that control having been vested in EUAP as debtor-in-possession under the jurisdiction of the Bankruptcy Court as of that date by the Bankruptcy Code.

IV. The Proposed Plan of Reorganization.

Without in any way requesting at this time any action by the Commission with respect thereto, we are filing herewith as Enclosure 3 for information purposes only a copy of the Fourth Amended Disclosure Statement for Bondholders' Committee and the Fifth Amended Plan of Reorganization, dated December 21,-1992.

This document was formally filed with the Bankruptcy Court on December 21, 1992 and represents the Committee's current concept of the Plan of Reorganization for EUAP. It is being furnished at this time as evidence of the thorough and comprehensive evaluation of EUAP's existing business and prospects which the Committee has performed. It is also provided for the purpose of presenting for the Staff's consideration a description of the framework of the proposal which will be filed with the Commission as the basis for requesting its consent to the transfer of control of EUAP's interest in the license and title to its interest in Seabrook to the reorganized entity which will ultimately emerge from bankruptcy. While this framework, as noted above, still lacks some specifics, such as the identity of the current creditors which will bn the owners of the reorganized entity, the identity of the offier.rs and directors of the reorganized entity, and the prec!.se terms and feasibility of the long-term financing vehicle, which will all be elements of the qualifications of.that entity which will need to be approved by the Commission, it nevertheless does contain sufficient information to demonstrate that.the eventual = application will be responding to all of the applicable criteria contained in the Commission's regulations. For the further assurance of the Staff, the Committee represents that to the best of its knowledge the substantial majority of the present creditors of EUAP are United States citizens and the Committee has no reason to believe that the emerging reorganized entity will be controlled by aliens.

NAESCO and the Committee expressly acknowledge that the Commission will have jurisdiction over the transfer of control of EUAP's interest in Seabrook and the Seabrook license inherent in the Plan and hereby commit to file with the Commission a formal mact.2. n ROPcs & GRAY application with respect thereto as promptly as possible after the confirmation of the Plan by the Court.

V. Conclusion.

By disclaiming jurisdiction with respect to the redemption of stock in the unique and narrow circumstances presented by EUAP's bankruptcy proceeding, the Commission will not be establishing a precedent that is prejudicial to its future options in this instance or in any future cas . It is conceded that the Coumission will continue to have jurisdiction to approve or disapprove any transfer of control of EUAP's interests in Seabrook and the license which is part of the Plan. Any disclaimer of jurisdiction on the facts presented here is highly unlikely to be applicable as a precedent in any other case.

Therefore, on behalf of NAESCO and the Committee, it is respectfully requested that the Commission disclaim any jurisdiction with respect to the proposed redemption of EUAP's stock, thereby permitting the Bankruptcy Court's schedule to be-met and facilitating the early confirmation of the Plan and its prompt submittal thereafter for Commission review and, if found to be acceptable, approval.

Respectfully sub, pitted,

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t-7 Joh A. Ritsher cc: Albert DeAgazio Edward Reis, Esq.

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In Re: )

) Chapter 11 EUA POWER CORPORATION, ) Case No. 91-10525 L f'

)

)

Debtor. )

) Hearing: December 8, 1992

) Hearing Time: 9:30 a.m.

OFFICIAL BONDHOLDERS' COMMITTEE, )

) ~

Plaintiff, )

) Adversary Proceeding

v. ) No. 91-1079

)

EASTERN UTILITIES ASSOCIATES, )

Defendant. , g}$

ORDER APPROVING JOINT MOTION OF OFFICIAL BONDHOLDERS' COMMITTEE, THE DEBTOR AND EUA TO ENTER SETTLERENT AGREEMENT TO COMPROMISE CONTROVERSIES PURSUANT TO FED. R. BANKR. P. 9019(a) AND TO AMEND THE DEBTOR'S SCHEDULE OF LIABILITIES Upon the Joint Motion of The Official Bondholders' Committee, EUA Power Corporation (the " Debtor"), and Eastern Utilities Associates ("EUA") to Enter Settlement Agreement and to Compromise Controversies Pursuant to Fed. R. Bankr. P. 9019(a) and to Amend-the Debeor's Schedule of Liabilities, adequate notice having been provided, a hearing having been held on December 8, 1992, and the Court having found that the Settlement Agreement satisfies the applicable standards of Fed. R. Bankr. P. 9019(a), is fair and equitable, is in the best interest of the Debtor's estate and was entered into in good faith, it is hereby ORDERED that:

(a) The Settlement Agreement is hereby approved and the Debtor and the Committee are authorized and directed to execute,

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deliver and perform under the Settlement Agreement, a copy of A; MA 4 D // r A ' % d man k h 4 M ,

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.I [ which is Theattached Debtor is hereto authorizeo as on Exhibit the Effective Date under the .

Setticment Agreement to pay in full the outstanding balance of the existing DIP Facility, as defined in the Settlement Agreement, with the proceeds of the $20 million payment it will receive from.

its parent, EUA; (c) The Debtor and the Committee, acting on behalf of the Debtor, are authorized and directed to execute releases in the forms attached to the Settlement Agreement and are authorized to enter the covenants not to sue set forth in the Settlement Agreement; (d) The Debtor and EUA are authorized and directed to withdraw and hereby are deemed to have withdrawn all pending interventions and objections to the plan and disclosure statement filed by the Committee, and EUA and its subsidiaries are authorized and directed to withdraw any and all proofs of claim which they may have filed in the Debtor's Chapter 11 case; (e) The Debtor is authorized and directed to redeem from EUA, consistent with the Settlement _ Agreement, all of the Debtor's issued and outstanding shares of common and preferred stock; ,

(f) The Debtor is authorized and- directed to indemnify- and hold harmless EUA Service Corporation ("EUA Service") and the Debtor's officers and directors for actions taken after the Effective Date of the Settlement Agreement as set forth in the Settlement Agreement;

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(g) The Debtor, subject to the discretion of the Committee, is author?. zed to continue to employ EUA Service to provide certain administrative services to the Debtor as specifically set forth in the Settitment Agreement; (h) The Debtor is authorized to assign to EUA, or its designee, its right to receive discounted engineering services from United Engineers and Constructors under the Settlement Agreement dated November 1, 1991 and previously authorized by this Court; (i) The Debtor is authorized to amend its schedule of liabilities as provided in the Settlement Agreement; (j) Adversary Proceeding No. 91-1079 concerning alleged preferential payments by the Debtor to EUA in excess of $38 million is hereby dismissed with prejudice; and (k) The Committee's Motion for Leave to File Adversary Complaint on Behalf of the Debtor and the Debtor's Creditors is hereby denied.

Dated: December @ , 1992 / #[##

Honotydle James E. Yacos, Unidd States Bankruptcy Judge

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, ,- Iv30.[ :.i m o C2tQ5H-2h5 SEhSR0A0FFl.!E Q002.006 HJHcA ATTACilMENT 2 SECURITIES ANO EXCHANGE CO.WISSION (Release No. 35-25719  ; 70 8099)

Eastern Utilities Associates, at gl.

Order Authorizing Issuanca of Notes; Provision of Services to a Nonassociater Assignnent and Acceptance of an Engineering Contract; Tax Allocation Agreements; Confirmation of a Decommissioning Guaranty; Reservation of Jurisdiction December 29, 1992 Eastern Utilities Associates ("EUA'), Boston, Massachusetts, a registered holding company, and its wholly owned subsidiaries, EUA Power Ccrporation ('EUA Power"), Manchester, New Hampshire, EUA Service Corporation ("EUA Servicea ), Bridgewater, Massachusetts, and Montaup Electric Ccmpany ("M0ntaup"), Besten, Massachusetts, have filed a joint application declaration, as amended, with this Commission pursuant to Sections 6 (a), 7, 9 (a) ,

10 and 12 (b) , (c), (d) and (f) of the Public Utility. Holding Company Act of 1935 ("Act") and Rules 42, 43, 44 and 45 thereunder. A notice of the filing of the application-declaration was issued by the Cc: mission on November 2S, 1992 (HCAR No. 25688).

To resolve various matters presently in dispute, as well as any and all other issues and claims among them, EUA, EUA Power and the officially appcinted Bondholders Co=mittee in EUA Power's bankruptcy proceeding (' Bondholders Committee') have_ entered into a settlement agreemant, dated November 18, 1992 (" Settlement Agreement *). 1/ The terms and conditions set- forth in the 1/ EUA Power filed for protection under Chapter 11 of the United States Bankruptcy Code (' Bankruptcy Code") on February 28, 1991 in the United States Bankruptcy Court, Dietrite of New Hampshire (" Bankruptcy Court') and has since (centinued...)

w >>ia: a, no c cr. a n< am w. unayr r wi u nsem 2

Settlement Agreement will beceme effective on the latter of the date of entry (*Ef fective Date') of (1) the requested order of the Ccmmiselon (except for the rederption of outstanding shares of EUA Power's ce= mon and pref erred stock over which the Ccenission is requested to reserve jurisdictien), and (ii) the order of the Bankruptcy Court approving the Settlement Agreement. 2/

Pursuant to the Settlement Agreement, EUA Power requests authority to redeem its cutstanding havan of ec= mon and preferred stock from EUA. Upon such redemption, UA Pcver will beccme a stand alone company and will no longer be a subsidiary company of EUA. EUA and EUA Power request that the Ccenission raserve jurisdiction with respect to the rede=ption until the Nuclear Regulato:.y Cc=ission ("NRC") approves such redemption.

In addition, EUA Service requests authorization to provide certain administrative services to EUA Power, following the redemption, through Novenber 18, 1994, en a cost basis (including a return en the capital invested by EUA in EUA Service) consistent with the requirements under the Act. Specifically, EUA Service will market electricity on a short-term basis, keep 1/ ( , . . c0ntinued) been operating its business as a debtor-in-possession.

1/ On Dece:nber 8, 09r 2, the Bankruptcy Court issued the order approving the Settlement Agreement.

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_ . . _ . _ - . . _ . . _ _ . . . _ ~ .

3 the finantial books and records of EUA Power. =anage EUA Power's

-cash recources and perform such other routine administrative services as the Bondholders Comr.ittee may request of EUA Service from time to timo until EUA Power's Chapter 11 case is closed.

EUA Power has agreed to indemnify EUA Service for any claims or liabilities that may arise in connection with such eervices.

EUA Power also requests authority to assign to Montaup EUA Power's right to receive discounted engineering services from 4

United Engineers and Constructors ("UE&C") under an -greement dated November 1, 1991 among the joint owners of Seabrook Nuclear Power Proja:t ( " S eabrook") and UE&C, and Montaup requests authority to accept such assignment. Montaup will reimburse EUA for 90% of the amount of services it receives as a result of such assignment.

EUA and EUA Power further request authority to carry out certain transactions in connecrion with the tax allocation agreements. Under the Settlement Agreement, the parties have egreed that, to the extent permissible under the tax lawn, the tax attributes of EUA Power -(n, net operating loss carry f orwards, investment tax credits and alternative -minimum tar.

credits) will first be utilized by .or allocated among the me=bers i

of the EUA tax group, and thereafter, EUA will cocperate with EUA J

. ~ . . _ . . . _ _ . _. _ .

,7 _ .

4 Power and the Bondholders Co==ittee to maximite, to the extent permissible, the am0unt of tax attributes that may be available to EUA Power upon the deconsolidation of EUA Power from the EUA tax group. In addition, the parties have agreed that no further amounts will be paid to EUA Power for its tax attributes under the tax allocation agrec=ents or otherwise regardless of the date upon which such deconsolidation occurs except (1) $20 million to be paid on the Ef f ective Date pursuant to the Settlement Agreement and (ii) EUA will be obligated to pay EUA Power 50% of the net tax benefits realized by the EUA tax group by reason ci the EUA tax group's use of EUA Power's tax attributes af ter Oecer.ber 31, 1993 if EUA liquidates or otherwise terminates its interest in IUA Power, and if EUA has not recaptured its excess loss account with respect to EUA Power. The Settle =ent Agreement therefore effectuates an arrangement with respect to ta:: matters between EUA Power and the other members of the EUA group that varies from the standard terms and conditions required pursuant to Rule 4S (0) .

EUA aisc requests Commission approval of 'the confier.ation of its duties and obligations under a LL=ited Guaranty, dated May 4, 1990, in favor of the joint cwners of Seabrook with respect to the decc==issioning-fund for Seabrook. Under the terms of the

4 aeu a v>. czes em mo a cr. a urt M , c ovues 5

Guaranty, EUA may be required to pay up to $10 millica (" Maximum Amounta) of the decennissioning costs of Seabroek for which EUA Power is responsible if EUA Pcwer defaults on its obligation to pay thcee costs at any time over the life of thc project. Under the terms of the guaranty, if certain events had occurred, the Maximum Amount would have been increased, but, the applicants represent that, such events did not occur.

Finally, EUA requests authorizatien to issue and sell through December 31, 1994 short-term notes (" Notes") in an aggregate amcunt not to exceed $20 millien outstanding at any one time. 1/ The Notes will be issued by EUA to banks pursuant to informal credit line arrangements which will provida for borrowings at a ficating prime rate or at available fixed meney a market rates. Notes bearing interest at the floating prime rate will be prepayable at any time without pre:nium or penalty. Noten bearing interest at available money market rates, which in all cases will be less than the prime rate at the time of issuance, will not be prepayable without penalty. The bank credit lines may be subjact in some cases to ec:=itment f ees equal to 1/4t of 1/ On the Effective Date, EUA will cause to be paid to EUA Power $20 million in consideration of, a=cng other things, the mutual releases contained in the Settlement Agreement.

EUA Power has agreed to use that portion of the $20 million to pay in full the amount outstanding under a certain debtor-in possession financing facility (" DIP Financing *)

provided by Connecticut Light and Power Cc:rpany and the United Illuminating Company. The DIP Financing was previously authorised by the Cc= mission (ECAR Nos. 25609 and 25386, dated August 21,-1992 and September 26, 1991, respectively).

l 1

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6 the line cf credit. The Notes will nature not more than one year frem the date of issuance, but none vill nature af ter December 3t, 1994. The Notes will be repaid by any conbinatien of the following methods: (1) the issuance of new notes; (2) internal funds; and (3) the issuance and sale of permanent securities for which authority will be sought under a separate applicatien with the Commission.

Fees and expenses in the estimated amount of $302,500 are expected to be incurred in connecticn with the proposed transactions. It is stated that the redamption of EUA Power's cutstanding common and preferred stock is subject to the issuance of an appropriate order by the Bankruptcy Court 1/ and requires the approval cf the NRC. It is further stated that no other state et iederal commission, other than this Cc= mission, has jurisdiction over the proposed transaction.

Due netice of the filing of said applicatien declaration has been given in the manner prescribed in Rule 23 promulgated under the Act, and no hearing has been requested of or ordered.by the Cor=dssion. Upen the basis of the-facts in the record, it is hereby fonnd, except as to those catters over which . jurisdiction has been reserved, that the applicable standards of the Act and 1/ As stated earlier, the Bankruptcy Court issued the order approving the Settlement Agreement. However, the amount of fees and expenses to be paid by EUA Pcwer in connection with the preposed transactions will be subject to-the approval by the Bankruptcy Court pursuant to Section 330 of the Bankruptcy Code.

9 7

rules thereunder are satisfied, and that no adverse findings are necessary: .

IT IS CRDERID, pursuant to the applicable provisions of the Act and rules thereunder, that the application-declaration, as amended, be, a.nd it hereby is, except as to those matters over which jurisdiction is reserved, granted and pemitted to become effective forthwith, subj ect to the ter:na and conditions prescribed in Rule 24 under the Act; and IT IS FUR ~"GR ORDERED, that jurisdiction should be, and it hereby is reserved, over the rede:rption of shares of EUA Power's con: mon and preferred stock.

For the Cc::nission, by the Division of Investment Manage:nent , pursuant to delegated authority.

. Jonathan G. Katz Secretary

%g N f.bl*

Sy: Ma aret H. McFarland Deputy Secretary

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ENCLOSURE 1 MEMORANDUM REGARDING THE CONTROL OF EUA POWER CORPORATION DURING ITS CHAPTER 11 PROCEEDING DATED JAINARY 12, 1993 PREPARED FOR THE NUCLEAR REGULATORY COMMISSION Prepared by:

The Official Bondholders'. Committee, by.its Attorneys, 1

Mark N. Polebaum, Esq.

Albert.A. Notini, Esq.

Frank W. Getman Jr., Esq.

HALE AND DORR 60 State Street Boston, MA~02109 (617) 526-6000

l On February 28, 1991 EUA Power Corporation ("EUAP") filed a l

voluntary petition for reorganization under Chapter 11 of the l

l United States Bankruptcy Code, 11 U.S.C. SS gn sea. (the

" Bankruptcy Code"). Upon filing its petition it became subject to the jurisdiction of the United States Bankruptcy Court for the District of New Hampshire (the " Bankruptcy Court"). EUAP has continued to operate its business under the jurisdiction of the Bankruptcy Court as a debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code.

On November 18, 1992 the Official Bondholders' Committee for EUAP (the " Committee"), Eastern Utilities Associates ("EUA") and EUAP entered into a settlement agreement pursuant to which EUA agreed to pay EUAP $20 million and to affirm a $10 million decommissioning guarantee (the " Settlement Agreement"). The Settlement Agreement also provided for the redemption by EUAP of all of its outstanding shares of common and preferred stock held by EUA (the " Redemption"), which all parties view as having no value. At issue is whether the Redemption will in any meaningful way change the control of EUAP. Given the limitations placed upon EUAP by the Bankruptcy Code, the continuation of the jurisdiction of the Bankruptcy Court and the worthless state of EUA's stock in EUAP, the Redemption will have no impact on the control of EUAP.

It is well established that the filing of a Chapter 11 petition and the invocation of bankruptcy court jurisdiction creates a new business entity separate and apart from the business entity which existed prior to the bankruptcy proceedings. E.c. In

m ._ . _ _ _ . _ _ . _ _ _ . _ _ . _ . _ . . _ _ . _ _ . _ . _ . . _ _ _ _ _ _ _ _ _ _ _ _

Le Mammoth Mart, Inc., 536 F4 2d 950, 954 (1st Cir.1976) ("Under a _,

1 Chapter XI arrangement, the debtor, as a juridical entity,. ceases to operate the business."); In re Hosoital Nuestra Senora de- ,

guadaluD2, 20 B.R. 229, 231-32 (D. Puerto Rico 1982) ("The operating receiver in this case is not the same entity as the prebankruptcy company .... A new entity is created with its own rights and duties subject to the supervision of the Bankruptcy Court."); In re-Chateaucav Corp., 102 B.R. 335, 354 (Bankr.-

S.D.N.Y. 1989); In re Pearson, 90 B.R. 638, 641 (Bankr. D.N.J.

1988) ("The filing of bankruptcy creates a new juridical entity-that is separate and apart from the Debtor which existed prior to bankruptcy proceedings."); In re Multech Coro., 47 B.R. 747, 750-51 (Bankr. N.D. Iowa 1985) ("[I]n Chapter 11 proceedings the prebankruptcy debtor as a juridical entity ceases to operate the-bus.iness and control is transferred to a distinct legal. entity, 2

usually the Debtor-in-Possession; who runs the business under

! supervision of the court."). The prebankruptcy business entity ceases to operate.the business and control is transferred to a l

distinct legal entity with its own rights and duties, the debtor-i

- in-possession, who operates the business post-petition under-the-supervision of the-bankruptcy court.1 Id.

1-An-example of the distinction made between:the pre _and post-filing entities can be seen.in:the treatment of breach of contract claims. A claim against a debtor for breach of contract occurring

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prior to:-the bankruptcy 1 filing results in a unsecured claim-aga i nst the debtor's estate and the creditor-receives a pro rata -

distribution with all other unsecured creditors. If~the breach-occurs post-petition, however, or if the debtor-in-possession rejects an executory' contract pursuant'to Section 365lof the Bankruptcy Code, any resulting claim will be given administrative

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l The-. supervisory control given to.the bankruptcy court over a.

debtor-in-possession can be seen in the strict-limitations-and-guidelines'in'the Bankruptcy Code-as to what actions a debtor-in-possession may take without bankruptcy court approval. Upon filing, a debtor-in-possession is no longer free to engage in actions other than those in the ordinary course of business without bankruptcy court approval. For example, the Bankruptcy Code allows a debtor-in-possession to continue to sell inventory in the ordinary course of business, but any sale of. assets outside-

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the ordinary course requires that the debtor-in-possession first receive bankruptcy court approval. 11 U.S.C. S 363.

Before a Chapter 11 case is commenced the stockholders of a corporation have the statutory authority to control and direct the operations of the corporation through the corporation's-board of directors. This changes after a Chapter 11 is filed. Post-petition, stockholders are simply parties in interest to the Chapter 11 case who, like creditors, may be heard by the bankruptcy court but cannot direct the actions of a debtor-in -

possession. This is particularly true where the shares of stock held by the shareholder have no value, as is the situation in the 4

. EUAP Chapter 11. EUA's shares of stock in EUAP have no value and are recognized by all parties, including EUA, to be worthless.

~

.. expense priority because it is viewed as claim against the'"new" j- post-filing entity. See In re Multech Corp., 47 B.R. at-750-51.

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4

. EUA has' filed numerous pleadings in the SUAP Chapter 11 to be r

heard on specific issues, but they have not', and could not direct or control EUAP's actions.

The appropriate control over a debtor-in-possession is imposed by the Bankruptcy Code and bankruptcy court Most significantly, a debtor-in-possession is not permitted to alter any material rights of creditors, shareholders or other parties in i

interest outside of a plan of reorganization. See In re Braniff Airways, Inc., 700 F_2d 935, 939-40 (Sth Cir. 1983): IP re Continental Air Lines, Inc., 780 F.2d 1223. 1227 (Sth Cir. 1986)..

For example, while a debtor-in-possession is entitled under Sectica 363 of the Bankruptcy Code to sell assets out of the ordinary course of businer.s uzith court approval, a court will not allow a sale pursuant to Section 363 which restructures the rights of creditnrs in addition to liquidating the debtor-in-possession's assets. Id. As the court stated Braniff Airways, "The debtor and the Bankruptcy Court should not be able to short circuit the

requirements of Chapter 11 for confirmation of a reorganisation by establishing the terms of the plan sub rosa in connection-with a sale of assets." In re Braniff Airways. Inc., 700 F.2d at1940, i

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An example of tne limitations on the ability of shareholders to-direct or control the actions of a Chapter 11 debtor-in-possession l

l- can be seen in In r olgtns-Manville h Coro., 66 B.R. 517 (Bankr.

S.D.N.Y., 1986). In Johns-Maryille, the bankruptcy court enjoined the equity committee frue calling a shareholders meeting ~to elect new directors where the bankruptcy court found_that the shareholders' meeting would threaten.the debtor's reorganization, and thus cause'irrecarable harra to the debtor.

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-._.. .~. - . - _ . - . - - - - - _ - . - . . - - - - - .

1 Section 1129 of the Bankruptcy Code establishes the requirements for confirming a plan of reorganization, including the transfer of  ;

control over a debtor.

on the other hand, after bankruptcy court approval, a debtor-in-possession can compromise and settle the specific claims or intorests of particular creditors or shareholders. Egg Fed. R.

Bankr. P. 9019. This is particularly so where a claim or interest  ;

i has no value. That is what has occurred in the Redemption permitted by the Settlement Agreement.

The Bankruptcy Court approved the Settlement Agreement and the Redemption on December 8, 1992. As it is impermissible for a debtor-in-possession to take any action outside a plan of reorganization which alters the rights of parties in interest, the Bankruptcy Court would not, and indeed could not, approve a change in control of EUAP outside of a-plan of reorganization. By approving the Settlement Agreement, the Bankruptcy Court recognized _that the rights of EUA as sole shareholder of EUAP were not affected or altered by the Redemption because EUAP's stock is worthless. The court implicitly acknowledged that the Redemption does not represent a meaningful change in the structure or control of EUAP. EUAP's shareholders will be extinguished under the Plan and would also be extinguished if a. Chapter 7 trustee was appointal and EUAP's estate was liquidated. Therefore, retiring EUAP's stock-through the Redemption has no effect on the control or ownership of EUAP. Control of EUAP and its business will--

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_ _ . . . _.m...__ -- _ _.___._- - _ -

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j remain in the hands of the Bankruptcy Court and EUAP as debtor-in- l t

possession until the effective date of the Plan. The effective date will not occur until after the Nuclear Regulatory Commission (the "NRC") approves the Plan. On the effective date of the Plan,

. ownership and control of EUAP will move out from under the supervision of the Bankruptcy Court and be transferred as outlined in the Plan. The change of control proposed in the Plan will  !

require NRC approval for the Plan to become effective. The Redemption, however, does not represent a change in control requiring NRC approval, m

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4 4 ENCLOSURE 2 MEMORANDUM REGARDING THE RELAT70NSilIP OF EASTERN UTILITIES ASSOCIATES TO EUA POWER CORPORATION DATED JANUARY 12,.1993' PREPARED FOR Tile NUCLEAR REGULATORY COMMISSION BY McDERMOTT, WILL & EMERY COUNSEL -

FOR EASTERN UTILITIES. ASSOCIATES I

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TABLE OF CONTENTS Background Information . . . . . . . . . . . - . . . . . . . . 1 Write Off of EUA's substantial Investment in EUA Power . . . 3 Acquistion of EUA Power . . . . . . . . . . . . . . . . . . . 3 Separato Existence of EUA Power . . . . . .- . . - . . . . . . . 5 Regulatory Monitoring of EUA Power's Affairs . . . . . . . . 6 SEC Oversight . . . . . . . . . . . . . . . . . . . . . . - . . -6 FERC Oversight . . . . . . . . .. . . . . . . . . . . -. . . 8 State Commission Oversight . . . . . . . . . . . . . - . . . . 8 Auditors' Review of EUA Power's Affairs . . . . . . . . . . . -

9 Liability of Directors and Officers of Public Companics . . - . 9 Scrutiny by Bondholders' Committee and Bankruptcy Court of EUA Power's Affairs . . . . . . . . . . . . . . . . . . 9 .

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t Backaround Information 1

EUA Power Corporation is a New Hampshire corporation authorized by the New Hampshire Public Utilities Commission (the "NHPUC") to engage in business as a public utility for the purpose of participating as a joint owner in the Seabrook Project and for the purpose of selling its share of the output of Seabrook Unit 1 for resale. EUA Power became a wholesale generating company when Seabrook Unit 1 commenced commercial i

operation on August 19, 1990.

The Company was organized solely for the purpose of acquiring its 12.1% interest in the Seabrook Project and became a wholly-owned subsidiary of Eastern Utilities Associates ("EUA")

on November 25, 1986. EUA is a Massachusetts voluntary association organized and existing under a Declaration of Trust dated April 2, 1928, as amended, and is a registered holding company under the Public Utility Holding Company Act of.1935

("PUHCA"). EUA owns directly all of the shares of common stock of three retail electric utilities: Blackstone Valley Electric Company ("Blackstone"), Eastern Edison Company (" Eastern Edison")

and Newport Electric Corporation (" Newport"). Eastern Edison owns all of the permanent securities of Montaup Electric Company l

. ("Montaup"), a generation and transmission company, which I'

supplies. electricity to Eastern-Edison, to Blackstone, to NewportL l and to two unaffiliated utilities for resale. EUA also owns directly all of the shares of common stock of EUA Service I ,

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("EUA Service"), which provides various accounting, financial

] t engineering, planning, data processing and other services to a)1  ;

EUA System companies, including Blackstone, Eastern Edison, I Montaup, EUA Power, EUA Cogenex Corporation ("EUA Cogenex"), EUA 4 Energy Investment Corporation ("EUA Energy") and EUA Ocean State ,

Corporation ("EUA Ocean State"). EUA Cogenex is an energy  !

management and cogeneration company. EUA Energy was organized to invest in cogeneration and small power production facilities and in research relating to energy or energy conservation. EUA Ocean-State owns a 29.9% interest in the Ocean State Power Project's two 255 MW gas-fired generating units. The holding-company system of EUA,-Blackstone, Eastern Edison, Newport, Montaup, EUA Service, EUA Power, EUA Cogenex, EUA Energy and EUA Ocean State is referred to as the EUA System.

In 1985 and 1986, when EUA was establishing EUA Power, there was a tremendous and constantly growing demand for electric power in the New England and northeastern regions of the United States.  ;

At that time, there was a universal. belief that power demands ,

would outstrip power supply in New England by.the end of the decade or by-the beginning of.the 1990s and that the growth'in i

demand would continue unabated. That belief continued through 1989 and even into the early months of 1990. However,.there was- ,

a sudden precipitous drop in the demand for electricity in the last.two months of 1990 and the beginning of-1991 because of a dramatic change in economic conditions.

As a consequence-of these economic developments, EUA Power's .I prospects for securing any kind of long-term power contract were-L l l

- .. _- . . . . . . - - - - . - - - . . - . - . - - . = _ - . - - .. . -

dramatically diminished and on February 28, 1991, EUA Power's board of directors voted to place EUA Power into a reorganization proceeding pursuant to Chapter 11 of the Bankruptcy Code and EUA Power's Chapter 11 petition was filed at the close of business that day.

liEitf Off o[_ Q A'n_BLbstantjal Inverdment_ht_Et3__P_qwnr As a result of EUA Power's bankruptcy, EUA wrote off its entire investment in EUA Power and took a change to earnings of approximately $143,000,000 as of the end of 1990 relating to that investment, which included a loss of approxinately 586,000,000 on EUA's equity investment in EUA Power, a loss of approximately

$37,500,000 in connection with EUA's guaranties of certain obligations of EUA Power (excluding EUA's $10,000,000 guaranty of EUA Power's decommisnioning obligations), a loss of approximately

$2,500,000 in connection with loans made to EUA Power and a reserve of approximately $17,000,000 for tax liabilities associated with the write off. EUA never received any cash return on its investment in EUA Power. As a result of the Settlement Agreement with the Bondholders' Committee described below, EUA has provided EUA Power with an additional $20,000,00, resulting in a total of direct and indirect investments by EUA in EUA Power of $146,000,000 (excluding EUA's $10,000,000 guaranty l

l of EUA Power's decommissioning obligations) .

1 ILcquistion of EUA Poh'eE A more detailed review of the regulatory approval process for the acquisition by EUA of its equity interest in EUA Power l

and EUA Power's acquisition of its 12.1% interest in the Seabrook 1

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Project clearly discloses the nature of EUA Power as a legal entity separate and distinct from the other members of the EUA System. Filings were made with the Securities and Exchange Commission ("SEC"), the Federal Energy Regulatory Commission

("FERC"), the Federal Trade Commission, the New Hampshire Public Utilities Commission ("NHPUC"), the Maine Public Utilities Commission, the Vermont Public Service Board, the Massachuuetts Department of Public Utilities (the "MDPU"), as well as the Nuclear Regulatory Commission (the " Commission").

~

The Attorneys General of Massachusetts and Rhode Island intervened in the proceeding before FERC to insure that EUA Power would not have an adverse impact on the members of the EUA System subject to the jurisdiction of their stato utility commissions.

The SEC and FERC both undertook an extensive review of the materials that were submitted to them. One of the principal concerns of the SEC throughout the existence of EUA Power has been to identify and limit the possible impact of EUA Power on EUA and the other members of the EUA System.

The materials submitted to the Commission which resulted in the Commission issuing Amendment No. 9 dated September 12, 1986 to the Seabrook Construction Permit (No. CPPR-135) (and allowed EUA Power to acquire its 12.1% interest in the Seabrook Project) clearly disclosed the limited nature of EUA's cormitment to EUA Power. In Attachment 3 to a Letter dated March 26, 1986 to the Commission which constituted Amendment No. 57 to the License Application, the level of EUA Power's proposed capitalization was disclosed to the Commission as consisting of $45,237,000 of

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(

equity ~ funds and $180,947,000 of debt funds for a total capitalization of $226,184,000. In fact, due to the extended delays in the issuance of Seabrook's full-power operating _ .

license, EUA ultimately determined to invest an amount significantly greater than the $45,237,000 initially reported to the Commission. As reported above, EUA directly or indirectly has made available to EUA Power approximately $146,000,000-and still has outstanding a $10,000,000 guaranty of EUA Power's  :

decommissioning obligations. The Safety Evaulation dated September 12, 1986 relating to Amendmont No. 9 to the Seabrook Construction Permit included a financial qualification review based upon the materials submitted to the. Commission, including the proposed capitalization of EUA Power, and that level of capitalization was not found to be unsatisfactory by the Commission.- The $226,000,000 of capitalization, including the 80%-20% debt / equity ratio, was also considered appropriate by the SEC and FERC.

Separate Existence of EUA Power Since its inception, EUA Power has always been' operated in a manner that clearly and strictly maintained and respected the separate corporate existence of EUA Power from EUA and the other members of the EUA System. EUA Power has its'own board of directors, officers,-minute book, bank accounts and regularly files various reports and information about its distinct operations and condition with the SEC,- FERC, and the NHPUC. EUA Power has never been represented as other than a legal entity

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separate and distinct from EUA and the other members of the EUA System.

Reculatory Monitorina of EUA Power's Affairs EUA's policy of maintaining and respecting the separate corporation existence of EUA Power was clearly announced by EUA at the outset and it has been maintained ever since, not simply as a matter of prudent legal policy, but also in order to comply with the numerous laws and regulations which are administered by the various regulatory agencies that have jurisdiction over one or more members of the EUA System. Many of these agencies routinely monitor the adherence to the policy and would simply not tolerate any irregularities in the relationship between EUA Power and the other members of the EUA System. A registered public utility holding company group such as the EUA System may be unique in terms of the number of regulatory agencies that are in a position to regulate and monitor the activities of various members of the system. In an unregulated industry, those activities would be virtually free from government oversight.

A more detailed review of the regulatory oversight to which-the EUA System is subjected will perhaps give the Commission a better feel for the regorousness of this oversight.

EEC oversicht The SEC under PUHCA has comprehensive jurisdiction over all intercompany transactions between the members of the EUA System, including all intercompany transactions with EUA Power, and sets the terms pursuant to which those transactions may be effected.

(See PUHCA S13 and Rules 81-95 thereunder) The SEC regularly

-a-._ ._, _ . . , _ . ___ _ . _ - _ _ ,

_._..__. _ _. _ _ _ _ ._ _ _ . _ __. . _ - _ . . . ~ - _ . _.. _ _ ._.._

audits the EUA System for compliance with its requirements and would require that any deviation from its requirements be rectified. The SEC has jurisdiction over the terms of financings F

undertaken by the members of the EUA System as well as how proceeds of financings are utilized and scrutinizes those financings for compliance with its requirements. (See PUHCA SS6 and 7) The terms of the service contracts executed by EUA Service with each member of the EUA System, including EUA Power, are carefully scrutinized by the SEC for adherence to SEC requirements. Given the uniqueness of EUA Power, its affairs have been particularly highly scrutinized by the SEC. From its inception through its bankruptcy filing, the SEC issued eight (8) separate orders with respect to the financing of EUA Power, two of which (rather than being issued by the staff of the Office of Public Utility Regulation pursuant to delegated authority) were ,

issued by the SEC Commissioners. In connection with each order the SEC reviewed and analyzed the relationship of EUA Power to the rest of the EUA System. Under Section 12 of PUHCA and Rule 45 thereunder, the SEC has jurisdiction over.any extension of credit by EUA or any other member of the EUA System to EUA Power and the SEC has specifically authorized each such extension of credit to EUA Power, including EUAs limited guaranty of EUA Power's decommissioning obligations. Any effort by the Commission to require such-an exteasion without SEC approval l would violate the plain language of Section 12 of PUHCA.

Congress gave the SEC extraordinary powers to regulate the L interrelationships of the members of a regulated holding _ company-1 I

l

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system and the SEC has diligently exercised those powers in regulating the relationship of EUA Power to the other members of the EUA System.

Efforts by other regulatory agencies to usurp the SEC's role in regulating intercompany transactions have been thwarted by the courts. On remand from the Supreme Court, the District of Columbia Circuit Court of Appeals upheld the SEC's special jurisdiction in response to an effort by FERC to impose its own standards on an intercompany transaction between the members of a -

registered holding company. Qbio Power Co. v. F.E.R.C. 954 F.2d 779 (D.C. Cir 1992), cert, denied, 113 S.Ct. 483 (1992).

FIRC Oversicht FERC also has jurisdiction over all of the utility members of the EUA System, including EUA Power. The FERC policies with which the utility members of the EUA System must comply include the obligation to prepare and submit to FERC financial statements which satisfy FERC requirements. Such financial statements identify intercompany transactions and FERC regularly audits those statements.

State Commission Oversicht Each of the utility companies included in the EUA System is also subject to the jurisdiction of the state utility commission in the state of its incorporation: the NHPUC for EUA Power; the Rhode Island Public Utilities Commission for Blackstone and Newport; and the MDPU for Eastern Edison ana Montaup. These Commissions all have authority to scrutinize and regulate intercompany transactions to the extent such regulations would

-8 -

a i m

f not be inconsistent with the SEC's regulation of those ,

transactions. (See Mass. Gen. Laws Ann. ch. 164, S76A; N.H. REv. ,

Stat. Ann. $366:5; R.I. Gen. Laws $39-3-30)

Auditers' Review of EUA Power's Aff airs EUA Power has issued its own audited financial statements for each fiscal year since its inception and it would have been ,

impossible for the auditors to issue reports which accompany those financial statements if they had come across irregularities in the relationship between EUA Power and the other members of the EUA System in the course of performing their annual audit of EUA Power.

Liability of Directors and officers of Public Companies EUA Power and EUA (as well as Eastern Edison and Blackstone) are public companies obligated to file reports with the SEC under the Securities Exchange Act of 1934. Such reports provide extensive information to the public about their activities. Any misrepresentations about the relationship of EUA to EUA Power would expose the directors and officers of EUA and EUA Power to personal liability. Those directors and officers were fully aware of their responsibilities and they implemented policies .

- from the outset to maintain and monitor the separateness of EUA and EUA Power to insure,-among other things, the accuracy of the disclosures being made to the public.

Scrutiny by-Bondholders' Committee and Bankruotcy Court.

- of EUA Power's Affairs In connection with EUA Power's Chapter 11. proceeding, the Bondholders' Committee conducted an-extensive analysis of the 9-

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intercompany transactions betwoon EUA Power and the other members  ;

of the EUA System and the Bankruptcy Court only allowed the Bondholders' Committoo to commence one legal action against EUA '

for the recovery of cortain allegod "proforontial paymonts" mado by EUA Power to EUA. These claims and all other potential claims of EUA Power against EUA were settled in connecticn with tho ,

Settlement Agreement entered into by EUA, EUA Power and the Bondholders' Committoo which was approved by the Bankruptcy Court on December 8 and the SEC on December 29 and became effectivo on-December 30, 1992. If the Bondholders' Committee, the Bankruptcy Court and the SEC did not believe that the Settlement Agreement was fair to EUA Power, it would have been inappropriato for the Bondholders' Committee to seek the approval of the settlement Agreement or for the Court or the SEC to approve it.

It is informativo to review the nature of the preferenco claims that the Bankruptcy Court allowed the Bondholders' Committee to bring against EUA because those claims clearly did not involvo circumstances in which it can be said that EUA in-any sense abused its relationship with EUA Power.

.The Committee sought to recover approximately $38.5 million in alleged preferential transfers from EUA. EUA roccived ,

approximatdly $36 million of that amount-in three substantially identical transactions which occurred in December, 1990. Prior to these transfers, EUA had advanced over $38 million to EUA

! Power during the period from May through December, 1990, primarily to enable EUA Power to make semi-annual interest l'

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payments to the Bondholders. These advances were all authorized by an SEC order under PUHCA.

In each of the three transactions at issue, EUA executed guarantics to enable EUA Power to obtain new loans from third-party lenders. In each case, EUA provided the guaranties solely on the condition that the proceeds of the now loans would be transferred to EUA to repay outstanding loans made to EUA Power.

Each of the new lenders made the loans to EUA Power based ext _onively upon EUA's guaranties, not EUA Power's credit-worthiness. Simply put, without EUA's guaranties and the requisite transfer of the proceeds to EUA, the now loans would never have been made.

By virtue of each of the three transactions, EUA Power's indebtedness to EUA was replaced by new loans from outside lenders on more favorable terms and fully supported by EUA's guaranties. Thus, these transactions did not diminish the EUA Power's estate to the detriment of other creditors. Indeed, when EUA Power filed its Chapter 11 petition and could not fulfill its obligations to the outside lenders, EUA paid on each guaranty to the aggregate tune of approximately $38.7 million.

It is also important'to note that all three transactions at issue were either undertaken in compliance with or mandated by orders of the SEC and the NHPUC and that, if the Committee had l

been successful in the preference suit, it would have been taking l

advantage of technicalities in the Bankruptcy law to force EUA in effect to pay twice on its guaranties.

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O UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW RAMPSHIRE

)

O In Re: )

)

EUA POWER CORPORATION, ) .

) Chapter 11

) Case No. 91-10525.

O )

O POURTB AMENDED DISCLOSURE STATEMENT FOR BONDHOLDERS' COMMITTEE FIFTH AMENDED PLAN OF REORGANIZATION DATED DECEMBER 21, 1992 O

O .

O RALE AND DORR 60 State Street Boston, MA 02109 (617) 526-6000 Attorneys for the Official Bondholders' Committee O ..

O --

O O

O TABLE OF CONTENTS O

1 I. INTRODUCTION ............................................. 2 A. Executive Summary .....................................

B. Disclosure Statement Requirements ..................... 3 4

C. Risk Factors........................................... 5

1. Single Asset.......................................

O 2. Regulatory Approvals.............................. 5 5

3. Financing......................................... 5

4. Power Contracts...................................

6 II. DESCRIPTION OF THE DEBTOR ................................

A. General Description and Relationship with Affiliates .. 6 g B. The Seabrook Interest .................................

7

1. Purchase by the Debtor ........................... 7

2. The Decommissioning Fund ......................... 7 8

3. Operations .......................................

10 C. The Bondholder Claims And Other Claims ............... 10

1. Bondholder Claims ............................... 10 C) a. The Notes ..................................

11

b. The Lien ...................................

12

2. The CICs ........................................ 12

3. Other Claims .................................... 12 D. Competition ..........................................

O 13 III. CIRCUMSTANCES GIVING RISE TO DEBTOR'S CRAPTER 11 ........

14 IV. DEBTOR'S POSTPETITION OPERATIONS ........................

A. Debtor's Financial Operations During the Chapter 11 14 Proceedings. .........................................

14

1. Financial Performance ........................... 15 I) 2. DIP Financing ...................................

a. First Stipulation .......................... 15

b. Second Stipulation ......................... 16 17

c. Third Stipulation...........................

17

3. Sales of Assets from Seabrook Unit 2 ............

4. Release of Decommissioning Bond ................. 18 lO B. Other Significant Events During the Chapter 11 ....... 18 l

1. Debtor's Borrowing Motion ....................... 18

2. Motions to Continue Service Agreement ........... 19

3. Termination of Exclusivity ...................... 20 20

4. The BECo RFP ..................................... 21

5. Motion for Approval of Commitment Letter ........

0 O

O 4

l 22 V . SU KHAR Y O F T H E P L AN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 A. Classes of Claims and Interests. ...................... 22 g

1. Class One - Claims of The Bondholders............ 23

2. Class Two.- Property Taxes. .....................

24

3. Class Three - All Claims Not Included ........... 25

4. Class Tour - Unsecured Claims of $25,000 or Less.

5. Class Five Interests - Equity Interests of EUA ... 26

6. Class Six Interests - Contingent Interest g 26 Certificates ....................................

B. Administrative Expenses, Priority Claims and Trade 2C Debts ................................................

1. Fees of Attorneys, Professionals and Committee 26 Members .........................................

28

2. Trade ........................................... 28

> 3. Unsecur ed Ta x Cla ims . . . . . . . . . . . . . . . . . . . . . . . . . . . .

28 VI. MEANS OF EXECUTION AND IMPLEMENTATION OF THE PLAN ....... 28 A. Revesting ............................................

29 B. Issuance of New Securities ..................... ..... 31 C. Regulatory Approval Process and Attendant Risks ......

I 1. New Hampshire Public Utilities Commission 31

("NBPUC") ....................................... 32

2. Federal Energy Regulatory Commission ("FERC") ...

3. Nuclear Regulatory Commission ("NRC") ........... 33

4. Securities and Exchange Commission ("SEC") ...... 33 D. Executory Contracts .................................. 35

> E. Summary of Provisions Of The Plan Relating To 36 Distribution ......................................... 36

1. Pro Rata Distribution ...........................

36

2. Bondholders Entitled to Receive Distributions ... 37

3. Distribution Date ...............................

4. Disbursing Agent ................................ 37

> 5. Disputed Claims or Interests .................... 38 38

a. Reserve.................................... 38

b. Distribution............................... 39

c. Status of Shares in Reserve................ 39

6. Surrender of Securities ......................... 40

7. Unclaimed Property ..............................

8. Withholding Taxes ............................... 40 F. Post Confirmation Date Financing ..................... 40 40

1. Gap Period Financing ............................

2. Post Effective Date Financing ................... 41 44 G. Management ........................................... 44

1. GAP Period Managing Agent ........................

2. Post Effective Date Management ... ,............. 45 H. Future Operations .................................... 45

1. Marketing Strategy .............................. 45

2. Projections and Financial Information ........... 47

)

VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES .................._54 55'

) A. Federal Income

1. Exchange of BondholTax Consehuences ers' Class One and ToClass Holders Of Claims Three ........................................... 55

m. Genera 1.............................r........ 55

b. Accrued Interest on Note..................... 56

2. Exchange of Certain Class Three Unsecured Cialms for New Securities .......................i...... 57

) 3. Class Tour Unsecured Creditors ..................

4. Cancellation of Contingent Interest Certificates . 57 57

5. Treatment of the New Securities ................. 58

6. Importance of Obtaining Professional Tax Assistance ...................................... 58 B. Federal Income Tax Conse uences To The Debtor......... 59 I' 1. Amount and Utilizat on of Net Operating Loss Carryforwards and Investment Tax credits ........ 59

a. General Limitation on Utilization of Tax Attributes rollowing an Ownership Change.... 59

b. The Bankruptcy Exception.................... 60

c. Other Considerations. ...................... 61

) 2. Cancellation of Indebtedness .....................-61

3. Deduction of Accrued Interest by the Debtor ..... 64

4. Alternative Minimum Tax ......................... 64 65 VIII. LITIGATION ............................................. 65-A. The EUA Settlement ..................................

) 1. Release of Claims .............................. 65

2. Support of Committee Plan and Disclosure Statement ...................................... 65

3. Redemption of EUA Shares ..................... 3. 65

4. Continued Administrative Support of EUA Service'. 66

5. Affirmation of Decommissioning Costs Guaranty .. 66

) B. Recovery and Abatement of Property Taxes ............. 66 C. bonbankruptcy Litigation .............................H66 67 IX. ALTERNATIVES TO THE PLAN OT REORGANIZATION AS PROPOSED .

X. CONTIRMATION, ETTECTIVE DATE AND DISCRARGE . . . . . . . . . . . . . 68 A. Acceptance .......................................... 68

) 69 B. Conditions to. Effective-Date ........................ 69

1. Possible Delay in Distribution..................

2. Plan Regulatory Approvals....................... 69

3. Confirmation Hearing.....................,...... 69 h X I . T EA S I B I L I T Y . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

)-

)1

)

SCHEDULE OF EXHIBITS 70 TOURTH AMENDED DISCLOSURE STATEMENT g POR BONCHOLDERS' COMMITTEE TITTH AMENDED PLAN OF REORGANIZATION DATED DECEMBER 21, 1992 D uXitIT A - Bondholders' Committee Fourth Amended Plan of Reorganization EXHIBIT 3 e ?crent Officers and Dire: tors of EUA Power Curporation D

EXHIBIT C - Eastern Utilities Associates Limited Guarantee EXHIDIT D - EUA Power Corporation Financial Statements Dated December 31, 1990 EXHIB7T E - EUA Service Corporation Service Contract 8 EXHIBIT F - EUA Power Corporation Marketing Agent Request for Proposals EXHIBIT G - Reorganized EUAP Pro Forma Tinancial Statements EXHIBIT H - Reorganized EUAP Pro Torma Tinancial Statements D

EXHIBIT I - Reorganized EUAP Pro Forma Financial Statements EXHIBIT J - Excerpt from UNITIL/ United Illuminating Contract EXHIBIT K - Statement of Executory Contracts B

D D

D

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O UNITED STATES BANKRUPTCY COURT

<3 DISTRICT Or NEW RAMPSHIRE

) I O In Re )

) Chapter 11 EUA POWER CORPORATION, ) Case No. 91-10525

)

I

)

Debtor. )

)

O l POURTE AMENDED DISCLOSURE STATEKDIT FOR BONDBOLDERS' COMMITTEE PIPTB AMENDED PLAN OF REORGANIZATION O DATED DECEMBER 21, 1992 The Official Bondholders' Committee (the " Committee") of the debtor, Great Bay Power Corporation f/k/a EUA Power Corporation (the " Debtor"), provides this Disclosure Statement to all known g Claim and Interest holders of the Debtor pursuant to Section 1125 of the Bankruptcy Code.

I. INTRODUCTION O The Committee is providing this Disclosure Statement to all of the known Claim and Interest holders of the Debtor in connection with its Tourth Amended Plan of Reorganization, a copy of which is attached to this Disclosure Statement as Exhibit A (the " Plan"). The Plan was filed by the Committee with the Bankruptcy Court on December 22, 1992. The purpose of this

.O Disclosure Statement is to provide to the Debtor's Claim and Interest holders information which is adequate for each Claim or Interest holder to make a reasonably informed decision in exercising its rights to vote to accept or reject the Plan. All capitalized terms defined in the Plan and not defined herein shall have the respective meanings ascribed to them in the Plan or, if O not defined in the Plan, as defined in the Bankruptcy Code.

EACH CLAIM AND INTEREST HOLDER SHOULD CARETULLY REVIEW THE PLAN AND DISCLOSURE STATEMENT AND DETERMINE WHETHER OR NOT TO ACCEPT THE PLAN BASED ON ITS INDEPENDENT EVALUATION AND JUDGMENT.

g 4N DETERMINING WHETHER A PLAN OF REORGANIZATION RAS BEEN ACCEPTED O

)

BY THE REQUISITE MAJORITY OF CLAIM AND INTEREST HOLDERS, ONLY

) THOSE CLAIM AND INTEREST HOLDERS WHO ACTUALLY VOTE ON THE PLAN ARE COUNTED.

The Committee unanimously recommends that you vote 'ln favor l of the Plan.

) Except where specifically stated otherwise, the portions of .

this Disclosure Statement describing the Debtor and the operations I of the Debtor have been prepared from information obtained by the Committee from management of the Debtor or from publicly available information. The Committee does not warrant or make any representation as to the accuracy of information obtained from

) management of the Debtor or from public records. Nor does the I Committee warrant the accuracy of any projected valuations, pro j forma financial data or conclusions of law. The Committee has used reasonable efforts and has relied upon the views provided to it by its financial and legal advisors with respect to the accuracy of these matters.

A. Executive Summary The Plan provides that the secured portion of the Claims held by the Bondholders will be converted into 85% of the equity of Reorganized EUAP and that the deficiency claim of the Bondholders,

) and all other unsecured claims, other than claims which do not exceed, or are reduced to, $25,000, will be converted into 15% of the equity of Reorganized EUAP. In each instance, these equity percentages will be calculated prior to any dilution resulting from the issuance of any securities as part of a post-Effective Date financing facility. All of the currently outstanding equity

) securities of the Debtor and the Contingent Interest Certificates

("CICs") issued in connection with the Series B Notes, or otherwise, vill be extinguished. The equity of Reorganized EUAP will be represented by a single class of common stock.

Reorganized EUAP will use good faith efforts to list its shares of this common stock such that they will be tradeable on the American

) Stock Exchange or the NASDAQ National Market System.

The holders of unsecured Claims of less than $25,000, other than those unsecured claims resulting from the ownership of the Notes, will be paid 50% of the Allowed Amount of their Claims in cash on the Effective Date. The Plan requires that prior to the

) Effective Date, the Committee will arrange for Reorganized EUAP to enter into a post-Effective Date financing facility in an amount sufficient to cover projected cash operating shortfalls through December of 1995.

?

)

G After the Confirmation Date, the Committee shall appoint g agents to manage the Debtor's business and to market the Debtor's share of Seabrook electricity. During the Gap Period, those agents shall report to the Committee and to the extent actions are to be taken outside of the ordinary course of business, auch actions shall be subject to approval of the Bankruptcy Court and At or any regulatory body with jurisdiction under cpplicable law.

, before the hearing on the Confirmation of the Plan (the

" Confirmation Hearing"), the Committee shall disclose the names of the members of the Board of Directors of Reorganized EUAP (the "New Board"). The New Board shall take office upon the Effective i Date. The New Board will serve until its members resign or are replaced in accordance with New Hampshire corporate law and the 1 l

3 requirements of Reorganized EUAP's charter and by-laws.

Reorganized EUAP will replace the Debtor as owner of the Seabrook Interest. Following the Confirmation Date, the Debtor, under the direction of the Committee, will seek to enter into long term power contracts to realize the long-term value of the 3 Seabrook Interest.

D. Disclosure Statement Requirements In In re Ferretti, 128 B.R. 16 (Bankr. D.N.H. 1991), the Bankruptcy Court set forthAa list list ofoffeatures which a disclosure 3 statement should include. those features, and an indication of where each can be found in this disclosure statement follows:

1. The circumstances that gave rise to the filing of the bankruptcy petition (Section III);

2. A complete description of the available assets and their value (Section II.B and IV.A);

3. The anticipated future of the debtor, with accompanying financial projections (Section VI.H);

4. The source of the information provided in the disclosure statement (Section I);

5. The condition and performance of the debtor while in Chapter 11 (Section IV);

6. Information regarding claims against the estate, including those allowed, disputed, and estimated (Sections II.C and V);

9 D

O

7. A liquidation analysis setting forth the estimated 6 return that creditors would receive under Chapter 7 (Section IX);

8. The accounting and valuation methods used to produce the financial information in the disclosure statement (Sections II.C.I and VI.H.2);

3 9. Information regarding the future management of the debtor, including the amount of compensation to be paid to any insiders, directors, and/or officers of the debtor (Sections VI.G and VI.H);

10. A summary of the plan of reorganization (Sections I.A 3 and V);

11. An estimate of all administration expenses, including attorneys' fees and accountants' fees (Section V.B.1);

12. The collectibility of any accounts receivable (N/A);

13. Any financial information, valuations or pro forma projections that would be relevant to creditors' determinations of whether to accept or reject the plan (Section VI.H);

14. Information relevant to the risks being taken by the D creditors and interest holders (Section VI);

15. The actual or projected value that can be obtained from avoidable transfers (Section VIII.A and VIII.C);

16. The existence, likelihood and possible success of C litigation (Section VIII);

17. The tax consequences of the plan (Section VII);

18. The relationship of the debtor with affiliates (Section II.A).

C. Risk Pactors The following is a summary of certain material risks associated with the Plan. Each creditor and stockholder and other holder of a claim against or interest in the Debtor should analyze 3 and evaluate the Plan, the risks associated therewith and the other information set forth in this Disclosure Statement as a whole with his or her advisors in determining whether to vote to accept or to reject the Plan.

O

1

) I i

) 1. Single Asset The Debtor's primary asset is its interest in Seabrook. When Seabrook does not function, the Debtor does not have any. operating revenues in the absence of a power contract which provides otherwise. There is no assurance that Seabrook will continue to l

) operate at or near capacity. There are times when Seabrook will not operate due to scheduled shutdowns for refueling and/or maintenance.

2. Regulatory Approvals

) Generally speaking, the Nuclear Regulatory Commission, which licenses Seabrook, can shut Seabrook down at any time in the interest of public health and safety.

3. Financing

) While the Debtor continues to sell electricity into the spot market, the proceeds from such sales are insufficient to allow the Debtor to meet its monthly obligations to fund Seabrook.

Reorganized EUAP will have to obtain funding from other sources to cover this shortfall. There is no assurance that such funding will be available. To date the Committee has not been able to

) obtain a committed source of post Effective Date financing for Reorganized EUAP. While the Committee has made efforts to obtain such financing, and believes that Reorganized EUAP will be able to obtain post Effective Date financing as set forth in Section VI.T herein, there is no assurance that such funding will be available.

The Committee believes that the EUA Settlement, discussed in

) Section VIII.A below, enhances the likelihood that Reorganized EUAP will be able to obtain such financing, and that such financing could be obtained on more favorable terms than previously available. There is, however, no assurance that this is the case.

) 4. Power Contract The Debtor is not currently a party to any executed long-term power contract with respect to its interest in Seabrook. The Committee believes that the Plan will put Reorganized EUAP into a position which will enable it to enter into such a contract.

3 There is no assurance, however, that Reorganized EUAP will be able to obtain such a long-term power contract in the future.- The Committee has executed a letter of intent to sell ten megawatts of capacity and energy-from Seabrook which will generate revenues for the ten megawatts to be sold consistent with the market evidence on which the Committee's financial advisor bases its estimate of

) the value of the Seabrook Interest.

J

i C) l l

O DESCRIPTION OF THE DEBTOR II.

A. General Description and Relationship with Affiliates The Debtor is a single-purpose New Hampshire corporation

() authorized by the New Hampshire Public Utilities Commission

("NHPUC") to engage in business as a public utility for the purpose of selling its share of the electricity output of Seabrook. The Debtor became a wholesale generating company when Seabrook Unit 1 (" Unit 1") commenced commercial operation on August 19, 1990.

O The Debtor was organized as a wholly-owned subsidiary of Eastern Utilities Associates ("EUA") on November 25, 1986. EUA is a Massachusetts voluntary association organized and existing under a Declaration of Trust dated April 2, 1928, as amended, and is a registered holding company under the Public Utility Holding o Company Act of 1935 ("PUHCA"). All of the Debtor's business activities to date, both pre- and post-petition, are conducted by EUA Service Corporation ("EUA Service"). EUA Service is also a wholly-owned subsidiary of EUA and an insider of the Debtor. EUA Service performs all of the Debtor's corporate, general management, financial and administrative functions, including o sales of the Debtor's Seabrook electricity. Under the Service Agreement currently in effect between the Debtor and EUA Service, the Debtor reimburses EUA Service for its costs and pays a return on the capital required for EUA Service to carry on its business.

The Debtor has no operational responsibility for Seabrook. Its sole business activity is the sale of its share of electricity 9 generated by Seabrook.

EUA also owns directly all of the shares of common stock of three operating retail electric utility companies (the " Retail Subsidiaries"), namely Blackstone Valley Electric Company

("Blackstone"), Eastern Edison Company (" Eastern Edison") and o Newport Electric Corporation. Eastern Edison owns all of the securities of Montaup Electric Company ("Montaup"), a generation and transmission company, which supplies electricity to Eastern Edison, to Blackstone, to Newport and to two unaffiliated utilities for resale. EUA Service provides various accounting, financial, engineering, planning, data processing and other services to all EUA subsidiaries including the Debtor, as o discussed above, the Retail Subsidiaries, Montaup, EUA Cogenex Corporation, EUA Energy Investment Corporation and EUA Ocean State Corporation. Cogenex is an energy management and cogeneration company. EUA Energy was organized to invest in cogeneration and small power production facilities and in research relating to 0

O

)

energy or energy conservation. EUA Ocean State was organized to

) invest in the Ocean State Power Project's two 255 megawatt gas-fired generating units, i

i The officers and Directors of the Debtor as of December 8, 1992 are set forth on Exhibit B to this DiLclosure Statement. The Committee obtained such list from the Debtor's Statement of

) Financial Affairs dated April 15, 1991. It is anticipated that upon the effective date of the EUA Settlement, all officers and Directors of the Debtor other than Mr. Stevens and Mr. Samuels will resign. Mr. Stevens will continue to berve as a Director and (

as President of the Debtor and will become its Treasurer.

Mr. Samuels will continue as the Secretary of the Debtor until the

) Effective Date of the Plan. The EUA Settlement provides for the Debtor's estate to indemnify Mr. Stevens and Mr. Samuels against claims arising from their continuing to serve the Debtor.

Pursuant to the EUA Settlement, the Debtor changed its name from EUA Power Corporation to Great Bay Power Corporation.

] B. The Seabrook Interest

1. Purchase by the Debtor The Debtor's principal asset is its undivided 12.1324%

interest in the Seabrook Nuclear Power Plant (the "Seabrook Interest"). Seabrook is a nuclear-fueled steam electricity 3

generating plant located in Seabrook, New Hampshire, which was planned to have two Westinghouse pressurized water reactors, Uni' 1 and Unit 2 (each with a rated capacity of 1,150 megawatts),

util. zing ocean water for condenser cooling purposes. Unit 2 has been cancelled.

) The Debtor acquired the Seabrook Interest for approximately

$174,000,000 in November 1986 from five New England electric utilities in independently-negotiated transactions. The purchase was financed through the sale of securities issued under the Indenture. At the time the Debtor acquired the Seabrook Interest, j construction of Unit 2 was substantially completed but its operating license had not been issued and commercial operation had not commenced. As of December 31, 1990, the Debtor's net investment in Unit 1, net of AFDUC, impairment reserve and accumulated depreciation, was approximately $340,600,000.

2. The Decommissioning Fund 3

Under the agreements of purchase and sale with each of the five sellers from which the Debtor purchased its Seabrook Interest, the Debtor was required to cstablish a fund of

$10,000,000 to secure payment of part of its share of the h

)

)

decommissioning costs of Unit I and any costs cf cancellation of 3 Unit 1 or Unit 2. In May 1990, EUA guaranteed this obligation (the " Decommissioning Costs Guaranty"). The Plan and ths EUA Settlement provide that the Decommissioning Costs Guaranty will remain in full force and effect in accordance with its terms. A copy of the Decommist.ioning costs Guaranty is attached hereto as Exhibit C. As part of the EUA Fettlement, defined and referred to

) in Section VIII.A nereof, EUA has reaffirmed its obligations under the Decommissioning Costs Gaaranty.

3. Operations In 1976, the NRC issued a construction permit for Seabrook.

3 On March 15, 1990, the NRC appreved a full power license for the nuclear generating unit at Seabrook. The unit was connected to the New England power grid for the first time in May, 1990, operating at approximately 15% of its maximum power level. The plant's power level was then gradually increased as part of the power ascension test program, and 1001 reactor power was achieved

) on July 19, 1990. In early August, 1990, operators began a warranty run of the plant's reactor as the final phase of the power ascension test program which was completed on August 17, 1990. From completion of the power ascension test program through the end of 1990, Seabrook ran, on average, at an 62.4% capacity factor. The Seabrook nuclear unit experienced 18 short term

) unscheduled outages or outage extensione and 7 reductions of power between June 1, 1990 and December 31, 1991.

Unit 1 is an 1150 megawatt nuclear generating plant. On March 1, 1990, the NRC issued an order lifting the last of its limitations on the full power license fer Unit 1 which had been 3 issued in 1986. The NRC temporarily delaye6 the effectiveness of its order to permit the filing of motions to stay the order. The Massachucetts Attorney General and other intervenors filed such stay motions with the United States Court of Appeals for the First Circuit on March 7, 1990. On March 14, 1990 the Court of Appeals denied the stay requests. The full power license for Unit 1 became effective on March 15, 1990, and on March 16, 1990 Unit 1 3 began the start-up process that led to its commercial operation.

The start-up process involved an ascent to full power during which various tests on Unit 1 facilities and operations were conducted.

On May 29, 1990 Unit 1 was connected into New England's regional electric power grid for the first time. On August 19, 1990,

) Unit 1 began commercial operation. From January, 1992 tncough the end of July, 1992, Unit 1 operated at approximately 100% of total capacity.

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The nuclear generating unit at Seabrook began its first refueling and maintenance outage on July 25, 1991, Activities performed during the outage included refueling, steam generator eddy current testing, removal and replacement of both primary component cooling water heat exchangers, reworking the rotor, repair of air / hydrogen leaks, and refurbishing of the main emergency diesel generators. Seabrook returned to service on p October 16, 1991. From October 16, 1991 through September 2, 1992, Seabrook has operated at a capacity factor of 97.6%.

Seabrook operated at a capacity factor of 99.6% during the first eight months of 1992. During the calendar year 1991, the Seabrook nuclear unit produced 6,814,895 megawatt hours of electricity.

Seabrook began its second refueling outage on September 7, 1992.

> The refueling was completed on November 8,-1992 and Seabrook was reconnected to the New England power grid on November 14, 1992.

The Debtor is cne of twelve New England utility companies who jointly own Seabrook as tenants in common. The Debtor's ownership of the Seabrook Interest is governed by a certain Joint Ownership p Agreement dated May 1, 1973, as amended. Pursuant to the Joint Ownership Agreement, the Debtor is required to pay its share (12.1324%) of all of the costs of Seabrook, including fixed costs (whether or not Unit 1 is operating), operating. costs, costs of additional construction or modification, costs associated with condemnation, shutdown, retirement, or decommissioning of p Seabrook, and certain transmission charges. Pursuant to the Form 10-K's filed with the SEC and the monthly reports filed with the United States Trustee's office, the Debtor has indicated that its monthly payments unde: the Joint Ownership Agreement have been approximately $2,000,000 per month, p In 1988, Public Service Company of New Hampshire ("PSNH"),

the owner of a 35.6% ownership interest in Seabrook (the "PSNH Seabrook Interest") filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code. As part of its plan of reorganization, North Atlantic Energy Corporation ("NAEC"), a wholly-owned subsidiary of Northeast Utilities ("NU"), acquired p the PSNH Seabrook Interest on June 5, 1992. In addition, on June 29, 1992, North Atlantic Energy Service Corporation

("NAESCO"), a newly-created subsidiary of NU, assumed from New Hampshire Yankee, a division of PSNH, operational responsibility for the management, operation and maintenance of Seabrook.

p In connection with the transfer of ownership of the PSNH Seabrook Interest to NAEC, and the transfer of Seabrook operational responsibility to NAESCO, NU petitioned various regulatory agencies, including the SEC and the NRC for approval.

All necessary regulatory approvals have been received and the approved transactions have been consummated. An appeal is I

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pending, however, with respect to the NRC orders, althoughInall Parties have asked to have that appeal held in abeyance.

b addition, in October 1992, the United States Supreme Court denied a petition for certiorari* in connection with the Bankruptcy Court

• decision approving PSNH's plan of reorganization.

> C. The Bondholder Claims And Other Claims

1. Bondholder Claims

a. The Notes p

The Debtor financed its acquisition of the Seabrook Interest through the issuance and sale of $180,000,000 of 17it secured rotes due May 15, 1993 pursuant to the Indenture. As a result of the Debtor's inability to pay the interest due on these notes, the Debtor exchanged and retired this initial series of notes 1988, for a new 173% Series B

(" Series A Notes") as of November 1, y Secured Nodes (" Series B Notes"). The Series B Notes have substantially the same economic terms as the Series A Notes, but have a later maturity date and provide for the payment of interest, at the Debtor's option, through the issuance under the Indenture of up to $100,000,000 in additional 173% Series C Secured Notes (" Series C Notes"), instead of cash. Between p

May 18, 1988 and November 15, 1989 the Debtor issued $99,597,200 of the Series C Notes, as follows:

Issue Date Principal Amount Issued

$10,085,700 05/18/88 5,615,200 p 05/19/88 3,159,700 05/31/88 1,466,400 06/27/88 238,700 09/08/88 22,957,700 11/15/88 813,200 01/11/89 as of 11/01/88 26,110,300 p 05/06/89 29,150,300 11/15/89

$99,597,200 Cash interest on the Series B and Series C Notes was paid as y follows:

$ 24,414,755 05/15/90 24,414,755 11/15/90 l

)

D The outstanding balance owed on the Debtor's Series B Notes B and Series C Notes, totalled approximately $293,500,000 as of the Filing Date consisting of $279,597,000 in principal and r

approximately $14,000,000 in accrued interest. The Notes represent 100% of the secured claims against the Debtor. As more fully discussed in Section VIII.A below, as a result of the EUA Settlement and the further amendment to the Debtor's schedules D provided therein, the Series B Notes and Series C Notes represent substantially all claims against the Debtor, other than certain de minimis claims and claims which may arise from the rejection of executory contracts, if any. The Debtor's schedules have been or will be further amended to provide that the claims arising under the Series B and Series C Notes are not disputed, contingent or p unliquidated.

b. The Lien The Notes are secured by a first priority mortgage lien and security interest in the Seabrook Interest (the " Lien"). The 3 Indenture provides that the Lien will extend to and become perfected with respect to the Debtor's entitlement to electricity generated by Seabrook following the occurrence of an event of default. No event of default under the Indenture had occurred prior to the Debtor filing its Chapter 11 petition. During the Chapt 3r 11 proceeding, the Committee, the Debtor and EUA expressed D differing views with respect to the value of the interest in the Debtor's Seabrook Interest the Bondholders held by virtue of the mortgage interest securing the Series B and Series C Notes.

Pursuant to the EUA Settlement, this matter has been resolved to recognize that, for the purposes of the EUA Settlement and the Plan, the security interest in the Seabrook Interest in favor of p the holders of the Series B and Series C Notes represents 85% of the total value of the Seabrook Interest.

The allocation of 15% of the New Securities to holders of Class Three claims is intended to cover the value of the nuclear fuel and provide additional compensation to holders of Class Three a claims in light of any uncertainty concerning the scope and extent of the Lien. In any event, based on the Debtor's schedules as amended pursuant to the EUA Settlement, it is not anticipated that there will be any material Class Three claims other than the claims arising under the Notes. Pursuant to the EUA Settlement Agreement, described in Section VIII.A below, EUA and its p affiliates have waived any claims they may have had against the Debtor.

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~0-The Debtor did not ascribe any specific value to the Seabrook Interest in the schedules it filed with the Bankruptcy Court, g stating simply that the value is " unknown." (Debtor's Schedule B-2, " Personal Property," and Schedule B-3, " Property Not Otherwise Scheduled"). Nevertheless, at the initial meeting of creditors in this case and at the Section 341 meeting of creditors, representatives of the Debtor stated that they believed the Bondholders' claims to be undersecured. (See Memorandum of O Law in Support of Debtor's Motion for Authority to Enter into a Loan and Security Agreement Under Bankruptcy Code 5364, at 6.) As set forth below, the financial advisor to the Committee has estimated that the value of the Seabrook Interest at or about the Filing Date was no more than $135,000,000 and is presently approximately $130,000,000. Other Joint Owners of Seabrook have O stated that they believe that the value of the Debtor's Seabrook interest is significantly less than the amount estimated by the financial advisor to the Committee.

2. The CICs

'O The Debtor also has outstanding 180,000 CICs evidencing the right to receive additional payments contingent upon and measured by the Debtor's income in certain years following the commercial operation of Unit 1. Based on the Debtor's financial performance, the Committee does not believe that the CICs have any value.

O 3. Other Claims EUA and certain of its subsidiaries filed certain proofs of claim against the Debtor which were either direct claims against the Debtor or claims held by EUA as the subrogee of certain claims held against the Debtor by financial institutions that had loaned

.O funds to the Debtor and which EUA had guaranteed and paid. EUA and its subsidiaries have withdrawn, or will withdraw, such proofs of claim pursuant to the EUA Settlement described in Section VIII.A below, and all claims held by EUA and its subsidiaries against the Debtor will be deemed disallowed.

O D. Competition The Debtor's marketing efforts, which have continued post-petition, have consisted of direct negotiations with utilities and-participation in bidding processes. Prior to its Chapter 11 O_ filing, the Debtor primarily focused its efforts on negotiating a

" life-of-the unit" contract for the sale of its entire share of Seabrook electricity. The Debtor was not able to negotiate such a contract and, thus, sold all of its Seabrook electricity pursuant to one-month contracts on the spot market.

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The Public Utility Regulatory Policies Act ("PURPA") was-

5) intended, among other things, to promote energy independence and diversification of supply and to improve the overall efficiency of electric supply. PURPA has resulted in a new class of non-utility power generation facilities called qualifying facilities ("QP's").

PURPA allows Or's to sell power to local utilities at specified rates based on avoided costs. The Debtor is competing with other

.O New England and New York utilities and with QF's and Independent Power Producers ("IPP's") as it markets its wholesale power to other electric utilities. The Debtor may face increased competition, primarily based on price, from QF's and IPP's in the future.

I) The Debtor has reported in its 1991 Form 10-K report that it is a member of the New England Power Pool ("NEPOOL"), which is open to a31 investor-owned, municipal and cooperative electric utilities in New England that are connected to the New England power grid under an agreement which provides for coordinated planning of future facilities as well as the operation of r:arly

O loot of existing generating capacity in New England and of Jelated transmission facilities as if they were one system. The NEPOOL

, agreement imposes obligations concerning generating capacity reserve and the right to use major transmission lines, and provides for central dispatch of the generating capacity of the pool's members with the objective of achieving economical use of

O the region's facilities. Pursuant to the NEPOOL agreement, interchange sales to NEPOOL are made at a price approximately equal to the fuel cost for generation without contribution to the support of fixed charges.

O III. CIRCUMSTANCES GIVING RISE TO DEBTOR'S CEAPTER 11 Since Unit l's commencement of commercial operations, the Debtor has been selling its share of electricity generated by Unit 1 in the wholesale spot market at prices substantially below its operations, maintenance and capital-related costs. For the

,O period August 19, 1990 through December 31, 1990, actual operations, maintenance and capital-related costs exceeded revenues from such short-term power sales by approximately

$23,000,000 on a pre-tax basis. The Debtor's December 31, 1990 financial statements, which were contained in the Form 10-K report filed by the Debtor with the Securities and Exchange Commission in O- May 1991, are attached hereto as Exhibit D.

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Upon filing its petitien, the Debtor stated that the long-

) term power supply market had taken a significant downturn. The forecast for demand for electricity in New England during the 1990's was reduced from previous estimates because of the, economic conditions in New England and the impact of conservation and load management on New England utilities. In addition, a number of competing sources of long-term power supplies have been made

) available to the market. Management of EUA also determined not to j provide additional funds to the Debtor to enable it to make the May 15, 1991 interest payment due to the holders of the Series B and C Notes. ,

DEBTOR'S POSTPETITION OPERATIONS

) IV.

A. Debtor's Financial Operations During the Chapter 11 Proceedings.

) 1. Financial Performance Since the Filing Date, the Debtor has operated its business as a debtor-in-possession. Until the refueling shutdown of Seabrook in July 1991 (the "First Refueling"), the Debtor was able to make payments of all of its ongoing obligations under the Joint

) Ownership Agreement. Upon the occurrence of the First Refueling, which lasted from July 26, 1991 to October 16, 1991, the Debtor had insufficient funds from which to make its payments under the Joint Ownership Agreement. As a result, the Debtor entered into the First Stipulation discussed in Section IV.A below, and as of November 6, 1992, had borrowings outstanding, including accrued ,

) interest, of approximately $13 million thereunder. A second refueling shutdown took place between September 5, 1992 and November 8, 1992 (the "Second Refueling"). No further refueling or maintenance outages are scheduled until the Spring of 1994.

The monthly profit and loss statements filed by the Debtor

) during this Chapter 11 proceeding, indicate significant, continuing losses. The Debtor reported a net loss of $19,800,000 in 1991- The 1991 net loss was $54,500,000 less than the.1990 loss primarily due to the cessation of recording interest expense on the Bondholder debt. In January, 1992 the Debtor showed a loss of only $66,564; however, for the period February 1992 througn June 1992, the Debtor again suffered losses of approximately

) $1,000,000 per month. According to the Debtor, operations, maintenance and capital related costo exceeded revenues from short term power sales by approximately $30,500,000 on a pre-tax basis for 1991. The Debtor continues to sell electricity at prices below its cost.

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O g 2. DIP Financing

a. First Stipulation At the commencement of these Chapter 11 proceedings, the Debtor was not able to obtain debtor-in-possession financing other than under the Borrowing Motion described in Section IV.B.1 below.

O The Committee believed this was insufficient to continue operations and therefore initiated an independent search for such financing. The Committee sought debtor-in-possession financing from approximately fifteen commercial lenders. However, Chapter 11 financing of the Debtor's operating deficits has not O been and remains unavailable from commercial banks due to the Debtor's lack of a rate base, lack of power contracts and the risks inherent in the ownership of a nuclear plant. As noted above, the Debtor is required under the Joint Ownership Agreement to pay monthly its share of Seabrook expenses whether or not Unit 1 is operating. Under certain circumstances, failure by the Debtor to make such monthly payments could result in a forced sale O of the Debtor's Seabrook Interest for 75% of its fair market value. Therefore, obtaining debtor-in possession financing became critical at or about the time of the First Refueling. At that time, the Debtor had no source of income and the only available source of financing was financing offered by certain of the Joint wners.

O On August 29, 1991, the Bankruptcy Court approved a certain Stipulation and Consent Order Under 11 U.S.C. SS 363, 364 and 365 Concerning Advances By Participating Joint Owners (the "First Stipulation") pursuant to which two Joint Owners, United Illuminating and Connecticut Light & Power (the " Participating g Joint Owners"), agreed to make advances to the Debtor. The SEC approved the First Stipulation on September 26, 1991. The advances enabled the Debtor to continue to make payment of its pro rata share of Seabrook's operating expenses ("Seabrook Expenses")

and Chapter 11 expenses during and after the First Refueling.

Pursuant t the First Stipulation, advances made by the O Participating Joint Owners had an interest rate of the prime rate of the First National Bank of Boston plus seven percent (7%) per annum. The First Stipulation provided the Participating Joint Owners with a priority lien on all of the Debtor's assets, which lien has priority over the lien of the Bondholders. The First n Stipulation further provided that in the event of a default U thereunder, the Participating Joint Owners were entitled to purchase the Debtor's Seabrook Interest for 75% of the lesser of fair market value or book value and to apply all or part of the amounts owing under the First Stipulation against the purchase price. The First Stipulation was scheduled to expire on O

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August 24, 1992, but the Bankruptcy Court approved an increase of the maximum available amount under the First Stipulation from O $15,000,000 to $22,000,000 and extension of the term of the First Stipulation beyond August 25, 1992 on a month to month basis, as determined by the Participating Joint Owners. This extension and increased availability of funds permitted the Debtor to continue paying its Seabrook Expenses and its Chapter 11 expenses during the Second Refueling. As of November 6, 1992, the outstanding C) principal amount owed under the First Stipulation plus accrued interest totalled approximately $13 million.

b. Second Stipulation Between March 1992 and July 1992 the Committee, the Debtor O and the Participating Joint Owners negotiated the terms of a financing facility which would replace the First Stipulation when it expired on August 24, 1992. As a result of such negotiations, the Committee, the Debtor and the Participating Joint Owners were prepared to enter into a certain July 1992 Stipulation and Consent Order under 11 U.S.C. 55 363, 364 and 365, Concerning Advances by V

n Participating Joint Owners (the "Second Stipulation"). The Second Stipulation provided financing through August 1993 in a maximum available amount of $22 million, representing an increase from the

$15 million which had initially been available under the First Stipulation. The Second Stipulation granted to the Participating Joint Owners the same rights and priorities as the First O Stipulation, but added a provision that required the Debtor and the Bondholders' Committee to attempt to sell the Seabrook Interest in the event that the obligations under the Second Stipulation were not paid in full when due.

In July, 1992, the Participating Joint Owners, the Debtor and 9 the Committee entered into a Stipulation Regarding Bondholders' Committees' Assent in Lieu of Objection to Second Stipulation (the

" Procedural Order") which provided that the Second Stipulation was contingent upon approval by the Bankruptcy Court of the commitment letter dated July 21, 1992 (the "Lehman Commitment Letter") with Shearson Lehman Brothers ("Lehman Brothers"). The Debtor would O have sought approval of the Second Stipulation without regard to the approval of the Lehman Commitment Letter by the Bankruptcy Court. The Lehman Commitment Letter provided for a $45,000,000 secured revolving loan to support the Committee's Plan of Reorganization. The Lehman Commitment Letter, discussed more fully in Section IV.B.5, was not approved at the hearing held U before the Bankruptcy Court on July 21, 1992 because it had been proposed outside of a plan of reorganization. In accordance with the Procedural Order, the Participating Joint Owners agreed to make advances under the terms of the First Stipulation through September 30, 1992, unless an earlier default under the First Q

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Stipulation occurred. Thereafter, the Participating Joint Owners p agreed in their sole discretion, to make advances on a month-to-month basis. The Participating Joint Owners continued to advance funds under the First Stipalation, as amended, until the amounts advanced thereunder were repayed from the proceeds of the EUA Settlement. The Second Stipulation never became effective. All proceeds from the EUA Settlement not used to repay the First g Stipulation will be used by the Debtor, upon obtaining the consent of the Committee, to pay operating and Chapter 11 expenses until such proceeds are exhausted.

c. Third Stipulation g

After execution of the EUA Settlement, as described in Section VIII.A below, the Committee, the Debtor and the Participating Joint Owners began negotiating the terms of a debtor in possession financing facility to replace the First Stipulation and the Second Stipulation (the " Third Stipulation"). The parties are discussing a financing which would provide for a maximum of p

S20 million in financing. The first draw under the facility would occur no earlier than February 1, 1993 and no later than October 31, 1993. The remaining terms of the Third Stipulation are still being negotiated and there is no assurance that the Participating Joint Owners will make the facility available on terms acceptable to the Committee and the Debtor. The Committee also intends to p

discuss new financing with other sources unless a prior acceptable arrangement is structured with the Participating Joint Owners. If an agreement is reached among the parties, the Third Stipulation will be submitted to the Bankruptcy Court for approval. The Committee estimates that in the event there is a Third Stipulation and the Committee consents to the Debtor drawing funds under it, the first draw will occur between June 1, 1993 and August 31, 1993.

3. Sales of Assets from Seabrook Unit 2 The Debtor also holds a 12.1324% ownership interest in g

Seabrook Unit 2. The Joint Owners decided in 1991 to dispose of Unit 2. Sales of assets from Unit 2 have been made since the Filing Date and the Debtor has received its proportionate share of the proceeds. The generator from Unit 2 was sold to Public Service Electric & Gas Co. in early 1992 and net proceeds realized by the Debtor in February and March 1992 totalled $607,896.

Additional sales of other Unit 2 assets during the pendency of the b

Chapter 11 proceeding have yielded net proceeds, to date, of

$31,848 to the Debtor. There are other Unit 2 assets remaining to be sold; however, the Committee cannot predict the timing of such sales or the amount of proceeds that will be realized therefrom.

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4. Release of Decommissioning Bond LJ Prior to the beginning of commercial operation on August 19, 1990, the Debtor and the other Joint Owners had been required to establish and fund a Pre-Operation Decommissioning Trust for Seabrook Unit 1 that would remain in place until all of the licensing issues with respect to Unit 1 had been finally resolved.

3 In June 1992, the last of the pending licensing issues was resolved, and the Pre-Operation Decommissioning Trust was liquidated; and $2,223,358 was returned to the Debtor. In July 1992, the release of the associated bonds that secured the trust resulted in a payment of $790,435 to the Debtor.

O The proceeds from sales of Unit 2 assets and release of the decommissioning bond were used entirely to fund the Debtor's Seabrook obligations.

B. Other Significant Events During the Chapter 11 O 1. Debtor's Borrowing Motion Shortly after the Filing Date, on March 11, 1991, the Debtor filed a Motion for Order Pursuant to Sections 364(c), 364(d) and 361 of the Bankruptcy Code and Bankruptcy Rule 4001(a) Authorizing Debtor In Possession to Obtain Post Petition Financing and Provide O Adequate Protection (the " Borrowing Motion"). In the Borrowing Motion, the Debtor sought authority to borrow from EUA up to

$20,000,000 on a priming and senior secured and administrative priority basis. The Debtor sought to secure these borrowings by a lien on all assets of the Debtor which would prime the Bondholders' Lien. The Debtor also sought to obtain for EUA a

$ super priority administrative expense under Section 364(c)(1),

senior to substantially all other administrative expenses arising in this case. Finally, the Debtor intended to grant EUA a lien on all recoveries from causes of action arising under the Bankruptcy Code, including preferential transfers, even though EUA was a potential preferential transfer defendant. The Debtor further

() stated in the Borrowing Motion that the inability to borrow funds from its parent could result "in a default and eventual forfeiture of the Debtor's Seabrook Interest under the terms of the Joint ownership Agreement" and that "[the) implementation (of financing) is critical to the Debtor's survival." The Borrowing Motion was scheduled for hearing on March 25, 1991.

O Because the proposed borrowing between the Debtor and EUA would have a dramatic impact on the entire case, the Committee filed a motion to continue the hearing on the Borrowing Motion (the " Motion to Continue"). In the Motion to Continue, the Committee sought additional time to scrutinize the proposed V

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transaction, prior to the time that the Bondholders' lien could be impaired. In the Motion to Continue, the Committee outlined n

v several possible objections to the Borrowing Motion that it might raise after sufficient opportunity to investigate the proposed transaction. The Bankruptcy Court allowed the Motion to-Continue, and rescheduled the hearing on the Borrowing Motion for April 25, 1991. Prior to the scheduled hearing, the Debtor withdrew the Borrowing Motion.

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2. Motions to Continue Service Agreement On March 4, 1991, the Debtor filed a Motion to Continue the Existing Service Contract (the " Service Agreement Motion"). In the Service Agreement Motion, the Debtor stated that it had no E) employees and conducted its business entirely through the services provided by EUA Service. The Debtor noted that under the terms of the service agreement dated January 2, 1991 (the "1991 Service Agreement"), services rendered to the Debtor by EUA Service were billed at actual cost. (Cost of service is determined in accordance with the Public Utility Holding Company Act ("PURCA")

O, and the rules, regulations and orders of the SEC issued thereunder, and includes all costs of doing business incuired by EUA Service, plus a return on the amount of equity capital reasonably required to carry on the business.) The Bankruptcy Court allowed the Service Agreement Motion on April 24, 1991. The 1991 Service Agreement expired on December 31, 1991.

In anticipation of the expiration of the 1991 Service Agreement, the Debtor filed a motion on November 14, 1991 to obtain approval of entry into a new service agreement with EUA Service (the " Service Agreement") pursuant to the same terms as the previous agreement, which motion was allowed by the Bankruptcy

,C Court in February 1992. A copy of the Service Agreement is attached hereto as Exhibit E. The Service Agreement expires on December 31, 1992, but may be terminated by either party on thirty days notice or by the Committee upon submission to the Bankruptcy Court of appropriate pleadings.

O Pursuant to the terms of the EUA Settlement Agreement described in Section VIII.A below, EUA Service is required to continue to provide administrative services, other than long-term power sales, on a cost basis to the Debtor, at the Committee's sole discretion. In no event, however, may the Committee require EUA Service to provide administrative services beyond two years

,d E from the effective date of the EUA Settlement.

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3. Termination of Exclusivity 4 On May 28, 1991, the Debtor filed a Motion for Order Pursuant to Section 1121 of the Bankruptcy Code Extending the Time.Within Which the Debtor has the Exclusive Right to File a Chapter 11 Plan and Obtain Acceptances Thereof (the " Motion to Extend"). In the Motion to Extend, the Debtor described its continued unsuccessful dp efforts to seek a purchaser for all or a substantial part of the Debtor's share of Seabrook electricity for the life of the unit.

The Debtor sought a seven month extension of the exclusive periods. The Bankruptcy Court denied the Debtor's Motion to Extend and the Debtor's exclusive periods were terminated on July 2, 1991.

4 4. The BECo RPP On October 11, 1991, the Boston Edison Company ("BECo")

issued a Request for Proposals ("RFP #3"), soliciting competitive bids for electric capacity and energy from QFs and IPPs. RFP #3 g was issued in accordance with Massachusetts Department of Public Utilities ("DPU") regulations which govern sales of electricity by QFs. The DPU permitted IPPs to participate in this transitional solicitation but prohibited participation by utilities.

On November 21, 1991, the Committee requested confirmation g from BEco that the Committee could submit a proposal on behalf of Reorganized EUAP under RFP #3. On December 13, 1991, BECo responded that the Debtor's Seabrook Interest would not be eligible because "the appropriate focus in determining whether a sponsor is an IPP is the generating facility not the individual ownership interests in the facility." Because more than 50% of g the equity in Seabrook is owned by utilities, BECo concluded that no power from Seabrook could be offered in response to RFP #3.

The Committee took the position that upon reorganization, at least 50% of the equity interest in the Debtor would be owned by the Bondholders and, therefore, as reorganized, the Debtor would qualify as an IPP.

9' On the strength of this position, the Committee and the Debtor submitted a joint bid to sell power from the Reorganized EUAP to BECo, and petitioned the DPU for an investigation and a determination that the joint bid was eligible to participate in RFP #3. On March 18, 1992, the DPU denied this petition, and on g March 24, 1992, BECo disqualified the joint bid. The Committee filed an appeal with the DPU on April 7, 1992, at>d with the Supreme Judicial Court for Suffolk County on April 17, 1992.

After further deliberation, the Committee withdrew the appeal on May 5, 1992.

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5. Motion for Approval of Commitment Letter On July 1, 1992, the Committee filed a Motion For Authority to Enter into Commitment Letter with Lehman Brothers for Plan of Reorganization Financing (the " Commitment Letter Motion").

Pursuant to the Lehman Commitment Letter, Lehman Brothers agreed to use its best efforts to syndicate a secured revolving credit p

facility to finance the Committee's Plan. Lehman Brothers agreed to provide $10,000,000 of the Lehman Facility. The Lehman Commitment Letter was structured to make the Lehman Facility effective when all Plan Regulatory Approvals necessary to implement the Committee's Plan had been obtained.

The facility set forth in the Lehman Commitment Letter was in the principal amount of $45,000,000, bearing interest at a floating rate of prime plus 5% per annum with a minimum rate per annum of 13.5%, and expiring in December 1995, provided that certain financial covenants were satisfied as of December 31, 1994. It was to be secured by a fiJst priority lien and mortgage on all assets of the reorganized Debtor. It also provided that the participating lenders in the Lehman Facility would receive 15%

of th9 equity interests in Reorganized EUAP, through the issuance of warrants. The Lehman Facility also required the payment of certain fees upon approval of the Lehman Commitment Letter and on and after the Effective Date of the Plan.

A hearing was held on the Commitment Letter Motion on July 21, 1992. At the hearing, the Committee argued, inter alia, that it was necessary to have plan of reorganization financing in place prior to confirmation of a plan, that the financing set forth in the Lehman Commitment Letter was the only financing presently available to the Committee to support a plan of reorganization, and that the volatility of the capital markets made it impossible to predict whether a similar facility would be available after the Confirmation Date.

The Bankruptcy Court, however, declined to approve entry into the Lehman Commitment Letter, and the Lehman Commitment Letter has thus expired. The Bankruptcy Court indicated that such financing arrangements could only be approved as part of the Plan #

confirmation process, after the terms of the financing had been disclosed to all of the Debtor's creditors. Pursuant to the Bankruptcy Court's order, therefore, it will not be possible to obtain a committed POR Facility prior to confirmation of the Plan.

The Committee will seek to obtain confirmation of the Plan notwithstanding the lack of committed financing. The Plan however, will not be effective unless the POR Facility, or such other facility as may be approved by the Bankruptcy Court and any i

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as to whether the Committee will be able to obtain a POR Facility.

Such a commitment may never be obtained.

V.

SUMMARY

OF THE PLAN Reference is made to the Plan (which is attached hereto as p

Exhibit A) for further details concerning the classification and treatment of holders of Claims against and Interests in the Debtor. The Bankruptcy Court has previously established a bar date for the filing of proofs of claim of January 15, 1992, and reference has been made both to the Debtor's schedules and the g

filed proofs of claim in order to determine approximate Claim amounts.

A. Classes of Claims and Interests.

The Plan divides the Debtor's creditors and Interest holders g

into six classes. The classes and the treatment afforded each class under the Plan are described below:

1. Class One - Claims of The Bondholders.

Class One consists of all claims, to the extent of the value I of the interest in property of the Debtor which secure such claims, pursuant to the Debtor's Series B and Series C Notes and the Indenture, as discussed above. The Series B and Series C Notes are secured by the Lien on the Seabrook Interest. The Bondholders have not received any principal payments on account of

, their Claims. In addition to the outstanding unpaid principal amount under the Notes of $279,597,000, the Bondholders are also owed pre-petition accrued interest of approximately $14,000,000.

The Committee's financial advisor estimates that the present value of the Seabrook Interest as of January 1, 1993 is approximately $130 million. The amount of Class One Claims that g will be satisfied equals 85% of the value of the Seabrook Interest, less the amount, if any, which may be outstanding under a Third Stipulation or other debtor-in possession facility on the Effective Date. The balance of the claims under the Series B and Series C Notes are classified as Class Three Claims. The Committee estimates that if the Effective Date occurs on or before June 1, 1993, then no borrowings will be outstanding under a debtor-in-possession facility as of the Effective Date. If the Effective Date occurs after that date, the Debtor may have borrowings outstanding under a debtor-in-possession facility.

b Pursuant to the Plan, each Bondholder will receive in full b satisfaction of its Class One Claims its Pro Rata share of 85% of the New Securities of Reorganized EUAP, prior to any dilution associated with the POR Facility.

The New Securities are described in Section VI.B.

> 2. Class Two - Property Taxes.

The Class Two Claims consist of the claims held by the Town of Seabrook, the Town of Hampton Falls, the Town of Hampton and the Town of Rye, in the approximate amount of $229,804, arising from unpaid property taxes arising prior to the Filing Date.

b These property tax claims are secured by statutory liens pursuant to N.H. R.S.A. 80:19 et seq.

The Committee believes that at least some portion of such property taxes may have been paid by the Debtor after the Filing Date, without Bankruptcy Court approval. If so, the Committee may b institute litigation to recover such payments and the Class Two claims shall include claims based upon any amount disgorged by such taxing authorities.

Pursuant to the Plan, the Committee may also seek to cause the Debtor to request an abatement of its real estate taxes by the p Bankruptcy Court pursuant to Section 505 of the Bankruptcy Code on the grounds that the value of the Debtor's interest in Seabrook is substantially less than its assessed value. The Joint Owners and the Debtor have advised the Committee that they believe such an action cannot be brought because it would violate either or.both of (1) agreements binding upon the Joint Owners which govern the

> operation of Seabrook and (2) a settlement among the Debtor, other Joint Owners and the Town of Seabrook previously approved by the Court in this case. The Committee disagrees with the Debtor and the Joint Owners on these issues. The Committee cannot predict

=

whether it will be able to cause the Debtor to request such an abatement or whether an abatement request, if authorized will

, succeed.

The holders of the Class Two Claims shall receive payment of the Allowed Amount of such Claims in three equal annual installments of principal and interest, having a present value, as of the Effective Date, of not less than the value of the taxing i authority's lien on the Debtor's interest in the property which secures such Claims. The Allowed Amount of the Class Two Claim shall bear interest at the rate equal to the prevailing interest

rate on two-year treasury notes, calculated on each anniversary of the Effective Date of the Plan. The first payment will be made on the later of (a) the first day of the first full month after the 1

b

O Effective Date or (b) the date each Class Two Claim is allowed by 0 Final Order. The remaining payments shall be due within thirty The days after the first two anniversaries of the Effective Date.

holders of the Class Two claims shall retain their liens until such Claims have been paid in full.

3. Class Three - All Claims Not Included g in Classes One, Two or Four, Consisting Primarily of Bondholder Deficiency Claims class Three consists of all Claims not included in Classes One, Two or Four, including Claims based upon the Notes and the Indenture, to the extent such Claims exceed the value of the interest in the Debtor's property securing such Claims. Class O Three includes Claims held by EUA and its affiliates, whether held directly or by subrogation, all of which have been or will be withdrawn and deemed disallowed under the EUA Settlement.

The Committee estimates that the unsecured portion of the Bondholder Claims totals approximately $170,000,000. Each holder n" of an allowed Class Three Claim shall receive its Pro Rata share of 15% of the New Securities.

Prior to the EUA Settlement, the Debtor has scheduled claims of $18,216.76 held by Citibank, N.A. for an estimated letter of g credit fee in connection with the certain bonds; a claim of

$12,488.31 held by Porter and Travers for legal fees in connection with these IDA bonds; a claim of $8,041,395.78 held by Citibank for short term notes outstanding and accrued interest thereon; and

' a claim of $8,303,983 held by Connecticut National Bank ("CNB")

for short term notes outstanding and accrued interest thereon.

However, the Citibank and CNB Claims were paid by EUA after the g filing of the Chapter 11 petition and EUA alleges that they passed by subrogation to EUA. Pursuant to the EUA Settlement, the Debtor's schedules have been, or will be amended to delete these l

claims, EUA has or will withdraw its proofs of claim for them and such claims are deemed disallowed.

'O Other unsecured claims filed against the Debtor include a claim in the amount of $41,287,588.34, filed by EUA and a claim of

$189,325.18 held by EUA Service for services rendered under the Service Agreement. In addition, Montaup, Eastern Edison and Blackstone have filed proofs of claim against the Debtor. In their proofs of claim, Montaup, Eastern Edison and Blackstone

'O admit failing to make tax benefit payments to the Debtor for 1990 in the aggregate amount of $2,113,218. In their proofs of claim, however, Eastern Edison, Montaup, and Blackstone each claim that it overpaid the Debtor for tax benefits due to the Debtor for the 0

O

O years 1988 and 1989. Eastern Edison, Montaup, and Blackstone have

O asserted claims against che Debtor for such alleged overpayments in the aggregate amount of $8,176,759.

Pursuant to the EUA Settlement, the Debtor has amended its schedules to delete all claims of EUA and its affiliates. EUA has withdrawn, or will withdraw the proofs of claim for these claims,

.O and such claims shall be deemed disallowed.

The Claims Register dated August 6, 1992, generated by the Bankruptcy Court (the " Register"), also lists Claims filed by United Engineers and Constructors ("UE&C") in the amount of

$315,545.47. The Committee believes and has been advised by the O Debtor that Ur&C's claim against the Debtor was resolved pursuant to an order of the Bankruptcy Court dated January 27, 1992 approving a compromise and settlement of the claim. The Register also reflects various other claims which the Committee believes are bondholder claims. Finally, the Register lists certain contingent claims filed by other owners of Seabrook. A copy of O the Register is available at the Bankruptcy Court.

Each holder of a Class Three Claim shall receive its Pro Rata share of 15% of the New Securities.

4. Class Four - Unsecured Claims of $25,000 or Less O

Class Four consists of all persons or entities holding general unsecured claims of $25,000 or less, or which the holder elects to reduce to $25,000, other than those unsecured claims resulting from the ownership of the Notes. The Debtor's schedule of liabilities, filed with the Bankruptcy Court on April 15, 1991,

$ as amended on December 27, 1991 and January 14, 1992, lists claims of less than $25,000, without giving effect to any potential reductions, in the aggregate amount of approximately S50 million.

A review of the Register reveals that claims have been filed by Class Four creditors whose claims differ from those scheduled or are not included on the Debtors' Schedules. The Register lists

() claims of less than S25,000 in the aggregate amount of $42,834.

Under the Plan, the Claims of Class Four unsecured creditors will be satisfied by a cash payment on the later of (i) the Effective Date, or (ii) as soon thereafter as each such claim becomes an Allowed Claim, to each of said creditors of an amount O equal to 50% of the Allowed Amount of such claim. The payments to holders of claims in this class may not exceed $500,000 after giving effect to any reductions to $25,000, and certain reduced claims will be excluded from this class if their inclusion would cause the aggregate amount of the claims in this class to exceed S500,000.

O O

O i

l

5. Class Five Interests - Equity Interests of EUA Class Five consists of the single holder of the Debtor's equity securities, EUA. Under the Plan, EUA will neither retain its Interest in the Debtor nor receive any distribution on account f such Interest. All Equity Interests of the Debtor which have O been authorized or issued as of the Record Date established by the Bankruptcy Court for the purposes of distribution, will be extinguished on the Effective Date. Pursuant to the EUA Settlement, all of the common and preferred stock of the Debtor held by EUA may be redeemed prior to the Effective Date of the Plan.

O

6. Class Six Interests - Contingent Interest Certificates Class Six consists of the holders of CICs. All outstanding CICs shall be cancelled as of the Effective Date and their holders g shall receive no distribution under the Plan.

B. Administrative Erpenses, Priority Claims and Trade Debts

1. Fees of Attorneys, Professionals and Committee Members O

The Allowed Amount of all Claims for administrative expenses and claims entitled to priority in accordance with Stetion 507(a) of the Bankruptcy Code, with the exception of claims entitled to priority in accordance with Section 507(a)(7) of the Bankruptcy Code, including the Claims of professional persons, shall be paid O in full in cash on the Effective Date, or upon the date on which the amount of each such Claim becomes an Allowed Amount, whichever is later.

Pursuant to orders of the Bankruptcy Court dated August 15, 1991, January 23, 1992, April 20, 1992, and October 13, 1992 (the C) " Interim Orders") the claimants listed below have received interim payments totalling $2,186,355.04. The table below sets forth the aggregate amounts requested in the five interim fee applications filed through December 8, 1992, and the amounts granted to each claimant pursuant to the four Interim Orders. No hearing has been held or orders entered as of the date of this Disclosure Statement O on the fifth set of fee applicants filed on December 7, 1992.

O O l

l h

Interim Interim

) Amount Amount Requested Received

a. The Debtor Dechert, Price and Rhoads S 646,752.27 S 333,067.40

)

21,193.63 18,886.11 Law Offices of Daniel Sklar S $

McLane, Graf, Raulerson 23,135.09 10,577.00

& Middleton S $

) Day, Berry & Howard and 4,000.08 Wiggin & Dana S 4,000.08 5 695,081.07 366,530.59 Debtor Total 4 5

)

b. The Committee

$1,648,336.26 797,897.94 Hale and Dorr $

Milbank, Tweed Hadley and McCloy S 670,719.04 S 289,161.18

) 689,875.51 Putnam, Hayes and Bartlett / $1,386,243.66 S NorthBridge Consulting Group, Inc.

37,432.07 0 Member Expenses S

) Richard S. Ruback (OID expert)/

62,033.69 39,409.07 Charles River Associates S $

Frank J. O'Connell 16,267.50 3,480.75 (special tax counsel) $ $

> Committee Total $3,821,032.22 $1,819,824.45 TOTAL $4,516,113.29 S2,186,355.04 The Committee estimates that as of the Effective Date, the i Committee's professionals will have incurred no more than an additional S2,000,000 in fees and expenses above the $4,516,113.29 requested to date. Although the Committee has no control over and, thus, cannot predict the total amount of fees and expenses that will be incurred prior to the Effective Date by professionals l

O-I r

retained by the Debtor, the Debtor has pros ded to the Committee its estimate that such fees will not exceed $200,000. The O Committee estimates that the Indenture Trustee's fees in this case will not exceed $300,000, and the expenses of the members of the Committee will not exceed $150,000,

2. Trade O All unpaid trade and service debts and obligations incurred in the normal course of business by the Debtor during the Debtor's Chapter 11 proceedings shall be paid during the ordinary course of business by the Debtor or in full in cash on the Effective Date.

Based upon its review of the Debtor's monthly reports to the United states Trustee, the Committee has no knowledge of any trade O and service debts unpaid by the Debtor during the course of the proceedings.

3. Unsecured Tax Claims The Allowed Amount of all claims entitled to priority in g accordance with Section 507(a)(7) of the Bankruptcy Code, if any, shall be paid in cash upon the Effective Date or in installments over six years. If paid over six years, the principal amount of each such Claim shall bear interest at a rate determined by the Bankruptcy Court to be sufficient to provide that the deferred g payments will have a value equal to the present value of the Allowed Amount of each such Claim. Based upon information provided by the Debtor, the Committee does not believe there are any claims against the Debtor entitled it to priority under Section 507(a)(7) of the Bankruptcy Code.

VI. MEANS OF EXECUTION AND IMPLEMENTATION OF THE PLAN O

A. Revesting Except as otherwise provided in the Plan or in the Final Confirmation Order, property of the Debtor's estate shall revest 0 in Peorganized EUAP on the Effective Date, free and clear of all claims, liens and other interests of creditors and equity security holders. Without in any manner limiting the scope of the foregoing, any cla3m or interest belonging to the Debtor shall be retained by and shall vest in Reorganized EUAP on the Effective Date, and Reorganized EUAP may enforce, settle or adjust any such O claim or interest. As of the Effective Date, Reorganized EUAP may use, acquire and dispose of property without supervision by the Bankruptcy Court and free from any restrictions of the Bankruptcy Code, other than those restrictions expressly imposed by the Plan or the Final Confirmation Order.

O O

l l

O Q B. Issuance of New Securities In reliance on an exemption from both the registration requirements of the Securities Act of 1933, as amended, Ithe "1933 Act") and applicable state and local securities laws afforded by Section 1145 of the Bankruptcy Code, the New Securities will not Q be registered under the 1933 Act or any state or local securities laws. In general, the New Securities issued pursuant to the Plan may thereafter be resold by any holder without registration under the 1933 Act pursuant to the exemption provided by Section 4(1) of the 1933 Act, unless the holder is an " Underwriter" with respect to any of the New Securities, as that term is defined in the

'O sankruptcy Code. In_ addition, the New Securities may generally be resold by the recipients thereof without registration on the state level pursuant to various exemptions provided by the respective laws of the several states. Recipients of the New Securities issued under the Plan are advised to consult with their own .

counsel, however, as to the availability of any such exemption 9 from registration under state law in any given instance and as to any applicable requirements or conditions to the availability thereof. Reorganized EUAP intends to continue to be a " reporting company" with respect to reports required to be filed under the Securities Exchange Act of 1934.

Section 1145(b) of the sankruptcy Code defines " Underwriter" O for purposes of the 1933 Act as one who (A) purchases a claim with a view to distribution of any security to be received in exchange for the claim, or (B) offers to sell securities issued under a plan for the holders of such securities, or (C) offers to buy securities issued under a plan from persons receiving such securities, if the offer to buy is made with a view to O distribution of such securities, or (D) is a controlling person of the issuer of the securities. Holders of the New Securities deemed to be Underwriters may be able to sell securities without registration pursuant to the provisions of Rule 148 or Rule 144 under the 1933 Act which, in effect, permit the public sale of securities received pursuant to the plan by Underwriters subject

() to volume limitations and certain other conditions. Holders of the New Securities who believe they may be statutory underwriters under the definition contained in Section ll45(b) of the Bankruptcy Code are advised to consult with their own counsel as to the availability of the exemption provided by such rules. The New Securities are expected to have a par value of approximately O S.01. The Plan contemplates the authorization of approximately 20,000,000 shares of the New Securities and initial issuance of 10,000,000 to 12,000,000 shares. There is no assurance.that the New Securities will trade based on the fair market value of the Seabrook Interest or that the market will value that interest in

O the same manner that the Committee has determined value.

'O

J g It is anticipated that Reorganized EUAP will enter into a Registration Rights Agreement with holders (or groups of holders who, under Section 240-13d-3 of the regulations promulgated under the Securities Exchange Act of 1934, are deemed to be the beneficial owners of each other's New Securities) of 10% or more of the New Securities outstanding on the Effective Date if such 3 New Securities were distributed to those holders of the New Securities in exchange for Series B or Series C Notes held by the holders on the Confirmation Date. The Committee expects that the Registration Rights Agreement will permit the holders to demand multiple registrations, provided that any demand is for registration of 5% or more of the total New Securities outstanding 3 at the time of the demand and subject to the right of the _

Reorganized EUAP Board of Directors to delay the demanded registration for bona fide business reasons. It is expected that Reorganized EUA Power will be responsible for the expenses of any registration under the Registration Rights Agreement.

$ Broker-dealers effecting sales of the New Securities will have an obligation under Section 1145(a) of the Bankruptcy Code for a period of forty days after the Effective Date to provide the purchaser with a copy of this Disclosure Statement (and any supplements hereto, if ordered by the Bankruptcy Court) at or before the time of delivery of such securities.

9 THE DISCUSSION ABOVE IS A

SUMMARY

OF THE GENERAL EFFECT OF THE REGISTRATION PROVISIONS OF THE SECURITIES LAWS UPON ISSUANCE AND RESALE OF SECURITIES RECEIVED UNDER THE PLAN. THE EFFECTS MAY VARY BASED ON THE INDIVIDUAL CIRCUMSTANCES OF EACH HOLDER OF A CLAIM RECEIVING SECURITIES. THE SEC HAS NOT REVIEWED OR PASSED g UPON ANY ASPECT OF THESE MATTERS. EACH RECIPIENT OF SECURITIES UNDER THE PLAN IS URGED TO CONSULT WITH HIS OWN COUNSEL WITH RESPECT TO THE EFFECT OF FEDERAL, STATC AND FOREIGN SECURITIES LAWS UPON HIM, INCLUDING BUT NOT LIMITED TO WHETHER OR NOT HE IS AN UNDERWRITER AS DEFINED IN SECTION ll45(b) OF THE BANKRUPTCY CODE (WHETHER BY VIRTUE OF BEING AN AFFILIATE OF THE ISSUER OR g OTHERWISE) AND THE EFFECT OF ANY APPLICABLE FOREIGN OR STATE LAW.

The Committee intends to use good faith efforts to list the New Securities on the American Stock Exchange or the NASDAQ National Market System. The Committee has determined that Reorganized EUAP is not likely to meet the exact numerical listing g requirements (for example, it may have fewer than the required number of shareholders) of either the American Stock Exchange or the NASDAQ National Market System. The governing bodies of both of those organizations, however, have the authority to accept securities for listing from companies which do not fully comply with all listing requirements. The Commit _ tee has begun B.

B

E p discussions with both organizations about listing the New Securities, but there can be no assurance at this time that the New Securities will be listed. .

C. Regulatory Approval Process and Attendant Risks The Plan calls for the reorganization of the Debtor and the issuance of securities and the assumption of liabilities by Reorganized EUAP. Outside the context of a Chapter 11 case, this reorganization of the Debtor and issuance of securities and assumption of liabilities by Reorganized EUAP would require the y regulatory approvals discussed below. To expedite the emergence -

from bankruptcy of EUA Power, the Committee intends to seek, or has sought, each of the regulatory authorizations discussed below.

However, the Committee has reserved and will reserve the right to seek regulatory and judicial determinations that the Bankruptcy Court's jurisdiction over the Plan preempts federal or state-g regulatory review with respect to actions necessary to implement the confirmed Plan. See Section 1123(a)(5) of'the Bankruptcy Code: Patterson v. Shumate, 112 S.Ct. 2242, 60 U.S.L.W. 4550 (June 15, 1992); Public Serv. Co. of New Hampshire, 108 Bankr. 854 (Bankr. D.N.H. 1989); In re FCX, Inc., 853 F.2d 1149 (4th Cir.

1988); cert. denied, Cooperatives v. FCX, Inc., 489 U.S. 1011 g (1989); The Columbia Gas System, Inc., C.A. No. 92-127-SLR, 1992 U.S. Dist. LEXIS 9460 (July 6, 1992).

1. New Hampshire Public Utilities Commission ("NEPUC")

Because the Debtor is, and Reorganized EUAP will be, a New

, Hampshire public utility, see N.H. R.S.A. 362:2, the Committee will seek authorization from the NHPUC with respect to the reorganization of the Debtor under N.H. R.S.A. 374:30, which authorizes a public utility to transfer its " franchise, works or system. . . or contract for the operation of its works and system located in his state, when the commission shall find that it will p be for the public good and shall make an order assenting thereto, but not otherwise."

The Committee will also seek authorization for the issuance of securities and the assumption of obligations by Reorganized EUAP under N.B. R.S.A. 369:1, which provides:

A public utility lawfully engaged in business in this state may, with the approval of the commission but not otherwise, issue and sell its stock, bonds, notes and other evidences of '

indebtedness payable more than 12 months after the date thereof for lawful corporate purposes. The proposed issue l

i

B and sale of securities will be approved by the commission where it finds that the same is consistent with the public D

good. . . .

To the extent applicable, the Committee may also seek NHPUC approval under N.H. R.S.A. 366:3 with respect to any contract between a public utility and an affiliate providing for the furnishing of any services. An affiliate is defined to include D "{elvery person who the Commission may determine as a matter of fact, after investigation and hearing, is either directly or indirectly . . . actually exercising any substantial influence over the policies and actions of a public utility . . . . " There can be no assurance, however, that the NHPUC will grant the g required approvals or that such approvals will be granted within the time requested.

2. Federal Energy Regulatory Commission ("FERC")

The Debtor is, and Reorganized EUAP will be, a "public g utility" also subject to FERC jurisdiction, see 16 U.S.C. S 824, because the Debtor owns and operates, and Reorganized EUAP will own and operate, facilities used to sell power for resale or to transmit power on an interconnected interstate electric system.

Section 203 of the Federal Power Act ("the FPA"), requires that a public utility not " dispose of the whole of its facilities subject to the jurisdiction of the Commission, or any part thereof of a value in excess of $50,000 without first having secured an order of the Commission authorizing it to do so." 16 U.S.C. S 824b(a).

Accordingly, the Committee will seek such authorization for the reorganization of the Debtor. There can be no assurance, however, that FERC will grant the required approvals or that such approvals g will be granted within the time requested.

Although Section 204 of the FPA, 16 U.S.C. S 824c, likewise requires that a public utility subject to FERC jurisdiction obtain prior FERC authorization before issuing any security or assuming any liability, such authorization is not required here because subsection (f) of Section 204 statec that the requirements of D Section 204 "shall not extend to a public utility organized and operating in a State under the laws of which its security issues are regulated by a State commission." Reorganized EUAP will be a public utility organized and operating in a state with laws that regulate its issuance of securities. Accordingly, the NHPUC's D

jurisdiction preempts FERC's jurisdiction under Section 204.

D D

C

3. Nuclear Regulatory Commission ("NRC")

Under the Atomic Energy Act of 1954, as amended, the NRC has supervisory and regulatory jurisdiction over the construction and operation of nuclear reactors, particularly with respect to public health and safety. Pursuant to the Atomic Energy Act, the NRC has issued an operating license for Seabrook which, inter alia, names the Debtor as an owner-licensee. Under the EUA Settlement, the O Debtor will take all necessary steps to effect the redemption of all of the Debtor's issued and outstanding shares of common and preferred stock (the " Redemption"). The Committee believes that the Redemption does not require any action on the NRC's part since the Redemption will not result in the direct or indirect transfer g of the operating license for Seabrook. The NRC will be requested, in the event it finds that the Redemption constitutes a transfer of control of the operating license for Seabrook, to approve such transfer.

By contrast, the reorganization of the Debtor under the Plan q will involve an indirect transfer of control over the Seabrook v license. Such a transfer requires prior approval of the NRC and may necessitate an amendment to the Seabrook license. The Committee intends to file an application with the NRC seeking such approval in conjunction with the Joint Owners. There can be no assurance, however, that the NRC will grant the required approvals n or that such approvals will be granted within the time requested.

v The NRC has the ability to shut down the Plant at any time in the interest of public health and safety. Because the Debtor's primary source of income flows from sales of its share of Seabrook Electricity, the risks of an NRC-related shutdown of Seabrook are an additional risk factor which should be considered in voting for

,d or against the Plan.

4. Securities and Exchange Commission ("SEC")

The Redemption will become effective prior to any effort by the Committee to solicit acceptances for the Plan, therefore the O

SEC will not need to approve the Plan or Disclosure Statement. No approval will be required because the Debtor will no longer be a subsidiary company of a registered holding Company within the meaning of the Public Utilities Holding Company Act ("PURCA").

Upon consummation of the Plan, any Bondholder that receives d 10% or more of the New Securities would become a " holding company" within the meaning of Section 2(a)(7) of PURCA. Prior to the Effective Date, any such Bondholder (s) should file an application for an order pursuant to Section 3(a)(4) of PUHCA exempting such Bondholder (s) from all provisions of PURCA other than 3

0 l

O O Section 9(a)(2). Section 3(a)(4) of the Act provides that the SEC shall exempt any holding company from any provision or provisions of the Act, unless and e*xcept insofar as it finds the exemption detrimental to the public interest or the interest of investors or consumers if "such holding company is temporarily a holding company by reason of the acquisition of securities for purposes of O liquidation or distribution in connection with a bona fide debt previously contracted . . . . " On the basis of the facts known to it, the Committee believes that any such Bondholder (s) would satisfy the requirements for an exemption under Section 3(a)(4) in that each would temporarily be a holding company by reason of the acquisition of securities for purposes of liquidation in e nnecti n with a bona fide debt previously contracted.

O The Committee believes that the emergence of the Debtor from bankruptcy under the Plan is in the public interest and that the Plan adequately provides for the protection of investors and consumers. However, there is no assurance that such approvals or exemptions will be granted or that they will be granted within the C) time requested. It is a condition to the Effective Date occurring under the Dlan, that the SEC shall not have denied a Section 3(a)(4) exemption to any Bondholder who will be issued 104 or more of the New Securities.

Pursuant to the Energy Policy Act of 1992 (the " Energy Policy O Act"), an exemption from PUHCA is available to certain types of generating facilities designated Exempt Wholesale Generators

("EWGs"). An EWG is defined as any person determined by FERC to be engaged directly, or indirectly, through one or m re affiliates as defined in secti n 2(a)(ll)(B) Iof

O PUHCA), and exclusively in the business of owning or operating, or both owning and operating,-all or part of one or more eligible facilities and selling electric energy at wholesale . . . .

.g An " eligible facility" is defined as a facility "used for the generation of electric energy exclusively for sale at wholesale

. . . . A portion of a generating facility can qualify as an eligible facility provided that no other portion of the facility is owned or operated by an electric utility company that is an affiliate or associate company of the entity applying for EWG 8tatuS- A person applying in good faith to FERC for a

'O determination of EWG status is deemed an EWG until FERC makes such determination.

The Committee believes that Reorganized EUAP will be eligible for EWG status pursuant to the Energy Policy Act. Thus, the Committee anticipates that the Debtor will apply to FERC for an O

.O

)

order declaring that Reorganized EUAP is an EWG. Since an EWG is not considered an electric utility company under Section 2(a)(3) g of PUHCA, the ownership of New Securities would not cause any Bondholder to become a " holding company" within the meaning of Section 2(a)(7) of PUHCA. Accordingly, provided that Reorganized EUAP is acco'rded EWG status, an exemption pursuant to Section 3(a)(4), described above, would not be required.

O D. Executory Contracts Pursuant to Bankvmtcy Code Sections 365(d)(2) and ll23(b)(2), the Debtor may assume or reject any executory contract or unexpired lease at any time prior to the Confirmation Date.

The Plan provides, however, that no executory contract or O unexpired lease may be rejected except with the consent of the Committee. The Plan provides that each executory contract or unexpired lease which has not expired by its own terms prior to the Effective Date, was not assumed during the Chapter 11 proceedings, and is not assumed under the Plan, !s rejected by g Reorganized EUAP.

Attached as Exhibit K is the Statement of Executory Contracts filed by the Debtor in this case. The Plan provides that it will serve as a motion to assume the following agreements, all of which are related to the operation of Seabrook:

O (i) The Agreement for Joint Ownership, Construction and Ownership of New Hampshire Nuclear Units, dated as of May 1, 1973, as amended (the " Joint Ownership Agreement");

(ii) The Seventh Amendment to and Restated Amendment for Seabrook Project Disbursing Agent, dated as of November 1, O 1990, as amended through and including the Second Amendment to the Seventh Amendment made as of the 29th day of June, 1992 by and-among North Atlantic Energy Corporation and the other Participants; (iii) The Transmission Support Agreement dated as of May 1, O 1973, as amended, by and among PSNH, New England Power Company and the other Participants; (iv) Agreement of Settlement dated as of January 13, 1989

(" Comprehensive Settlement Agreement"), by and among PSNH, The United Illuminating Company, Canal Electric Company, The O Connecticut Light and Power Company, EUA Power Corporation, Massachusetts Municipal Wholesale Electric Company, Montaup electric Company, New England Power Company, and Tarnton Municipal Lighting Plant, Bangor Hydro-Electric Company, e

l 6 l

I I

O Central Maine Power Company, Central Vermont Public Service O Corporation, Fitchburg Gas & Electric Light Company, and Maine Public Service Company, and Yankee Atomic Electric Company; (v) Agreement of Compromise and Settlement dated as of November 1, 1991, among United Engineering & Constructors, Inc.,

The Participating Seabrook Joint Owners named therein and Yankee O Atomic Electric Company; and (vi) Seabrook Project Managing Agent Operating Agreement, dated as of June 29, 1992, as Amended, between North Atlantic Energy Service Corporation and the other Participants; O (vii) Such other agreements which pertain to Seabrook and which have been entered into by the Debtor or by or on behalf of all Joint Owners, a complete list of which shall be filed no later than ten days prior to the date scheduled for confirmation of the Plan.

O The Plan provides that all cure payments which may be required by Bankruptcy Code Section 365(b)(1) under any executory contracts or unexpired leases which are assumed or assumed and assigned under the Plan will be made by Reorganized EUAP on the Effective Date or as soon as practicable thereafter.

O The Plan provides that any claims for damages crising from the rejection of an executory contract or unexpired lease not rejected prior to confirmation must be filed within thirty days after the mailing of notice of Confirmation or be forever barred from receiving any distribution under the Plan.

O E. Summary Of Provisions Of The Plan Relating To Distribution

1. Pro Rata Distribution The property to be distributed to each of Classes 1 and 3 under the Plan shall be divided Pro Rata among the holders of Claims of the class, based on the Allowed Amount of the holders' O claims in that class and subject to fractional allotments of the New Securities as described in the Plan.

2. Bondholders Entitled to Receive Distributions O Except to the extent otherwise provided pursuant to an order of the Bankruptcy Court, any distribution under the Plan in respect of Claims under the Series B or Series C Notes will be made to the Indenture Trustee for distribution to the Bondholders as of the Record Date for distribution purposes (subject to the rights of the Indenture Trustee as against such holders pursuant O

l O

)

to the terms of the Indenture). The reasonable fees and expenses

)

of the Indenture Trustee incurred solely in connection with making such distributions shall be paid by Reorganized EUAP to the extent provided in the Indenture, or as otherwise agreed betwee.n Reorganized EUAP and the Indenture Trustee.

3. Distribution Date

) Subject to the provisions of the Plan, property to be distributed on the Effective Date shall be distributed to the Disburning Agent designated by the Committee on or as soon as practicable after the Effective Date but in no event more than three (3) days following the Effective Date and (c) shall be

)

distributed by the Disbursing Agent on or as soon as practicable after the receipt _thereof to each holder of a claim of that class that is an Allowed Amount as of such date, and (b) shall be distributed by the Disbursing Agent to each holder of a Claim of that class-that becomes an Allowed Amount after the Effective Date, to the extent allowed, as soon as practicable after the

)

order allowing the claim becomes a rinal order.

Property to be distributed under the Plan on account of a claim or a kind described in Bankruptcy Code Sections 507(a)(1),

507(a)(2), or 507(a)(7) shall be distributed on the later of (a) the applicable date specified in the preceding paragraph and

) (b) the date on which the distribution to the holder of the claim would have been due and payable in the absence of the Plan.

4. Disbursing Agent Such entity or entities as may be designated by Reorganized EUAP, including the Indenture Trustee or stock trar.sfer agent for

) the New Securities shall act as Disbursing Agent under.the Plan with respect to property to be distributed under-the Plan. A Disbursing Agent may employ or contract with other entities to assist in or perform the distribution of property to be distributed. Each Disbursing Agent shall maintain sucP ' counts as may be authorized by the Bankruptcy Court for the p' 'ses of

) maintaining any reserve provided for in this Plan or fo. auct.

other purpose as may facilitate the distributions contemplated by this Plan. Each Disbursing Agent shall serve without bond, and subject to the approval of the Bankruptcy Court, shall receive reasonable fees and expenres from Reorganized EUAP.

)

)

)

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5. Disputed Claims or Interests

a. Reserve Notwithstanding any other provision of the Plan, the Disbursing Agent shall withhold from the property to be distributed under the Plan to each class of Claims, and shall glace in a separate reserve for such class a sufficient amount to

) se distributed on account of the face amount or estimated amount, as the case may be, of each claim in such class that is disputed, contingent or unliquidated and that has not become an Allowed Amount as of the date of initial distribution under the Plan, including, without limitation, any disput ed Claims in respect of executory contracts rejected pursuant to the Plan, plus any post-

) Filing Date interest to the extent such amount would be included in the Allowed Amount of such claim.

As to any unliquidated claim or contingent claim, the Bankruptcy Court shall, upon motion by Reorganized EUAP, the holder of the Claim, or the Committee, estimate the maximum amount

) of such Claim for purposes of allowance pursuant to Section 502(c) of the Bankruptcy Code. Such estimation shall constitute the maximum amount in which such claim may ultimately become an Allowed Amount.

To the extent practicable, the Disbursing Agent shall invest

) any cash in the reserve in a manner that will yield a reasonableThe net return, taking into account the safety of the investment.

Disbursing Agent shall also place in the same reserve any distributions received on any securities held in the reserve, including dividends (in stock or cash) received on shares of New Securities.

)

b. Distribution The property in each reserve, including the allocable portion of the net return and any dividends, interest or other payments received thereon, shall be distributed on account of the disputed,

) contingent or unliquidated Claims as and to the extent that such claims become Allowed Amounts.

Any property in the reserves established for disputed Claims in each of Class 1 through 3, inclusive, remaining after the resolution of all disputes over, the allowance, or subordination

)- of Claims in such classes, including the remaining net return and dividends, interest or other payments received thereon, shall be distributed to the holders of Claims in Allowed Amounts in Class 1 and Class 3 in accordance with the Plan.

)

)

- - - , ,-,c-- - . - , , . ~ --

)

For the sake of efficiency and economy in connection with distributions, the making of the foregoing distributions may be I withheld until a number of Final Orders respecting disputed Claims in a particular class have been entered, but such distributions shall be made not less frequently than once every six months.

c. Status of Shares in Reserve D Any New Securities held in a reserve for disputed, contingent or unliquidated claims shall be treated as issued and outstanding New Securities for all purposes (including dividends). The Disbursing Agent shall vote such shares in the same proportion as the vote, including abstentions and shares that were not voted, on all issued and outstanding New Securities that are not held in a D reserve.

6. Surrender of Securities It is a condition to participation under the Plan that (a) a holder of a Series B or Series C Note that desires to receive the D property to be distributed on account of that Series B or Series C Note shall surrender the Series B or Series C Note to the Disbursing Agent or its designee; and (b) the nolder of a note of the Debtor other than a Series B or Series C Note that desires to receive the property to be distributed on account of an Allowed Claim based on that note shall surrender the note to the B Disbursing Agent or its designee. All other claims shall be paid according to the Allowed Amounts of those claims.

If a holder of a Series B or Series C Note or other note of the Debtor is unable to surrender such Series B or Series C Note or other note because it has been destroyed, lost or stolen, such D holder may receive a distribution with respect to such Series B or Series C Note or other note upon presenting to the appropriate Disbursing Agent, in a form acceptable to such agent (a) proof of such holder's title to such Series B or Series C Note or other notes (b) proof of the distribution or theft of such Series B or Series C Note or other note, or an affidavit to the effect that B the same has been lost and after diligent search cannot be found; and (c) such indemnification as may be required by such Disbursing Agent to indemnify such Disbursing Agent, Reorganized EUAP and all other persons deemed appropriate by such Disbursing Agent, against

any loss, action, suit or other claim whatsoever which may be made as result of such holder's receipt of a distribution on account of B such Series B or Series C Note or other note under the Plan.

In the event of a transfer of ownership of Series B or l Series C Notes which are not registered on the transfer records of the Debtor, the New Securities or cash to be distributed or paid D

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)

may be distributed or paid to a transferee of an Allowed claim if

) an executed letter of transmittal in form satisfactory to the Disbursing Agent is pres,ented to the Disburning Agent, accompanied by such documentation as is required to evidence and effect such transfer and by evidence that any applicable transfer taxes have been paid.

) 7. Unclaimed Property Any property which is unclaimed for one year after distribution thereof by mail (a) except as provided in subsection (b) hereof to the latest mailing address filed of record with the Bankruptcy Court for the party entitled thereto or if no such mailing address has been so filed, the mailing address reflected

) in the Schedule of Assets and Liabilities Filed by the Debtor, as amended; or (b) in the case of the holder of Series B or Series C Notes to the latest mailing address maintained of record by the Indenture Trustee, shall become property of Reorganized EUAP.

8 .- Withholding Taxes

)

The Disbursing Agent shall withhold from any property distributed under the Plan any property which must be withheld for taxes payable by the person entitled to such property to the extent required by applicable law.

)

P. Post Confirmation Date Financing

1. Gap Period Financing The Debtor will use the proceeds from the EUA Settlement, as

) described in Section VIII.A below, first to pay off all amounts owed to the Participating Joint Owners under the First Stipulation. The remaining proceeds from the EUA Settlement will be available to pay the Debtor's operating expenses, Chapter 11 expenses and other costs and expenses on an ongoing basis. The Committee's financial advisor estimates that the proceeds from the

) EUA Settlement will fund the Debtor's operations until sometime between June 1, 1993 and August 31, 1993. Only after all proceeds from the EUA Settlement have been exhausted will the Debtor have occasion to require funding under a debtor-in-possession facility.

The Debtor is currently negotiating with several parties, including the Participating Joint Owners, to obtain debtor-in-

)- possession financing to fund Seabrook operating expenses and Chapter 11 expenses for the period from when the proceeds of the EUA Settlement are exhausted until the Effective Date.

)

)

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2. Post Effective Date Financing O Since the early stages of this Chapter 11 case, the Committee engaged in extensive efforts to obtain adequate plan of reorganization financing for the Debtor. Its financial advisors have attempted to obtain a long-term power contract for a portion of the Debtor's Seabrook electricity at a price which would q' support a commercial loan in an amount sufficient to fund a plan of reorganization. The Committee's individual members as well as its counsel and financial advisors have engaged in detailed negotiations with commercial banks, investment banks and public utilities concerning Chapter 11 and plan of reorganizatica financing, with or without a power contract. As a result of these efforts, the Committee has explored fully the range and price of I available financing alternatives.

The Committee has been unable to convince any commercial bank to provide financing for its Plan absent the Debtor obtaining a long-term power contract at prices well above the spot market price or significant credit enhancement, neither of which is O currently available. Consequently, the Committee sought plan of reorganization financing in the capital markets. In July, 1992, the Committee's efforts resulted in the Lehman Commitment Letter.

Because Lehman Brothers is a member of the Committee, the Committee established a special subcommittee in order to ensure impartial, arms-length negotiations. The subcommittee consisted O of State Street Bank and Trust Company, the trustee under the Indenture, as lead negotiator, and the Committee's counsel, Hale and Dort and Milbank, Tweed, Hadley & McCloy, and financial advisor, Putnam, Hayes and Bartlett as predecessor to NorthBridge Consulting Group, Inc.

O Pursuant to the Lehman Commitment Letter, Lehman Brothers agreed to syndicate and make available to Reorganized EUAP a secured revolving credit facility to finance the Committee's Plan.

Lehman Brothers agreed to provide $10,000,000 of the Lehman Facility with the balance to be provided by a syndicate of lenders which Lehman Brothers would form. It was further agreed that the

() syndicate lend 2rs could include other Bondholders. The Lehman Commitment Letter was structured to make the Lehman Facility effective after all Plan Regulatory Approvals had been obtained.

However, entry into the Lehman Facility and execution of the Lehman Commitment Letter was contingent upon the Bankruptcy I Court's approval of the Lehman Commitment Letter prior to plan confirmation. As discussed in Section IV.B above, such approval was not granted and the Lehman Commitment Letter expired on July 22, 1992 and has not been renewed. It is uncertain as to whether the Committee will be able to obtain a POR facility. Such 4

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a commitment may never be obtained. However, upon confirmation of the Plan, the Committee intends to use reasonable efforts to 3 obtain long-term POR Pacility financing on terms not materially less favorable than those set forth in the Lehman Commitment Letter, with certain modifications necessitated by the change in timing.

The Committee intends first to aeek this financing from

) Lehman Brothers. Nonetheless, the Plan permits the Committee after the Confirmation Date, to enter into a POR Facility on the same, similar or more favorable terms with an entity other than Lehman Brothers and is authorized to enter into a POR Facility on terms less favorable than the terms set forth in the Lehman Facility, subject to approval of the Bankruptcy Court and any

) regulatory body with jurisdiction under applicable law. In light of the $20,000,000 made available under the EUA Settlement, the ccmmittee anticipates that it may be able to improve the terms of the POR Facility it had previously negotiated with Lehman Brothers. There is no assurance, however, that the Committee will be able to do so.

) The Committee will use its best efforts to obtain a POR Facility in the principal amount of not more than $45 million, an amount sufficient to fund Reorganized EUAP's ongoing operations until it secures one or more power contracts sufficient to fund and carry the Reorganized EUAP business forward on an ongoing

) basis. Subject to Bankruptcy Court approval, such a POR Facility will bear interest at a floating rate of not more than prime plus 7% per annum. It may also provide for a minimum rate per annum, ,

and expire in December 1995, although it is possible t1at the POR Facility could expire as late as December 1997. It will likely be Secured by a first priority lien and mortgage on all assets of

) Reorganized EUAP. As additional consideration for providing the POR Facility, the participants in the POR Facility may seek to obtain the economic value of up to 15% of the common stock of Reorganized EUAP, on a fully diluted basis excluding the value received by the Debtor's estate from the EUA Settlement.

Moreover, the amount of the equity to be paid to the POR Lenders 3 may be subject to reduction if Reorganized EUAP reduces the commitment amount of the POR Facility. The agent for the POR Lenders may be entitled to appoint one member of the New Board of Reorganized EUAP.

The POR Facility may also require the payment of certain

) customary fees on and after the Effective Date of the Plan, such as (a) a commitment fee, equal to 1/2% per annum on the average daily unused amount of the POR Facility, accruing from execution of a commitment letter,_but first payable on the Effective Date;

)

4 (b) an agent's fee of $75,000 per annum, payable in advance and O first due on the Effective Date, and (c) a facility fee equal to 3% of the POR Facility amount, ($1,350,000), payable upon the Effective Date.

Finally, aside from these fundamental economic terms, there will likely be a variety of covenants and conditions typical of a O financing of this type. The POR Facility will also in all likelihood require the Debtor's estate to pay certain fees and expenses associated with the financing. These fees and expenses may fall into three categories:

a. the POR Lender may seek a commitment fee of up to

() $350,000 upon execution of a commitment letter to provide the POR Facility for agreeing to use its good faith efforts to provide and/or syndicate the POR Facility (the " Initial Commitment Fee").

The Committee believes that payment of such an Initial Commitment Fee would be commercially reasonable and necessary to induce the POR Lender to provide or syndicate the POR Facility.

b. the POR Lender would likely require that expenses of its professionals incurred in conducting due diligence for and documenting the POR Facility will be reimbursed as an administrative expense after review and approval by the Bankruptcy Court, e

c. the POR Lender would likely require that the Debtor indemnify the POR Lender and its affiliates, advisors, officers, directors, employees, attorneys and agents (the " Indemnities")

from any liabilities arising out of a commitment letter to provide the POR Facility and the transactions contemplated thereby, S including attorneys' fees and expenses, unless such liabilities are the result of the gross negligence or villful misconduct of the indemnities. Any such indemnification expenses will have administrative expense status, subject to review and approval by the Bankruptcy Court.

9 The Committee believes that such a POR Facility will enable Reorganized EUAP to repay any balance outstanding under the Third Stipulation and fund its ongoing operations until it secures one or more power contracts sufficient to finance and carry Reorganized EUAP's business forward.

$ The Plan permits the Committee to obtain a POR Facility in an amount which is not more than $45 million.

There is no assurance that a POR Facility of the type I described above will be available or if a POR Facility is

available, whether some or all of the terms will be more or less k

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favorable than those described above. The Plan delegates to the Committee the responsibility and power to negotiate for and obtain -

) the POR Facility. If, in the Committee's judgment, the financing that it is able to obtain is materially less favorable than the terms described above, the Committee will seek Bankruptcy Court approval and such regulatory approval as is required under applicable law with respect to such facility.

)-

G. Management

1. GAP Period Managing Agent The Committee's financial advisor, NorthBridge Consulting

) Group, Inc., as successor to Putnam Hayes and Bartlett, and counsel, Hale and Dorr, together with James Asselstine of Lehman Brothers, a member of the Committee, acting as a subcommittee of the Committee, are negotiating the terms upon-which a managing agent for the Debtor and Reorganized EUAP will be retained for the purpose of managing and conducting the affairs of the Debtor

) during the Gap Period as well as following the Effective Date.

The Committee does not anticipate that following the Confirmation Date the Debtor will require the services of any employees.

Rather, all of the Debtor's and Reorganized EUAP's business affairs will be conducted by the managing agent or other professionals retained by the Debtor and Reorganized EUAP. EUA

) Service will likely continue to provide some of these administrative services after the Confirmation Date and prior to the Effective Date of the Plan. As discussed above, Mr. John Stevens, who is currently the President and a Director of the Debtor, will serve as the sole Director, President and Treasurer of the Debtor from the effective date of the EUA Settlement

) through the Effective Date of the Plan. Mr. Richard Samuels will serve as the Secretary of the Debtor for that same period. The financial affairs, reporting requirements and participation as a joint owner will be the responsibility of the managing agent. The marketing of the Debtor's and Reorganized EUAP's share of Seabrook electricity will be the responsibility of the marketing agent

) described in Section H below. The performance of the managing agent and marketing agent will be subject to the supervision of Mr. Stevens and the committee during the Gap Period and will be  ;

subject to the supervision of the New Board following the- '

Effective Date. The Committee has received a letter of intent l from NU and United Illuminating indicating their willingness to 1

) serve jointly as the Debtor and Reorganized EUAP's managing agent. I l The terms upon which those services will be provided are under I discussion and no final agreement has been reached. Under the EUA Settlement, the Committee may continue to receive management services, other than long-term power sales services, from EUA L

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)

Service until the later of two years from the effectiveThe date of the EUA Settlement or the Effective Date of the Plan.

) Committee will file with Bankruptcy Court a motion for authority to enter into a service contract with a party other than EUA EUA Service at such time as acceptable terms have been reached.

Service will continue to provide these services until a new arrangement has been structured. The managing agent willAs not set function as the Board of Directors of Reorganized EUAP.

) forth below, the Reorganized EUAP will have an independent Board of Directors. In the event that the existing Board of directors of the Debtor were to resign upon entry of an order confirming the Plan, the Committee will seek instructions from the Bankruptcy Court with respect to the Board of Directors of the Debtor.

) 2. Post Effective Date Management On the Effective Date, all directors and officers of the Debtor will be deemed to have resigned, if they have not earlier resigned, without any further action on the part of any person or e n t i t '< . The New Board shall take office upon the Effective Date.

) The persons the Committee intends to appoint to the New Board have not yet been selected, but such persons shall be identified at or prior to the Confirmation Hearing. The first annual meeting of the new shareholders will take place approximately one year after the Effective Date.

) D. Future Operations

1. Marketina Strateay On July 10, 1992, the Committee issued a Request for Proposals (the "RTP") to serve as the marketing agent on behalf of

) the Debtor and Reorganized EUAP beginning on the Confirmation Da e. A copy of the RTP, in the form attached hereto as ExLibit F, was sent to five New England utilities. On July 30, Putnam, Hayes & Bartlett received responses to the RTP from three of them. The Committee's financial advisor, NorthBridge Consulting Group, Inc., as successor to Putnam, Hayes and

) Bartlett, and Bernhard Fleming, of IDS, a member of the Committee, acting as a sub-committee of the Committee, have evaluated the proposals received, and will negotiate with one or more of the respondents in order to enter into a contractAtwith the selected this time, respondent prior to the Confirmation Date.

negotiations are currently underway with UNITIL Corporation to

) employ their services as marketing agent for the saleable power of Reorganized EUAP. The Committee will file a motion with the Bankruptcy Court seeking approval of a marketing agent contract at such time as it has been completed.

Y

)

I The marketing agent's contract will provide that the I marketing agent will perform all of the marketing functions currently provided by EUA Service under the Service Agreement, including short-term marketing of energy and capacity from the Seabrook Interest as well as the procurement and negotiation, for execution by the Debtor and Reorganized EUAP, of longer-term contracts to maximize the value of the Seabrook Interest. The I contract will be structured to give the marketing agent an incentive to place long-term power contracts. All long-term power contracts during the Gap Pericd will be subject to review and approval by the Committee and the Bankruptcy Court and any regulatory body with jurisdiction under applicable law. Following the Effective Date, all long-term power contracts will be subject I to review and approval by the New Board and any regulatory body with jurisdiction under applicable law.

During the Gap Period, the Committee presently intends to instruct the marketing agent to utilize a two part strategy in marketing power from the Seabrook Interest to negotiate short-term

> sales on a monthly to semi-annual basis that maximize short-term revenues and thereby reduce operating deficits in 1993 and 1994; and to negotiate longer-term contracts in 1993 and 1994 that will reduce cash flow deficits to break-even levels by 1995 and provide the basis for refinancing the POR Facility prior to the end of 1995. A fuller implementation of this strategy is set out in the

> Projections and Financial Information section that follows. There is no assurance, however, that this strategy will be successful.

Since Seabrook became operational in August 1990, Debtor has been unable to obtain a long-term power contract to sell its Seabrook-generated power. Without such a contract Debtor has b operated at a loss and is likely to continue to operate at a loss until such a contract is obtained. While the Committee is currently negotiating with UNITIL Corporation to act as marketing agent for the saleable power of Reorganized EUAP, there is no assurance Reorganized EUAP will at any time be able to obtain a power contract with sufficient revenues that will enable it to

> operate profitably. In such event, Reorganized EUAP may not be able to obtain sufficient capital to continue to conduct its business beyond 1994/95 when the Plan of Reorganization financing necessary to effect the Plan, if obtained, is likely to expire.

The Committee has executed a letter of intent to sell ten b megawatts of capacity and energy from Seabrook which will generate revenues for the ten megawatts to be sold consistent with the market evidence on which the Committee's financial advisor bases its estimate of the value of the Seabrook Interest.

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2. Pro $ections and Financial Information

) The Committee intends to seek a POR Facility of not more than

$45 million that will repay the GAP Period Financing, if any, and fund expected operating deficits in 1993 anu 1994 beginning on the Effective Date. Currently, the output of the Seabrook Interest is being sold on a monthly basis on a S/MWH basis, at prices below the Debtor's unit operating costs. Due to the weak demand for

] electricity in the region and the fixed nature of operating costs, this condition is likely to continue through 1993 and 1994, necessitating draws on a debtor-in-possession facility and the POR racility.

Reorganized EUAP will be responsible under the Joint

} Ownership Agreement for its share (12.1324%) of all the costs of Seabrook, including fixed costs (whether or not Unit 1 is operating), operating costs, costs of procurement, fabrication and disposal of nuclear fuel, costs of additional construction or modification, costs associated with condemnation, shutdown, a

retirement or decommissioning of Seabrook and certain transmission

/ costs. Reorganized EUAP will also be responsible for payment of local property taxes to the towns of Seabrook, Bow, Hampton and Hampton Falls, and the payment of the New Hampshire Nuclear Station State Property Tax, subject to the pending judicial challenge. The Committee's financial advisor has also projected other costs of Reorganized EUAP that will be incurred during the GAP Period and thereafter for the continued operation of and sale of power from the Seabrook Interest, including management agent expenses, marketing agent fees and commissions, legal fees and other reorganization expenses.

3 The projected annual cash expenditures for the operation of

/ the Seabrook Interest are set out under the heading Disbursements on the Pro Forma Cash Flow Statements in Exhibits G, H and I hereto. The projected Disbursements are based on the 1993 Budget and 1994-1997 Forecast (For) Seabrook Station (the "1993 Seabrook Budget"), on the Seabrook Station Unit 1 Fuel Cycle Economics Projection (the " Fuel Projection"), on projections and other data

) provided to the Committee by the Participating Joint Owners, and on estimates and extrapolations made by the Committee's financial advisor. The specific line item Operating Costs on the Pro Forma Cash Flow Statement is the sum of five items on the Pro Forma Income Statement: Operations Expense, Transmission Expense, Property Taxes, Decommissioning and Seabrook Tax. The sources for

) individual line items and the underlying assumptions regarding the escalation of costs are noted on the Assumption Tables in Exhibits G, H and I. General inflation as measured by the GDPIPD is projected at 4% per annum. The projected total cash costs for

)

)

1993, 1994 and 1995 (including extraordinary expenses of a one-time nature) are approximately S41 million, S34 million and $37 9 million respectively. The 1993 Seabrook Budget projections reflect the cost savings for operations and maintenance that the Joint Owners have projected as a result of NAESCO assuming operational responsibility for the management, operation and maintenance of Seabrook.

$ The 1993 Seabrook Budget projects operation of Unit 1 at a 901 capacity factor during periods in which there are no planned outages. After the Second Refueling that began on September 5, 1992 and concluded November 8, 1992, no refueling or maintenance outages are scheduled until 1994. Refueling and maintenance outages are scheduled thereafter on an 18 month basis. The 1993

] Seabrook Budget projects for 1993, 1994 and 1995 annual capacity factors of 90%, 76% and 76% respectively. Therefore, during non-outage years, such as 1993, the 1993 Seabrook Budget projects that the electricity generated by the Seabrook Interest should be approximately 1,100,000 MWH. During planned-outage years such as 1994 and 1995, the 1993 Seabrook Budget projects that the

] electricity generated by the Seabrook Interest should be approximately 931,000 MWH.

The Committee's financial advisor has based its projections of generation on the projections contained in the 1993 Seabrook Budget, following the 18 month refueling schedule. However, the D Committee's financial advisor has discounted the 1993 Seabrook Budget projection by 101, resulting in a Connittee projection of 990,000 MWH in non-outage years and 838,000 MWH in planned-outage years. The Committee's financial advisor projects the capacity factor for the Seabrook Interest in 1993, 1994 and 1995 at 811, 69% and 69% respectively, or an annual average capacity factor of

] 72.75 percent. This projection is more conservative than the capacity factor projected in the 1993 Seabrook Budget as the fixed costs of operating the Seabrook Interest are spread over a smaller number of MWH, resulting in higher unit operating costs under the Committee projections. The 72.75% capacity factor projection is also generally consistent with the performance of Seabrook since

[] it began commercial operation on August 19, 1990. Since that date Seabrook has operated at a cumulative capacity factor of approximately 801. The projection of the Committee's financial advisor is also consistent with the operating history of Northeast Utilities' Millstone Unit 3 that began operating in 1986.

Milestone Unit 3, like Seabrook Unit 1, is an 1150 MW Westinghouse

[] PWR reactor with General Electric turbines and generators. Both units are now operated by subsidiaries of Northeast Utilities.

During its first five years of operation, Millstone 3 operated at annual capacity factors of 844, 67%, 76%, 70% and 81% for a five-year average capacity factor of 75.5 percent.

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g Based on the total cost projections and the generation projections set out above, the projected breakeven unit cash costs (including extraordinary expenses of a one-time nature) for the Seabrook Interest are S40.18/MWH in 1993 (or equivalently 4.1 cents /kWh). Breakeven projections for 1994 and 1995 are 4.0 cents /kWh and 4.4 cents /kWh respectively. Reorganized EUAP will O have lower breakeven costs going forward than the Debtor had prior to the Filing Date. The debt service costs of the approximately

$280 million of Series B Notes and Series C Notes will not be included in the calculation of Reorganized EUAPs costs as these notes will be converted to equity under the Plan. Annual breakeven projections include as a cost (for purposes of the g breakeven calculation) projected capital additions for plant and nuclear fuel, and a fuel disposal fee of approximately one mill per kWh. If generation is lower than projected due to unplanned forced outages, extension of planned outages or regulatory action forcing a plant shutdown, breakeven unit cash costs will be higher. Conversely, if generation is higher than projected, g breakeven unit cash costs will be lower. Unit sales revenue since commercial operation began on August 19, 1990 has ranged from a low of 1.8 cents /kWh in April, 1991 to a high of 3.4 cents /kWh in January, 1991. Average unit sales revenue since th.? beginning of commercial operation has been approximately 2.5 cents /kWh.

g Based on the generation and cost projections set out above, and the more detailed assumptions set out in the Assumption Table in Exhibit G, the POR Tacility of not more than $45 million should

! be sufficient to cover operating deficits in 1993, 1994, and 1995 and provide enough time to secure the longer-term contracts necessary to obtain conventional debt financing by the end of 1995. The cumulative am unt f the POR Facility which is drawn

.O and the length of time during which draws are required will depend on the future path of electricity prices, the escalation rate of operating costs, the interest payments due under the POR Facility,

and the capability of Reorganized EUAP to enter into longer-term I contracts to sell some or all of the output from the Seabrook Interest n this basis and other factors. There can be no O assurance that Seabrook will operate as projected, that costs actually incurred will be as projected, or that revenues actually received from sales of energy and capacity will be as projected.

l The Seabrook Interest currently competes with and will g continue to compete with other sources of baseload generation capacity in the Northeast United States. Competitors of Reorganized EUAP will include both utilities and non-utility generators (i.e. independent power producers and qualifying facilities). Due to the conversion of debt to equity under the Plan, Reorganized EUAP will, on the Effective Date, be able to lO 4

compete for market contracts based on its going forward costs and g will not need to recover, in the prices it obtains in the market, sunk costs that have been written down during the Chapter 11 process or previously by the Debtor. At the present time, the best evidence of the market price for purchases of medium- to long-term commitments of baseload energy and capacity is that of transactions arising from the all-source solicitation conducted by g UNITIL Power Corporation ("UNITIL") in 1991. The UNITIL solicitation was issued to over 220 companies including utility and non-utility generators active in the Northeast. UNITIL received bids from 54 companies for approximately 2,700 MW to fill its need for 25 MW in 1993 growing to 75 MW in 1996.

g On March 23, 1992 an agreement dated February 10, 1992 between United Illuminating Company as seller and UNITIL as buyer was filed with the Federal Energy Regulatory Commission (the "FERC"). The contract was subsequently approved as a market-based contract and the contract rates were accepted for filing by the FERC in its order dated August 28, 1992. The contract provides for the sale of 7 MW from Bridgeport Harbor Station Unit No. 3 0 ("BHS3") beginning on May 1, 1993, escalating to 15 MW on November 1, 1996 and continuing through October 31, 2005. The contract also provides for the sale of an additional 15 MW from New Haven Harbor Station Unit No. 1 ("NHHSl") beginning on November 1, 1996 and continuing through October 31, 2006. The entitlement to and obligation to pay for capacity under the contract is expressed as I a percentage of rated capacity of each of the units. The contract provides for a fixed schedule of escalating capacity charges for each of the units. UNITIL, as buyer, is responsible for fuel costs, transmission charges and losses, and other expenses. An excerpt of the pricing terms for the contract is attached hereto as Exhibit J.

g The market price (on a cents per kWh basis) established by the UNITIL purchase contract for baseload energy and capacity depends on the fixed capacity prices for BHS3 and NHHS1, their

capacity factors, and the fuel costs and other expenses passed through to UNITIL as buyer. Based on current delivered coal I prices to BHS3, escalating at the projected general inflation rate of 4% per annum, and a capacity factor of 75%, the unit busbar cost for BHS3 power under the contract is estimated to rise from approximately 4.1 cents /kWh in 1993 to approximately 7.8 cents /kWh in 2005. Based on the April 1, 1992 NEPLAN Staff estimates of the dispatch price for residual oil and natural gas in 1996, their I escalation thereafter, and a capacity factor of 70%, the unit busbar cost for NHHS1 power under the contract is estimated to rise from approximately 6.2 cents /kWh in 1996 to 11.0 cents /kWh in 2006.

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) l Based on the unit contract for baseload capacity and energy

) from BHS3 and NHHS1, the Committee's financial advisor has determined the fair market value of the Seabrook Interest as of the beginning of 1993 by applying a discounted cash flow analysis through 2029 which uses estimates of future revenues that the Seabrook Interest would generate from the sale of electricity at the market prices established by the sale from United Illuminating

) Company to UNITIL. Future costs are projected based on the 1993 4 Seabrook Budget, the Fuel Projection, other data provided to the Committee by the Participating Joint Owners, and on the Committee's financial advisor's estimates and extrapolations.

Using a 34% federal tax rate, an 8% New Hampshire tax rate, and a 13% required return on equity, the Committee's financial advisor

) estimates the fair market value of the Seabrook Interest as of the beginning of 1993 at approximately $130 million. Pursuant to the EUA Settlement described in Section VIII.A below, the projected borrowings and accrued interest owed under the First Stipulation will have been paid in full on or about January 1, 1993. After this payment a cash balance of approximately $4 million will remain from the money paid to the Debtor under the EUA Settlement.

)-

As disclosed above, actual sales in 1993 and 1994 of most of the power from the unit will likely be made at spot prices that, when combined with sales under long-term contracts, will require a debtor-in-possession facility or tne POR Facility to fund expected

) operating deficits. Based wn the projected operating costs, the projected generation and the market evidence of future power prices, the Committee's financial advisor has developed three scenarios for future operations and has completed pro forma financial projections for each. The Committee's financial advisor believes the three cases reflect probable scenarios, although

) there can be no assurances that this is the case.

As a result of the expected infusion of $20 Million from the EUA Settlement Agreement and the resulting repayment of the borrowings and accrue / interest under the First Stipulation, the projection by the Committee's financial advisor of future

) borrowings under the POR Facility, for each of the three cases reflected in the pro forma financial projections, is significantly lower than $45 million. The projections in Exhibits G, H & I hereto also reflect the recent 1993 Seabrook Budget, changes in anticipated legal and other expenses resulting from the EUA Settlement, current projections of expenses for the marketing and-managing Agents, and current information on the level of

) borrowings under the First Stipulation following the refueling outage that ended November 8, 1992.

)

)

h The projections in Exhibits G, H and I apply the following I rule in determining the payment of dividends. No dividends will be paid until net income.is positive. If net income is positive, 90% of net income is paid as dividends to the holders of_the New Securities and the remaining 10% is accumulated in a reserve fund until such fund totals $20 million. Once the reserve fund reaches

$20 million, all free cash flow is paid as dividends. This rule

> 1s intended for financial projection purposes only, and does not necessarily represent the policy that will be adopted by Reorganized EUAP with respect to the payment of dividends in the future.

The projections in Exhibits G, H and I incorporate the I revenues (on a MW weighted basis) from the sale of 10 MW of capacity and energy from Seabrook pursuant to a signed letter of intent between the Committee and a prospective purchaser. A contract to formalize the intentions of the parties is being drafted and will be submitted to the Bankruptcy Court for approval. The revenues expected to be received under the

> contract, when it becomes effective in mid-1993, are consistent with the market evidence on which the Committee's financial advisor bases its estimate of the value of the Seabrook Interest.

Case it Reorganized EUAP obtains contracts sufficient to meet operating and asset coverage covenants in POR Facility.

Should Reorganized EUAP sign one or a series of longer-term contracts to sell its entitlement beginning in 1994 and/or 1995 at prices approximately equal in present value terms to the UI-UNITIL contract, sufficient cash flow would be generated by 1995 and continuing through 2004 to meet both the operating coverage ratio

> and asset coverage ratio tests set out in the POR Facility. These contracts would provide security for conventional bank financing with more attractive terms to repay the amount drawn on the POR Facility before the end of 1995.

There can be no assurance that one or a series of contrac*.s

> containing similar financial terms will be executed. The proforma projections reflecting the assumption that such contracts are entered into are attached hereto as Exhibit G.

Case 2: Reorganized EUAP obtains contracts at lower prices than in Case 1, but due to the EUA Settlement Agreement is

> still able to meet the asset and operating coverage covenants in the POR Facility.

i b I

l e

It is possible that longer-term contracts at prices lower g than those projected in Case 1 will be entered into by Reorganized EUAP prior to the end of 1994. Because of the $20 Million cash provided under the EUA Settlement Agreement, no additional financing is required under the case 2 assumptions. In this case, the borrowing under the POR racility including accrued interest totals approximately $20 Million at the end of 1994 and sufficient I cash flow would be generated by 1995 and continuing through 2004 to meet both the operating coverage ratio and the asset coverage ratio tests set out in the POR Facility.

These contracts would provide security for conventional bank financing with more attractive terms to repay the amount drawn on I the POR Facility before the end of 1995. The proforma projections based on this set of assumptions are attached hereto as Exhibit H.

Case 3: Reorganized EUAP obtains a commitment 01/1/95 for subordinated debt funding of $20 Million.

I It is possible that some longer term contracts will be placed prior to the end of 1994, but that a significant portion of the Because of the $20 asset will remain uncommitted into 1995.

Million cash provided under the EUA Sattlement Agreement, the projected borrowings under the POR racility, including accrued interest, total approximately $20 Million at the end of 1994 under I Case 3 assumptions. However, the operating coverage test in the POR Facility will still not be met in this case.

The terms of the Lehman Commitment Letter provide that failure to meet the operating coverage test is not an event of default, but that this failure will result in a_ reduction of the I size of the facility to the lesser of $35 The Million or the Committee expects outstanding balance under the facility.

that as a result of the EUA Settlement, the POR Tacility will likely provide that if the outstanding balance is substantially less than $35 Million, the size of the facility would not be limited to this outstanding balance in the event of failure to I meet the operating coverage test, but there is no assurance that this will be the case.

Alternatively, the committee expects that if the size of the POR Facility were so limited by its terms, then subordinated debt -,

financing or other debt or equity financing would be sought to I provide funding through 1995 to meet operating deficits and pay current interest on the POR Facility. There is no assurance, however, that such financing would be available.

D.

.0 >

In this case it is assumed, but there is no assurance, that a l

O commitment for an additional s20 Million is obtained on January 1,  ;

1995 and is drawn down, as needed, through the end of 1995.

Longer-term power contracts available in 1996 allow conventional bank financing at more attractive terms to be arranged to ,

l refinance the POR Facility, as well as any new subordinated debt.

The pro forma projections based on this set of assumptions are -

'O '

attached hereto as Exhibit I.

VII. CERTAIN FEDERAL INCOKE TAX CONSEQUENCES The discussion below is a summary of certain federal income tax consequences of the plan to the Debtor, its creditors and O stockholders. INFORMATION WITH RESPECT TO THE DEBTOR WAS OBTAINED  ;

BY THE COMMITTEE FROM MANAGEMENT OF THE DEBTOR OR WAS PUBLICLY  :

AVAILABLE, AND THE COMMITTEE MAKES NO REPRESENTATION AS TO THE ACCURACY OF SUCH INFORMATION.

DUE TO THE UNSETTLED AND COMPLEX NATURE OF SOME OF THE TAX 0 ISSUES, AS WELL AS THE POSSIBILITY THAT DEVELOPMENTS SUBSEQUENT TO THE DATE HEREOF COULD AFFECT THE TAX CONSEQUENCES OF THE PLAN, THE FOLLOWING DISCUSSION SHOULD NOT BE REGARDED AS DEFINITIVE ADDITIONALLY, THISOR AS-COVERING ALL POSSIBLE TAX CONSEQUENCES.

SUMMARY

DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION r THAT MAY BE RELEVANT TO A PARTICULAR CREDITOR OR STOCKHOLDER IN O LIGHT OF ITS PERSONAL INVESTMENT CIRCUMSTANCES OR TO CERTAIN PERSONS SUBJECT TO SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS (FOR EXAMPLE, INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, BROKER-DEALERS AND FOREIGN PERSONS) AND DOES FURTHER, NOT DISCUSS TRE ANY ASPECT OF STATE, LOCAL OR FOREIGN TAXATION. ,

DISCUSSION WITH RESPECT TO CREDITORS AND STOCKHOLDERS-OF THE O DEBTOR IS LIMITED TO PERSONS WHO HOLD CLAIMS OF THE DEBTOR, AND WHO WILL HOLD THE NEW SECURITIES, AS CAPITAL ASSETS WITHIN THE MEANING OF SECTION 1221 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE " TAX CODE").

CREDITORS AND STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR O OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF I THE PLAN INCLUDING THE APPLICABILITY OF ANY STATE, LOCAL AND .

FOREIGN TAX LAWS.

This summary is based upon the Tax Code, regulations, rulings and decisions in effect on the date hereof and upon proposed -

O regul.itions, a11 of which are subject to change-(possibly with retroactive effect) by legislation,. administrative action or-judicial decision. Moreover, due to a lack of definitive judicial' or administrative authority and interpretation,; substantial uncertainties. exist with respect to various tax consequences of the Plan as discussed herein. NO RULINGS RAVE BEEN OR ARE

O-

~54-0-

= . . - . = . = . = - = _-- . - . . , .

D l l

In this case it is assumed, but there is no assurance, that a 3 commitment for an additional $20 Million is obtained on January 1, 1995 and is drawn down, as needed, through the end of 1995.

Longer-term power contracts available in 1996 allow conventional bank financing at more attractive terms to be arranged to refinance the POR Facility, as well as any new subordinated debt.

The pro forma projections based on this set of assumptions are attached hereto as Exhibit I.

VII. CERTAIN FEDERAL INCOME TAX CONSEQUENCES The discussion below is a summary of certain federal income tax consequences of the plan to the Debtor, its creditors and stockholders. INFORMATION WITH RESPECT TO THE DEBTOR WAS OBTAINED BY THE COMMITTEE FROM MANAGEMENT OF THE DEBTOR OR WAS PUBLICLY AVAILABLE, AND THE COMMITTEE MAKES NO REPRESENTATION AS TO THE ACCURACY OF SUCH INFORMATION.

DUE TO THE UNSETTLED AND COMPLEX NATURE OF SOME OF THE TAX

) ISSUES, AS WELL AS THE POSSIBILITY THAT DEVELOPMENTS SUBSEQUENT TO THE DATE HEREOF COULD AFFECT THE TAX CONSEQUENCES OF THE PLAN, THE FOLLOWING DISCUSSION SHOULD NOT BE REGARDED AS DEFINITIVE OR AS COVERING ALL POSSIBLE TAX CONSEQUENCES. ADDITIONALLY, THIS

SUMMARY

DOES NOT DISCUSS ALL ASPECTS OF FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR CREDITOR OR STOCKHOLDER IN

) LIGHT OF ITS PERSONAL INVESTMENT CIRCUMSTANCES OR TO CERTAIN PERSONS SUBJECT TO SPECIAL TREATMENT UNDER THE FEDERAL INCOME TAX LAWS (FOR EXAMPLE, INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, BROKER-DEALERS AND FOREIGN PERSONS) AND DOES NOT DISCUSS ANY ASPECT OF STATE, LOCAL OR FOREIGN TAXATION. FURTHER, THE DISCUSSION WITH RESPECT TO-CREDITORS AND STOCKHOLDERS OF THE h DEBTOR IS LIMITED TO PERSONS WHO HOLD CLAIMS OF THE DEBTOR, AND WHO WILL HOLD THE NEW SECURITIES, AS CAPITAL ASSETS WITHIN THE MEANING OF SECTION 1221 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE " TAX CODE").

CREDITORS AND STOCKHOLDERS ARE URGED TO CONSULT WITH THEIR 3 OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE PLAN INCLUDING THE APPLICABILITY OF ANY STATE, LOCAL AND FOREIGN TAX LAWS.

This summary is based upon the Tax Code, regulations, rulings and decisions in effect on the date hereof and upon proposed

) regulations, all of which are subject to change (possibly with retroactive effect) by legislation, administrative action or judicial decision. Moreover, due to a lack of definitive judicial or administrative authority and interpretation, substantial uncertainties exist with respect to various tax consequences of the Plan as discussed herein. NO RULINGS HAVE BEEN OR-ARE D

The determination of whether an unsecured claim constitutes a p

" security" for federal income tax purposes is complex and depends on the facts and circumstances surrounding the origin and nature of the claim. Generally, corporate debt obligations evidenced by written instruments with original maturities of 10 years or more have been held to be securities, while notes with a term of five years or less generally do not qualify as securities. While the g

length of time to maturity is generally regarded as the single most important factor, the classification of notes as " securities" depends upon an overall evaluation of the nature of the 3ebt.

ACCORDINGLY, BONDHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS AS TO THE CLASSITICATION OF THE NOTES AS "SECURITIEf" FOR TAX PURPOSES.

I b. Accrued Interest on Notes.

The manner in which consideration is to be allocated between accrued unpaid interett and principal of the Notes for federal income tax purposes is unclear under present law. The Plan provides that the fair market value of the New Securities as of I the Effective Datte will be allocated (A) first to accrued but unpaid interest on the Notes, and (B) next to the original issue price of the Notes. The Service, however, could challenge such an allocation and contend that some other allocation (for example, a pro rata allocation between accrued but unpaid interest and original issue price) is re (See " Deduction of Accrued I InterestbyDebtor,"below.)uired.

A Bondholder that previously included in income accrued but unpaid interest attributable to the Notes should not recognize income to the extent that the amount of consideration received by the Bondholder which is attributable to accrued interest far I federal income tax purposes does not exceed such previously included accrued interest. To the extent a portion of the consideration received by a Bondholder which has not previously included in its income accrued but unpaid interest attributable to the Notes is treated for Federal income tax purposes as attributable to accrued but unpaid interest, such Bondnolder will I recognize ordinary income in the amount of such interest, regardless of whether the Bondholder realizes an overall gain or loss upon the surrender of its claim or whether such gain or loss is recognized.

Notwithstanding the general discussion above, a Bondholder's I basis in the New Securities treated as received in satisfaction of accrued interest, if any, on the Notes, should be equal to the amount of interest income treated as satisfied by the receipt of I

m_-_

)

such New Securities. Additionally, a Bondholder's tax holding

) period in such New Securities should begin on the day following the date on which it has a right to receive such securities.

2. Exchange of Certain Class Three Unsecured Claims for New Securities .

Pursuant to the Plan, unsecured creditors, other than the Bondholders, holding claims greater than $25,000 will exchange their unsecured claims for a percentage of the equity in Reorganized EUAP represented by the New Securities. If, as is likely, such unsecured claims do not constitute " securities" for

)

federal income tax purposes (see " Exchange of Bondholders' Class 1 One and Class Three Claims for New Securities--General," above), l the exchange vill not qualify as a tax-free recapitalization. In i such event, the unsecured creditors will recognize gain (or loss) to the extent the fair market value of the New Securities received as of the effective date (other than New Securities treated as-received in exchange for accrued but unpaid interest) exceeds (or

) is less than) their tax basis for their claims. The character of any recognized gain or loss as ordinary or capital will depend upon the status of the creditor, the nature of the claim in the creditor's hands, and the creditor's holding period for the claim.

In a taxable exchange, the unsecured creditors would have a tax basis in the New Securities equal to their fair market value on

) the Effective Date, and would have a tax holding period commencing on the day following the date on which they have a right to receive such securities.

3. Class Four Unsecured Creditors Class Four unsecured creditors that exchange their unsecured claims for a cash payment in an amount equal to 50% of the Allowed Amount of their claims should recognize gain (or loss) to the extent that the amount of cash received exceeds (or is less than) their tax basis for their claims. The character of such gain or loss as ordinary or capital will depend upon the status of the

)- creditor, the nature of the claim in its hands and the creditor's holding period for the claim.

4. Cancellation of Continoent Interest Certificates The cancellation of the CICs should result in a loss for

) federal income tax purposes to the extent of the tax basis of the holders of such instruments. If such instruments are capital assets in the hands of the holders, such loss will be a capital loss.

)

)

)

5. Treatment of the New Securities Dividends, if any, paid on the New Securities will be taxed to the holders as ordinary income to the extent of Reorganized EUAP's current and accumulated earnings and profits. A dividends-received deduction may be available with respect to such dividends to the holders of the New Securities that are corporations. To

) the extent that a distribution exceeds current and accumulated earnings and profits, it is treated as a nontaxable recovery of the holder's adjusted tax basis to the extent thereof, and any remaining amount is treated as gain from a taxable disposition. A holder of the New securities will generally recognize capital gain or loss upon a sale or other taxable disposition of the New

) Securities equal to the difference between the amount realized and the holder's tax basis in such New Securities. However, a holder that acquired the Notes subsequent to their original issuance with more than a de minimis amount of market discount will be subject to the market discount rules of sections 1276 through 1278 of the Tax code. Under those rules, assuming that no election to include

) market discount in income on a current basis is in effect, any gain recognized on certain subsequent dispositions of the New Securities received in exchange for the Notes will be taxable as ordinary income to the extent of any market discount remaining thereon.

) 6. Importance of Obtaining Professional Tax Assistance THE FOREGOING IS INTENDED TO BE ONLY A

SUMMARY

OF CERTAIN OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN, AND IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING WITH A TAX PROFESSIONAL. The federal income tax consequences of the Plan which are described

) herein and the state, local and foreign tax consequences of the Plan which are not addressed herein, are complex and, in some cases, uncertain. Such consequences may also vary based on the individual circumstances of:each holder of a claim. ACCORDINGLY, EACH HOLDER OF A CLAIM IS STRONGLY URGED TO CONSULT WITH ITS OWN TAX ADVISOR REGARDING THE FEDERAL, STATE LOCAL AND FOREIGN TAX

) CONSEQUENCES OF THE PLAN. Among the issues the holder of a claim may desire to consider, in addition to the issues discussed above,

?"

(a) The extent to which the creditor is entitled to a bad debt deduction or worthless securities loss; (b) The extent to which Section 108(e)(7) of the Tax Code may apply to the New Securities received by a Bondholder or unsecured creditor, which could have the effect'of

)

)-

)

changing the characterization for tax purposes of the gain

) realized upon a subsequent sale or other disposition of all or part of such New Securities; and (c) The extent to which a portion of the consideration received by a creditor for its claims pursuant to the Plan is y properly allocable to accrued interest on such claims.

i B. Federal Income Tax Consequences To The Debtor.

1. Amount and Utilization of Net Operating Loss i Carryforwards and Investment Tax Credits l

)

As of December 31, 1991, the Debtor had unrestricted net operating loss carryforwards ("NOLs") of approximately $70 million and investment tax credit carryforwards ("ITCs") of approximately ,

$11.2 million. In general, a corporation is permitted to carry i forward an unutilized NOL for 15 years following the year in which the loss giving rise to the NOL is incurred. If not utilized, the

)

Debtor's NOLs are scheduled to expire in 2005 and 2006 and the Debtor's ITCs are scheduled to expire between 2001 and 2004. The Debtor's NOLs and ITC's are referred to collectively as " Tax Attributes". For any year in which the Debtor is a member of the EUA consolidated tax group, its Tax Attributes may be used and

) possibly exhausted by the other members of the group.

a. General Limitation on Utilization of Tax Attributes' Following an Ownership Change.

Section 382 (in conjunction with Section 383) of the Tax Code

) generally restricts a corporation's i.e., utilization of its Tax the date on which the Attributes after the " Change Date,"

corporation undergoes an ownership change, by limiting the amount of income earned by the corporation after the ownership change that may be offset by Tax Attributes that arose prior to the ownership change (the "Section 382 Limitation"). As a result of

) the consummation of the Plan, an ownership change within the meaning of Section 382 of the Tax Code will occur with respect to the Debtor. In general, where the Section 382 Limitation applies, a corporation's utilization of its pre-Change Date Tax Attributes for taxable periods following the Change Date is limited to an annual amount of Tax Attributes equal to the product of (i) the

) value of the corporation immediately before the ownership change multiplied by (ii) the long-term tax exempt rate on the date of the ownership change (as anneunced each month by the Treasury Department). To the extent the annual limitation is not utilized in any year, the annual limitation for the following year is increased on a cumulative basis. The long-term tax exempt rate

)

)

B I

for ownership changes occurring in November, 1992 is 5.95 percent.

In the case of a corporation in proceedings under Chapter 11 of the Code that either (i) does not qualify for the Bankruptcy Exception discussed below or (ii) elects out of the Bankruptcy Exception, the value of the corporation for purposes of computing the Section 382 Limitation is adjusted to reflect any increase in the corporation's value as a result of any cancellation or I surrender of claims of creditors in the transaction. ,

1 If the Section 382 Limitation were to apply, based upon the .

Committee's estimate of the total equity value of the Debtor i following the Effective Date, and assuming that that value is l equal to the value of the Seabrook Interest as estimated by the l I Committee's financial advisor as of January 1, 1993 (which should not be taken as a representation of the actual trading values of the Debtor's equity securities following the Effective Date but only an estimate of possible future trading values based upon the Committee's good faith belief as to how the financial markets value securities substantially similar to the New Securities), and I assuming the long-term tax exempt rate for November, 1992 were to apply, the Debtor's ability to utilize its NOLs for taxable years following the Effective Date generally would be limited to approximately $7.7 million per year (increased, possibly, to the extent of certain recognized built-in gains). Due to inherent uncertainties regarding, among other items, the post-Effective i Date equity value of the Debtor, there can be no assurance with respect to these estimates. Further, due to uncertainties regarding the amount and timing of the Debtor's future income and future income tax rates, the value to the Debtor of utilizing its NOLs on such a limited basis cannot be ascertained with any certainty.

b. The Bankruptcy Exception.

Even though the Debtor will experience an ownership change by reason of consummation of the Plan, the Tax Code provides that the Section 382 Limitation does not apply (unless the corporation I

elects for it to apply), where (1) immediately before the ownership change the corporation is under the jurisdiction of a court pursuant to Chapter 11 of the Code, (ii) such ownership change results from the court approved plan of reorganization and (iii) the post-reorganization stock ownership of the corporation satisfies certain conditions (the " Bankruptcy Exception"). The stock ownership conditions require that the stockholders and certain creditors of the corporation (described below), determined immediately before the ownership change, own in the aggregate (after such ownership change and as a result of being stockholders or creditors immediately before such change) stock of the corporation having 50% or more of both the value and voting power 1

)

of the total outstanding stock of the reorganized corporation.

) For purposes of the Bankruptcy Exception, stock received by 1 creditors in satisfaction of their debt claims against the corporation will be counted toward the 50% ownership requirement j only to the extent such creditors received such stock in satisfaction of (1) indebtedness held by such creditors for at least 18 months before the filing of the Title 11 petition with

) respect to the corporation or (ii) indebtedness which arose in the ordinary course _of the trade or business of the corporation and which at all times has been held by such creditors.

If the Bankruptcy Exception applies, the Debtor must reduce its Tax Attributes by (1) any interest deductions taken by the -

Debtor during the taxable year in which the Effective Date of the

)

Plan occurs and the three preceding taxable years with respect to indebtedness that was converted into, or exchanged for, stock pursuant to the bankruptcy reorganization, and (ii) 50% of the amount by which the Tax Attributes and asset basis of the Debtor would have been reduced had the Stock-for-Debt Exception not been applicable to the exchange. See " Cancellation of Indebtedness,"

) below. Because the Committee believes that the required reduction in Tax Attributes under the Bankruptcy Exception will be disadvantageous, it will seek to cause the Debtor to elect to apply the Section 382 Limitation described above which the Committee estimates would limit utilization of the Debtor's NOLs to approximately $7.7 million per year and correspondingly limit

) the utilization of the Debtor's investment tax credit carryforwards.

c. Other Considerations.

Section 269 of the Tax Code grants the Service the power to

) disallow any deduction, credit or allowance (including the utilization of Tax Attributes) where a corporation undertakes certain transactions for the principal purpose of avoiding or evading federal income taxes. The Debtor intends to continue its historic business enterprise and to seek out and evaluate new business opportunities. Although there can be no certainty due to

) the factual nature of the Section 269 inquiry, the Committee believen that the Debtor's Tax Attributes will be available, subject to the Section 382 Limitation, to be utilized against its future operating income.

2. Cancellation of Indebtedness Under the Tax Code, a taxpayer generally must include in gross income the amount of any cancellation of debt (" COD") income realized during the taxable year, except to the extent payment of such indebtedness would have resulted in a-tax deduction. Section

)

O d

108(a) of the Tax code provides, however, that when the discharge O of indebtedness occurs in a case under the sankruptcy Code, gross '

income does not include any amount that otherwise would be included in gross income by reason of the discharge of indebtedness. Instead, the discharged indebtedness in a~

bankruptcy case will generally be applied to reduce certain tax attributes of the taxpayer in the following order: NOLs, ITCs, O capital loss carryovers, the basis of the taxpayer in its property and foreign tax credit carryovers.

Under the plan, the holders of Class Two Claims will be paid the full amount of their Allowed Claims. The treatment of such 4 claims, therefore, should not create COD income with respect to l the Debtors, except to the extent, if any, that previously 0 deducted interest is not required to be paid. In contrast, satisfaction of Allowed CJass One Claims, Allowed Class Three Claims and Allowed Class Four claims will result in COD income,-

and the Debtor's tax attributes will accordingly be reduced by the difference between the consideration transferred in satisfaction 0 and the amount of the discharged indebtedness unless (1) the discharged claims would have resulted in a deduction had they been paid in full, or (ii) in the case of the Class one and Class Three claims, the Stock-for-Debt Exception described below (the " Stock-for-Debt Exception") is applicable.

Under the Stock-Tor-Debt Exception, a debtor corporation in a O case under the Bankruptcy Code does not realize any COD income and does not have to reduce its tax attributes when it pays creditors shares of its own stock in satisfaction of the creditors' claims.

The Stock-for-Debt Exception generally will apply when indebtedness is discharged in exchange for common stock unless (1)

O the am unt of stock transferred is nominal or token in amount (i.e., the amount of stock transferred is de minimis), or (ii) the amoant of stock transferred fails to meet a certain proportionality test which is generally satisfied if the ratio of the value of the stock received by any unsecured creditor to the amount of indebtedness discharged in consideration thereof is not 1 ss than sos f a similar ratio computed for all unsecured O creditors participating in the transaction.

The Treasury Department recently issued a new set of proposed regulations addressing the requirement of the Stock-for-Debt Exception that the stock issued in exchange for the outstanding n debt not be " nominal or token". Although the proposed regulations are ambiguous and unclear in several respects, they provide that, as a general rule, all relevant facts and circumstances must be considered in determining whether shares of stock issued for indebtedness are nominal or token.

O O

)

i While the proposed regulations do not provide a list of relevant facts and circumstances which must be considered in

) determining whether shares of stock issued for indebtedness are nominal or token, the Service is presently considering the issuance of ruling guidelines that will further clarify the nominal or token determination with resoect to shares issued in exchange for unnecured debt. The determination of whether common stock issued for unsecured indebtedness is nominal or token is

)~ made on an aggregate basis with respect to all common stock issued for unsecured indebtedness. The proposed regulations treat undersecured indebtedness (i.e., indebtedness which is secured by property with a value less than the adjusted issue price of the indebtedness) as two separate debts. Undersecured indebtedness will be deemed to consist of (1) a secured indebtedness with an

) adjusted issue price equal to the value of the property securing such indebtedness and (ii) an unsecured indebtedness with an adjusted issue price equal to the remainder.

The ruling guidelines, .if promulgated in their present form, would provide that the Service will rule that common stock issued

) for unsecured indebtedness in a bankruptcy case is not nominal or token if the unsecured creditors receive common stock worth at least 15% of the total value of all of the debtor's stock outstanding after the bankruptcy case. Since the holders of Class Three Claims will receive 151 of the total value of the Debtor's stock outstanding after the bankruptcy, the Committee believes

) that the issuance of stock to such holders would satisfy the contemplated-safe harbor of the ruling guidelines.

The Committee expresses no view as to the applicability of the Stock-for-Debt Exception to the discharge of Class Three Claims in light of the uncertain application of the nominal or If the Service were to assert successfully that the

) token test.

Stock-for-Debt Exception were not applicable with respect to all or a portion of the discharge of Class Three Claims (because the New Securities issued in satisfaction of such claims were nominal or token, or for some other reason), the Debtor would not recognize COD income by reason of Section 108(a) of the Tax Code,

) but would be required to reduce its Tax Attributes by the amount cf the COD income.

Although the matter is not free from doubt, the Committee believes that the distribution of New Securities to the Bondholders will not be nominal or token and therefore that the

) Debtor may take the position that the Stock-for-Debt Exception applies with respect to the discharge of Class One Claims which are exchanged for New Securities. Accordingly, the Debtor should recognize no COD income and no attribute reduction will-be required with respect to the discharge of such claims.

)

)

0 9 3. Deduction of Accrued Interest by the Debtor To the extent a portion of the consideration issued-to creditors pursuant to the Plan is attributable to accrued and unpaid interest on their claims, the Debtor should be entitled to interest deductions in the cmount of such accrued interest, to the 4 extent it has not already deducted such amaunts.

The amount of consideration allocable to accrued interest where creditors are receiving less than the full principal amount of their claims is unclear under present law. Based on certain legislative history, however, the Committee believes it is J appropriate to allocate, in accordance with the Plan, the consideration transferred to creditors first to the accrued interest on such creditors' claims. See " Federal Income Tax Consequences to Holders of Claims," above. There can be no assurance, however, that the Service will not seek to challenge this allocation or that such a challenge, if asserted, would not J be sustained by a court of law.

4. Alternative Minimum Tax For purposes of computing the Debtor's regular tax liability, all of the taxable income recognized in a taxable year generally J may be offset by the carryover of Tax Attributes (to the extent permitted under, among other sections, Sections 269, 382, and 383 of the Tax Code). Although all of the Debtor's regular tax liability for a given year may be reduced to zero by virtue of its Tax Attributes, the Debtor in any given year may be subject to the alternative minimum tax ("AMT"). The AMT imposes a tax equal to

] the amount by which 20% of a corporation's alternative minimum taxable income ("AMTI") exceeds the corporation's regular tax liability. AMTI is calculated pursuant to specific rules in the Tax Code which eliminate or limit the availability of certain tax deductions and other beneficial allowances and which include as income certain amounts not generally included in computing regular J tax liability. Significantly for the Debtor, AMTI does not include COD income excluded under Section 108 of the Tax Code.

However, also of particular importance to the Debtor is the fact that in calculating AMTI, only 90% of a corporation's AMTI may be offset by NOLs. Thus, in any year for which the Debtor may be subject to the AMT, it may not be able to reduce its tax liability

] to zero through the use of NOLs.

4 Y

i d'

l VIII. LITIGATION J The EUA Settlement A.

~

1. Release of Claims l

On December 8, 1992 the Bankruptcy Court authorized the Debtor and the Committee to execute, deliver and perfctm under the

]

EUA Settlement. Pursuant to tha terms of the EUA Settlement, the Debtor changed its name to Great Bay Power Corporation and released any and all claims it holds against EUA, its affiliates )

and their respective officers, directors, trustees and agents, including, but not limited to, claims arising under Section 547 of

} che Bankruptcy Code and claims for breach of fiduciary duty, fraudulent conveyance and mismanagement. The Committee released all claims it has brought or could bring against EUA on behalf of the Debtor and executed a covenant not to sue EUA. Individual Committee members released any individual claims they may have had against EUA and its subsidiaries, other than claims arising under

} the Series B Notes and Series C Notes. In return, EUA agreed to pay the Debtor $20 million and release any and all claims it may have against the Debtor and the Committee including, but not limited to, a withdrawal of all proofs of claim filed by EUA and its subsidiaries, totalling approximately $50 million, in the Debtor's Chapter 11 case. This includes any claims held by EUA

}

against the Debtor as subtogee of certein claims held against the Debtor by financial institutions that had loaned funds to the Debtor and which EUA guaranteed and paid. The Debtor also agreed to amend its schedules filed with the Bankruptcy Court to reflect that it no longe, contests the validity of the Bondholders claims arising under the Notes. The parties also stipulated that the value of Debtors pr'.'et" held by the holders of the Notes is 3 equal to 85% of ths VC :s of the Debtor's interest in Seabrook for the purposes of the fic.a.

2. Support of Committee Plan and Disclosure Statement Pursuant to the EUA Settlement, the Debtor and EUA agreed to

] withdraw all objections to the Plan pending with the SEC or the Bankruptcy Court, and support the Committee's efforts to confirm and implement the Plan.

3. Redemption of EUA Shares

) Under the terms of the EUA Settlement the Debtor will redeem from EUA, or EUA will surrender to the Debtor, all of the outstanding shares of common and preferred stock of the Debtor held by EUA.

)

') t

4. Continued Administrative Support of EUA Service g

The EUA Settlement provides that EUA Service shall continue is to provide to the Debtor administrative services of the. type it currently providing, other than long-term power sales, under the Service Agreement until the later of two years from the effective The date of the EUA Settlement or the Effective Date of the Plan.

I EUA Settlement provides that the officers and directors of Reorganized EUAP that serve during the Gap Period will be indemnified by the Debtor's estate for actions they take at the direction of the Committee or in the ordinary course of business.

5. Af firmation of Decommission!.nq Costs Guaranty Under the EUA Settlement, EUA reaffirms and confirms its duties under the Decommissioning Costs Guaranty.

B. Recovery and Abatement of Property Taxes I If, after the Filing Date, the Debtor made payments, without Bankruptcy Court approval, of any prepetition real estate taxes to any taxing authority, including, without limitation, the towns of Seabrook, Hampton Falls, Hampton or Rye, the Committee may seek to ce?- nce litigation against these taxing authorities to recover

e. n . yments.

Pursuant to the Plan, the Committee may also seek I 1 c, 'es e the Debtor to request an abatement of its real estate Lt ': a by the Bankruptcy Court pursuant to Section 505 of the Ba si.m aptcy Code on the grounds that the value of the Debtor's interest in Seabrook is substantially less than its assessed value. The Joint Owners and the Debtor have advised the Committee that they believe such an action cannot be brought because it I would violate either or both of (1) agreements binding upon the Joint Owners which govern the operation of Seabrook and (2) a settlement among the Debtor, other Joint Owners and the Town of Seabrook previously approved by the Court in this case. The Committee disagrees with the Debtor and the Joint Owners on these issues. The Committee cannot predict whether it will be able to I cause the Debtor to request such an abatement or whether an abatement request, if authorized, will succeed.

C. Nonbankruptcy Litigation In June 1991, New Hampshire imposed a Nuclear Station

> property tax applicable only to Seabrook. The Debtor and the other Joint Owners believe that the tax is constitutionally invalid. In October 1991, the Attorneys General of Connecticut, Massachusetts and Rhode Island petitioned the United States Supreme Court in an original jurisdiction case for a determination of the legality of the tax,'and in January 1992, the Supreme Court

lO agreed to take the case. The Debtor's 1991 tax assessment was APProximately $1.4 million. In September 1991, the Debtor paid O'

approximately 50% of that amount and, subsequently, refused to pay an additional installment which became due on December 15, 1991.

In February 1992, the New Hampshire Attorney General informed the Debtor that the New Hampshire Department of Revenue Administration would commence litigation against the Debtor in the Bankruptcy Court to collect the tax if the Debtor did not pay the overdue O installment by March 9, 1992. The Debtor paid the delinquent installment in March 1992. The Debtor's 1992 tax assessment was approximately $2.7 million. The Debtor has learned that its tax liability will be higher in 1993 due to an increased valuation of the property. The Debtor made the first three quarterly payments f $679,415 f r 1992 in April 1992, June 1992 and September 1992.

O Each payment of the tax is made under protest. The Supreme Court has assigned the case to a special master. Oral argument before the special master will likely be held in December 1992. The special master is expected to issue a report to the Supreme Court in January 1993. None of the financial projections used in the Disclosure Statement consider the beneficial financial impact on O Reorganized EUAP if the Joint Owners are successful in the Supreme Court. If the Joint Owners obtain a favorable ruling in the Supreme Court case, the Debtor believes it will be entitled to a refund of all payments made, which would substantially improve the financial projections for Reorganized EUAP.

O IX. ALTERNATIVES TO THE PLAN OF REORGANIZATION AS PROPOSED The Committee believes that there are no alternatives to the Plan other than a forced sale of the Seabrook Interest under the terms of either the Joint ownership Agreement or possibly under O the terms of a debtor-in-possession facility. The Debtor's exclusivity period was terminated on July 2, 1991 and the Debtor has stated in its most recent Form 10-K that it has no intention to propose a plan.

n The Committee believes that it is possible that debtor-in-U possession financing may be obtained from the Participating Joint owners. Material terms of such financing remain to be negotiated and the Committee and the Dabtor cannot predict whether or when such negotiations will be successfully concluded.

The Committee believes that the value of the distributions to O be made under the Plan provide more value to the Debtor's creditors than would any forced sale of the Debtors assets which might be conducted. The Committee estimates that the value of the distributions payable under the Plan as of the Effective Date will be equal to the sum of the full fair market value of the Seabrook i

()

B Interest, less the borrowings, if any, outstanding under any B debtor-in-possession financing to which the Committee consents daring the Gap Period. There can be no assurance, however, that the price at which the New Securities will trade will equal this value. The Committee further believes that if there were a forced sale of the Seabrook Interest that the amount realized from such a sale, whether pursuant to the Joint Gwnership Agreement, a debtor-D in possession facility or a foreclosure, would not exceed 75% of the fair market value of the Seabrook Interest and would most likely result in a significantly greater discount from the Committee's opinion of fair market value.

The Committee therefore believes that the Plan is far D preferable to a Chapter 7 liquidation and that creditors will receive more under the Plan than they would in a Chapter 7 liquidation.

X. CONFIRMATION, EFFECTIVE DATE AND DISCHARGE g A. Acceptance In order to obtain confirmation of the Plan by the Bankruptcy Court, the Plan must be accepted by:

(i)

Of those creditors in Classes One through Four who 3

actually vote on the Plan, creditors ho1. ding at least two-thirds in dollar amount of the Allowed Amount of the aggregate Claims, constituting more than one-half in number of such voting creditors.

(ii) Of those interest holders in Classes Five and Six who p actually vote on the Plan, holders of at least two-thirds in amount of the allowed interest of such voting interest holders.

Each creditor and Interest holder should be aware that if any class of Claims or Interests should fail to accept the Plan by the 3 required majority, the Bankruptcy Court may nonetheless enter an order confirming the Plan under the so called However, cramdown provisions the Committee of Section 1129(b) of the Bankruptcy Code.

will not seek to confirm the Plan unless the Plan is accepted by the Class One creditors. The Committee will request the Bankruptcy Court to confirm the Plan under the cramdown provisions g if any class of creditors or Interest holders, other than Class One, rejects the Plan. The requirements for obtaining such an order are complex but in general, allov the Bankruptcy Court to enter such an order if, after notice and a hearing, the Bankruptcy Court finds that the Plan does not discriminate unfairly and is b

D

)

fair and equitable with respect to any impaired class of Claims or

) Interests which has not accepted the Plan. " Fair and equitable" means that with respect to a class of unsecured creditors, no junior class is receiving or retaining property under the Plan.

B. Conditions to Effective Date i

) 1. Possible Delay in Distribution.

If the Plan is confirmed, it will not be implemented immediately upon Confirmation. Instead, the Effective Date will not occur unless various conditions described in the Plan are satisfied or waived prior to September 1, 1993, or such earlier or later date as may be established in accordance with the Plan. The

)- Committee contemplates that those conditions will be satisfied by September 1, 1993. The Confirmation Order may be vacated if these conditions are not timely met, waived or extended.

Because of the conditions to the Effective Date provided for in the Plan, it is possible that substantial delay will occur

) between Confirmation of the Plan and the Effective Date. In addition, there is no assurance that the conditions to the Effective Date will be timely fulfilled, or that any waivable conditions which are not timely fulfilled will in fact be waived.

2. Plan Regulatory Approvals.

)

The reorganization, financing and operation of Reorganized EUAP as a New Hampshire public utility, require a series of regulatory approvals. As discussed above, the Committee believes that the Bankruptcy Code may preempt the need for some or all Plan Regulatory Approvals. Notwithstanding the foregoing, to expedite

) the emergence from bankruptcy of the Debtor, the Committee has sought, or intends to seek, all of the regulatory approvals discussed in Section VI.C.

3. Confirmation Hearing.

) The Bankruptcy Code requires the Bankruptcy Court, after notice, to hold the Confirmation Hearing.

The Confirmation Hearing in respect of the Plan has been scheduled for March 5, 1993. The Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court without

) further notice except for an announcement of the adjourned date made at the Confirmation Hearing. Any objection to Confirmation must be made in writing and specify in detail the name and address of the objector, all grounds for the objection and the amount of

)

)

I the Claim or the nature and amount of the Interest held by the y objector. Counsel for the Committee on whom objections must be served is: ,

Mark N. Polebaum, Esq.

Albert A. Notini, Esq.

Hale And Dorr g 60 State Street Boston, Massachusetts 02190 Objections to confirmation of the Plan are governed by Bankruptcy Rule 9014.

g At the Confirmation Hearing, the Bankruptcy Court will confirm the Plan only if all of the requirements of the Bankruptcy Code a r e rne t .

D D

D

l

) XI. FEASIBILITY The Plan may be confirmed only if confirmation is.not likely to be followed by the liquidation or the need for further financial reorganization of Reorganized EUAP. The Committee believes that the Plan complies with this financial feasibility

> standard, as demonstrated by the projected financial statements for Reorganized EUAP discussed above.

THE OFFICIAL BONDHOLDERS' g COMMITTEE OF EUA POWER CORPORATION By Authorized Committee Member, D

E. Decker Adams, Vice President State Street Bank and Trust Company Of Counsel: .

/ j/

> .. /

,/ ' / : ,,- ,.-

/

l ,

a

, ,rl, !i l

,/ ,

' .-J '. /,, .

Mark N. Polebaum, Esq. (BNH 01615) p Albert A. Notini, Esq. (BNH 03117)

Frank W. Getman Jr., Esq.

HALE AND DORR 1155 Elm Street Manchester, NH 03101 (603) 627-7600 Dated: December,hi, 1992 i

I.

EXHIBIT A g

UNITED STATES BANKRUPTCY COURT DISTRICT OF NEW RAMPSHIRE

)

In Re )

> Chapter 11

)

EUA POWER CORPORATION, ) Case No. 91-10525

)

)

Debtor. )

I b

BONDHOLDERS' COMMITTEE POURTH ARENDED PLAN OF REORGANIZATION p The Official Bondholders' Committee (the " Committee") of Great Bay Power Corporation, f/k/a EUA Power Corporation (the

" Debtor") proposes the following Plan of Reorganization to all of the Debtor's Claim and Interest holders pursuant to Section ll21(c) of the Bankruptcy Code.

ARTICLE I.

Definitions 1.1 For purposes of the Plan, the following terms shall have p

the respective meanings set forth below:

(a) Allowed Amount means (a) the amount of any Claim that has been allowed by a Final Order; or (b) the amount of any Claim that is timely filed with the Clerk of the Bankruptcy Court or that is listed by the Debtor in its Schedule of Assets and

)

Liabilities filed with the Bankruptcy Court on April 5, 1991, as amended or supplemented from time to time in accordance with Federal Rule of Bankruptcy Procedure (the " Bankruptcy Rules") as undisputed, noncontingent or liquidated and as to which Claim (1) no objection to the allowance thereof has been filed with the Bankruptcy Court within any period of limitation fixed by the

)

Bankruptcy Code, the Bankruptcy Rules or orders of the Bankruptcy Court or (ii) an objection has been timely filed with the Bankruptcy Court but has been withdrawn prior to entry of a Final Order with respect to the Claim, or (iii) an objection has been filed, which objection is determined in favor of the claimant by a Final Order; or (c) the amount of a Claim for an administrative i expense as to which (i) no objection has been filed within any

J' period of limitation fixed by the Bankruptcy Code, applicable Bankruptcy Rules or (ii) an objection has been timely filed but withdrawn prior to entry of.a Final Order on the Claim or (iii) as to which Claim a timely objection has been filed, which objection e is determined in favor of the claimant by a Final Order or (iv) with respect to fees and expenses of Professional Persons, the amount of such fees and expenses allowed by a Final Order; or (d) with respect to the Series B Notes and the Series C Notes, the principal amount of the Notes, together with accrued and unpaid interest at the rate provided for in the Indenture through tne 3 Filing Date.

(b) Bankruptcy Case means In re EUA Power Corporation, n/k/a/ Great Bay Power Corporation, Case No. 91-10525-JEY pending before the Bankruptcy Court.

3 (c) Bankruptcy Code means the Bankruptcy Reform Act of 1978, 11 U.S.C. 55101 et seq., as it may be amended from time to time.

(d) Bankruptcy Court means the United States Bankruptcy I Court for the District of New Hampshire or such other court as may

$ hereafter assume jurisdiction over the Debtor's Chapter 11 case.

(e) Bondholders means all holders of the Series B Notes and the Series C Notes as of the Record Date.

(f) CICs means the Contingent Interest Certificates e issued by the Debtor.

(g) Claim means any claim, as that term is defined in the Bankruptcy Code, against the Debtor.

(h) Committee means the Official Bondholders' Committee 3 for EUA Power Corporation appointed by the United States Trustee on March 14, 1991, as modified by the addition or remova'l of members from time to time.

(i) Confirmation Date means the date on which an order of the Bankruptcy Court confirming the Plan is entered on the 9 docket of the Bankruptcy Cc it in the Bankruptcy Case.

(j) Debtor means Great Bay Power Corporation, f/k/a EUA Power Corporation, the debtor-in possession in Chapter 11 Case No.

91-010525.

D (k) Decommissionino Costs Guaranty means that certain Limited Guaranty dated May 4, 1990 pursuant to which EUA guaranteed the obligations and liabilities of the Debtor for Decommissioning Costs and Costs of Cancellation as defined in the Joint Ownership Agreement.

D L

B

D (1) Effective Date means the date designated in Article VIII.

(m) EUA means Eastern Utilities Associates, a 3 Massachusetts voluntary association.

(n) EUA Service means EUA Service Corporation, a Massachusetts corporation.

(o) EUA Settlement means that certain Settlement 3 Agreement dated November 18, 1992 amo79 the Debtor, EUA and the Committee approved by an order of the Bankruptcy Court dated December 8, 1992.

(p) PERC means the Federal Energy Regulatory Commission.

P i

(q) Filing Date means February 28, 1991.

(r) Final Order or Orders means an order or orders of a

} court or administrative agency of competent jurisdiction which Ls shall not have been reversed or stayed, as duly entered on the V docket of the case or proceeding in which the order is or orders are issued; the time to appeal which shall have expired, with no appeal or motion seeking rehearing, review or reconsideration pending, as a result of which, such order or orders shall have become final in accordance with applicable law.

C (s) Final Confirmation Order means an order entered by the Bankruptcy Court and duly entered on the docket of the Bankruptcy Court in the Bankruptcy Case with respect to which no stay has been entered and the time for filing appeals has expired with no appeals pending.

3 (t) First Stipulation means the Stipulation and Consent Order Under 11 U.S.C. 55 363, 364 and 365 Concerning Advances by Participating Joint Owners dated as of August 29, 1991.

(u) Gap Period means the time period beginning on the Confirmation Date and endinc on the Effective Date.

(v) Indenture means the Indenture of Trust dated as of November 15, 1986, as amended by three supplemental indentures dated February 24, 1987, May 1, 1988 and November 1, 1988, pursuant to which the Debtor issued the Series B Notes and the Series C Notes.

(w) Indenture Trustee means the State Street Bank and Trust Company.

(x) Interest means any equity security in the Debtor, as that term is defined in the Bankruptcy Code.

D

(y) IDA means the State of New Hampshire Industrial Development Authority.

(2) Joint Ownership Agreement means the Agreement for Joint Ownership, Construction and Operation of New Hampshire -

Nuclear Units dated May 1, 1973, as amended.

(aa) Joint Owners means all current Participants (as g

defined in the Joint Ownership Agreement)

(ab) Lehman Facility means a $45 million secured revolving credit plan of reorganization financing facility provided by Shearson Lehman Brothers ("Lehman Brothers"), on terms not less favorable to the Reorganized EUAP than the terms set g

forth in the expired commitment letter dated July 21, 1992, a copy of which is attached hereto as Exhibit A.

(ac) New Securities means the shares of common stock issued by Reorganized EUAP on the Effective Date, representing 100% of the equity in Reorganized EUAP, in accordance with the g

revised Articles of Agreement of Reorganized EUAP.

(ad) NHPUC means the New Hampshire Public Utilities Commission.

(ae) NRC means the Nuclear Regulatory Commission.

' (af) Notes means the Series B Notes and the Series C ,

Notes.

(ag) Participating Joint Owners means United Illuminating and Connecticut Light & Power.

(ah) Plan means this plan of reorganization and the exhibits hereto, either in their present form or as they may be altered, amended, or modified from time to time.

(ai) Plan Regulatory Approvals means, to the extent p

reasonably deemed necessary by the Committee: (i) a Final Order or Orders of the NHPUC approving the reorganization of the Debtor, the issuance of the New Securities by Reorganized EUAP, and granting any other necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, (ii) a Final Order or Orders of FERC approving the reorganization i

of the Debtor and granting any other necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, (iii) a Final Order or Orders of the NRC granting authorization for the transfer of the Seabrook license, and any necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, (iv) a Final Order or Orders of the SEC granting authorization for the reorganization of

> l

O the Debtor, and any necessary approvals with respect to the transactions contemplated hereby to occur by the Effective Date, or (v) any other governmental approval or order reasonably deemed by the Committee to be necessary under applicable law with respect 3 to the transactions contemplated hereby to occur by the Effective Date. ,

(aj) POR Facility means a plan of reorganization loan facility in an amount not more than $45 million and on the same, similar or more favorable terms than the Lehman Facility, but in 3 any event having terms not materially less favorable to the Reorganized EUAP than those provided under the Lehman Facility.

(ak) POR Lender means the provider or syndicator of the POR racility.

(al) Professional Persons means those attorneys, 3 accountants, appraisers, financial advisors, auctioneers or other professional persons retained by the Debtor or the Committee or the Court, or other professionals authorized to be paid out of the assets of the Debtor's estate.

(am) Pro Rata means the same proportion that the Allowed

'9 Amount of a Claim in a particular class bears to the aggregate Allowed Amount of all Claims in such class.

(an) PURCA means the Public Utility Holding Company Act of 1935, as amended.

J (ao) Record Date means, (i) with respect to voting on the Plan, the date fixed by the Bankruptcy Court as the record date for determination of the holders of Interests, CIC's, and the Series B Notes and Series C Notes for the purpose of voting on the Plan or (ii) with respect to distributions under the Plan, the m date fixed by the Bankruptcy Court as the record date for determination of the holders of Interests, CIC's, and the Series B Notes and Series C Notes for the purposes of making distributions under the Plan.

(ap) Reorganized EUAP means the Debtor after the 3 cancellation of tne Debtor's existing Interests on and after the Effective Date.

(aq) Seabrook means the Seabrook Nuclear Power Plant, Seabrook, New Hampshire.

g (ar) Seabrook Interest means all of Debtor's right, title and interest in and to its 12.1324% interest in Seabrook.

(as) Second Stipulation means the Second Stipulation and Consent Order Under 11 U.S.C. SS 363, 364 and 365 Concerning Advances By Participating Joint Owners.

4

)!

(at) SEC means the Securities and Exchange Commission.

) (au) Series B Notes means the notes designated as "17)%

Series B Secured Notes due May 15, 1993" issued pursuant to the Indenture and secured by a first lien on the Seabrook Interest.

(av) Series C Notes means the notes designated as "175%

Series C Secured Notes due November 15, 1992" issued pursuant to i

) the Indenture and secured by a first lien on the Seabrook l Interest. l (aw) Service Agreement means the agreement between the Debtor and EUA Service dated January 2, 1992.

) (ax) Syndicate Lenders means those lenders who are members of the syndicate formed by the POR Lender to provide the ,

I POR Facility.

1.2 Terms defined in the Bankruptcy Code or Bankruptcy Rules and not otherwise specifically defined in the Plan shall, when h used in the Plan, have the meanings ascribed to them in the Bankruptcy Code or Bankruptcy Rules.

ARTICLE II.

)-

Administrative Expenses And Priority Claims 4

The Allowed Amount of all Claims for administrative expenses and Claims entitled to priority in accordance with Section 507(a) of the Bankruptcy Code, with the exception of Claims entitled to

) priority in accordance with-Section SG7(a)(7) of the Bankruptcy Code, including the Claims of Professional Persons, shall be paid in full in cash on the Effective Date, or upon the date on which the amount of each such Claim becomes an Allowed Amount, whichever shall be later. All trade and service debts and obligations incurred in the normal course of business by the Debtor during the Debtor's Chapter 11 proceedings shall be paid in the ordinary

)

' course of business by the Debtor or, at the Debtor's option, in full in cash on the Effective Date.

The Allowed Amount of all Claims entitled to priority in accordance with Section 507(a)(7) of the Bankruptcy Code, if any,

hall be paid, at the Debtor's option, in cash upon the Effective Date or in installments over six years. If paid over six years, the principal amount of each such Claim shall bear interest at a rate determined by the Debtor and the holder of such claim or, if necessary, by the Bankruptcy Court, to be sufficient to provide that the deferred payments will have a value equal to the present value of the Allowed Amount of each such Claim.

[

\

l IO ARTICLE III.

Designation Of Classes Of Claims And Interests O

3.1 All Claims against and Interests in the Debtor of whatever nature, whether or not scheduled, liquidated or unliquidated, absolute or contingent, including all claims arising from the rejection of executory contracts, and all Claims or Interests arising from the past or present ownership or sale or O purchase of the securities of the Debtor, including all administrative expense and priority Claims, shall be satisfied and discharged pursuant to and as provided i.. this Plan. All Claims and Interests, excluding all administrative expense and priority Claims in accordance with Section 1123(a)(1) of the Bankruptcy Code which are addressed in Article II hereof, are classified as O follows:

(a) Class One. All Claims based upon the Notes and the Indenture to the extent of the value of the interest in the property of the Debtor granted to the holders of such Claims, or to the Indenture Trustee under the Indenture, to secure those O Claims.

(b) Class Two. All Claims arising prior to the Filing Det held by taxing authorities for unpaid real property taxes, which are secured by a lien on property of the Debtor. Class Two shall include any claims of taxing authorities which may arise O upon disgorgement by any taxing authority of funds received from the Debtor after the Filing Date without authority of the Bankruptcy Court in payment of taxes incurred prior to the Filing Date.

(c) Class Three. All Claims not included in Classes O One, Two or Four, including the Claims based on the Notes and Indenture to the extent that such Claims exceed the value of the interest in the property of the Debtor granted to the holders of such Claims or to the Indenture Trustee under the Indenture to secure those Claims.

O (d) Class Four. All Claims which are allowed in the amount of $25,000 or less, or which have been reduced to $25,000 at the election of the holder, which would otherwise have been classified in Class Three. The Claims in this class may not exceed $500,000 after giving effect to any reductions to $25,000 and all reduced Claims will be excluded from this class if their O inclusion would cause the aggregate amount of the Claims in this class to exceed $500,000.

(e) Class Five. All Interests as of the Record Date.

(f) Class Six. All CICs as of the Record Date.

O O

J ARTICLE IV.

D TREATMENT OF CLASSES OF CLAIMS AND INTERESTS 4.1 Class One Claim.

The Class One Claims are impaired. In full payment and satisfaction of the Class One Claims, each holder of an allowed Class One Claim shall receive a number of shares of New Securities equal to the holder's pro rata share of 85% of the issued and

! outstanding New Securities or such other percentage of the issued and outstanding New Securities as the Bankruptcy Court shall D' determine based on any objection which a holder of a Class Three Claim asserts to the allocation of the New Securities between Class One and Class Three. Except to the extent otherwise specifically provided for in the Confirmation Order, if no objection to the allocation of New Securities between Class One and Class Three is filed prior to the date set by the Bankruptcy

) Court for filing objections to the Plan, then the entry of the Confirmation Order shall constitute the Bankruptcy Court's order that the New Securities shall be allocated 85% to Class One and 15% to Class Three. The New Securities shall be issued on the Effective Date and distributed to the holders of Class One Claims as soon thereafter as is practicable. The fair market value of 3 the New Securities as of the Effective Date will be allocated (a) first to accrued but unpaid interest on the Notes, and (b) next, to the original principal amount of the Notes.

4.2 Class Two Claims.

3 The Class Two Claims, if any, are impaired. The holders of the Class Two Claims shall receive payment of the Allowed Amount of such Claims in three (3) equal annual installments of principal and interest, having a present value, as of the Effective Date, of not less than the value of the holder's lien on the Debtor's interest in the property which secures such Claims.

) The Allowed Amount of the Class Two Claim shall bear interest at the rate equal to the prevailing interest rate on two-year treasury notes, calculated on each anniversary of the Effective Date. The first payment shall be due on the later of (a) the first day of the first full month after the Effective Date or (b) the date the Class Two Claim is allowed by final order of the

) Bankruptcy Court. The remaining payments shall be due within thirty (30) days after the first two anniversaries of the Effective Date. The holders of the Class Two Claims shall retain their liens until such Claims have been paid in full.

)

)

O 4.3 Class Three Claims.

The Class Three Claims are impaired. On the Effective O Date, Reorganized EUAP shall issue New Securities equal to 15% of the New Securities issued under the Plan to holders of allowed Class Three Claims. Each holder of a Class Three Claim.shall receive a number of shares of New Securities equal to the holder's pio rata share of 15% of the issued and outstanding New Securities or such greater percentage of issued and outstanding New O Securities as the Bankruptcy Court shall order in the Confirmation Order. The initial distribution of New Securities shall be made to the holders of Class Three Claims on the later of the Effective Date or the date the Class Three Claim becomes an Allowed Amount.

Subsequent distributions of New Securities shall be made in accordance with the provisions of Section 6.6(b) of the Plan.

4.4 Class Four Claims.

The Class Four Claims are impaired. On the later of the Effective Date or the date the Class Four Claim becomes an Allowed Amount, the holder of each Class Four Claim shall receive cash in 0 an amount equal to 50% of the Allowed Amount of such Claim.

4.5 Class Five Interests.

Class Five Interests are impaired. All Class Five Interests in the Debtor shall be cancelled as of the Effective O Date and the holders of such Interests shall receive no distribution under the Plan.

4.6 Class Six Interests.

Class Six Interests are impaired. All outstanding CIC's O shall be cancelled as of the Effective Date and the holders of such Class Six Interests shall receive no distribution under the Plan.

ARTICLE V.

O NEW SECURITIES 5.1 Description Of New Securities.

O The New Securities shall be issued by Reorganized EUAP pursuant to Section 1145 of the Bankruptcy Code and shall be freely tradeable under stato and federal securities laws.

Reorganized EUAP will use its good faith efforts to have the New Securities listed for trading on a national stock market.

O O

i The New Securities shall consist of a single class of common stock. The terms and conditions of the New Securities shall be as provided in the Articles of Agreement of Reorganized p EUAP, as approved by the Committee prior to the Confirmation Date.

The Articles of Agreement will authorize the issuance of a total of 12,000,000 shares of common stock, at S.01 par value._ Such shares shall be issued to the holders of allowed Claims in Class One and Class Three as and to the extent provided in the Plan.

The New Securities to be issued under the Plan will be, when p issued, fully paid and nonassessable. Pursuant to Section 1145 of the Bankruptcy Code, Section 5 of the Securities Act of 1933 (15 U.S.C. 77e) and any state or local law requiring registration for offer of sale of a security or registration or licensing of an issuer of, underwriter of, or broker or dealer in, a security, shall not apply to the issuance of the New Securities.

g -

ARTICLE VI.

MEANS OF EXECUTION AND IMPLEMENTATION OF THE PLAN D

6.1 Articles of Acreement of Reorcanized EUAP.

As of the Effective Date, Reorganized EUAP shall adopt amended Articles of Agreement complying with the requirements of this Plan. A copy of the amended Articles of Agreement is p attached hereto as Exhibit B.

6.2 Issuance Of New Securities.

On the Effective Date, the Debtor's existing Interests shall be cancelled and of no further force or effect, without any p further action on the part of any entity. Immediately subsequent to such cancellation, on the Effective Date, Reorganized EUAP shall issue the New Securities, representing 100% of its issued and outstanding shares, in exchange for debt, to the holders of Class One and Class Three Claims which have an Allowed Amount pursuant to Section 1145 of the Bankruptcy Code. In the event p that Reorganized EUAP draws upon, and the POR Lender advances funds under, the POR Facility, Reorganized EUAP may issue to the POP. Lender, without further order of this Court, a right to receive the economic value of up to 15% of the common stock of Reorganized EUAP on a fully diluted basis, excluding however, to the extent it is calculable, any value attributable to amounts p recovered as part of the EUA Settlement.

Upon the Effective Date, Reorganized EUAP will enter into a registration rights agreement with holders (or groups of holders who, under Section 240-136-3 of the regulations promulgated under the Securities Exchange Act of 1934, are deemed to be the i beneficial owners of each other's New Securities) of 10% or more

D of the New Securities outstanding on the Effective Date if such l

New Securities were distributed to those holders of the New Securities in exchange for-Series B or Series C Notes held by the j holders cn the Confirmation Date (the " Registration Rights 3 Agreement";. The Registration Rights Agreement will provide that such holders may demand hultiple registrations, provided that any demand is for registration of 5% or more of the total Ne'w Securities outstanding at the time of the demand and subject to the right of the Reorganized EUAP Board of Directors to delay the 3

demanded registra*. ion for bona fide business reasons. Reorganized EUA Power will be responsible for the expenses of any registration under the Registration Rights Agreement. The Registration Rights Agreement will be submitted for the approval of the Bankruptcy Court prior to the hearing on confirmation of the Plan.

6.3 Calculation of Distribution Amounts of New Securities.

No fractional share of New Securities shall be issued.

Fractional shares or certificates shall be rounded to the next greater or next lower whole number of shares as follows: (a) fractions of 0.5 or greater shall be rounded to the next greater whole number, and (b) fractions of less than 0.5 shall be rounded 3 to the next lesser whole number, provided, however, that each holder of a Claim to which New Securities shall be distributed pursuant to the Plan shall receive at least one share of New Securities. For purposes of the foregoing, all reference to holders of Claims herein shall refer to the beneficial owners of such claims,_and all calculations relating to the rounding 3 provisions or cash distribution of this section shall be made based on such beneficial ownership.

6.4 Ownership and Ongoing Operation of Seabrook Interest.

Reorganized EUAP shall succeed to ownership of the 3 Seabrook Interest and the Debtor's rights and obligations under the Joint Ownership Agreement and the other agreements executed by the Joint Owners pertaining to the ownership and operation of Seabrook.

6.5 Financing.

3_

(a) Gap Period Financing.

During the Gap Period, the Debtor will initially be funded by the proceeds remaining from the.EUA Settlement after 3 payment of amounts outstanding under-the debtor-in-possession financing in effect on December 8, 1992. When such proceeds are exhausted, the Debtor may be funded under a debtor-in-possession facility or in such other manner as the Committee directs. On the Effective Date, all amounts owing under such a debtor-in-possession facility as shall be in place, if any, shall be paid in.

y full in cash from the proceeds of the POR Facility.

J

O (b) Plan of Reorganization Financing.,

Prior to the Effective Date, the Committee is authorized 3 to and shall enter into, without further order of this Court, the POR Facility or shall have otherwise obtained access to not more than S45 million of funds available to pay the GAP Period financing, if any, and other amounts due under the Plan and to pay expenses of Reorganized EUAP following the Effective Date. The syndicate Lenders may include Bondholders. The POR Facility shall O

become effective on the Effective Date. If the Committee is unable to enter into the POR Facility and the Committee deems it necessary to enter into a plan of reorganization financing facility on terms materially less favorable than the terms set

• forth in the Lehman Facility, the Committee is hereby authorized 3 to enter into such other facility, subject to the approval of the Bankruptcy Court and any regulatory bodies with jurisdiction under applicable law.

6.6 Distribution.

(a) Disbursing Agent.

O Such entity or entities as may be designated by the Committee, including an indenture trustee or stock transfer agent for the New Securities, shall act as Disbursing Agent under this Plan with respect to property to be distributed under this Plan.

O The Disbursing Agent may employ or contract with entities to assist in or perform the distribution of property to be distributed. The Disbursing Agent shall maintain such accounts as may be authorized by the Debtor for the purposes of maintaining any reserve provided for in this Plan or for such other purpose as may facilitate the distributions contemplated by this Plan. The

') Disbursing Agent shall serve without bond and shall receive reasonable fees and expenses from Reorganized EUAP, which may be paid in the ordinary course of business without obtaining an order from this Court. The Disbursing Agent, may retain counsel, which counsel shall be paid its reasonable fees and expenses, subject to the approval of the Bankruptcy Court, from Reorganized EUAP.

3 Disputed Claims or Interests.

(b)

(i) Reserve Notwithstanding any other provision of this Plan, the

) Disbursing Agent shall withhold from the property to be distributed under this Plan to each class of Claims, and shall place in a separate reserve for such class a sufficient amount to be distributed on account of the face amount or estimated amount, as the case may be, of each Claim that is disputed, contingent or unliquidated, and that does not have an Allowed Amount as of the 6 date of initial distribution under this Plan, including without O

l

(>  ;

limitation, all disputed claims in respect of executory contracts rejected pursuant to the Plan. For purposes of this provision (i) a cla'm which does not have an Allowed Amount shall constitute a O " disputed claim" and (ii) the " face amount" of a claim shall be the amount set forth on the proof of such claim, or if no proof of such claim has been filed, the amount of such claim scheduled in the Debtor's Schedules of Assets and Liabilities filed with the Bankruptcy Court, as amended, plus any unpaid pre-Filing Date interest accrual.

O In the case of a disputed claim in Class One or Class Three, the property so withheld and placed in reserve shall consist of that number of shares of the New Securities which equals the percentage of all New Securities to be issued to the holders of Class One or Class Three Claims, as the case may be, O that is the same percentage that the disputed Class One or Class Three Claim bears to all Class One or Class Three Claims, as the case may be.

As to any unliquidated claim or contingent claim, the Bankruptcy Court shall, upon motion by the holder of the claim, or O the Committee, estimate the maximum amount of such claim for purposes of allowance pursuant to Section 502(c) of the Bankruptcy Code. Such estimation shall constitute the maximum amount in which such claim may ultimately become an Allowed Claim and shall be used in calculating the reserve in the immediately preceding paragraph.

To the extent practicable, the Disbursing Agent shall invest any cash in the reserve in a manner that will yield a reasonable net return, taking into account the safety of the investment. The Disbursing Agent shall also place in the same reserve any distributions received on any securities held in the O reserve, including dividends (in stock or cash) received on shares of Reorganized EUAP common stock.

(ii) Distribution The property in the reserve, including the allocable O portion of the net return and any dividends, interest or other payments received thereon, shall be distributed on account of the disputed, contingent or unliquidated claims or interests as and to the extent that such claims or interests become Allowed Amounts.

Any property in reserves established for disputed Claims O in Classes One and Three, remaining after the resolution of all disputes over the allowance or subordination of Claims in such classes, including the remaining net return and dividends, interest or other payments received thereon, shall be distributed pro rata to the holders of Claims in Allowed Amounts in Class One and Class Three in accordance with Sections 4.1 and 4.2 of this O Plan.

O

For the sake of efficiency and economy in connection with distributions, the making of the foregoing distributions may p be withheld until a number of Final Orders respecting disputed claims in a particular class have been entered, but such distributions shall be made not less frequently than once every six months.

(c) Status of New Securities in Reserve.

D Any New Securities held in a reserve for disputed, contingent or unliquidated claims shall be treated as issued and outstanding Reorganized EUAP common stock for all purposes (including dividends). The Disbursing Agent shall vote such shares in the same proportions as the vote, including abstentions y and shares that were not voted, on all issued and outstanding shares of Reorganized EUAP Common Stock that are not held in a reserve.

(d) Surrender of Securities.

As a condition to participation under this Plan (1) a D

holder of a Series B or Series C Note that desires to receive the property to be distributed on account of a Claim arising from that Series B or Series C Note shall surrender the Series B or Series C Note to the Disbursing Agent or its designee.

p If a holder of a Series B or Series C Note is unable to surrender such note because it has been destroyed, lost or stolen, such holder may receive a distribution with respect to such note upon presenting to the Disbursing Agent, in a form acceptable to such agent: (i) proof of such holder's title to such note, (ii) proof of the destruction or theft of such note, or an y affidavit to the effect that the same has been lost and after diligent search cannot be found; and (iii) such indemnification as may be required by the Disbursing Agent in its sole discretion to indemnify the Disbursing Agent, Reorganized EUAP, and all other persons deemed appropriate by the Disbursing Agent against any loss, action, suit or other claim whatsoever which may be made as 3

a result of such holder's receipt of a distribution on account of such note under this Plan.

(e) Unclaimed Property.

Any property which is unclaimed for one year after p distribution thereof by mail (i) except as provided in (ii), to the latest mailing address filed of record with the Bankruptcy Court for the party entitled thereto or if no such mailing address has been so filed, the mailing address reflected in the Schedule of Assets and Liabilities filed by the Debtor, as amended, or D

D

D (ii) in the case of the holder of Series B or C Notes to the latest mailing address maintained of record by the Indenture Trustee, shall become property of Reorganized EUAP.

D (f) Withholding Taxes.

The Disbursing Agent shall withhold from any property distributed under this Plan any property which must be withheld for taxes payable by the person entitled to such property to the

) extent required by applicable law.

(g) Indenture Trustee.

Upon the Effective Date, the Disbursing Agent or Reorganized EUAP, at the direction of the Committee, shall 3 reimburse the Indenture Trustee in cash for all reasonable and necessary fees and expenses incurred by the Indenture Trustee during the Chapter 11 case, including the fees and expenses of the Indenture Trustee's counsel.

6.7 Miscellaneous.

O The Debtor and Reorganized EUAP shall execute such documents and take such other actions as are necessary to effectuate the transactions which, under this Plan, are contemplated to occur on the Effective Date.

) 6.8 Operations.

a. Gap Period Management.

If, as of the Confirmation Date, the Service Agreement has not been previously terminated, then as of the Confirmation 3 Date, the Service Agreement shall be terminated pursuant to the order of the Bankruptcy Court dated March 9, 1992. During the GAP Period, the Debtor shall employ those agents designated by the Committee, which may include EUA Se vice as permitted under the EUA Settlement, to perform all functions currently performed or required to be performed by EUA Service pursuant to the Service 3 Agreement, including, without limitation (i) a marketing agent to develop and update a strategy to maximize the value of Reorganized EUAP's assets based upon assessment of market conditions and appropriate contract terms and (ii) a managing agent to attend meetings of the Joint Owners and otherwise manage and maintain the Debtor's business, in each case pursuant to written agreements 3 approved by the Bankruptcy Court and any regulatory body with jurisdiction under applicable law. During the Gap Period, the Debtor shall continue to own its assets and operate its business as a debtor in possession, except as otherwise provided for in the Plan or the Final Confirmation Order. The Debtor shall seek such regulatory approval for its GAP Period management and marketing S

O l

B services as the Committee may reasonably direct. Mr. Stevens and Mr. Samuels shall be entitled to the indemnification rights set forth in the EUA Settlement.

D b. Post-Effective Date Management Upon the Effective Date, all directors of the Debtor shall be deemed to have resigned without any further action on the part of any person or entity. The new boatd of directors of Reorganized EUAP appointed by the Committee (the "New Board")

D shall take office upon the Effective Date. The members of the New Board appointed pursuant to this Section 6.8(b) shall continue in office until they resign, are removed or their successors are elected pursuant to Reorganized EUAP's charter, as amended, or Reorganized EUAP's bylaws.

Decommissioning Costs Guaranty.

D 6.9 The Decommissioning Costs Guaranty shall remain enforceable terms.

and in full force and effect in accordance with its D 6.10 Litigation.

The Committee may commence and prosecute any claims, other than those resolved as part of, or as limited by, the EUA Settlement, and defend any claims made against the Debtor, including preference, fraudulent conveyance or other bankruptcy D claims in the name of and on behalf of the Debtor, Reorganized EUAP and/or the Bondholders. Subject to the POR Facility, net proceeds of such litigation shall be applied to reduce the amount outstanding under the POR Facility or used for working capital or general corporate purposes of Reorganized EUAP.

p 6.11 Vesting And Revesting.

Except as otherwise provided in any provision of this Plan or in the Final Confirmation Order, all property of the estate shall revest in Reorganized EUAP on the Effective Date, free and clear of all claims, liens and other interests of D creditors and equity security holders. Without in any manner limiting the scope of the foregoing, any claim or interest belonging to the Debtor or to the estate shall be retained by and M

shall vest in Reorganized EUAP on the Effective Date and Reorganized EUAP may enforce, settle or adjust any such claim or interest. As of the Effective Date, Reorganized EUAP may use acquire and dispose of property without su)ervision by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code, other than those restrictions expressly imposed by this Plan and the Confirmation Order.

i O

6.12 Continued Existence Of The Committee.

The Committee shall continue to exist as constituted by the United States Trustee, from time to time, with the powers and O authorities provided for in Section 1104 of the Bankruptcy Code, provided for in the Plan and provided for in the Final Confirmation Order. Upon the Effective Date, the Committee shall have no further responsibility for the direction or supervision of the management or conduct of affairs of Reorganized EUAP. The Committee shall continae to exist after the Effective Date only C) for the purposes of administering and closing the Chapter 11 case, and such other purposes as may be provided for in the Final Confirmation Order.

6.13 Determination of Tax Assessment.

O By the Plan, the Committee seeks a determination by the Bankruptcy Court, pursuant to Section 505 of the Bankruptcy Code, of the tax liability of the Debtor for real estate taxes assessed against the Debtor's interest in the real property associated with its Seabrook Interest (the "Seabrook Property"). The Plan shall constitute the Committee's motion for a determination by the O Bankruptcy Court that the assessed value of the Seabrook Property is substantially less than the value assessed by the relevant taxing authorities. The Committee reserves the right to withdraw such an action under Section 505 of the Bankruptcy Code at its discretion.

O 6.14 Discharge.

Upon the Effective Date, all claims against and all debts and liabilities of the Debtor shall be discharged as provided in the Plan and Bankruptcy Code sections 524 and 1141.

O ARTICLE VII.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 7.1 As of the Effective Date, Reorganized EUAP hereby

() rejects any and all executory contracts and unexpired leases of every name and nature, except those which (a) prior to the Effective Date, the Debtor shall have assumed with the consent of the Committee or (b) as of the Effective Date, are the subject of pending motions to assume, with the consent of the Committee or (c) as of the Effective Date, are designated by the Committee to O be assumed pursuant to the Plan. Any Claim arising from or as a result of the rejection of any executory contract or unexpired lease must be filed within twenty days after the Effective Date, and the Allowed Amount thereof shall be treated as a Class Three Claim, but nothing herein shall constitute a determination that 0

1

3 any such rejection gives rise to or results in a Claim or constitutes a waiver of any objections to such Claim by the Debtor, the Committee, or any party in interest.

J 7.2 The Plan shall const..Jte the Debtor's motion to assume the following contracts, agreements, purchase orders, leases, governmental permits, licenses and approvals with respect to the Seabrook Plant that have been entered into by the Debtor, or by an agent (including, without limitation, the New Hampshire Yankee O division of PSNH, and North Atlantic Energy Service Corporation) for or on behalf of the

Participants:

(i) The Agreement for Joint Ownership, Construction and Ownership of New Hampshire Nuclear Units, dated as of May 1, 1973, as amended (the " Joint Ownership Agreement");

O (ii) The Seventh Amendment to and Restated Amendment for Seabrook Project Disbursing Agent, dated as of November 1, 1990, as amended through and including the Second Amendment to the Seventh Amendment made as of the 29th day of June, 1992 by and among North Atlantic Energy Corporation and the

$ other Participants; (iii) The Transmission Support Agreement dated as of May 1, 1973, as amended, by and among PSNH, New England Power Company and the other Participants; O (iv) Agreement of Settlement dated as of January 13, 1989

(" Comprehensive Settlement Agreement"), by and among PSNH, The United Illuminating Company, Canal Electric Company, The Connecticut Light and Power Company, EUA Power Corporation, Massachusetts Municipal Wholesale Electric Company, Montaup Electric Company, New England Power Company, and Taunton O Municipal Lighting Plant, Bangor Hydro-Electric Company, Central Maine Power Company, Central Vermont Public Service Corporation, Fitchburg Gas & Electric Light Company, and Maine Public Service Company, and Yankee Atomic Electric Company; O (v) Agreement of Compromise and Settlement dated as of November 1, 1991, among United Engineering & Constructors, Inc., The Participating Seabrook Joint Owners named therein and Yankee Atomic Electric Company; Seabrook Project Managing Agent Operating Agreement, (vi) as of June 29, 1992, as Amended, between North Atlantic O dated Energy Service Corporation and the other Participants; and 0

O

4 (vii) Such other agreements which pertain to Seabrook and which have been entered by the Debtor or by or on behalf of all Joint Owners, a complete list of which shall be filed no e later than ten days prior to the date scheduled for confirmation of the Plan.

ARTICLE VIII.

g Conditions to Occurrence of Effective Date The Effective Date of this Plan shall occur, and this Plan shall take effect, to the extent not implemented upon the Confirmation Order becoming a Final Order, on the day der'.gnated by the Committee which shall be as soon as is reasonably

] practicable but not more than thirty days (as calculated in accordance with Bankruptcy Rule 9006(a)) after all the following conditions are satisfied or waived; provided that the Effective Date shall not be later than September 1, 1993 unless extended in accordance with Section 8.3 below:

$ 8.1 The confirmation order shall have been entered and shall have become a Final Confirmation Order.

8.2 Each of the following conditions shall have occurred or been waived pursuant to Section 8.3 below:

J (a) All Plan Regulatory Approvals shall have been obtained and shall be in full force and effect and shall not contain any provision or be subject to any condition reasonably unacceptable to the Committee.

(b) All necessary consents of all entities, if any, who e are parties to executory contracts or unexpired leases to be assumed pursuant to this Plan, or which were entered into by the Debtor after the date of commencement of the Bankruptcy Case and are reasonably deemed by the Committee to be material to the Debtor, shall have been obtained.

) (c) The Committee shall have made, in determination, financing arrangements consistent its with Section 6.5 so that Reorganized EUAP shall have available to it the funds required to satisfy the cash payment obligations of the Plan on the Effective Date and to fund Reorganized EUAP's ongoing business operations.

}

(d) The revised Articles of Agreement of Reorganized EUAP contemplated by Section 6.1 shall have been filed with the New Hampshire Secretary of State.

)

b (e) No determination shall have been made by the SEC denying an exemption pursuant to Section 3(a)(4) of PUHCA, from all provisions of PUHCA other than Section 9(a)(2), to any

, Bondholder that receives 10% or more of the New Securities.

8.3 Waiver Of Conditions. The Committee may waive any of the conditions to the Effective Date described in Article VIII of the Plan or extend or reduce, one or more times, any time period described in Article VIII, including, but not limited to,

, the date specified for the occurrence of the Effective Date in Sections 8.0 and 8.4 hereof. Any such waiver or extension shall become effective upon the filing with the Bankruptcy Court of a notice which states that the Committee has granted such waiver or extension. No order of the Bankruptcy Court shall be required to make any such waiver or extension effective.

~

8.4 Effect Of Nonoccurrence Of Conditions To The Effective Date. If each of the conditions to the Effective Date has not occurred or been duly waived by September 1, 1993, or by such later date as may be established in accordance with Section 8.3, g

then, upon motion by any party in interest made after the date for satisfying (or obtaining waivers of) the conditions to the Effective Date (as such date may be extended hereunder), and prior to the time that each of said conditions has occurred or been duly waived, the Confirmation Order may be vacated by the Bankruptcy Court. Notwithstanding the foregoing, however, the Confirmation Order may not be vacated after each of the conditions to the Effective Date has either occurred or been waived. .

g ARTICLE IX.

RETENTION OF JURISDICTION  !

Following Confirmation of this Plan and until the

' reorganization case is closed, the Bankruptcy Court shall retain such jurisdiction as is set forth in this Plan. Without in any manner limiting the scope of the foregoing, the Bankruptcy Court shall retain jurisdiction for the following purposes:

, a. To determine the allowability, classification, priority or subordination of claims and interests upon objection, or to estimate pursuant to Section 502(c) of the Bankruptcy Code the amount of any claim which is or is anticipated to be unliquidated as of the Effective Date, or proceedings to subordinate claims or interests by Reorganized EUAP, or by any p

O proceeuing which shall be deemed toofon Plan; include or this any O

b.

Plan, issue such orders as may be necessary e for thTo s construe implementation, including, withoutexecution, and consummation ofs thi Plan, limiting generality of the foregoing, orders to

~

O expedite Plan Regulatory Approvals, orders implementing or relating to the plan for interim management referred to in S 6.8, all notwithstanding any otherwise applicable n law; ection on-bankruptcy c.

of compensation and expense reimbursementTo determine nce any and a

<> the Effective Date and to d for periods on or before of administrative expenses;etermine any other request for payment d.

the Bankruptcy Court on or before the Effective ate; DTo e oredetermine 0 e.

or interpretation Reorganization of this Case is closed; Plan which arises eatoreany on time b fT the f.

O Effectivecontracts executory Date for the rejection, assumption or unex or assiTo gnment of e determin claim resulting therefrom; pired leases and the allowance of any g.

To determine all applications, adversary i

i proceedings, contested matters and other litigated matters ending p O on or before the Effective Date, including a determination Debtor's tax liability as provided in Section 6 13 h of the to section 505 of the Bankruptcy Code; .

ereof pursuant h.

purposes as may be provided in the Confirmation er Order; an 3 1.

To modify this Plan pursuant omission in this Plan, or to reconcilee ect inconsistency in the Plan so as to carry out any or nonmaterialS purposes.

its intent and lo I ARTICLE X.

CONTIRMATION REQUEST O The Committee, as proponent of this Plan, hereby requests confirmation of this Plan pursuant to Bankruptcy Code Section 1129(b) ir the event that this Plan is not 2ccepted by all classes of Claims and Interests entitled to voter provided however, that the Corenittee will not seek to confirm the Plan unless the Plan is O accepted by the Class One creditors.

THE OTTICIAL BONDHOLDERS' COKHI7 TEE OF EUA POWER CORPORATION O

By Authorized Committee Member, u /

O E. Decker Adams, Vice President State Street Bank and Trust Company O

Of Counsel '

/

9 ,, b' Mark N. Polebaum, Esq. (BNH 01615)

Albert A. Notini, Esq. (BNH 03117)

Trank W. Getman Jr., Esq.

HALE AND DORR 1155 Elm Street O Manchester, NH 03101 (603) 627-7600 Dated: December ~ 1992 O

O

~2?-

O

)~

EX}{IBIT A

)-

Lehman Commitment Letter J-J J

J J-y J

y 23 -

Dc gw3gg,w w ww

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st and be continuing; (b) All represen.ations and warranties shall be true and correct; (c) There shall have occurred no material adverse change in the condition (financial or otherwise),

operations, assets or prospects of the Borrower since the date of confirmation of the Plan; 4-l 4

O (d) No Default or Event of Default under the Credit Agreement shall have occurTed and be continuing; (e) The Agent shall have received a notice of borrowing from the BorTower. The request for and the

• acceptance of each extension of credit by the Borrower shall constitute a representation and warTanty that the conditions to such extension of credit shall have been satisfied; ~

(f) No event of default (or event which with notice or

1. lapse of time would become an event of defeuh) shall have occurred and be continuing under the Joint Operating Agreement; and (g) Such other conditions as may be required by the Agent in its reasonable discretion, D Ee~erentatient and

_Wa-- a n t i e s: Those typleal for financings of this type and as may be specified by the Agent.

Ore atinr coverace: For each fiscal quarter du-ing 1995, the ratio of Revenues to Operation and Maintenance Expenses shall D equal 1.0 times. For any quarter in which a regularly scheduled refueling shutdown occurs, the ratio of average Revenues for the latest four quarters to Operation and Maintenance Expenses shall equal 1.0 times.

The failu e of the Borrower to rneet this Operating D Coverage covenant shall constitute the occurrence of an event requiring a mandatcry reduction on the last day of each such fiscal quarter in the principal amount of the Facility (a " Mandatory Facility Reduction Event"). Upon the occurrence of a Mandatory Facility Reduction Event, the amount of the Facility shall be automatically reduced J to the lesser of $35,000,000 or the then outstanding balance of the Facility. The Borrower's failure to meet the Operating Coverage covenant shall have no affect on the Facility other than to constitute a Mandato y Facility Reduction Event, and shall not be an event of default thereunder.

D D

3 5

)

) " Revenues" shall mean, for any quarter, the Borrower's share of all revenues from the sale of electrical energy '

and capacity from Seabrook for such quarter.

" Operation and Maintenance Expenses" shall mean, for

) any quarter, 25% .of the latest 12 months of (i) all payments due under the Joint Operating Agreement (ii)  ;

reasonable and necessary insurance costs, (iii) income, property, sales and franchise taxes, (iv) reasonable and necessary costs and fees used in maintaining any governmental approvals for Seabrook, (v) fuel costs, (vi) waste disposal costs (vil) transmission and wheeling-

) expenses, (vill) capital expenditures, ~(ix) all decommissioning costs, and (x) corporate general and administrative expenses.

Agici_Ccvera te: The value of the assets of the Borrower shall equal at least 200% of the outstanding Facility on December 31,

) 1994. The determination of value shall be made by using l a present value analysis performed by an independent l consultant selected by the Agent and consented to by the '

Borrower, such consent not to be unreasonably withheld. :i The consultant shall value the pre-tax operating. cash flows (before interest payments, if any) that can be 3 reasonably expected, based on power contracts then in effect and as reasonably' approved by the Agent, to be generated from the Borrower's assets. The valuation shall be calculated as of December 31. 1994 using a.

discount rate equal to the greater of 13.5% or the Prime -;

Rate plus 7%. All cash flows shall be projected from  ;

) December 31,1994 to December 31, 2004 (the " Appraisal The P eriod"). consultant shall treat non-cash-decommitsioning costs during the Appraisal Period c5 cash expenses. The consultant shall not ' calculate a - l

- terminal value at the end of the Appraisal Period as part - '

of the valuation.-

) However, in the event that the Borrower has on or before ' .

December 31, 1994, entered into a power contract or_ -'

contracts that extend beyond December 31, 2004, the incremental present value of the cash flows based on such contract (s) resulting from power - sales after -

)- December 31, 2004 shall be included in the consultant's valuation unless the Agent, acting reasonably -and. in ,

consultation with Agent's counsel, _ has madcL - a _  ;

determination - that. such contract (s) are subject to-conditions precedent so that1the purchaser may ; be :

relieved _ of the obligation after December 31, _2004 to --

y make payment under such contract (s) to the Borrower, notwithstanding that the Borrowe.r has fully compiled.

with-its' affirmative obilgations under such contract (s). -

In such event, the consultant snall include the revenues based on such : contract (s) up to the date that the i purchaser _' may be_ relieved of the obligation to make y( -payment, notwithstanding that the Borrower hasy fully-compiled with its affirmative . obligations under such

-contract (s).

- 6-i h

_ w y ,ve-+ -*ey -- wysi -eW y-**9%- p -y pew i,

1

) .

Necative Covenem;; The Borrower shall not:

i I

(a) Merge or consolidate with any other party; (b) Create or permit to exist any liens or encumbrances

) on any assets except as permitted by the Credit Agreement (subject to exclusions to be negotiated);

(c) Sell or otherwise dispose of assets except as

• permitted by the Credit Agreement; (d) Create or permit to exist indebtedness for borrowed 3 money; (e) Declare or pay any dividends; (f) Amend its certificate of incorporation;

) (g) Make investments-and advances except as may be permitted by the Credit Agreement; (h) Enter into any transactions-with affiliates except as

• may be permitted by the Credit Agreement; 3- (1) Amend, terminate or waive any provision of the joint operating agree ment (the " Joint Operating Agreement") for Seabrook except for exceptions to be negotiated;

0) Engage in any business other than the business 3 engaged in on the date hereof; (k) Permit Seabrook to be shut down for any reason other than refueling for a period of sixty consecutive days, or for refueling for a period not to exceed any regularly scheduled refueling period plus forty days;

) (1) Expend more than $ for any purpose in the ordinary course of business without the consent of the Agent; and (m) Such other negative covenants as may be required by 3 the Agent in its sole discretion.

E

_7 3.

) EeWv Petlelemtion: In partial consideration of the Post-Consummation Financing Facility, the Agent and Lenders shall receive an acceptable equity security of the Bo'. Tower. The .

Agent shall have the right to appoint one member of the Berrower's board of directors. The equity security shall have an economic value equivalent to 15% of the 3 common stock of the Borrower. For purposes of the calculation of the economic value of such common stock, no credit shall be given for recovery of any sums in respect of " fiduciary duty" or preference litigation currently pending in the case. For purposes of the calculation of the 15% share referred to above, the

) Agent assumes that after giving effect to the Plan (i) the Borrower shall have no indebtedness other than the Post-Consummation Financing Facility and (ii) all other indebtedness of the Borrower shall have been converted to equity pursuant to the Plan. The 15% share initially allocable to the Agent and tenders rnay be reduced as

) described heretofore in " Optional Commitment Reduction." If for any reason, the relevent regulatory approvals for the issuance of such equity secu-ity to the Agent cannot be obtained, the Borrower shall make a cash payment to the Agent in the arnount equal to the economic value of the equity security, payable at such

) time as mutually acceptable to the Agent and Borrower.

Evems of Defeuh: These typical for financings of this type and as may be specified by the Agent.

Assten nents end Pardebtden:

) The Agent, without the Borrower's consent, may from time to time assign er sell participations in all or any

- pertion of its rights and obligations under the Credit Ag eement. The power marketing agent and Official Bondholders Committee of EUA Power Corporation agree to cooperate actively with and assist the Agent in

) completing a timely and satisfactory syndication. Such assistance shall include, without limitation, the preparation of syndication materials and attendance at meetings with prospective lenders.

Derumemstion:

Mutually satisfacto y in form and substance to the Agent

) and the Borrower.

Gove nine Law: New York, except as preempted by Federallaw.

4 4012G

) ,

-s-

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O EXHIBIT D 0

Amended and Restated Articles of Incorporation of -

EUA Power Corporation O

O t'

O g

O O

O The Amended and Restated Articles of Incorporation of EUA Power Corporation shall be in substantially the form attached hereto and shall not be effective before January 1, 1993.

P o

D Amended and Restated Articles of Incorporation of EUA Power Corporation

& TIRST: The name of the Corporation ist EUA Power Corporation.

SECOND: 7he period of its duration is perpetual.

8 THIRD: The Corporation is empowered to transact any and all lawful business for which corporations may be incorporated under RSA 293-A and the principal purpose or purposes for which the Corporation is organized are:

$ The principal purposes for which the Corporation is organized are the production, generation, manufacture, purchase, transportation, supply and sale of any form or source of light, heat, energy or power, and the transaction of any and all lawful businesses for which corporations may be incorporated under New 11ampshire RSA Chapter 293-A.

9 TOURTH: The aggregate number of shares which the Corporation shall have authority to issue is No. of Shares g Class Par Value Authorized Common Stock S.01 20,000,000 FITTH: The capital stock will be sold or offered for sale g within the meaning of RSA 421-B (New Hampshire Securities Act).

SIXTH: Provisions, if any, for the limitation or denial of preemptive rights:

g No shareholder of the Corporation shall have, solely as a result of such shareholder's ownership of shares of the Corporation, a preemptive right to have first offered to such shareholder any part of any of the authorized shares (including treasury shares) of this Corporation hereafter issued, optioned, or sold, or any part of any debentures, D bonds, notes, or other securities of the Corporation 1

D e convertible into shares hereafter issued, optioned, or sold by the Corporation. This provision shall operate to defeat I rights in all shares and classes of shares now or hereafter ~

I authorized for issue and in all debentures, bonds, notes, or  !

other securities of the Corporation which nay be convertible into such shares, and also to defeat preemptive rights in any e and all shares and classes of shares and securities convertible into such shares which the Corporation may be hereafter authorized to issue by any amended certificate duly flied.

SEVENTH: Provisions for the regulaticin of the internal

]) affairs of the Corporation are:

See Attachment 7A.

D EIGHTH: Provision eliminating or limiting personal liability of directors or officers:

See Attachment 8A.

NINTH: The address of the registered office of the Corporation is:

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2) The name of its registered agent at such address is:

D e

G

)

I TENTH: The name and address of each incorporator ist  :

Name Address -

Mary Karlin 1850 Elm Street Manchester, New Hampshire 03105

)

)

Dated , 1992 1 EUA POWER CORPORATION

).

By Titles Print or type name

)

and Secretary

) Print or type name T

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) Attachment 7A l

1. Articles of Incorporation. Notwithstanding any c6.her provisions of law, these Articles or the By-Laws of the

- Corporation, and notwithstanding the fact that a lesser percentage

) may be specified by law, the affirmative vote of seventy-five percent (75%) of the shares of capital stock issued and outstanding and entitled to vote shall be required to amend or repeal, or to adopt any provision inconsistent with, these Articles.

) 2. By-Laws. The Board of Directors is expressly authorized to adept, amend or repeal the By-Laws of the Corporation to the extent permitted by law, provided, however, that the affirmative-vote of at least seventy-five percent (75%) of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote shall be required to amend or repeal, or to adopt

) any provision inconsistent with, Section 1.10, Section 1.11, Section 1.13, Article 2 or Article 6 of the By-Laws. -

3. Removal of Directors. Directors of the Corporation may be removed only for cause by the affirmative vote of two-thirds of the shares of the capital stock of the Corporation issued and

-) outstanding and entitled to vote.

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)

I B

Attachment BA Article A b

Except to the extent that the New Hampshire 9usiness Corporation Act prohibits the elimination or limitation of liability of directors or officers, or both, for breaches of fiduciary duty, no director, officer, or both, of the Corporation shall be personally liable to the Corporation or its shareholders g' for monetary damages for any breach of fiduciar aty as a director, officer, or both, notwithstanding any; provision of law imposing such liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director, officer, or both, of the Corporation for or with respect to any acts or omissions of such director, officer, or both, occurring prior to such amendment.

Article B

1. Action, Suits and Proceedings other than by or in the Right of the Corporation.

The Corporation shall indemnify each person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation), by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan)

(all such persons being referred to hereafter as an " Indemnitee"),

or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys' fees), ju and reasodgments, fines and amounts paid in settlement actually nably incurred by him or her or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, if (1)--he or she acted in good faith and (2) he or she reasonably believed:

(a) in the case of conduct in his or her official capacity with the Corporation, that his or her conduct was in its best interests; and (b) in all other cases, that his or her conduct was at least not opposed to its best interests, and, (3) with respect to any criminal action or proceeding, the Indemnitee had no reasonable cause to believe his or her conduct

)

) was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the person did not meet the standard of conduct described in l this Section. 1:otwithstanding anything to the contrary in this Article B, except as set forth in Section 6 below, the Corporation

) shall not indemnify an Indemnitee seeking indemnification (1) in connection with a proceeding (or part thereof) initiated by the Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation, or (2) in connection with a proceeding charging improper personal benefit to him or her, whether or not involving action in such person's official

) capacity, in which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her.

2. Actions or Suits by or in the Right of the Corporation.

The Corporation snall indemnify any Indemnitee who was or is a party or is threatened to be made a party to any threstened,

) pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer or trustee of, or in a similar capacity with, another

) corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or emitted in such capacity, against reasonable expenses (including attorneys' fees) if (1) he or she acted in good faith and (2) he or she reasonably believed: (a) in the case of conduct in his or her official capacity with the

) Corporation, that his or her conduct was in its best interests; and (b) in all other cases, that his or her conduct was at least not opposed to its best interests, and, (3) with respect to any criminal action or proceeding, the Indemnitee had no reasonable cause to believe his or her conduct was unlawful, except that no indemnification shall be made in respect of any claim, issue or

) matter as to which such person shall have been adjudged to be liable to the Corporation. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, is not, of itself, determinative that the person did not meet the standard of conduct described in this Section.

) Indemnification for Expenses of Successful Party and 3.

Court-Ordered Indemnification. Notwithstanding the other provisions of this Article B, to the extent that an Indemnitee has been wholly successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of

)

this Article B, or in defense of any claim, issue or matter

)

> therein, or on appeal from any such action, suit or proceeding, he or she shall be indemnified against reasonable expenses (including attorneys' fees) incurred by him or her or on his or her behalf in connection therewith. Without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an b

adjudication that the Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by the Indemnitee, (iv) an adjudication that the Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with g respect to any criminal proceeding, an adjudication that the Indemnitee had reasenable cause to believe his or her conduct was unlawful, the Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

4. Netification and Defense of Claim. As a condition y precedent to nas or her right to be indemnified, the Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving him or her for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate y

therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Indemnitee. After notice from the Corporation to the Indemnitee of its election so to assume such defense, the Corporation shall not be liable to the Indemnitee for any legal or other expenses subsequently incurred by the Indemnitee in connection with such claim, other than as provided below in this Section 4. The g

Indemnitee shall have the right to employ his or her own counsel in connection with such claim, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of the Indemnitee unless (1) the employment of counsel by the Indemnitee has been authorized by the Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and the Indemnitee in the conduct of the defense of such action or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, in each of which cases the fees and expenses of counsel for the Indemnitee p

shall be at the expense of the Corporation, except as otherwise expressly provided by this Article. The Corporation shall not be entitled, without the consent of the Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for the Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above.

.g.

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' 5. Advance of Expenses. Subject to the provisions of Section 6 below, in the event that the Corporation does not assure the defense pursuant to Section 4 of this Article B of any action, suit, proceeding or investigation of which the Cor receives notice under this Article, any expenses (poration including p attorneys' fees) incurred by an Indemnitee in defending a civil or criminal action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter, provided, however, that the payment of such expenses incurred by an Indemnitee in advance of the final disposition of such matter shall be made only upon (1) receipt

, of an undertaking executed by or on behalf of the Indemnitee to repay all amounts so advanced if it is ultimately determined that the Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article, (2) receipt of a written affirmation of the Indemnitee's good faith belief that he or she has met the standards of conduct required by this Article, and (3) a determination that, based on the facts then known, indemnification would not otherwise be precluded by the standards of conduct set forth in Sections 1 or 2. Such determination shall be made in the manner specified in Section 6 of this Article B.

6. Procedure for Indemnification. In order to obtain I indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the Indemnitee shall submit to the Corporation a written request, including in such request such documentation and information as is reasonably available to the Indemnitee and is reasonably necessary to determine whether and to

.what extent the Indemnitee is entitled to it.?emnification or advancement of expenses and including, with respect to advancement of expenses, the undertaking to repay and the affirmation of good faith required by Section 5. Any such indemnification or advancement of expenses shall be made (1) with respect to requests under Sections 1, 2 or 5, only upon a determination by the Corporation that the Indemnitee has met the applicable standards of conduct set forth in Sections 1 or 2, as the case may be, and (2) with respect to a request under Section 3, within 60 days after receipt by the Corporation of the written request of the Indemnitee. The determination required under clause (1) of the preceeding sentence shall be made in each instance within 60 days of the date of Indemnitee's written request by (a) a majority vote of a quorum of the directors'of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question (" disinterested directors"), (b) if no such quorum is obtainable, a majority vote of a committee of two or more disinterested directors, (c) a majority vote of a quorum of the outstanding shares of stock entitled to vote for directors, which quorum shall consist of shareholders who are not at that

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] time parties to the action, suit or proceeding in question, or (d) special legal counsel (who may be regular legal counsel to the Corporation) selected by the Board of Directors or its committee, or (e) a court of competent jurisdiction.

7. Remedies. The right to indemnification or advances as

) granted by this Article shall be enforceable by the Indemnitee in any court of competent jurisdiction if the Corporation denies such request, in whole or in part, or if no disposition thereof is made within the 60-day period referred to above in Section 6. Unless otherwise provided by law, the burden of proving that the Indemnitee is not entitled to indemnification or advances of expenses under this Article shall be on the Corporation. Neither 3 the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is preper in the circumstances because the Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 that the Indemnitee has not met

) such applicable standard of conduct, shall be a defense to the action or create a presumption that the Indemnitee has not met the applicable standard of conduct. The Indemnitee's reasonable expenses (including attorneys' fees) incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such proceeding shall also be indemnified

) by the Corporation.

B. Subsecuent Amendment. No amendment, termination or repeal of this Article or of the relevant provisions of the Business Corporation Act of New Hampshire or any other applicable

- laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with

) respect to any action, suit, proceeding or investigation ari:ing out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.

9. Other Richts. The indemnification and advancement of

) expenses provided by this Article shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of shareholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in any other capacity while holding.

) office for the Corporation, and shall continue as to an Indemnitee .

Who has ceased to be a director or officer, and shall inure-to the benefit of the estate, heirs, executors and administrators of the Indemnitee. Nothing contained in this Article shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing 3'

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indemnification rights and procedures different from those set 3 forth in this Article. In addition, the Corporation may, to the l extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such -

rights may be equivalent to, or greater or less than, those set forth in this Article.

3-.

10. Parital Indemnification. If an Indemnitee is entitled under any pr 91sion of this Article to indemnification by the Corporation for some or a portion of the expenses _(including attorneys' fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by him or her or on his or her '

3 behalf in connection with any action, suit, proceeding or investigation and any appeal, therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify. '

I the Indemnitee for the portion of such expenses (including attorneys' fees), judgments, fines or amounts paid in settlement to which the Indemnitee is entitled.

3

11. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect i tself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, _

3- liability or loss incurred by him or her in.any such capacity, or &

arising out of his or her status as such, whether or not'the Corporation would have the power to indemnify such person against such expense, liability or less under the Business Corporation Act

.of New Hampshire.

9 12. Merger or consolidation. If the Corporation is merged into or consolidated with another corporation and sn't Corporation is not the surviving corporation, the surviving corporation shall-assume the obligations of the Corporation under this Article B with respect to any action, suit, proceeding or-investigation arising-out of or relating to any actions, transactions or facts 9 occurring prior to the date of such merger or consolidation.

13. savings Clause. If this Article B or-any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation-shall nevertheless-indemnify

.each Indemnitee as to any expenses (including. attorneys' fees) 3- judgments,-fines and amounts _ paid in settlement in connection with any action,Lsuit, proceeding or-investigation,-whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any-applicable portion of this Article that shall not have been invalidated and to the-fullest extent permitted by applicable law.

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14. Subsec;uent Leci.slation. If the Business Corporation Act

. of New Hampshire is amended after adoption of this Article to expand further the indemnification permitted to Indemnitees, then the Corporation shall indemnify such persons to the fullest extent g permitted by the Business Corporation Act of New Hampshire, as so amended.

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A.V.E !; D E D A !; D R E S T A T E D BY-LAWS Or EUA POWER CORPORATION

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D E AMENDED AND RESTATED BY-LAWS OT EUA POWER CORPORATION D

TABLE OF CONTENTS Pace S ARTICLE 1 - Shareholders................................... 1 Section 1.1 Place of Meetings...................... 1 Section 1.2 Annual Meeting......................... 1 Section 1.3 Special Meetings....................... 1 Section 1.4 Notice of Meetings..................... 1 p Section 1.5 Voting Record.......................... 2 Section 1.6 0uorum................................. 2 Section 1.7 Adjournments........................... 2 Section 1.8 Voting and Proxies..................... 2 Section 1.9 Action at Meeting...................... 2 Section 1.10 Nomination of Directors................ 2 p Section 1.11 Notice of Business at Annual Meeting... 3 Section 1.12 Action without Meeting................. 4 Section 1.13 Organization........................... 4 ARTICLE 2 - Directors...................................... 5

> Section 2.1 General Powers......................... 5 Section 2.2 Number; Election and Qualification..... 5 Section 2.3 Change in Size of the Board............ I Section 2.4 Teriure................................. 5 Section 2.5 Vacancies.............................. 5 Section 2.6 Resignation............................ 5

> Section 2.7 Regular Meetings....................... 6 Section 2.8 Special Meetings....................... 6 Section 2.9 Notice of Special Meetings............. 6 Seccion 2.10 Meetings by Telephone Conference Ca11s................................. 6 Section 2.11 Quorum................................. 6

> Section 2.12 Action at Meeting...................... 6 Section 2.13 Action by Consent...................... 6 Section 2.14 Remova1................................ 7 Section 2.15 Committees............................. 7 Section 2.16 Compensation of Directors.............. 7 p ARTICLE 3 - Officers.... .................................. 7 t

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Enumeration............................ 7 Erction 3.1 7 9 lection 3.2 Election..................... .........

8 Section 3.3 Qualification..........................

8 Section 3.4 Tenure.................................

Section 3.5 Resignation and Remova1................ 8 8

Section 3.6 Vacancies..............................

Section 3.7 Chairman of the Board and Vice- 8 3 Chairman of the Board.................

8 Section 3.8 President..............................

9 Section 3.9 Vice Presidents........................

Section 3.10 Secretary and Assistant Secretaries.... 9 Section 3.11 Treasurer and Assistant Treasurers..... 9 10 Section 3.12 Salaries......... .....................

$ 10 ARTICLE 4 - Capital Stock..................................

Issuance of Stock...................... 10 Section 4.1 Certificates of Stock.................. 10 Section 4.2 Transfers.............................. 11 i Section 4.3 Lost, Stolen or Destroyed Certificates 11 g Section 4.4 Record Date............................ 11 Section 4.5 Section 4.6 Corporation's Acquisition of its Own Shares............................ 12 12 ARTICLE 5 - General Provisions.............................

9 Section 5.1 Tiscal Year............................ 12 Corporate Sea 1......................... 12 Section 5.2 Waiver of 12 Section 5.3 Notice.......................

12 Section 5.4 Voting of Securities...................

Evidence of Authority.................. 12 Section 5.5 12 Section 5.6 Articles of Incorporation..............

g Transactions with Interested Parties... 13 Section 5.7 -

Severability........................... 14 Section 5.8 Pronouns............................... 14 Section 5.9 14 ARTICLE 6 - Amendments.....................................

D

.',. Section 6.1 By the Board of Directors.............. 14 By the Shareholders.................... 14 Section 6.2 7

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AMENDED AND RESTATED BY-LAWS g

OF EUA POWER CORPORATION ARTICLE 1 - Shareholders 1.1 Place of Meetinos. All meetings of shareholders shall be held at such place within or without the State of New Hampshire I as may be designated from time to time by the Board of Directors or the President or, if not so desimmted, at the registered office of the corporation.

1.2 Annual Meetino. ~

The annual meeting of shareholders shall be held en a date to be fixed by the Board of Directors or P the President (which date shall not be a legal holiday in the place where the meeting is to be held) at the time and place to be fixed by the Board of Directors or the President and stated in tne notice of the meeting. If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu of the annual meeting, and any action taken at that special b meeting shall have the same effect as if it had been taken at the annual meeting, and in such case all references in these By-Laws to the annual meeting of the shareholders shall be deemed to refer to such special meeting.

1.3 Soecial Meetinos. Special meetings of shareholders may

> be called by the President or the Board of Directors of the corporation. In addition, upon written application of one or more shareholders who are entitled to vote and who hold at least 101 of the capital stock entitled to vote at the meeting, special meetings may be called by the Secretary, or in the case of the death, absence, incapacity or refusal of the Secretary, by any

> other officer. Business transacted at any special meeting of shareholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4 Notice of Meetinos. Written notice of each meeting of shareholders, whether annual or special, shall be delivered not

> less thi' 10 nor more than 60 days befo:1 the date of the meeting to each snarcholder of record entitled to-vote at such meeting.

The notices of all meetings shall state the place, day and hour of the meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called.

If mailed, notice is deemed delivered when deposited in the United l

States mail addressed to the shareholder at his address as it appears on the stock transfer books of the corporation, with p postage prepaid.

1.5 Votine Record. The officer or agent having charge of the stock transfer ocoks for shares of the corporation shall make a complete record of the shareholders entitled to vote at the meeting or any adjournment of the meeting, arranged in i alphabetical order, with the address of and the number of shares held by each. The record shall be produced and kept open beginning two business days after notice of the meeting is given and shall continue until the meeting, and shall be subject to the inspection of any shareholder or his agent or attorney during the whole time of the meeting.

1.6 Ouorum. Unless otherwise provided by law, the Articles of Incorporation, or these By-laws, a majority of the shares of the capital stock of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at the meeting for the transaction of business.

1.7 Adiournments. Any meeting of shareholders may be adjourned to any otner time and to any other place at which a meeting of shareholders may be held under these By-Laws by the shareholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no shareholder is i

present, by any officer entitled to preside at or act as Secretary of such meeting. It shall not be necessary to notify any shareholder of any adjournment of less than 30 days if the time and place of the adjourned meeting are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business which might have been transacted at the original meeting.

1.8 votine and Proxies. Each outstanding share, regardless of class, shall be entitlec to one vote on each matter submitted to a vote at a meeting of shareholders. A shareholder may vote either in person or by proxy executed in writing by the shareholder or by his duly authorized attorney-in-fact. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.

1.9 Action at Meetino. If a quorum is present at any meeting, the affirmative vote of the majority of the shares represented at the meeting and entitled to vote on the subject matter shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by law, the Articles of Incorporation or these By-laws.

1.10 Nomination of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible for e

)

election as directors. Nomination for election to the Board of Directors of the corporation at a meeting of shareholders may be

) made by the Board of Directors or by any shareholder of the corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section. Such nominations, other than those made by or on behalf of the Board of Directors, shcIl be made by notice in writing delivered or mailed by first class United States mail, postage

) prepaid, to the Secretary, and received not less than 60 days nor more than 90 days prior to such meeting; provided, however, that Af less than 70 days' notice or prior public disclosure of the date of the meeting is given to shareholders, such nomination shall have been mailed or delivered to the Secretary not later than the close of business on the 10th day following the date on

) which the notice of the meeting was mailed or such public disclosure was made, whichever occurs first. Such notice shall set forth (a) as to each proposed nominee (i) the name, age, business address and, if known, residence address of each such nominee, (ii) the principal occupation or employment of each sucn nominee, ( 111) the number of shares of stock of the corporation

) which are beneficially owned by each such nominee, and (iv) any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to be named as a nominee and to serve as a director if elected); and (b) as to the shareholder 3 giving the notice (i) the name and address, as they appear on the corporation's books, of such shareholder and (ii) the class and number of shares of the corporation which are beneficially owned by such shareholder. The corporation may require any proposed nominee to furnish such other information as may reasonably be Tequired by the corporation to determine the eligibility of such

) proposed nominee to serve as a director of the corporation.

The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should-so determine, he shall so declare to the meeting and the defective

) nomination shall be disregarded.

1.11 Notice of Business at Annual Meetino. At an annual meeting of the snarenolders, only such business shall be conduc'ed as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (a)

) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before an annual meeting by a shareholder.

For business to be properly brought before an annual meeting by a shareholder,

) if such business relates to the election of directors of the corporation, the procedures in Section 1.10 must be complied with.

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D If such business relates to any other matter, the shareholder must have given timely notice thereof in writing to the Secretary. To D be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that less than 70 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be

> timely must be so received not later than the close of business on the 10th day following the date on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever occurs first. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (a) a brief description of the 5 business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the corporation's books, of the shareholder proposing such business, (c) the class and number of shares of the corporation which are beneficially owned by the shareholder, and (d) any material interest of the

> shareholder in such business. Notwithstanding anything in these By-Laws to the centrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in tnis Section 1.11 and except that any shareholder proposal which complies with Rule 14a-B of the proxy rules (or any successor provision) promulgated under the Securities Exchange Act of 1934, as amended, and is to be included in the corporation's proxy statement for an annual meeting of shareholders shall be deemed to comply with the requirements of this Section 1.11.

1.12 Action without Meetinc. Any action required to be taken

.at any meeting of sharenolders of the corporation or any action p which may be taken at a meeting of the shareholders may be taken without a meeting, without prior notice and without a vote, if a or consent in writing, which may be contained in a single document may be contained in more than one document so long as the documents in the aggregate contain the required signatures, setting forth the action so taken, is signed by all of the snareholders entitled to vote with respect to the subject matter.

1.13 Oreanization. The Chairman of the Board, or in his absence the Vice Cnairman of the Board designated by the Chairman of the Board, or the President in the order named, shall call meetings of the shareholders to order, and shall act as chairman of such meeting, provided, however, that the Board of Directors may appoint any sharenolder to act as chairman The of any meeting Secretary of in the the absence of the Chairman of the Board.

corporation shall act as secretary at all meetings of the shareholders; but in the absence of the Secretary at any meeting of the shareholders, the presiding officer may appoint any person p

to act as secretary of the meeting.

e

10 ARTICLE 2 - Directors O

2.1 General Pcwers. All corporate powers shall be exercised by or under the autnority of, and the business and affairs of the -

corporation shall be managed under the direction of, a Board of Directors, except as may otherwise be provided by law. In the event of a vacancy in the Board of Directors, the remaining O directors, except as otherwise provided by law, may exercise the powers of the full Board until the vacancy is filled.

2.2 Number

Election and Qualification. The number of directors wn cn snall constitute tne wnole Board of Directors shall be determined by resolution of the shareholders or the Board O of Directors, but in no event shall be less than three or more than eight. The directors shall be elected at the annual meeting of shareholders by such shareholders as have the right to vote on such election. Directors need not be shareholders of the corporation or residents of New Hampshire.

O 2.3 Chance in Size of the Board. The number of directors may be fixed or enanged from time to time, within the range set forth in Section 2.2, by the shareholders or the Board of Directors. After shares are issued, only the shareholders may change the range for the size of the Board of Directors or change from a variable range to a fixed Beard or vice versa. The number O cf directors may be decreased, within the range, at any time and from time to time by a majority of the directors then in office, but no decrease shall have the effect of shortening the term of any incumbent director.

2.4 Tenure. Each director shall hold office for the term o for which he is elected and until his successor shall have been elected and qualified.

2.5 Vacancies. Any vacancy occurring in the Board of Directors, inclucing a vacancy resulting from an enlargement of the Board, shall be filled by the shareholders, by the affirmative o vote of a majority of the remaining directors though less than a quorum of the Board of Directors, or by a sole remaining director.

A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office. Any directorship to be filled by reason of an increase in the number of directors may be filled by the Board cf Directors for a term of office O continuing only until the next election of directors by the sharenolders.

2.6 Resionation. Any director may resign by delivering his written resignation to the Board of Directors, its Chairman or the corporation at its principal office. Such resignation shall be O

effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event.

d' O

)

2.7 Regular Meetings. Regular meetings of the Board of

)- Directors may be neld witn or without notice of the date, time, place or purpose of the meeting. A regular meeting of the Board may be held at any time and place, within or without the State of New Hampshire, including, without notice, immediately after and at the same place as the annual meeting of shareholders.

) 2.8 Special Meetings. Special meetings of the Board of Directors may be held at any time and place, within or without the State of New Hampshire, designated in a call by the Chairman of the Board, President, two or more directors, or by one director in the event that there is only a single director in office.

) 2.9 Notice of Special Meetings. Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (i) by giving notice to such director in person or by telephone or telecopy at least 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> in advance of the meeting, (ii) by 3 sending i telegram or telex, or delivering written notice by hand, to his last known business or home address at least 48 hours5.555556e-4 days <br />0.0133 hours <br />7.936508e-5 weeks <br />1.8264e-5 months <br /> in advance of the meeting, or (iii) by mailing written notice to his last known business or home address at least 72 hours8.333333e-4 days <br />0.02 hours <br />1.190476e-4 weeks <br />2.7396e-5 months <br /> in advance of the me.iting. A notice or waiver of notice of a meeting of the Board of L'irectors (whether regular or special) or any committee

) designated by the Board, need not specify the purposes of, or the business to be transacted at, the meeting.

2.10 Meetings by Telephone Conference Calls. Members of the Board-of Directors or any committee designated by the Board may  !

-participate in a meeting of the Board or such committee by means of a conference telephone or similar communications equipment by

) means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at such meeting.

2.11 Quorum. A majority of the number of directors fixed as

) the number of directors constituting the full Board shall constitute a quorum for the transaction of business of the Board of Directors. Common or interested directors may be counted in determining the presence of a quorum.

2.12 Action at Meeting. The act of a majority of the

). directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by law, the Articles of Incorporation or these By-Laws.

2.13 Action by Consent. Any action required to be taken at any meeting of the Board of Directors or any action which may be

) taken at a meeting of the directors or of a committee, may be r

taken without a meeting if a consent in writing, which may be contained in a single document or may be contained in more than

, one document so long as the documents in the aggregate contain the required signatures, setting forth the action so taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be.

2.14 Removal. Directors of the corporation may be removed I only as permitted by law and the Articles of Incorporation.

2.15 Committees. The Board of Directors, by resolution adopted by a ma]ority of the full Board, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in the resolution

> of the Board of Directors and subject to the provisions of the Busintss Corporation Act of the State of New Hampshire, shall have and miy exercise all the authority of the Board of Directors.

Each committee must have at least two members, who serve at the pleasure of the Board. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time

> request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided for the Board of Directors.

> 2.16 Compensation of Directors. Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary corporations in any other capacity and receiving

> compensation for such service.

ARTICLE 3 - Officers

> 3.1 Enumeration. The officers of the corporation shall consist of a President, a Secretary, who shall be the registered agent, a Treasurer and such other officers and assistant officers and agents with such other titles as the Board of Directors may determinei including a Chairman of the Board, a Vice-Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers,

> and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2 Election. The President, Treasurer and Secretary shall be elected annually by the Board of Directors Other at its officers first meeting may following the annual meeting of shareholders.

_7_

O be appointed by the Board of Directors at such meeting or at any other meeting.

O 3.3 Qualification. No officer need be a shareholder. Any two or more offices may be held by the same person.

3.4 Tenure. Except as otherwise provided by law, by the Articles of Incorporation or by these By-Laws, each officer shall hold office until his successor is elected and qualified, unless a O different term is specified in the vote choosing or appointing him, or until his earlier death, resignation or removal.

3.5 Resicnation and Removal. Any officer may resign by delivering his written resignation to the corporation at its principal office. Such resignation shall be effective upon O receipt unless it is specified to be effective at some other time or upon the happening of some other event. Any officer or agent may be removed at any time, with or without cause, by the Board of Directors whenever in its judgment the best interests of the corporation will be served by such action, but such removal shall be without prejudice to the contract rights, if any, of the person O so removed or of the corporation. Election or appointment of an officer or agent shall not of itself create contract rights.

3.6 Vacancies. The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices O ether than those of President, Treasurer and secretary. Each such successor shall hold office for the unexpired term of his predecessor and until his successor is elected and qualified, or until his earlier death, resignation or removal.

3.7 Chairman of the Board and Vice-Chairman of the Board.

'O The Beard of Directors may appoint a cnairman of tne soard and may designate the Chairman of the Board as Chief Executive Officer.

If the Board of Directors appoints a Chairman of the Board, he shall perform such duties and possess such powers as are assigned to him by the Board of Directors. If the Board of Directors appoints a Vice-Chairman of the Board, he shall, in the absence or CF disability of the Chairman _of the. Board, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties and possess such other powers as may from time to time be vested in him by the Board of Directors.

3.8 President. The President shall, subject to the O direction of the Board of Directors, have general charge and supervision of the business of the corporation. Unless otherwise provided by the Board of Directors, he shall preside at all meetings of the shareholders and, if he is a director, at all meetings of the Board of Directors. Unless the Board of Directors has designated the Chairman of the' Board or.another officer as O Chief Executive Officer, the President shall be the Chief

.O

Ixecutive Officer of the corporation. The President shall perform such other duties and shall have such other powers as the Board of Directors may from time to time prescribe.

D 3.9 Vice Presidents.. Any Vice President shall perform such duties and possess such powers as the Board of Directors or the President may from time to time prescribe. In the event of the absence, inability or refusal to act of the President, the Vice President (or if there shall be more than one, the Vice Presidents

' in the order determined by the Board of Directors) shall perform the duties of the President and when so performing shall have all the powers of and be subject to all the restrictions upon the President. The Board of Directors may assign to any Vice Presi-dent the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.10 Secretary and Assistant Secretaries. The Secretary shall perform sucn duties and shall have sucn powers as the BoardIn of Directors or the President may from time to time prescribe.

addition, the Secretary snall perform such duties and have such powers as are incident to the office of the secretary, including I without limitation the duty and power to give notices of all nectings of shareholders and special meetings of the Board of Directors, to attend all meetings of shareholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of shareholders and their addresses as required, to be custodian of corporate records and the cor-D porate seal and to affix and attest to the same on documents.

Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assis-D tant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary.

In the absence of the Secretary or any Assistant Secretary at any meeting of shareholders or directors, the person presiding at D the meeting shall designate a temporary secretary to keep a record of the meeting.

3.11 Treasurer and Assistant Treasurers. The Treasurer shall perform such duties and shall nave suen powers as may from time to time be assigned to him by the Board of Directors or the D President. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including without limitation the duty and power to keep and beto responsible for all funds and securities of the corporation, deposit funds of the corporation in depositories selected in accordance with these By-Laws, to disburse such funds as ordered D by the Board of Directors, to make proper accounts of such funds, s-

and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation.

The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the President or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the I Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.12 Salaries. Officers of the corporation shall be entitled I to such salaries, compensation or reimbursement as shall be fixed or allowed f rom time to tirae by the Board of Directors.

ART CLE 4 - Capital Stock D 4.1 Issuance of Stock. Unless otherwise voted by the shareholders and subject to the provisions of the Articles of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any unissued balance of the authorized capital stock of the corporation held in its treasury may be issued, sold, D transferred or-otherwise disposed of by vote of the Board of Directors in such maaner, for such consideration and on such terms as the Board of Directors may determine.

4.2 Certificates of Stock. The shares of the corporation shall be represented by certificates. Each such certificate shall D be signed by the Chairman or Vice-Chairman, if any, of the Board of Directors, or the President or a Vice President, and by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer of the corporation and may be sealed with the seal of the corporation or a facsimile of the seal. Any or all of the signatures upon the certificate may be a facsimile. Each

> certificate must state on its face the name of the corporation and that the corporation is organized under the laws of New Hampshire, the name of the person to whom it is issued, and the number and class of shares the certificate represents.

Each certificate for shares of stock which are subject to any

> restriction on transfer pursuant to the Articles of Incorporation, the By-Laws, applicable securities laws or any agreement among any number of shareholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction.

r

t 4.3 Transfers. Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to e applicable law, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its trans-fer agent of the certificate representing such shares properly ~

endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer g agent may reasonably require. Except as may be otherwise required by law, by the Articles of Incorporation or by these By-Laws, the corporation shall be entit2ed to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other g disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-Laws.

4.4 Lost, Stolen or Destroyed Certificates. The corporation may issue a new certificate of stock in place of any previously

, issued certificate alleged to have been lost, stolen, or destroyed, upon such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

O 4.5 Record Date. The Board of Directors may fix in advance a date as a record date for the determination of the shareholders entitled to notice of or to vote at any meeting of shareholders or to express consent (or dissent) to corporate action in writing

.without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any

1. change, conversion or exchange of stock, or for the purpose of any other lawful action. Sech record date shall not be more than 70 days before the date of such meeting, nor more than 70 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining O shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. The record date for determining shareholders entitled to express consent to corporate action in writing without a meeting,-

• when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. The record date for determining shareholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

D d

9

A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholder shall apply to any adjournment of the meeting: provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

4.6 Corporation's Accuisition of its Own Shares. The corporation may acquire its own shares and shares so acquired constitute authorized but unissued shares.

D ARTICLE 5 - General Provisions 5.1 Fiscal Year. Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall begin on the first day of January in each year I and end on the last day of December in each year.

5.2 Corporate Seal. The corporate seal shall be in such form as shall ce approved by the Board of Directors.

5.3 Waiver of Notice. Whenever any notice whatsoever is D required to ce given by law, by the Articles of. Incorporation or by these By-Laws, a waiver of such notice either in writing signed by the person entitled to such notice or such person's duly authorized attorney, or by telegraph, telecopy, cable or any other available method, whether before, at or after the time stated in such vaiver, or the appearance of such person or persons at such I meeting in person or, where permitted, by proxy (excep where such person attends for the express purpose of objecting to the transaction of business because the meeting is not lawfully called or convened), shall be deemed equivalent to such notice.

5.4 Votina of Securities. Except as the directors may I otherwise designate, the President or Treasurer may waive notice of, and act as, or appoint any persen or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at, any meeting of shareholders or shareholders of any other corporation or organization, the securities of which may be held by this corporation.

5.5 Evidence of Authority. A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the shareholders, directors, a committee or any officer or representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive

> evidence of such action.

5.6 Articles of Incorporation. All references in these By-Laws to the Articles of Incorporation shall be deemed '.o refer to the Articles of Incorporation of the corporation, as amended and in effect from time to time.

r

p 5.7 Transactions with Interested Parties.

g (a) A conflict of interest transaction is a transaction with the corporation in which a director of the corporation has a direct or indirect interest. A conflict of interest transaction is not voidable by the corporation solely because of the -

director's interest in the transaction if any one of the following is true:

O (1) the material facts of the transaction and the director's interest were disclosed or known to the Board of Directors or a committee of the Board of Directors and the Board of Directors or committee authorized, approved, or ratified the transaction; O (2) the material facts of the transaction and the director's interest were disclosed or known to the shareholders entitled to vote and they authorized, approved, or ratified the transaction; or (3) the transaction was fair to the corporation.

(b) For purposes of this section, a director of the corporation has an indirect interest in a transaction if (1) another entity in which he has a material financial interest or in which he is a general partner is a party to the transaction or (2) another entity of which he is a director, officer, or O trustee is a party to the transaction and the transaction is or should be considered by the Board of Directors of the corporation.

(c) For purposes of subsection (a)(1), a conflict of

~ interest transaction is authorized, approved, or ratified if it receives the affirmative vote of a majority of the directors on C the Brard of Directors (or on the committee) who have no direct or indirect interest in the transaction, but a transaction may not be authorized, approved, or ratified under this section by a single director. If a majority of the directors who have no direct or indirect interest in the transaction vote to authorize, approve, or ratify the transaction, a quorum is present for the purpose of 3 taking action under this section. The presence of, or a vote cast by, a director with a direct or indirect interest in the transaction does not affect the validity of any action taken under subsection (a)(1) if the transaction is otherwise authorized, approved, or ratified as provided in that subsection.

3 (d) For purposes of subsection (a)(2), a conflict of interest transaction is authorized, approved, or ratified if it receives the vote of a majority of the shares entitled to be counted under this subsection. Shares owned by or voted under the control of a director who has a direct or indirect interest in the transaction, and shares owned by or voted under the control of an 4 entity described in subsection (b)(1), may not be counted in a r

3

)-

1 vote of shareholders to determine whether to authorize, cpprove, or ratify a conflict of interest transaction under p- subsection (a)(2). .The vote of those shares, however, is counted in determining whether the transaction is approved under other sections of this chapter. A majority of the shares, whether or not present, that are entitled to be counted in a vote on-the transaction under this subsection constitutes a quorum for the purpose of taking action under this section.

) Severability. Any determination that any provision of 5.8 these By-Laws is for any reason inapplicable, illegal or ineffec-tive shall not affect or invalidate any other provision of these By-Laws.

y 5.9 Pronouns. All pronouns used in these By-Laws shall'be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

ARTICLE 6 - Amendments 6.1 By the Board of Directors. Except as otherwise provided k in the Articles of Incorporation, these By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quor.m is present.

) 6.2 By the Shareholders. Except as otherwise provided in the Articles of Incorporation, these By-Laws may be altered, amended or repealed or new by-laws may be adopted by the shareholders, provided notice of such alteration, amendment,

. repeal or adoption of new by-laws shall have been stated in the notice of such special meeting.

)

)

d'

)

[

\-

le EXHIBIT B O

Current officers and Directors

~

( (To be replaced on the Effective Date of the Plan)

O Position Held Name Director, Vice President, Richard M. Burns Assistant Secretary, Assistant O Treasurer Director, Executive Vice Arthur A. Eatch President T"*5"" ^5515t*"t 8'C"t*'Y Cliff 'd 3 "*b'It' 3'-

O Director, Executive Vice Robert E. Maguire President Director, Assistant Secretary Milliam T. O'Connor Assistant Secretary O sasil Pallone Director, Chairman Donald G. Pardus Secretary Richard A. Samuels Assistant Secretary 0 John r. S=itka Director, President _

John R. Stevens Director, Vice President Robert P. Tassinari Director, Vice President Robert F. Wolf f , Jr.

O O

f 4

O

- - - - - - _ - - - _ _ _ _ _ _ _ _ - _ _ _ _ _ - - - - ~ - - - - _ _ _ _ __ - ' ' - - - - - _ . . _ _

)4 .

T I 't is.* l Iljf* ,

EXH2 BIT c Sjgfgo gt

=. LYMI?rS c"p Au?y I

II Pursuant to Sections 3(1) and 20 of the Decom.nissioning g.

Cests security Agreement dated Noves.ber 25, 1986, as amended on March 20, 1989 (" DOS A"), the undersigned, Eastern Utilitiew I Associates, hereby quarantees to the Joint Ovners of the SeabrecX Nuclear Pro $ect (* Joint owners") timely payment of the

!ndebtedr.ess, obligations and liabilities of TVA Power Ccrperatien fer Decct.=issioning costs and Costs of Cancellatten under the Agreenant f or Joint Ovnership, Construction and operation of Hav Hampshire Nuclear Units, dated as of May 1, 1973, as amended ("JOA") . This Limited Guaranty shall be N centinuing, absciuto and uncenditional but shall be limited in ac cu.nt as provided belov.

f The undersigned has also have obtained the consent of The Aetna casualty and surety Ccapany ("Astna') to the release of the $10 tillion fund nov held under the DCSA, in return for the censitzens of the undersigned in the amount of $10 million (the

• EUA commitment") with respect to the obligations of EUA Power p

Corporation to pay its share of Pre-op Decommissioning costs, f which hat. been escured by a surety Send issued by Aetna dated

}

March 20, 1989.

This Limited cuaranty shall be reduced on a dollar for dollar basis in the amount of all payments which may duly be made The total aggregate from ti.mo to time under the IVA commitment.

payments which may me made under this Limited cuaranty and the

~

Et8005239

l

)

,' -__a.__ ._.._..._.. _._ ___.. . . . . . . .. . .

l D. IVA Cen:itaant shall not exceed $10 million (' Maximum Azcunt"):

(

erevided, however, in the case of the Joint cvners only, the ~

Marinua Amount may be increased by such additional amount g

(* Additional Anount"), if any, as any be paid in cash to IUA Fower Corporation (or to the undersigned as its assignee) by or in behalf of United Engineers and Constructors, Inc. ("UIEC"), in settlement of claims (*Clains") against UI&C, which were assigned to IVA Power Corporation by the so-called Departing Participants l

under the Settlement Agreement made as of January 13, 1989 by and I

among said present and former Joint owners of the Seabrook 8 Nuclear Project and Yankee Atomic Iloctric Company, or as to which Clai=s a final judgtent resulting from litigation or arbitration has been entered. The Additional Amount shall be

$ reduced by (i) si million, and (ii) any payments of l inder.nification and contribution which EUA Power Corporation say be required to make as provided in Section 3 of said settlement

'l -

5 Agreement. If not sooner terminated by reason of payment by the as

j undersigned of the Maxi.mua Amount and any Additional Amount, I set forth in this third paragraph hereof, this Limited Guaranty shall remain in full force and affect until all Decommissioning 3

1 costs and costs of cancellation which are the responsibility of ZUA Fower' corporation have been paid by the undersigned or by IVA l ~

Power corporation.

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l l 4 BA003340 i

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it As used herein. the Joint Ovners for whose benefit this Limited Guaranty is executed are each of the following entities ,

and the successors and assigns of each who may become Participants under the JoA by acquiring an ownership share of the Seabrook Huclear Units and Property Units (as defined in the JoA), namely:

Public Service Company of New Hampshire i

The United Illuminating company canal Iloctric Company The connecticut Light and Power company Hudson Light & Pover DepSrt=ent Massachusetts Municipal Wholesale Electric company Mentaup tiectric Company New England Power company New HL2pshire Electric Cooperative, Inc.

Taunton Municipal Lighting Plant

' verzent Electric Generation and Transmission cooperative, Inc.

This Limited Guaranty will become ef fective when at least 80% of the Ovnership Interests (excluding EUA Power corporation) listed below execute the Acceptance and any thereaf ter be enforced for tha benefit of all beneficiaries

)

hereunder by one Joint Ovner or by any Joint Ovner for its own separate interest and account.

In the event the Managing Agent duly appointed under b paragraph 34.3 of the JoA in the course of its duties advances funds to. pay for EUA Power Corporation's Decouaissioning costs, coste of cancellation wr Pre-op Decesaissioning costs, such I Managing Agent shall be entitled to exercise the rights of a beneficiary hereunder up to the Maximum Amount, reduced by any o ALL49DO.UDs

• 3*

I 1

tua00S341 '

pay ents which at any time may be duly made under the EUA cot =it=ent, but in no event shall the aggregate liability of the undersigned to all beneficiaries under this Limited Guaranty, and under the EUA Co==itaant exceed the Maximum Azount and, in the 8 case of the Joint evners, any Additional Azount.

• The original of this Limited Guaranty when executed shall be filed with and held by the person who serves from time O to time as Secretary of the Joint ovners' meetings and shall be returned to the undersiqM d upon te mination.

The name of the undersigned Eastern Utilities

$ Associates, is the designation of the Trustees for the time being under a Declaration of Trust dated April 2, 1928, as amended.

All persons dealing with Eastern Utilities Associates must look g solely to the Trust property for the enforcement of any claies against it, as neither the Trustees, of ficers or shareholders assume any personal liability for obligations entered into in behalf cf Eastern Utilities Associates.

IN WITNISS WIA.t0T, Eastern Utilities Associates has executed this Limited Guaranty under seal this 4th day of May, 1990.

O EAs tax vizl.zTzts AssoczATES g Witness: "Fr a ; j..t Mu

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>~ tv wer The undersigned, each of which certifies to State Street Eank and Trust Company, Boston, Massachusetts that it is a Joint ovner of the seabrook Nuclear Project in the percentage of ovnership shown opposite its name, hereby accepts the above g

1.izited Guaranty of Eastern Utilities Associates and hereby agrees that the DCSA and the tcc financing statements filed with respect thereto are to be terminated and hereby directs the Bank to return all ecllateral held under the DCsA promptly to IUA Power corporation and to mark the Premissory Hots paid in full and return the aforesaid prc:gtly to IVA Power Corporation.

IN WITHISS WHER.EOT, each of the undersigned has day ct

> executed the above Acceptance under seal as of this May, 1990.

I _

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Oi WITNISSIS: PU3.2C $ERVICE CCMPuY or HEW KAMPSHIKI (35.569%)

II- Sy o ( Ok Its i t _e- vice irtt' cent 3 i

/b O TKI VNITID 21.LUMINATING CCMPuy (17.5%)

By:

Its:

CANAL ILICTRIC C0KPANY (3.523%)

sy:

Its:

0 Tar CeHHtCT:Cvr 1.2cn uO PCWIR COMP ANY (4. 059 % )

By:

It

0 NUO50H L2CHT & PCWER CIPAR'"XINT (0.077%)

' sy:

Its:

O -

MA55ACW"5ETTS MUNICIPAL WHOLIS A1.E ELECTRIC COMPANY (11.5934)

O . Sy:

' Its:

- NTW ENCIAND PCVER CCKPANY

. (9.957%)

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tut 00534#,

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Acery Aver The undersigned, each of which certifies to State g street Bank and Trust Cenpany, Boston, Massachusetts that it is a Joint evner of the seabrook Nuclear Project in the percentage of evnership shevn opposite its name, hereby accepts the above g Limited cuaranty of tastern Utilities Associates and hereby _

agrees that the DCSA and the UCC financing statenants flied with respect thereto are to be ter=inated and hereby directs the Bank to return all collateral held under the DCSA prenptly to EUA Power C rperation and to nark the Premissory Note paid in full and return the aferesaid pronptly to r"A Power Corporation.

IN VITNISS WHIRICT, each of the undersigned has D

executed the above Acceptance under seal as of this lith day of May, 19 9 0. ,

I CANAL ELECTRIC C0KPANY _

8y M _

p .

RJssell D. Wr;ght, Einancial

.; Vice President and Treasurar i

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.I r O' ne tre.csir.d he4 ceds in u tw omery date my 4, 1990, in behalf cf iu rdste.ia.:7. C'A Pevu: Cer;craticn ('TM"), to 4.i! ths fellev.r4:

1 "D.Ls 1.1=itad Gmery shall arted and be fully effective with cr.:ellatice. rupe:t toade S. pycr.t y c:APof De:acz=.asicr.fr.g Cosu13

• .ich rAssem.t emeto ed rraire Costs t7 of O

1xw to be rets: .ed to C.XP er to a trustst or reca1vn: e2 iu esute or useu er f.s oths.: vise r:Tedh for the beslit of iu credit:rs, u a :ss.f.t of ey te.k:.=cey, fr.selvency er recTgr.i.ution proceedi.4s u to 4.ich C AP is ::he rabjett."

O 3 CE8 S *IF#7 ' ** * '"d 81F*d h ****'#*d

• 12 ^:* *t"  :

mde saa.1 c.is lith day cf Ny,1990.

EAS":US LTD.TT33 ASSO"'.A*ES By: M_ '-

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Eastem Utilities ,

w, I Eufsen velicas Assocates c m u:. m w , {0L 3 *c su am swvm :210 vnwssn l .

• l

, Wy ll,1990 as I I

To %e Joint ows of da Seahtek Raclar O Project (" Joint Cunars")

We Have Dwrated Ceaets to e.a 1'-#ted N ar cty F.e.farred to 541cw:

tan 51:ss O his is to cerdi= t.at da en:z:it::n .t of Ta. stem Utilities Associnas trda.: its L.f=ited Owery dated My A,1990, of thaly pa .c cf the irdah:at.us, obl4stiTJ cd liabilitiu Cf its s- idiary, DA Fews: Cer;cratien, f= Deca:x=.ssicnir.g Costs ed Costs of Cecellatix. unde the Jeint Cmarship Apocac.t. u cended, in tha ace.:nt of 510 c111on, vill rce be redged by my O. fees e.d spe .su, includ!.ng at:.=: .eys ' feu, d.ich Eastam U:ili:its Associates may ine.: in erraction with tha preparation, perfe .c.ca ed eJ=caer.t of said f * 'ted hety.

Vey tmly y:urs, O }' dr tenald C. Faz a  :

Praaidant i Chlaf Ex.eerd.ve Officar O

t 9-racesass O f

_._-______..._.m__ . _ _ . _ _ _ _ _

4 i '

~.+ IXH2B27 D in ma eo.marios O ~

, Si A714 TNT OF (tf L8)!NCoME '

r' Yous 144=d Daember 31. ,

(la The.4uda)

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1899 18 2 1111 WoT170 mon g)

. 8 to.ste 3 e_g o Operossag Rmeins .

Opsreinst spanneat E '

8' 1p'  !

7J38 451

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o ser Opereses ,

• 1,083

= Malatenesso 4,p)p Dettuisees and Desemalutes,.ag

.('

end l Tuu onee Tha !aseas (18.684) 32,16") G2. b)'

. ' lac ese Tai Crest 3.C) r3.3W) II 43L  ;; ;f, Deferred Tues 3,C) () ein (3.2 fi 4; i }

g Teul t9erimas Espousa 13,934 ),219 ;7 - ,.

C9s riasg laeone ,

Premite for tit.asted kana (13.647) es 9 ' reek tavuiment (A) 18.377 g

Laa. md Isione Tuu et Premies (A) eet s eio -3:4 . .

cae, come een.> sei f22.947 5.16e en

'O k e Before lauree: Chatsu 1suruiChtgut 48333 84,850 46 l'a 1surut se Laeg+'7ers Debs 737

" oest teurut tapeaae 1,116 1.!*2 1.668 Amersaaen of De64 tapeww Axe 6ste for tem **d Peas g

L* sed "Nr.sg Cessemos (de40d) (ei318) -

• o (Cindit) 3.0 and N) s1.sse , s.m _

Neileurui Cursu * (3,953) . ell C4.303)

Gest) latene Af%et Iseftal Chargu ' 18.860 14.920 it.tH g.

Prefemd omdemas Amentoneau sc an1.tmi 8 e-mus mass--0 : ?ID >

Nei n,au) 8 .-mm<mmm.c mmm== ss )8

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.Q e sTA'!T.MDff of AITADfED(DEFICff')lAAND808 *

. Yous EaW Daneshw al. .

. (la Thouanada)- '

.0, g g g .

MN N) (WOTE N) 1-

.. '1

.. . 813,9*9 34 mined tamisp Sepanas of Yan $18Jil 8. ,

6 . 33.H0 8

• As prevenstr reponed 31.1871 (8,12 O_ ,

4, ,, . ,

Adjwassas (Nees M) n ,ea, . io.,se .

A4 a -

O.9th dll

.O: (14.90fl 18350

- - (toes) Issene A *st laasrael Chatsee Roused (De Aest) Earm ap a lad of Yest _8 g 8-~ g 8 l.

1

= p 7)# ersompaspsd sent us as isagralpaa #see Asassal somosos. . -

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tvA 30m co n,.eiou OI

• 5'T ATEM1W OF C ASH TLows

, YE AA.1 INDED DICEM31 A 31, os The.uada t

• M uit un (NOTE M) (NCT! R)

O' C ASH Flow F3.0M OP19.ATNG ACm7723: (3Jg)) 3 33 (tau) Insane ANr laurut Chargu 3 (74 Jct) 3 Adjusassou to Itasewi:e Net laceae se Not Cuh Pncidad by C5ersus Atenssa: 1,si) 6,118 1.t26 Depreciaties ud Ameruutoe l.es:

O A ersuse..tN=iuir=1 *

(21Jt?) 18,437 22.tle Defernd Tsaas (9f) (4,9 t) ($ x 3) .

~ *

~ 3sessiment Ten Crest. Not * $4,U0 46.l:4 Non Cash laurist Espean Aale-sace for Fees U6*4 :h ~.as (48.404) (41.318)

. . ' Ceu rw e es

,O Pnenee for Less es $3.881 5.ebteet 1s uanest (8,124) (431) gig caer - Net Net chassu a wetaus Cer:u]: (d.* 5) ($) (1.!!T) l A tte m u Itw o able 110 (12) 188 Auma.u Payable 3 WI O - Ast rud Tatu i r!0 fit)

Cest Net (4 4.amo 17.436 .J :::

Nel Cash (L' sad la) Pt,wded from Oyef eug Assviou C A5H 7*.0W TEOM DNIIT:SC AC";Vi"33; (7,7t() (15,47c) G3.130)

Courecues tapets, tau ie eee e ,u ,, C.,,i,,u,m... f) ;10)

.O 2.V24 (2J e 0)

Nel Caan Frondad from (Vand ls)lavuus Atankes CASH Ft0W TROM FNANCNC ACm7728:

Jesuesm 8,MO 1.3JD 2.300 '

Profernd Stask 21.000

• Laag Ters Debt G.987)

($49) (266)

• O

• 7in u t a tapesans 14.477 s.3 J

~

- Nat lasrease is Shen Term Dek 39.328 8.3 ia Not Cub Prended twa Fianaslag Aetmanas 0r2) Ito 0 11Ji No (Deeream)Insanas la Cub Cae (.ad Tempersr; Cad invenewee 28 1.183 tot .

si pegisming of Year g,

Cub and Tempenry Cank invasawse u Lad et Fened iJ SJ SJ .

Can piti dwing es year ent: s 4 .rs: : s (14,910) ta=taa .(18.23f) 3 0 - 1s4sne Tsim (bM 3- (10.06#) 8 1

ty nosepurag wu sn as innpaipn ef 6* Auseint suunna, 32

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I'.' A PC + IR ce ppe n.r;;cs 3 A.L.ANCE SMiti C4 ,. Deustee31, Cs N.usu)

' Auns 1222 1111

. B c71 R) 04 y ,3,, ,,,, ,,e2,,1,,,,,,,,,; 3 $4 8,t il 3' 47c,43 3

~ ULLey Nat and Nw:ur 7wel Laus '

A ssanshad Prewsics for Deptwunes 9,161 us A.ssemu6es

' ' ' L' ' " *d 3 *" .

js.gn O h'.u"6 3 roc k Iseuuts sa ( A)

De fa ned Alle.ute fer F.a/.a Nd :>,'c.:

'

• 136.3 2 14.3U ,

Ceut se9 (C.C ud K) to tcc Du s e.a. 4er : F.st (D) 36.: M a ;))

tow Net t't..fy P.us ud Cler la=utmesu C.u-s tt Aut u: 38 g Cut isd "espen*y Cuh la utmasu (3) le Assedeu ltusivebls: 3.M t C.a u ms rs. .N'u 2.836 Cast 26 2.:45 Auer.sud compu.

. 820 P '

• 8 5'* * * **

• r " 8 a s IU 186 O Cast Curisti Atuu 'El 2 ** 9

• TeulCasa: Ansu Osfsns4 Deb:W: 4.I)$ 6.1$4 L'u ae' tt4 DebtIapesu 419 311 CJer Defensd Dsbiu 3.16e 630 TeW Defstnd De6.u 33) CS7 3 41) .19 $

Q

• foul Aassu 3

"47.7AL:2.AT.ON A.N'D L1A3".JTIES C4 p o' ut.es: (0,oM) $ 11.411 3

C4aubes Iguity (T) s),oso so.in 0 -

reifen.4 si t cz) SCO.3M _ 279.5 M -

Lett-Tefu Dek (7.0) 3:C.5 F1 331.604__

, Tut! Capiulhassa Csms t UA1;~n' 14.877 Home Psysbk 115 334 Assawnes Psyshio 942 n 4Jt2 V Tu.as Actread 6.t77_ 5.116

• Janarut Assmed 1.11) ,

28.470_

Toul Curres LiaWoes 2.71s_ 2.883 Vumerued lavsennest Creda (B.C) -

21.364 _ 31.3M __

Assumulaud Defened Tsus (A.9)

J Cossusatu ut Cesungssetta (0) 813 183 3 333.0U I Ten! Lahu ud Capiuksee Tk ateeanu,nsg teru sn u inugist put ef as f.usdalsutsassu.

33 .

3 -

i YhE $$

s .

It' A PO*'E k CC 9JCl#.ON

• ST ATIM E NT C F C APTT A1. 2.A'",0N '

• Deu mhe t 31, (la N.u.a.t.a) 9' .

- 1t22 1!H (seTt'K)

.Can.zes Igw yr (E): ,

Cas sos $wt sad relaud A(./ tet.:. P aid *ls Cs p ul. $ O! per 6!we. eveerus4. us.ed * ~ " ~ ' ~

ut ewo us.sg 10.CCC st. ares 8 10 3 10 Asu. ass (De f.sii) Earr age (1)

(O12 ll. C Teul Css.ses Equ.ty (t) :9C) _ 11.811 S .

Cszuuve CesviMle frsfertsd sat (1):

C'.au A *.3 % Cuanalauwe Ces im.e Pee fe rt 4 sus t. *.S % . $100 pit vth,e a usefus4 *$0.000 Ektru, issed 60.*90 63C90_

O u.g owutus.sl 00,KC Lites us C,900 (1) 1.es3-u's DeH (7.0): lit.CCC ll0.CCC 27 1.'21 Samu 3 $4aut64 Nous dwa 1993 (1) 99.197 99,197 11 1.' t senu C servrs4 Nous s.e 1992 (2) var.able hu $6d Wuu DupesaJ Taid.ty 21.000 G Rs.saw S+audw2MD >oc s91 l's_lli Tout .

3 300.3F7 8 381.10

Tsul Cariul.utee **"*******1'"******* .

6 (1) Pro fmed liest Dmdaeds as, esaalains. At Desember 31.1990, erproumusly 154,100,000 of A.ssassed Earmast us ruruud fee the permest e(pesforted divWeeds.

(2) f ee ab hamrest paysans la 1988 and 1989 es which me Compaay paid immrut sa Settee C Naas, med holdet of esa miaund.ag $srias 5 New egal as 133 A g " ef laurest la Serias C Now, abe efracase naamal inutsat rate es tbs & asses 8 sad Satiu C Nwas mad be 23.77$ E. The Campany laausd u sedisemal 879,$91,300 a34rs aste praipeJ sammu of Series C Naas is 1988 and 1989. .

ne suonMnus *** an u auve Mn34*f ** !unid '""*"*-

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6

-_. ._. 1 m__.___. . . _ _ _ _ . . _ _ _ _ - _ _ _ . _ . . .

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• . EXH2B27 E

!*.*A SIAV;;I ::UCF.A;;;8 One litetty $tuare 3, t:n. i e:1:o O $ - .

( .

IIRVICI CONTR.AC; O Data )

(

To: It'A ?cve r Coryoratter.

1 taberty $guare O~ 3: sten. .*A C1;;0 I*.*A Servate ::r; erat :n (hereinafter calist f ervice Costany) is a c =pary engages ;rt stily :n the renser:ng af serv:ce to ecstantes The organtsatact., n the Eastern ter.tutt of

$ l'talattes Assetastes r. citing-::: sty systes.

• h s:tess an: -ettet of :st a;* ctatter. of the Serv te Campany are teststet te -est ste retutrerents of Secta r. O unter the Publit l't:11ty Molcits Company Act of

f33 att the .; *es att reguist cr.s presultated thereunter to the eng that servates verf arses ty tre f orvate Cerzany !

r said associate tempasses

$stv:ces vill be renceres vill be renteret by t:

the at :st. f t rly and stuttacly aliccated.fres :se to time of stet:!:t er general

O serv te :::;any enly uten recet;tSaad re uests say always be zodi!!st et cancelled by ytv at Tet. vests snarefore.The ;arties herets agree as felievs:

yo. nst;etten. <

1. Ser'nte Onstasy agrees ts !vrnish you upon the terms and esadstaans 9 tay serv;tes gestribed in $thedule I herste as y:

- tere:n set farth sutt of tr. serv:te Co.,any v: 11 also furstsh, if ava:1.tle, s.tn

' *; ** **** 't.

O servates net testrated in $thetulo 1 as ycu may rerivest.

1. Servate Caspany has and will maintain a staf f trained and expertettes in l

'the engineer:ng, cperation. sa:ntenante ans management of public Trsparties.

af ter tatsuttation with you costerning services to be rendered pursuant te y ur i

,0, resuest, arr.nge f,,

services of non-affeltated experts. .. sultants. acteuttants and attermeys.

3. All et the services readered under this agressest will be at attual test thereof. Diref t sharges vill be made for serv;ses where a direct a11 station of test is possibla. The methods of determining such sosts and the allocatten- These settets O thereof are set forth is schedules It and 111 respeittvely herste.Such methods may be are revieves annually and more frequently if appropriate.

>~

mesified or thanged-by $stvite Company without the notessity of an anotasest et this agreenest provided that in each tastance all services rendered hereof vil!, to at attual test thereof f airly and eguitably allesated. and all ta attertante with the retuitements of the Public Utility Relding Cospaa? Att of 1935 ama i

ans regulatt as . d orders thereunder, lo- any material changes in such tatheas, i.

i 10; 3117 :NT.I'.*A .

'^" _, ,, , __

B 4 Illis will be renceret es sett es tracticatie ef terSa them close tes vt:1ofbe eac3 u,rnth arc vt11 be payable withan ten says af ter reces;t.

perfsr:e6 herevnder f or not more than one year, toemetetts January 1. ;192. att conciauts: through December 31. 1992.

• 3. Die agreesett its perf vill be subject to terzination er modification at any time ormatte asy car.flict vath any f ederal or state law or any to the extent rule. regulation or order of a f ederal or state regulatory body havingThe agreem jurisdictico.

tegvistory body whose approval is a legal preret,unstte to its emetwtton and deliv e ry e r p e r f o tsa.nc e .

6. Sis agreetett vill be sub;ect to ter:1tatten by either party on a starty-day writte : ttee.

I*.'A 517.V1:1 Cl?.?:7.AT10S B

By Presstent D Atzeptet:

D 7:ver Corperatton B

Sr 9

B' D'.

B snt:en.nA

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I 5 :KC1".1 1 str.*: cts e at yttrety.to g

Subject to the previstats of the Service constatt. Service Cespany vill kee; itself and its persennel available and tospetent to render assistance, guidance.

9 advate. supervisten. d;;sttien, attinastration ratetenante, plans and studies, as say be rats utreg, in ettnet taen with the f o11ewsag functions and att;vittes:

CIM%A1, MA*IMIM A20 AOP.!N1577A710N services in the g I4etuttve and Attatistrative - ptsvide t tsultatten attaccatastrat;:n of all aspects of the electra

.atagerett 4?.

.s;tess at: uting tre f:rtulatten and ef I'.*A f ectuattet of polic;es att ,

Systes t! tispar.Les.

r

tra:s af fet: rg er relatang to the

• nterta?. A.c:,t - f orvates c:tternet with emattning and evaluattag the re;;at;;;ty :( f anatstal set cperatatt an! creation system ttspany g terr;;stte with a;;r: vet pc11stes, protetures and plans ana mothe s uset et safeg. art assets.

Oata pretessats - *: ruter and other cata processing activaties inclut;ts assesarett at tests harsvare and sof tware act.uistttsts, anstallat;:ts, er.hattetetts att all etter support r.stessary to seat the data processits B ,

.eets cf 41* functants.

Censuse; tervices - Develop and actinister conruser service policies ar.c protetutes, toerticate, acvtse and assist residential tear.artial, accustr s1 and suntcaval custcaers on all matters and plan, taplement att r.cntter relatat consumer prograss.

D

n :tx:I Cor? orate Af f airs - Oversee policies and practicas relat*,d to the perforsatte of corporate secretarial functions and activities intluding the preparatten and saintenance of minutes of diretters' and steth. holders' g seettag's, related ccrporate records, reports and correspondence.

Employee telattens - Coordinate sanagesent-union and all other employee trainits.

relation satters including recruitsett, amployee pistement, cospensation, safety. health. valf are and all esplayee benefits.

D Insurante and pensions - Advise and assist with katurance and f ansion satters

, including centracts with Lasurers, trustees and attuartes and the placement of policies for all costantes.

Purchasing = Oversee the purchasing of satorials and sup I expositing ana .satorial control servicis.

t MM . @ A . _ _ _ _ . . _ _ _ _ . _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _

- - .-. - - ._ __. - -.. = - - -

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. c:u:wr r.xts:3c .

Pswer supply and Haragesent - Services relattts to all aspects of I'.'A $ystess' short tern power supply. sales and tests tttludits forstants, teatrett J

() salse and purchase statnistratten. #g?00L interaction. generation test studies, vnolesale power 61111tg ans eporting.

Resourse Planning - Services in the areas of catattty planning. lead fore.

casting, construttten and revenue f orecastics including analysts of generation transtassten ate sistg' .bution retutrements tased on

' C) forecasted lead.

Spettat Frejette - frovsde analysse and guidance for etener.it evaluation cf engansefing and crerattens alternstaves through on.getts strategic studies. as well as es;ertase concerntng togulatory littgatten anc related catters,

S

U:WI ::.W.*NICA 1:NS I:t; state Relattans - Oevelet. : rlerett att asstat with a*1 Csasunitatten f rsgrats teclugsts stese vtth custators, erployees. security:evelty nolders, and finar.ctal analysts, ratang agencies ans investrent firms.

()  ;.atataan itatsens tetween the $.vsten anc Teteral/$ tate agenttes, trate associattens and atters.

r Pubitt Interratten - p;svste servates and anf ormatisn to and catttain at escretnate relattens with the pus 11s. Carry out puslic tr.f ormatica programs inclusing these aristag cut of regulatory. and legtstative stters.

.19 Advertising - Assist in the sovelcraent ans taplementatten of lysten 4tver: stng pregrass , prir.

c:llateral ana torporate tientity program.

l l

NN lO Jinance and Treasury - Advise and assist in all financing matters includstg short and long ters fitancings, capital aseds assessment general treseary responsibilities and other banking and fissatial matters.

Tester,and maintain relattens with commercial banks. investment baskets.

analysts. saturity holders, indenture trustees, staasf er agents and q) registrare.

Atteunting - Services teaterning the kssping of acteusts and sellateral attivities of a general acteunting. tustomer acteusting and plant acteunting nature. Prepara finastial reports, develop atteustingAppear betere and tretedures and enhance automated acteunting systems.

I)* satisfy requirements af regulatory bettes with respect to attsutting matters.

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.r vene .r:A

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• 1 GP

- ;43,s - Advise att assast vitt a;l ts satters tttawdans preparatact sttr.als, and review of Teteral ate State attste anc ether tas toturns. tas asseassetts, ralstions vath Intertai Revenue service and other tasang awttstatiss tecluding awtits. tietas and brief s vhare notessary.

Titattant Reporting, swdgetitt and TerecastLng - Assist. Prepara and stalyse

g. financial, eterational att statisticalEstablish reports,bwagetary reports tocontrols, stetLholters.

assast regulatory tr== :: ens ate others.

in the deve1citent, preparatiet and review of operstits and tatstrutt;:n budgets att tash att other financial and operattenal f orecasts.

1svotue f.etutres.tts ar.d Fates - Advise on Assist and assist in the with Eatters reistits preparatten 4D to cost of service and revenue rettatemente.

cf petitists ate arplicatacts retutred in connection vith rate tr.atges.

ssagt r a t e s tr es sie s and ar.alys e e !!s t s on revenue s , review e arr.att s trenes are niet f er rate stetges encawcing vtolesale att retail rates.

g IN;;;:II);::: c CT!7.A*;*Sg Syste: 0;erata:ts - f ervatee at crn:wnstien with esttanus1 consterats of all :tatsr:ssa:n ate castratwt:ca systens att19 ding stattating attto na:ntain centatu carest tg c:rrettive act::tas an agent vath LEMYIO. $!?tX and ethers at fatttact generatt:n att

-e e tang syst s: retw;teterts; ptsvage metessary data for inter ar.t attra g c::;aty till;ts ;wr;c s s s .

• ettra'. Meter testats - Provate f or all testing ar.d repatting of meters att as se ttatec etwa; tent.

Ing.ts erats - Fr:vid e geteral and specific engineerttg services retutred 3 itService c:n;wtation s at:

with the construction and maintenante of a41 f ata elestrical, sechanical and civil engineering spetafications protuttact, transsissist and distribution f acilities Assist studies and standards in the preparation in att analys s design. ;tetetures and methods.

of cistatats and construttast budgets.

Substations and Communications - Provide reguired itstallation, operation and matatenance servita to fatt11 ties in 113 KV tad 3&S KV bulk power substations and all communication eguipment.

4 6

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Ek .

3:EC:*..I ::

IIII?.**NATICN Cf COST CT 5thv10t AND AL'.00A710H TEIP.IOT su Cost of service vill he determined in accordatte with the Public Uttitty toldits Cospany Act of 1933 ar.c the rules and regulatitts and ersers thereur.cer, and will include all tests of dcing business incurred af aquity capital by the Service Company.

reasetably ree,utred to plus a reasonable return on the steunt carry en auch business.

O Reterds vill be saistained for each Department of the Service Cetpany in order to attutulate all costs of sting businesesalartes and to of deterette theatt erployees cost of relatei These tests vill include wagso att c e rvic e . taxes, penstens att other esplcyes benefits, and estenses eust as itswrance, corret stier ex;ense on the West Bridssvater Serette atterest en acts-ter: cett, r e r.t . lagrt, test. telephone . 6.; plies , att other howsess e p;tg C e t t e r 2 w a

• g an g gg tests.

n act t;en, ret:rcs vall te ratt.ts tec cf general actatistrat ve expetses, unten vill attaute tr.e tests cf cperating tte Servate Ccepany as a stricrate att;ty.

Chargea f or serettea val; he desertsted f ree the time sheets of espicyeee and will be c:tputed en the basis tf esta empicyee's heurly rateThese plus charges an apportatteent att II cf relates expenses att general actinastrative expenses.

Telated expenses and ten-;ef ssteel expenses (e.g. . use of autetetive stu ; tent, etc.) plus a return en etuity ta;;tal. !Drzula. Each f ortula vill have an v111 be billed directly to the ser tetrantes. by means of et.uttatle allocatLch apptsp riat e b asis sucn a s cus ter.ets , as te rs , espitye e s . plant inve stasets .The bas GD stventertee or operattts revenues. causal relationship to the service st;&ty Dep ar tzett 's te s t will be ar a dire ctThese bases will be revieved tatually by a perfor:sc by such departtent. This tesetttee stil stuntttee made up of fitantial officers of each tespany.

evaluate the equity of each alistation basis and review the factors derivsc ft:r.

Saats rar;4 tent calculations. Out-of-pocket expenses which are taturred for the gp Jarvtand tempanies vill be billed directly at cost.

The costs of operation of the Service Company vill be audited annually ate the amounts paid to the Service Company by each of the servited costantes f or servicar rendered during the audited period will be adjusted to tenfers to the

~

audited figures. ta the event of tay discrepancy.

8 8

S 311VCONT.ITA

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I..'.I.U's .* I. .'I IXH2 B2*r r 10 .My 1992 O n 3-3-

O

• he Cr'c a1 B:nchoice's' C:mmmee (tre 'C:rnmittee') of EUA Po*et Com:taten 1

cM 'Dett:t') seems toPener retain a ma'a:Ung age *1 to ma'ket capa::ty and savgy frem Plaat ('Stattoc() on benatt of the footgaN2ed De*ter 16e Seatt:ck Ns:'e st The resergenitec EL AP') teg nn.mg .:en centrmat,cn of a p!an of tectgan tat.cn.

Ccmmmee wowi: ce p,sase: to cons er a c'cpess' trem 2- to provice mese semess.

ann--re ime Cettet tued for Chaptet 11 prete:,en with the U.S. Samktwetcy Coun Ier t*

The Detter is a s+;'s n

Ds%ct of New Hampshoe (the 'Cos ') en 8'ebruary 28, 1991 purpose entW wncte ecle owniness is tre ownstanto of a 12.1324% interest in seatecek. The ceti:t is a wncuy oces subsic:a'y of Eastern The DetterUukties has noAssoc:ates, operational a O Massa:husetts voluntary assoc 2ation ('E U A*).

M of the Debtor's management a:tr<iust are current'y tospo*albiltty for Seatteok.

D'0 weed by EUA sevet comorauen, a subst$ay of EUA.

The Comm.'ttee reptasents the holdets of Series 5 and Series C bonds et the PVinam, Hayes & Battlett. Inc. (PHB) serves as tinancial O. reeto, (ine sondheiders7 The members of the Commrttee hold more than 60% of the advisor to the Committee. The Commates has been actNey working to Dutatanding o! alms of she bondholdera.

1 secure thancing to support a plan of teo'Gan.1ston wNch the Comm4 tee mienes to The Commmeo Pe will ptovide that all outstancia; picpose (the ' Committee Plan *).

equity mie'esta in the Debtor mit be canceled and that 100% of the sowily inte'ests in O the moorgamed gUAp we de issued to ine crestors et the cebtor and the pes,si proMing Enancing for the Comfruttes Man.

has reconVy obtained a commtenent from Ehea' son Lehman

'The Committet Stethys Inc. (Lohman*) to synd:ste 845 mUllon octars of reorgantzstion financing, of This sinancing win provide ade:wate

• "'ch Lehman itsen wirt contribute sto m!1 tion.

O funding for cash operating losses associated with the Rootgantled EUAP's share e i

O ,

D t

O we coeteve into and intov;n tirH vece Seet'och in 1953 anda 1994. The Irarc a;

( tests. The Comm.tte

.s tr e s at,sf ac"'en cf ce .a.n beset aae oce'at'eg cowetage for Lenman to peoceec with als c.e currentty sesong swine'tal.cn from the Costt A copy of the Ccmmmte :

e,ligence inevities and the format'en of the synd.cate.

motion Ned with the Cosn is ariacBed.

O pa4ebma a c e *t t

As desettbed in the motten, the Cof9mittee intends to ble the Ccmmittet Plan The Commmeo Pian will procca ter the retsntien of wth the Coun prior to July 21.

a tearkedng agent ef t:ttve on the cate of ptan cent.rmauon wne will be tesponsit'e tot the short term me'keting of Seabrook energy and capacty, as well as for the g peccurement and no getat'en of longThe term contracts to maximtse the valve cf Committee invltes 2- to Suomfl a AscegaN2ed EUAD's thaf t of S e ab'cok.

ptcpcsal to serve as marketing agea,t.

Yowf preccsal, wt!ch need net be lengthy, should accrets the following f4ve

• cp'es:

g .

v

• The ca:acil;t'en sac emperience of 2- to ptovide these sca ices; e ideas et extar.p'es of how the Stat'ock pc*st could best te markette; e A ce neti;ticB ct the spec l.c Inc!vid.it's to be involve $ in tn's fwnc','cai, g tcgetner w'th theit te siaa.t experience and captoitities; e Tne cere;easst:en n'tangements tnat yeg p'epots (the Ccmmittet has a streng prefeteret tot incentfit retagements); and

• Amy pctental eca.flicts of inte'est that you have Identif4e d and tBe O mechan:sma yes prepest for mtligst:ng them.

30, 1952 All s'epesats must te receNed no Isle than SM p.m. EDT on Thu'sday, JulyProposals may be cy PHB, anc shosto be sent to the attentbn of Mr. John Ebetteln.

sent by fact.mde tra nsmission to (617) 225 2524.

• If you have any questions totated to yewt preposal please cati or fan John Eberieln (617) 212 0310 of Micntel Schmier (417) 2L2 0233. We look fonrard to yest responta.

Sincers% .

6' Wichael M. Schnt:2tt Manegrng Drector Y. MMS /gr Enciosure It*N AA1 H eT.$ k M*"J"~. INC D

~ ~ ~ - - ' - -- ______ _ _ _ _ ' ""-^~~%_ - _ __ _

O O O O O O O O O O O Exne:td MEORGAMZED EUAP VRO FORMA INCOME STATEMENT i

(000'sj i

f903 f904 1995 _ f996 f997 1998 f909 _ 2000_ 200f _ 2002 2.77 329 4.39 4.86 525 5 69 6.17 6.71 7.31 7.98 ELECTRIC REVENUE (CMGWD OPERATING REVENUES:

27.458 27.558 36.799 48.077 44.009 47.6T7 61.124 56.162 61276 78.959 OPERATING EXPENSES-FuelEspenne 3.843 3.440 3.558 4253 3.811 3.946 4.720 4234 4.388 5254 Operations Expense 15.175 19.105 20.152 17.555 21.925 22.668 19.747 24.662 25.499 22212 Transmisabn Expense 1.164 1.187 1211 1235 1.260 1.285 1.311 1.337 1.364 1.391 Property Taxes 3.591 2.394 2.394 2.394 2.418 2.442 2.467 2.491 2.516 2.541 C- .% A y 888 924 960 999 1.039 1.000 1.124 1.169 1215 1264 Seabrook Tas [ Hole 1) 3.106 3230 3.359 3.494 3.634 3.779 3.930 4.087 4251 4.421 Service Conand Empense 1.370 1.193 1.or.8 918 971 1,028 1.000 1.155 122s 1.302 Dgrecletion Eupense 3.503 3.575 3.650 3.745 3.811 3.003 4.020 4.101 4216 4.361 Determd Taret (1.859) (3.112) (532) 3.762 063 1.859 7.035 3.834 5.166 10.872 0 0 0 0 0 0 0 0 0 f%organitsHon Costs 4.ORG 2.157 242 200 0 0 0 0 0 0 0 POR Faclety Ft es -

TOTAL OPERAT7NG EMES: 37.023 32.178 36.022 3a.354 39.830 41.991 45.442 47.070 49.841 53.619 OPERATFNG INCOME- (9.5r4) (4.620) 778 9.723 4.179 5.686 15.682 9.192 11.435 25.340 O O O O 76 2 72 280 510 800 800 INTERESTINCOME

. EARNINGS BEFOREINTERESTANO TAXES (9.566) (4.620) 778 9.723 4255 5.958 15.062 9.702 12235 26.140 INTEREST ON LONG-TERM DEBTWACILITY: 2t15 1.664 2.010 2.420 2.386 2.349 2,307 2259 2207 2.147 TAXABLE 1NCOME- (9.831) (6284) (1232) 7.303 1.868 3.609 13.656 7.443 10.029 23.o93 TAXES-0 0 0 0 0 0 0 0 0 0 Federailrmme Taxes I 0 0 0 0 0 0 0 0 0 2.B88 State income Taxes NETfNCOME: (9.851) (6284) (1232) 7.303 1.868 3.609 13.656 7.443 10.029 21.105 OfVFDENDS PAfD- . _ , ,

0 0 0 __ 6.572 1.682 3248 122'<) _ 8.032 12.479 28.557 Notes: (1J Sobrect to penanngjursdalchaserny, see secten V111 C of D& StatM Page f of 4

-~~y--- .y . ..

EXW9tTC REORGANTZED Et3DP VR0 VORM4 CASH FLOW STRTEMENT (000's1 IM8 1909 2000 2001 M 1993 1994 1995 199G fMT RECEtPTS Operating Revenues 27.458 27.558 3G.799 48.077 0 44.009 0

47.677 0 61.124 0 0 56262 0 61270 78.959 0 0 20.167 0 0 0 0 0 Debt Finance 0 0 0 0 0 0 800 800 Equity Finance 0 7G 272 200 Sto 0 0 0 Interest on Reserve Fund TOTAL RECOPTS:

27.458 27.558 56.966 48.0T7 44.085 47.949 61.405 56.772 62.078 79.759 9t.0 814 814 940 OfSBURSEMEN7S 814 940 814 814 940 814 Waste Disposal Operating Costs 23.924 26.040 28.077 25.677 971 30.275 1.028 31255 1.000 28.578 1.155 1226 33.746 f.302 34.845 31.829  ;

1.193 1. ore 918 i 1.370 2.455 3.324 4.Or.5 Sarvice Contract Em 2,606 2.627 3212 2.1R2 2.955 3.614 Capital Ad$tions(Plant) 2.599 624 6.688 7.477 6.448 .

I 4.456 6.161 556 5.740 5.750 2.204 440 493 552 CapPal Ad$tions (Fuel) 280 313 351 393 Fecmfy/LTD Principn! Repaymant (9.424) (6.341) 19.724 0 0 0 0 0 0 0 0 4.086 0 0 0 Reaganitation Costs 0 0 0 0 242 200 0 POf1 FecfRy Fees 2.157 2.307 2259 2207 2.147 0 0 2.420 2.386 2.349 0 0 0 0 0 Interest C.iWterm Debt 0 0 0 0 0 0 0 0 2.888 Federt sneTeres 0 0 0 0 0 0 0 State income Taxes TOTAL DtSBURSEMENTS 31.400 27.558 56.9r4 50 39.60950 37.498 50 44.492 50 5043.370 50 41.444 50 49.597 51202 4.000 50 50 BEGINN!NG CASH: 50 50 8.518 6.637 3.507 18.085 15.328 12.529 28f47 50 50 50 50 Cash Batance 50 50 50 50 50 50 50 Desired Cash (8.468) (6.587) (3.457) 50 (18.035) (15278) 50 (t2.479) (28.5571 (0) 0 0 50 Requirements 50 50 50 50 50 50 50 0 5.745 7246 0 ENDING CASH 0 1.895 4.905 209 0 0 CASH b HESERVE FUND: 0 6.572 f.682 3248 _12.200 _ 8.032 _ 12.479, 28.557 0 0 DIVfDENDS- __

Paga 2 of 4 f

ER l

l N

EXHfDITC REORGANt2ED EUA9 PRO FORMA CALANCE SHEET

[000's]

1909 2000 2001 2007 190G 1907 19957 1992 1993 1904 1995 ASSETS UT!UTY PLANT & OTHER : 127.000 129.509 132205 134.832 138.045 140227 143.182 146.795 149250 152.574 156,639 P! ant in Service 7.078 10.728 14.472 18283 22.186 26206 30.307 34.524 38.885 0 3.503 Accum Dwam 123.572 121.944 120.996 120.590 118.943 118.051 117.754 127.000 126.006 125.127 124.104 Net Plant Nuclear Fust 3.000 8.756 10.959 15.415 21.577 22.132 27.872 34.320 34.045 41.632 49.100 O 2.902 5.528 8272 11.585 14.581 17.712 21.402 24.912 28.485 32.700 Nuclear Fuel Amoet. 5.431 7.143 9.002 7.551 10.159 12.828 10.033 13.147 16.311 3,000 5.853 120.495 131.155 133A17 128,975 131.198 131.065 Net Nuclear Fuel 130.000 131.049 130.559 131247 133.5M TOTAL UTtUTY PLANT: 50 50 50 50 50 CURRENTASSETS: 50 50 50 50 4.000 50  ;

Cash 0 0 0 1.8 % 6.801 7.010 127>4 20.000 20.000 20.000 l 0

OtherCummt As-As 6.851 7.Or,0 12.8M 20.050 20.050 20.050 50 50 50 f.045 154.115 4.000 TOTAL CURRENT ASSETS: '

134.0n0 131.990 130.609 131297 135.5':0 136.346 138215 146 222 149.025 151248 TOTAL ASSETS: .

CAMTAUZATION AND UA81UTIES CAPITAUZAT10N:

Common Equity 134.000 134.000 134.000 134.000 134.000 134.000 134.000 134.000 134.000 134.000 Retainm1 Eamings 0 (o.851) (16.134) (17.367) (16.63r,) (16.449) (16.089) (14.723) (15.313) (17.764) 117.551 117.911 119277 118.687 116236 10R,784 (252161 Total EquRy 134.000 124.149 117.Bri6 116.633 117.364 0 9.709 17.714 20.167 19.BR 7 19.573 19222 18.829 18.390 17.895 17.343 Facieff Long-Torm Debt 137.124 137.134 138.106 137.076 134.132 126.127 134.000 133.858 135.580 136.800 137251 TOTAL CAPTTAUZA770N: 0 0 0 0 0 CURRENTUABIUT1ES: 0 0 0 0 0 0 0 0 0 0 Accounts Payable 0 0 0 0 0 0 0 O O O Notes Paysble O O O O O O O O TOTAL CURRENTUABtUTIES:

DEFERRED CREDITS (778) 1.081 8.116 11.950 17.116 27.988 l 0 (1.859) (4.971) (5.503) (1.741) 0 0 0 Accumuletad DetermiTaxes 0 0 0 0 0 0 0 0 Othar Deterred Crndits 130.609 131297 135.510 136.346 138 215 146222 149.025 151.248 154.11 134.000 131.099 TOTAL UABILITTES A CAPf7AUZAT70N:

DE8TEOUlTY RATIO-

' Debt 0 00 % 725% 13 07% 14.74 % 14 49% 1427% 14 02% 13.63 % 13 41%

100 0 % 02.75% 86.93*4 85 26 % 85.51 % BS 73% 85.9R% 86 37% B6.50%

EqtMy ,ma,,u -ww w>me a Paoa 3 of 4

g g U S S S O O U g g ExHrsttd ASSUMP110N TABLE

[000's]

Note Source

• Dats

• Revenue Assumptions ~

Germretand Financial Assenye; vat- ~~' $0.025AWh in $1992'seasona!ly adiusted and escalated at CE ISpot Sales

~

Startin[ Debt ~ _,

• ' inf!ation for uncommitted plant capecity_ _

CE_

Debt RgaoaGg at 01 January-1996 .

50 0 MW startmg 01 Jan-94 at $0.0410&Wh in $1992

,"* Contract 1 Starting Equity _ _ 134.000 escalated at f.5% per year. _ __ __ , _,

Starting Debt as % of Capital _ .0.00% 89.5 hr# starting 01 Jan-95 at 50.040%Wh in $1992 CE Contract 2 Share of Seabrook_ (MW) _

_ _ 139.50 escalated at 11.5% per year _ , _ _ , _ _ , _

CapacRy Facior (Outage _ Year) ,,_,68 57% . , .

81.00 %

_Cg_F, ector (Nonoutage Year) _.

Cost Assumpfsons __ Note _ _ _ _ ____ _ Source

• _ ,13.00% _. _

SB.CX j "Fe@_ Interest Rate ,Operatierts Expense Post-Budget escalated af inHadort from 3rd prior year __ _

Term of Re"<.oi.wd Conventional Debt (Years) _ ._

20 _ JOD.CX 0 TrairspA Expanse Escalatad at irviration minus 2% _ . ._ __,

Years interest Onfy _

__ .W.CX fropertyJames _ 0% escalat@o W3. innaM nwnus 3*4 Wa*

.Costg=%moysngp

_ 12m Escalated at inflation , _ _ . _ , , _ SB.CX 4 00 % De-w m J sse #g ,_ _ _ _ _

J Inflation Rate _

_ OO.CX

.Saabrook Tax _ Escalated at inflation _ _ _ __ _ _ _ _ _ _ _ _ _ _

Federal Tax Rate _ 34.00 % Commitee Estimates based on bids from service mJd-ws JOD.CE

__ 8 00% Servre Contract S. tate _,T__ay, Rate Post-Budget escalatad at inflatityt _ _ _ ._ SB.CX Capital Addtvens(Ptant) _

Cwike{ Rate _ 39.28 % As per FCE escalated at inflat on _ __

FCE

., Capital _Ad6tions_(Fuer) ___

Waste Dnposal $0.00095AWh escatated at 0%__ _ ____

FCE _

Reorga@tson Costs __, , Comenieee Estanates , _ _ _ _ __ __ __. _ CE _

Abtwev

• • Estmare based on prsme + 7%. *W - - - - -

- - - ~ ~ ~ ~ ~ ~ -~~

SB See sectron VI.F.2 of Drsdosure Statement.

Seabrook W' .

- - - - - - ~ ' ~ ~ ~

300 y Joint Owner Data ,__

FCE See section V1H2 of Drsclosure Statement.

FUetCciaEwa Y s _

cg Committee Eshmates CX Ccmmittee Esim v!4e 5 _ __

4 Page 4 of 4

1- O- O- O O O- O O O O O O  !

DrNWitM ME000 GAM 2ED EllA9 +

I PF90 FORMA NC0anE STATE 10ENT

- 10tWsl I

i

.__ _ _ _ IM _ f W fo95 fW fM IN _ _ fR, N _ Mf __M j ELECTRfCREVENUE(CMWHJ 2.77 3.08 4.02 4.49 4 89 5.34 5.83 6.38 6.93 7.66  ;

l  !

l OPERAT7NG REVENUES: 27.458 25.805 33.719 44.403 40.991 44.746 57.755 53.479 58.550 75.789 [

i i

OPERATNG EXPENSES:

l FusiEmpense 3.843 3.440 3.558 4253 3.811 3.946 4.720 4234 4.388 5254  !

Opereflons Expense 15.175 19.105 20.152 17.555 21.925 22.668 19.747 24.662 25.499 22212 TransnessL9 Ezpense 1.164 1.187 1211 1235 1260 1.285 f.311 1.337 1.364 1.391 i i Property Tames 3.591 2.394 2.394 2.394 2.418 2.442 2.467 2.491 2.516 2.541 [

Decernmissiordng BR8 924 960 999 1.039 1.090 1.124 1.169 1215 ' 264 .

Seabrook Tax { Note 1) 3.106 3 230 3.359 3.494 3.634 3.779 3.930 4.087 4251 4.421  !

Service Contract Empanse 1.370 1.193 1.039 885 935 989 1.046 1.108 1.173 1244 .

I Depredselon Empense 3.503 3.575 3.6 % 3.745 3.811 3.903 4.000 4.101 4216 4.361 Oc8 erred Tanos - (1.859) (3.742) (1.732) 2.305 (292) 606 5.635 2.615 3.970 10.076 i ReorgentraGon Costs 4.0R6 0 0 0 0 0 0 0 0 0 f POR FacNWy Fees 2.157 239 183 0 0 0 0 0 0 0 TOTAL OPERATWG EXPENSES- 37.023 31.546 34.775 36.864 38.540 40.698 43.999 45.f104 48.592 52.764  :

OPERATMG WCOME: (9.566) (5.741) (1.056) 7.539 2.451 4.047 13.756 7.675 9.959 23.025 '

f NTERESTJNCOME O O O O 3 102 102 261 541 617 i EAAF#NGS BEFDAE W7ERESTAND TAXES (9.566) (5.741) (1.056) 7.539 2.455 4.149 13.P58 7.936 10.500 23.642

, WTERESTONLONG-7ERW DEBTEACJLTTY. 285 f.761 2.490 3.063 3.021 2.973 2.920 2.960 2.793 2.718 l TAXAstEfNCCME: (9.851) (7.502) (3.546) 4.475 (566) 1.176 10.938 5.075 7.706 20.923 I TAXES:

4- Federellncome Tazes 0 0 0 0 0 0 0 0 0 0  ;

, State Interne Tawes 0 0 0 0 0 0 0 0 0 1.3R5 a NETWCOME: (9.851) (7.502) (3.546) 4.475 (566) 1.176 10.938 5.075 7.706 19.559 DrYlDENDS PAlth o 0 0 4.028 0 27 9.844 4.568 6.936 21.483  ;

i L i -r Ncwes: friSoeper1opendingjudicistc #. see secnon vnt C ctDisciosure s:aremant i l

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                  &                                                           5E               55 1

1 B

g DrNF9fT H HEORGANTED EUAP PRO FORhtA BALANCE SHEET [0L'0**1 2002 1993 1004 1995 19o6 19ai 1906 1909 _ 3100 _ 2001 1902 _ ASSETS 156.639 UTILITY Pt. ANT & 07HER: Plant in Sarvice 127.000 129599 132105 134.832 138.045 140227 143.182 146.795 149250 152374 Accum Depracianon ' - 0 3303 7.078 10.728 14.472 18283 22.186 26206 30.307 34324 3R.R85 Net Plant 127.000 126.096 125.127 124.104 123.572 121.044 120.906 120 390 118.943 1 Nuclear Ftni 3.000 8.756 10.959 15.415 21377 22.132 27.872 34.320 34.945 41.632 49.t f73 17.712 21.492 24.912 28.485 32.709 0 2.002 5.528 B2T2 11385 14331 Nucinar Ftml Amat. 7.143 9.012 7.551 10.159 12.828 10.033 13.147 16.311 3.003 5.853 5.431 Net Mucfose Ftml 130,000 131.949 130.559 131247 133.564 129.495 131.155 133.417 128J75 131.108 134.065 TOTAL UTTLTTY P! ANT; 50 50 50 50 CURRENTASSETS. 50 50 50 400 50 4.000 50 Cash 0 0 82 2.547 2547 6.515 13322 15.415 20.On0 0 0 Othat Curmnt Assets 50 50 132 2.947 2.597 6365 13.572 15.465 20.050 4.000 50 TOTAL CURRENTASSETS: TOTAL ASSETS 134.000 131.999 130 609 131298 133.606 132.441 _ 133.752 139.oSt3 142347 146.6 CAPITALLZATION AND LIABIUnt5 CAPITAllZADON: 134.tr30 134.000 Comrnon Equey 134.000 131.000 134.000 134.000 134.ono 134.000 134.000 134.000 134.000 1 Retairwd Enmings 0 (9.851) (17.737 (20.R99* , (20.451) (21.017) (19.RSR) (18.774) 114 5 70 (18267) (17.4%) ( l Total Equey 134.000 124.149 116.647 113.101 113 549 112.083 114.132 115226 155.733 116.504 Facery / Long-Term Ocbt 0 9.709 t 9.561 25529 25.175 24.778 24.3r 23.836 23278 22.654 21.054 TOTAL CAPTTAlf2ADON: 134.000 133.858 136209 138.630 138.724 137.760 138.465 139.061 139.011 131.1 0 0 0 0 0 CURRENT LIABILIDES- 0 0 0 0 0 Accounts PeyWe 0 0 0 0 0 0 0 0 0 0 l 0 0 0 0 0 ' Notes Payabis 0 0 0 0 0 0 0 0 TOTAL CURRENTLIABtUTTES: DEFERRED CREDI7S- 921 3.536 7.506 17.581 Accumulated Deferred Taxes 0 (1.859) (5.600) (7.333) (5.027) (5.319) 0 (4.713) 0 0 0 0 0 0 0 0 0 0 Other Defemed Credits TOTAL LIABILf77ES & CAPTTALCADON: 134*)00 131.999 130.609 131.298 133.696 132.441 133.752 130.083 142 547 1 . DCBTEQUTTY RADO-DM 0 00 % 725% 14.36 % 18.42 % 18_15 % 17.99 % 1757% 17.14 % 16.75 % 1628 % Equiry 100 0% 92.75 % 85 64 % 81 58% 81 85% 82 01% 82 43 % 82.86 % 8325% 83 72 Pana 3of 4

txNrerrM ASSUMPDON TABLG [000's] Source

• 03?A A*V**U*ASSU*PbO" . - . Note _ _ _ _ _ _ _ _ _

M*A Y"'*W3LAS*W5"$ - CE Spot Sales $0 025AWh in $1992 seasonatty adjustad and escatated at Starting Debt 0 in'lation for in w m mited plant capacity _ _, . . , , Debt Re&M gat 01, January-1996 . 25.529 CE

                                                                         .*** Contract 1                50 0 MW starting 01-Jan-94 at SO 0350AWh in $1992 Sta_rting_ Debt as % of Capital                     _ __ 0.00%

escaWed at innat%_ _ _ _ _ _ _ _ _ _ _ - , _ _ _ . , ,

6. tart _i_n,gg ____ J34.000 , , _

CE Cmtract 2 09 5 MW startng 01-Jan-95 at $0.0375&Wh in $1992 Equity lssued at O_1_-January.1995- - - _ __ _ _ O _C_apacity Factor (Outage Year) __ 68.57% Note _ _ Source

• _.

Cost Assumpfkris ._ _ _ 81.00 % _ _ ,. ___ Capacity Factor (Non-Outage Year) _ _ j 13.00 % Cp-,oivis Expense _ ,. Post-Sudryt escalated at inffaten from 3rd prict year _ _ _ SB.CX _ _ [ Facility Interest Rate _ JOD.CX 13.00 % Tienso A Expanse Escalatad at innation rmnus 2% _ _ _ _ _ _ __ _ Subordinated Debt Rate 0% escalatad to 1996, inflation mmus 3% therea*!ct _ _ _ _ JOD.CX _ Tenn of Refinanced Curr,-n a;v4 Debt (Years) 20 Preparty Taxes . . 0 Dm.w oin!ssioning _ Escatated at inflation _ _ _ _ __ _ _ _ _ . _ SU.CX Years Interest _Only ,___ JOD.CX _ 12.00 % Seabrook Tax Escatated at inftation _ _ _ , _ _ __ Cost ot_C ,n d;vaal Debt _ . _ _ Comnwttee Estimates based on bids from se wca p owders JOD.CE l 4.00 % Sennco Contract Inflation Rate Capital Additions _(Plant) Post-Dodgat escalated at inflation _ _ __ _ __ _.,_ SU.CX l Federal Tax Rate _ 34 00 % SU.CX Capital Additions (Fuel) Post-Badgat escalated at inflation State Tax, Rate _ _8 00% FCE_ Waste Disposa! $0.00095AWh escatated at 0%_ _ ____ _ _ _ _ _ Cw.J.ir--d Rate . _ 39 28% Committee Est, mates _ _ _ _ _ __ CE Reorganization Com _ _ _ AM

• Source . _ _ _ _ _ . _ _ _ _ _ _ _ ___ _ _

SB

 ** Estimate based on pnme + 7%.                                           Seabrook Budget __                                    _- _ _ _                    _ _ _                      _

JOD Joint Ow,er Data _ _ _ _ _ _ _ _ _ , _ l See section W F2 of Disclosure Statement FCE

 *** Includes f0MWcont.act.

Fuel Cycle Ewnis _. __ __ _ CE Commntee Estimates __. _ See sectron W.H 2 of Disclosure Statement. CX Comm ttee EminAtas _ _ Page 4 of 4

EXNiBITI REDRGANtZED EUAP PRO FORMA INCOME STA TEMENT tootrsi f996 f907 fMF 19W 3 00 mot 20tr' fMJ 1994 1995  ! 4% 5 09 5 55 6 07 6 64 727 323

                                      ~

2.77 3 08 4 28 ELECTRIC REVENUE (CA(WH) OPERATTNG REVENUES 27.458 25.805 27.061 42.393 30.094 42.631 54.069 50.850 55.618 71.928 l OPERATING EXPENSES: 4253 3.811 3.446 4.720 4234 4.388 5254 FuaI Expame 3.643 3.443 3.558 Operations Experne 15.175 19.105 20.152 17.555 21.925 22.M8 19.747 24.662 1337 25.499 1.364 22212 1.391 l 1.187 1211 1.235 1260 12R5 1.311 Tie.e,- A. Expame 1.t M 2.541 2.394 2.418 2.442 2.467 2.411 2.516 3.591 2.344 2.324 Property Taxes 1.169 1215 1264 888 924 om om t039 1.080 1.124 D.-wi.. M 3.634 3.779 3.930 4.087 4251 4.421 3.106 3230 3.359 3.444 Seabrook Tax [Nde 1] 891 940 902 1.048 1.108 1.172 1.370 1.193 1.002 845 Service Cortract Expeme 4.101 4216 4.361 l 3.650 3,745 3.8 s t 3.003 4.020 Depreciation Erpense 3.503 3.575 ' (420) 4246 1265 2.503 8.745 (1,859) (3.742) (4.223) 1.338 (1217) Deferred Taxes 0 0 0 0 0 4.OR6 0 0 0 0 Reorgerdration Costs 0 0 0 0 0 239 158 0 0 POR Facility Fees 2.157 TOTAL OPERAT1NG EXPENSES: 37.023 31.546 32222 35.857 37.571 39.624 42.556 44.344 47.060 8.558St.369 20.567 l i 6.536 1.523 3.007 12.413 6.455 0:ERATTNG INCOME (9.5G6) (5.74 t) (5.162) 85 291 291 O 1 1 O O O O IN7ERESTINCOME 3.008 12.414 6.541 8.850 20.85R (9.566) (5.741) (5.t 62) 6.5'W3 1.523 EARNfNGS BEFORE IPti eut5 F AND TAXES: 3.824 4.171 4.006 3.900 3.RR3 285 1.761 3.144 3.939 3.885 INTEREST ON LONG-TERM DEBTEACILITY: 2.597 (2.362) (815) 8243 2.455 4.859 16.975 l TAXAFLEINCOME- (9.851) (7.502) (8.356) l TAXES- 0 \ 0 0 0 0 0 0 0 0 0 I FederalIncome Taxes 0 0 0 0 0 0 0 0 0 0 State income Teres 2.455 4.859 16.975 (9.851) (7.502) (8.356) 2.597 (2.362) (815) 8243 NETINCOME. 0 0 15277 0 0 _0 1.112 7.419__ 2209 __4249 DtVfDENOS PAID

• _ _ _ _ _

Notes * [fJ Subject 16 pending}udicalchnRenge, see secten VITI C of Dmctostre Statemer:t Pmy,1 of 4

i O O O O O O O O O O O i NEDRGANt2ED EtlAP PMC FDRRfA CASH FLOWSTATEMDIT j ' 1000'*1 . r 7 ( 1993 1904 1995 1906 1997 1996 1909 _ 2000 2001 2002 . c . RECEIPTS. i Opereeing Revenues 27.458 25.805 27.061 42.393 39.094 42.631 54.969 50.850 55.618 71.928 ' j 0 0 32.829 0 0 3.467 0 0 0 0  ; i Debi Finance EquRy Finance 0 0 0 0 0 0 0 0 0 0 [ Interest on Reserve Fund 0 0 0 0 0 1 1 85 291 291 TOTAL NCEN 27.458 25.805 59.889- 42.393 39.094 46.099 54.970 50.935 55.910 72219  ; OfSBURSEMENTS: ' 940 814 814 940 814 814 940 814 814 940 { Weste Disposal . Operating Costs 23.924 26.840 28.077 25.677 30275 31255 28.578 33.746 34.845 31.829 I Service Contreet Egenee 1.370 1.193 1.002 845 891 940 992 1.048 1.108 1.172 [ Capilal Addlltons(Plant) 2.599 2.606 2.627 3212 2.182 2.955 3.614 2.455 3.324 4.065 l CapRei Additions (Fuel) 5.756 2204 4.456 6.161 556 5.740 6.448 624 6.688 7.477. - Facelty4.TD Principal Repayment (9.424) (8.002) 22.755 456 510 572 711 796 892 999 { Reorganizatfort Costs 4.006 0 0 0 0 0 0 0 0 0 POR Faduty Fees 2.157 239 158 0 0 0 0 0 0 0 Interest on t.ong4erm Debt 0 0 0 3.939 3.885 3.R24 4.171 4.086 3.990 3.883 j Federalincome Towes 0 0 0 0 0 0 0 0 0 0  ; State incomo Taxes 0 0 0 0 0 0 0 0 0 0 7DTAL DfS80RSEMENTS- 31.408 25.805 59.889 41231 39.113 46.099 45.454 43.569 51.661 50.3r6 4.000 50 50 50 100 50 50 50 50 50 i BEGINNNG CASH: Cash Balance 50. 50 50 1212 81 50 9.566 7.415 4299 21.903 50 50 50 100 50 50 50 50 50 50 Deedred Cash Requirements (0) 0 0 (1.112) (31) 0 (9.516) (7.365) (4249) (21.853) 50 50 50 100 50 50 50 50 50 50 i ENDWG CASN: I 0 0 0 0 31 (0) 2.047 5.156 0 6.576 CASHlo ESERVEFUNEh _DfVIDENDS: , _ _ . _ _ 0 0 0_ 1.112 _ _ 0 _ 0 _7.419 _ 2209 _4 249 15277  : i t

                                                                                                                                                                     ?
;                                                                           Page 2 of 4 j

< { l.

                                                                                        " ' ~                                                --            . ~ , ,

                                                                                                                          . , . . . _ .           , __         v tXHtBITf REORGANt2ED EtlAP PRO FORMA BALANCE SHEE1'

[000's] 1097 1909 XOO 2001 2000 1902 1903 1994 1095 190G _1000 IASSETS UTILITYFtANT& OTHER: 156 639 127.000 129.509 132205 134.832 138.045 140227 143.18? 146.795 149.250 152,574 Plant in Samce Accum Dapreciation

• O 3.503 7.0 78 10.728 14.472 18283 22.186 26.206 30.307 34.524 38.885 Not Ptant 127.000 126.0 % 125.127 124.104 123.572 121.944 120.906 120.590 118.943 118.051 117.754 Nuciaar Fuel 3.000 B.756 10.959 15.415 21.577 22.132 27.872 34.320 34.945 41.632 44.109 Nucinar Fual Amort. 0 2.902 5.528 8272 11.5R5 14.581 17.712 21.492 24.912 28.435 32.709 3.000 5.853 5.431 7.143 9.992 7.551 10.159 12.828 10.033 13.147 16.311 Net Nuclaar Fual 130.000 131.949 130.559 131247 133.$r.4 129.495 131.155 133.417 128.975 131.198 134p65 TOTAL UT1UTYPIANT:

CURRENTASSETS: 50 50 50 50 50 4.000 50 50 50 100 50 Cash 31 2.128 7.284 7284 13p60 0 0 0 0 0 31 OrharCummt Assets 81 2.178 7.334 7.Tta 13.910 4.0n0 50 50 50 100 81 TOTAL CURRENT ASSETS TOTAL AoM 134.000 131.999 130.609 131297 133.ma 120.576 131236 135.506 136.300 138.532 147.975 l CAPITAUZA710N AND UADIUTTES CAF'1TAUZATDN: Commort Equpy 134.000 134.000 134.0n0 134.000 134.000 134.000 134.000 134.000 134.000 134.000 134.000 Retained Ean*gs 0 (9.851) (17.353) p5.708) R4224) R6.585) (27.401) 96.576) 96.331) 95.720) 94.0??1 I Total Ev>#y 134.000 124.141 116.647 10R292 109.T76 107.415 106.599 107.424 107.669 31.3r.0 10R280 109.978 Faciley / Long-Term DetA 0 9.709 19.561 32.829 32.373 31.863 34.758 34.047 33251 32.359 134.000 133.858 136,209 141.121 142.149 139278 141.358 141.471 140.920 140foo 141.33n TOTAL CAPITAUZATION: CURRENTUABfUTIES: 0 0 0 0 0 0 0 0 0 0 0 Acteunts Payable 0 0 0 0 0 0 0 0 0 0 0 Notes Paysbie 0 0 0 0 0 0 0 0 0 TOTAL CURRENTUABtUTIES: 0 0 DEFERRED CREDITS. 6.6 U Accumulated De(emed Taxes 0 (1.859) (5.000) (9.823) (8.485) (9.702) (10.122) (5.876) (4.611) 0 (2.106) 0 0 0 0 0 0 0 t Omer Deterred Credits 0 0 TOTAL UABTU77ES S CAPITAUZATION- 134.000 131.909 130.609 131297 133ff.4 129.576 13t235 135.595 136.309 138.531 147.975 . DEBTEOUT7Y RATIO: Debt 0.00% 7.25 % 14.36 % 23 26% 22.77 % 22.08 % 24.59 % 24 07% 23f47% 23 01% ?2.19% Equity 100 0 % 92.75 % 85 64 % 76.74 % T7.23% 77.12 % 75.41 % 75.93 % 7640% 76 09*4 77 81 % i Pwye 3 of 4

                                                                                                                     =                         -                ,
                                     *             *

• w EXMinsti A$$UMPTION TABLE

[0M's] Note _ _ _ _ _ _ Source

• Da!A Revenue Assterptions _ , _

CE GeneralandQ1s_n_dal Assurrprions- _

                                                                                                            $0.025/kWh in $1992 seasonaffy aqusted and esca!ated at l Spot Sales

_ Starting Debt _0 inflation for uncommitted piant capacity _ __ __ _ . _ _ . _ 20.000 CE Sabo'tlinated Debt CvncAr. sat at 014anuary-1995 50.0 MW startng 014an-94 at $0.0350AWh in $1992

                                                                         *** Contract 1

__32.829 _ _ __ _ Debt Refinancing at 014anuary-1996 esentated at inflation _ _ CE 0.00% Starting Debt as % of Capital 89.5 MW starting 014an-96 at $O 0375AWh in $1992 134.000 Contract 2 Starting Equity escalated at 11.5% par year _ __ _ _ _ _ _ _ _ _ _ _ _ , _ EquMyissued at.014anuary _1995_ . _ _ _ _ _ . _ . _ _ . _ .O Source

• _

Cost Assumpfens _ _ _ _ _ _ _ _ _ _ _ Note _ _ _ _ _ 68.57 % . _ SS.CX , _C.ag_ Factor (Mage Year) Post-Btxkrt escalated at inhton from 3rd prior year _

                                                  , __ _81.00%           , Operations _ Expense                                                                                                        _ JOD.CX _

Capadty Factor _(Wage Year) Transmission Espense_ Escalatad at inflation nwnus 2% __ _ _ _ _ _ ._

**Fecility Interest Rate                           _ 13.00 %                                                  0% escafated to 1996, inflation mmus 3% thereatter                           _ _ . _JOD.CX_.

Subordinated Debt Rate _3.00% 1 _ Property Taxe.s Dewu.. n-arg_ _ Escalated at inttation_ _ _. _ __ _ _ _ _ _. ._ _ JOD.CX _ _ _ SB.CX Term of Refinanced Csgr,sq.cr.al Debt (Years) _ _ 20 Escalated at inflaten _ ___ __ _ _ _ _ o Seabrook Tax Commrttee Estimates based on tMs from sennceye.W-rs._ . __JOD.CE _ Yeers Interest Onty - _,_ 12m _qpontract Costg_@peuyx,l M_, Post-Budgat escatated at inffaten . . _ _ _ _ _ . _ _ _ _ SU.CX_ Capital Additions (Plant)_ 4.00 % _ SG.CX _ inflation Rate _ _, 34.00% Capital Additions _(Fuel)_ Post-Budget escalated at inffation_ _ _ _ _ _ _ _ ___ _ _ FCE _ __ Federal Tax Rate Wasta Disposal $0 00095AWh escalatad at 0% _. State Tax Rate _ 8.00% , Reorganization Costs _ _ Committee Estimates __ _ _ _ _ _ _ _ _ ___ _ CE _ _ 39.28 % LCombinedRate Af*'""

• S0t"C8 ._ _ _ . . _ _ _ _ _ ___

                                                                                                                                ._ _         . _ _ _ _ _ _ _ _ . ._ _ _. ______ _ _ _ .                           50 Seabrook Budgat _                                                       _ _ ____ _ __ _                                          __ JOD
 "' Estimate basedon pnme + 7%.                                                                                                                                 _ _ __

Joint Owner Data _ __ _ _ _ _______ _ _ FCE See secten VIF.2 of Disdosure Statement Fuel Cycle Ew..u.rics _ _ _ _ _ CE

 ***Incirnies 10MWcontract Commstfee Estanates ___ _                  _

See secten VI H 2 of Drsdosure Statement Cornmittee Extrapdations_ _ _ _ _ _ _ _ ____ _ __ __._ _ _ CX Page 4 of 4

f ..

                                                                                                                 .r.

T* , . -

                                                   **                                t       'gg;*g;'$ 3         .              .

PAGE 4 3 - d, .. . . Article 4. Monthly Payments Due VI , g UNITIL Power si.all pay monthly to VI, in accordance with tha ( provis' ions of Article 11 below, the sum of (a), (b), (c), and if

     \         applicable (d) and (e)

(a) caoacity. A " Capacity charge,' for each Unit as set forth

1. below, divided by 12 and multiplie'd by the number of kilowatts of capacity corresponding to UNITIL Power's Entitlement Percentages in BHS3 and Nats for such nonth, respective 1yt asas maar

.# ca peitr cher9 capeltr cAars. Dates s/Kw - Year a/Fw - Year May 3. 1993 - oct. 31 1993 1.25 0 o Nov. 2. 1993 - Oct. 31. 1994 350 Mov. 2. 1994 - Oct. 31, 1995 til O mov. 1, 1995 - Oct. 31, 1996 200 0 Nov. 1 1996 - oct. 31. atti 210 120 O,, Nov. 1. 1997 - Oct. 31, 1990 220 230 125 130 Nov. 1. 1998 = oct. J1 1999 Wow. 4, 1999 - oct. 31, 2000 240 135 Nov. 1, 2000 - Oct. 31, 2001 250 140 Nov. 1. 2001 - Oct. 31, 2002 260 145 Nov. 1, 2002 - Det. 31, 2003 210 150 Nov. 1. 2003 - Oct. 31, 2004 . 280 155 Nev. 1. 2004 - Oct. 31, 2005 290 llo S Nov. 1. 2005 - oct. 31, 2006 0 166

                                    *The number of kilowatts for which payment is owing during each power year (November through october) for SHS3 2nd NHHS shall be the product of UNITIL Power's Entitlement I                                   Percentages in BHS3 and NHHS times each Unit's then current NEPEX Winter Capability rating.

Rhtm e (b) Introy. An " Energy charge" equal to the sum of %e products, for each Unit, of (1) UNITIL Power's Entat3enant Percentage in the Unit in effect during the month bei-s billed, multiplied by (ii) the f uel costs of una tnit 1cr I such month, which shall include fuel, ash-disposal and e ;I - ,_

      ;'                               i)=, -                                                2 %        .'. l.: I I   l.. I ,
                                                                                                                                  '*>yc&-n  s*4;< #m'" a.: g=. *.,.

) h Pact i D ( other fuel related costs for all amounts properly chargeable by U! to what is presently Account No. 501 ,

                                                                                                                                       .j (ruel) of the Uniform System of Accounts prescribad by the p                                                                Pederal Energy Regulatory commission ("rERC") for Public 4

Utilities and Licensees. N- san I (c) Transrission. A

• Transmission Charge" per month that reimburans VI for the costs that UI incurs for the transmission of UNITIL Power's Entitlement Percentages in BHS3 on other utilities' transmission f acilities to the y Point (s) of Delivery as specified in Article 5.2. Such transmission charges shall reimburse UI for actual costs incurred under transmission agreements arranged by VI and utilized for the delivery of Entitlement Percentages tu UNITIL Power under the Agreesent, including all D transmissien charges paid to the utility that has provided such transeission services.

plus D (d) Sc2 Allovenees. Beginning January 3, 2000, UNITIL Power will be responsible for the 502 allowances necessary for the actual operation of its Entitlement Percentages in BHS3 c.r.d NHHS as specified in Article 6. D st121 (e) station service Ener$v. UNITIL Power vill be responsible for its Entitlement Percentage share of SHS3's and NHHS's y station service energy while SHS3 and NKHS are shut down or are operating at a level insufficient to meet station servica necdc. To satisfy this obligation, unless i otherwise agreed to by the parties, such service for WIT:L If , ( Power's Entitlement Percentage in NHMS will be provided by m asamuseursfammmes

L

                                                                                              ...  .a .
                                                                                                              \

PAGE 6 O UNITIL Power in accordance v(th Ntto'OL Aalling and "own-load" procedures and such service for UNITIL Pover's Entitlement Percentages in SHS3 vill be provided by UI. UI's charge for such service for SHS3 will be equal to the 4 product of (1) an allowance for energy cost in dollars per 9 s , negawatthour (determined by multiplying the Bridgeport

                        .              Earbor station Unit 2 NEPEX Replacement ruel Price in -

affect en the 1st asy ef ti.. subject month in $/million 27U times a heat rate of lo' million STU/MWH) and (ii) UNITIL 9 Power's Entitlement Percentage share of the station service energy (erpressed in regawatthours) for RHS3 metered while BHS) is shut down or is operating at a level insufficient to meet station service needs during the subject month. Article 5. Transmission Transmission of UNITIL Power's Entitlement Percentage in NHHS shall be administered in accordance with the provisions of the NEPDOL D Agreement regarding Pool-Planned Units and with Article 5.1 of this Agreement. Transsission of t*NITIL Power's Entitlement Percentages in BH53, a non-Pool-Planned Unit, shall be administered in accordance with the provisions of. Article 5.2 of this Agreement. 5.1 Transmission of UNITIL Power's Entitisment Percentage in NEIS. UNITIL Power's Entitlement Percentage in NHMS shall be delivered to UNITIL Power at the points where the output of such unit enters the ENV-PTT system. UNITIL Power shall arrange for and assume all costs of transmission for its Entitlement Percentage in NHHS. UNITIL Power shall be responsible for all transmission and transformation losses incurred with respect to this Entitlement Percentage and tmITIL Power shall pay to NEPCOL sonthly the tppropriate transmission a

) rn:3 : r. s

          ,...........,o           ....    . . . . . . . ,                                    . . . _ . . ,                                 .a.    .  ,t.. t l'.;ji;pij! m s,t                                                                                                                                     I              ce, c                    ,

, r.A 1:.v ::n:v ::s ( sur ti.it s t Dtve* > OF

                                                                                                                                                  )         t X t C'.

• C # 4 C "., Ni s,4 0 $

75: cttier cas set foNe eg est:.ics ti* trac:s D l D see use:..ef 1:ste e .s of [*eca ry Oct. tracts D D D D41t6 .Ag ral 15.1,91 , --~g hn e i' ~ P OUd a n t c.e... DECLARATION D

 ,           isomot;auu I                                                                                                       and t.
     '       the debtotts)in this casa,dettart und*1 penalty of petjury that the foregoin$ to true and corries to the best of my knowitdst.mfem"ateor and bebef.

Coa ton atioat 1. John a. stevent the President n ewsa vis,d egter e oi the otporation named as 6tbtot in this cau. etctatt under penahy of perjury that I have rtad the foretoms.sna that it is true anc tortte D to the best of my knowltigt. information and bebtf. j I e mem6t*-an turhorstedeltal- of the panntes camed PAanta5 HIP 1. as achtet in this cau. declart unset penahy of perjury that I have read the fortsomt. and that it a true and cottact to the beit of m) knowledst. information anc behti. b ,,,,

               .._,d      on     ...a n ,                                             .
                                                                                             . ., m. _     ,

c,m.a m John R. evens

                                                                                                                                                                         ...e,_.............-

D

Aner=~e" se 5 s'e-en ef Deme ~ ccmans 1, Regatntion Papu Apatmenu Mth vanous bolsen of Senes B and 54nes C 544st:4 Notu ame Conuagtet interest Candcates, 1 Ap 4 ment for Joint Ownintup, Construenon and Operation of New Hampsttre Nuclear Unn;. c.ai 4 May 1,1973, u amended by 2.3 sepante asentmenu, the tut bemg u of Neverr.tet 1, p 1990-3, Seventh Ametcment to and Resuted Aptement for Seatrook Project Datunag Agent. 4 Trmmmion Suppon Artemenu u of May 1.1973, 5, Apeament to share Cmata Cosu Apocratsd With the Taskstory.Subrock Tnrarnasion Line, > d,ated u of AprM 17,1986

6. Nocicat Suppen 54 mees Artament berwt4n Yankta Atomic Electne Company ana Putlic Semez Cornpany of New Hampthare Amng on lu C% Behalf saa u Agtnt for the Jomi Ownen of the Scabrook Suuon, 7, 54rvice Contract bertus EUA Power Corpendon anc EUA Semes Corponnon, January 2, D 1991.

3. Federal it.coms Allocauen Tu Apetment among Euttra Uti'a uts Apocates and Aftlatta Corporaucts.

9, Indenture of Montage cated u of Novsruber 15,1986 to State Streat Bank an6 Trust Compaty along with Fint asa Second Supplementaa to lacenture. g

10. F"ERC 54ttlement Artament by and amcas EUA Power Corporation. Ma.uachusstu DPU, Manactuattu Attorney Genent Monuup Ejecint Company, E.utern Edison Company.

Blackstent VaUey Dettnc Compacy, Rhode Ltiana PUC. Dmsion of Public Utilices and Camers, and Attorney Otneral g 11. JEPOCI. AFeement.

12. 54ttlement Aptement as of Jaanary 13.1989 by and among pressat and former Joint Owncn of Saabrook and Yaakas Atonde Dactnc Company,

13. Apt 4 ment aated Octater 19,1773, u amended, by and betweca United Eagtneen and Constructors, lac. and the Joint Owaan of Seabrook.

14. Standstm Agreement dated February 11967, by and among tbs Jotat Owntn of Seabrook.

United Eaginess and CofJirkclora, lac Rad Yaalas Atomic Decittc Company. 11 Sumy Boed twood by the Aetna casualty and Sursty Company, dated Marsh 20,1989, erneut:4 to behalf of Seabrook Project Joint Onwen by Public Semca Compery of New Hampshire (New Hampshirs Yashas DMslos).

 >                       todetc.niScation Apnement dated March 29,1989, betwesa EUA Power Corporaton and the 16.

Aataa casualty and Sursty Company.

37. 1.can and Trust Apacment, tlated as of Deczmber 1,1993, by and among The Industrial Deslopmcat Authonry of the Stats of New Hampshirt. EUA Power Corporation, and Shawmut Bank N.A.

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