AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF MERGER


      This is AMENDMENT NO. 1 dated as of January 26, 2000 (the  "Amendment") to
the AGREEMENT AND PLAN OF MERGER (the "Agreement")  dated as of November 4, 1999
by and among Eastern  Enterprises,  a Massachusetts  voluntary  association (the
"Company"),  KeySpan  Corporation,  a New York corporation  ("Parent"),  and ACJ
Acquisition LLC, a Massachusetts limited liability company which is directly and
indirectly wholly owned by the Parent ("Merger Sub").

1. The parties entered into the Agreement to provide for a business  combination
(the  "Merger")  pursuant  to which the Merger Sub would merge with and into the
Company, with the Company as the survivor of the Merger.  The purpose of
this  Amendment  is to set forth  certain  agreements  by and among the Company,
Parent and Merger Sub to amend the Agreement.  Accordingly,  the Company, Parent
and Merger Sub agree as set forth  below in this  Agreement.  Capitalized  terms
used in this  Amendment  that are not defined  herein shall have the  respective
meanings  ascribed  to them in the  Agreement.  Capitalized  terms  used in this
Amendment that are not defined in the Agreement  shall be deemed included in the
Agreement with the respective meanings ascribed to them in this Amendment.

2.  Section 4.13 of the  Agreement is hereby  amended to read in its entirety as
follows:

           Section  4.13 VOTE  REQUIRED.  The  approval  of the  Merger  AND THE
      AMENDMENT TO THE COMPANY  DECLARATION  OF TRUST TO PERMIT A  MASSACHUSETTS
      LIMITED   LIABILITY  COMPANY  OR  ANY  OTHER  COMPANY  TO  MERGE  INTO  OR
      CONSOLIDATE  WITH THE  COMPANY by a majority  of the votes  entitled to be
      cast by all holders of Company  Common Stock (the  "Company  Shareholders'
      Approval") are the only votes of the holders of any class or series of the
      capital  stock  of the  Company  or any of its  subsidiaries  required  to
      approve this Agreement, the Merger and the other transactions contemplated
      hereby.








      IN WITNESS  WHEREOF,  Eastern  Enterprises,  KeySpan  Corporation  and ACJ
Acquisition  LLC have caused this Amendment to be signed as a sealed  instrument
by their  duly  authorized  representative  officers,  all as of the date  first
written above.

                                   EASTERN ENTERPRISES


                                    By: /s/ J. Atwood Ives
                                        ------------------------------
                                        Title: Chief Executive Officer



                                    KEYSPAN CORPORATION


                                    By: /s/ Gerald Luterman
                                        ------------------------------
                                        Title: Senior Vice President



                                     ACJ ACQUISITION LLC


                                    By: /s/ Steven Zelkowitz
                                        ------------------------------
                                        Title: Manager