File No. 70-8351
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1
to
FORM U-1
APPLICATION-DECLARATION WITH RESPECT TO
AN INVESTMENT BY EUA ENERGY INVESTMENT CORPORATION
IN A POWER LINE CONDITIONING AND
UNINTERRUPTIBLE POWER SUPPLY MANUFACTURER
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EUA ENERGY INVESTMENT CORPORATION
P.O. Box 2333, Boston, Massachusetts 02107
(Name of companies filing this statement
and address of principal executive office)
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company
parent of applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, ESQ.
McDermott, Will & Emery
75 State Street
Boston, MA 02109
1. The first sentence of the second paragraph of this Application-Declaration
is hereby amended and restated to read as follows:
The Applicant seeks Commission approval for EEIC to invest a total of
$275,000 to be paid as consideration for the acquisition of 9.9% of the common
stock of Quality Power Systems, Inc., a Massachusetts corporation ("QPS")
engaged in the manufacture, marketing and sale of uninterruptible power systems
and utility interface front-end power supplies which reduce harmonic
distortion.
2. Item 1 of this Application-Declaration is hereby amended and restated in
its entirety to read as follows:
ITEM 1. DESCRIPTION OF THE PROPOSED TRANSACTIONS.
I. Overview of the Application-Declaration.
EEIC hereby requests authorization to invest $275,000 in QPS, such amount
to be paid in one lump sum as consideration for the acquisition of 9.9% of the
total common stock of QPS. EEIC further requests authorization to acquire
without additional consideration such additional shares of the common stock of
QPS as EEIC from time to time may be entitled to receive to maintain EEIC's
9.9% ownership interest in QPS. Unless otherwise authorized by the Commission,
EEIC will divest its entire ownership interest in QPS and will cease to
maintain representation on the Board of Directors of QPS on or before January
1, 2005. In accordance with the terms and conditions of a Stock Purchase
Agreement entered into subject to Commission authorization by duly authorized
officers of QPS and EEIC on January 24, 1994 and attached hereto as Exhibit B-2
(the "Stock Purchase Agreement"), EEIC's investment would be used by QPS for
the development and marketing of low harmonic distortion Uninterruptible Power
Systems ("UPS") manufactured by QPS under a license to QPS by Digital Equipment
Corporation ("DEC") pursuant to the License Agreement attached hereto as
Exhibit B-1.
II. Power Problems Addressed by the HA6000 System; Description of the
Uninterruptible Power Systems and the QPS Marketing Strategy.
The HA6000 system provides an integrated solution to three areas which are
of concern to both an electric utility and the customers it serves. These
areas are harmonic distortion, power factor correction and an uninterruptible
power supply. The last two concerns are generally classified as customer-
specific because individual load characteristics are required in order to
establish an appropriate response plan.
Harmonic distortion derives from many sources including feedback from
customer installations, and equipment including nonlinear components of
capacitors and inductors. Color televisions, microwave ovens, refrigerators,
computers, variable speed motors and other electrical appliances contribute to
harmonic distortion. Utility customers with sensitive electric loads
including, for example, computers, medical monitoring equipment and electronic
test equipment need minimal input voltage swings to ensure proper operations of
their equipment. Over- or under- voltage supply may result in equipment being
damaged or performing in a manner which compromises its integrity.
Harmonic distortion also jeopardizes the reliability of an electric
utility's distribution system and the "quality" of the electric power it
delivers. Quality of electric power generally refers to the shape and
magnitude (maximum value) of the waveform of the power delivered by a utility
company to its customers. The ideal shape of waveform is a pure 60 cycle
sinewave form. Harmonics of the 60 cycle waveform occur in multiples of 60
(e.g., 120, 180, 240 and 300 cycles) and cause distortions which appear as
ripples in the 60 cycle waveform. Odd multiples of the 60 cycle waveform
(e.g., 180, 300 and 420 cycles) increase the maximum value, causing an increase
in the input voltage anticipated by the customer, while even multiples of the
60 cycle waveform (e.g., 120, 240 and 360 cycles) diminish it.
The primary purpose of the UPS is to improve the quality of power supplied
by an electric utility provider to its customers by reducing harmonic
distortion at the interconnection between the utility and its customers. QPS
achieves such quality enhancement using DEC's HA6000 product, a system
developed by DEC to satisfy new requirements being imposed on power line
conditioning equipment and uninterruptible power supplies by International
Safety and Electrical Manufacturing Compliance (EMC) Standards. The HA6000
utilizes a unique technology which generates a synthesized current wave form
that tracks the input voltage sine-wave to reduce total harmonic distortion to
a level fifteen to twenty percent below currently available systems. It is
built using a modular concept that allows construction of units between 3.3 KVA
and 20 KVA in 3.3 KVA increments. This design provides advantages related to
maintenance, repair time and costs since work may be done on individual major
components rather than on the total unit, and represents an architecture
innovative in its application to utility equipment and supplies.
The HA6000 also provides power factor correction and back-up power
capabilities, which in turn reduces the costs of electricity to utility
customers. Many utility companies include power factor correction costs in the
tariffs of their larger customers, either through an adjustment to the billing
determinates or as a separate charge when the customer's power factor is below
a predetermined value. A customer may install its own power factor correction
equipment as a means of reducing its utility bill. Back-up power capabilities
allow an individual customer to continue with critical operations when there is
an interruption in its normal supply system. The type of back-up system is
determined by customer-specific data. There are commercially available
battery-based uninterruptible power supply systems which are sized to satisfy
both a specific load and the time duration the load will be satisfied.
Currently, only one supplier of commercially available UPS actively supports
power factor correction.
There currently are seven competitors of QPS, none of which manufactures
or sells products that meet the HA6000 specifications. To take full advantage
of its perceived market opportunity, QPS has developed a multi-phased marketing
plan involving: first, direct sales to DEC as the power supply module for DEC
computer systems; second, sales through electric utilities including affiliates
of EUA to their commercial and industrial customers; and third, direct sales by
QPS marketing and sales personnel to non-DEC original equipment manufacturers
("OEMs"), consultants for power quality problems and end-user customers. With
respect to sales to customers of electric utilities (including affiliates of
EUA), the Applicant and QPS believe that the increasing use of automation for
demand side and load management of energy needs and the proliferation of
computers and other sensitive electronic equipment used by customers of
electric utilities will necessitate enhanced reduction of harmonic feedback
into the distribution systems of electric utilities. To support the second
phase of the QPS multi-phase marketing plan, EUA affiliates will receive "most
favored" OEM pricing on systems procured for installation at sites serviced by
EUA retail electric affiliates. EEIC itself does not plan to market the
HA6000. It anticipates, however, that EUA Cogenex will purchase and offer the
HA6000 as a component of its energy management services, as appropriate to the
requirements of its customers.
QPS' marketing program is based on satisfying a relatively small portion
of the steadily growing UPS market. An independent market research firm, Frost
& Sullivan, has projected the UPS market to grow from $1.24 billion in 1992 to
$2.12 billion in 1998, in a report which they issued in November 1993 as Report
#2632-25 or ISBN-1-56753-575-5. The report identifies 22 UPS manufacturers.
However, only 7 of the manufacturers produce units in the size range being
targeted by QPS. The QPS business plan is based on a cautious initial sales
program to ensure quality control by limiting sales in the first two years to
50 and 150 units, respectively, at average unit sales price of $25,000. The
HA6000 units should have a competitive advantage in the marketplace because
they already meet the new strigent harmonic distorition standards which are to
become effective in 1996.
III. Anticipated Benefits of the Proposed Transactions.
The HA6000 will benefit direct users by separating the equipment it serves
from the general utility distribution system and by using utility-provided
power to generate a synthesized sinewave output. The HA6000 will indirectly
benefit non-users by isolating the utility distribution system from sources of
harmonic distortion, thereby reducing the total harmonic distortion imposed
upon the utility system.
Additionally, use of the HA6000 technology will permit electric utilities
in the New England region to reduce harmonic distortion in an extremely cost
efficient manner by directing corrective attention specifically to customers
whose equipment contributes to harmonic distortion at utility interconnections
and by providing such customers with the lowest available rates on low
maintenance modular units customized to such customers' respective needs.
Customers who have no power quality complaints will not be required to
contribute to such corrective efforts, yet will benefit from improved power
servicing due to anticipated reductions in electric utilities' capacity
requirements costs upon implementation of the HA6000 systems. QPS has
committed to manufacture and market its UPS and related products in the New
England region. (See NEES Application, second paragraph of Item 1.)
IV. Applicable Precedent.
In Releases No. 35-25353 and 35-25580 dated July 25, 1991 and July 13,
1992, respectively, the Commission authorized Electec, a wholly-owned, non-
utility subsidiary of Entergy Corporation, a registered holding company under
the Act, to acquire and maintain an equity ownership interest of at least 9.95%
but less than 10% in First Pacific Networks, Inc. ("FPN"). Electec's
investment in FPN was for the purpose of developing utility applications for a
patented communications system. The marketing of the system was not restricted
to utility applications and included plans to develop applications for
business, cable television, local telephone communications and international
communications. Because the system was expected to "dramatically" increase the
exchange of information between a utility and its customers, the investment was
permitted and deemed to be functionally related to the business of the Entergy
Corporation holding company system. Similarly, (a) the Applicant herein
proposes to acquire and maintain a significant but less than 10% equity
interest in QPS; (b) among the diverse target markets for the QPS products are
direct utility applications which are expected to noticeably increase the
quality of power supplied to retail electric customers by reducing harmonic
distortion at the point of interface between a utility and its customers; and
(c) the Applicant firmly believes that implementation of the HA6000 and other
QPS products at utility retail customer sites will enhance the efficiency and
diminish the maintenance and repair time and costs of servicing such customers.
In CSW Credit, Inc. (Release No. 35-25995 dated March 2, 1994), the
Commission announced detailed criteria for authorization of the ownership and
operation of non-utility functionally related businesses. EEIC believes that
the transaction proposed herein satisfies the Jersey Central Power & Light
(Release No. 35-24348) criteria affirmed in CSW Credit in that, upon
authorization and investment, (i) EEIC's investment in QPS will have evolved in
connection with the utility business of the EUA system; (2) EEIC's investment
($275,000) will not be significant in relation to the EUA system's total
financial resources; and (3) as described in Sections II and III of this Item
1, the investment has the potential to produce benefits for investors and
consumers. EEIC further believes that the proposed transaction satisfies the
additional criteria set forth in CSW Credit. For the reasons set forth in
Section II of this Item 1, EEIC's proposed investment in QPS would benefit the
EUA integrated public utility system and its customers. As explained in the
last paragraph of Section II of this Item 1, there currently is no product
available on the market comparable to the HA6000.
V. Description of the Operative Documents.
Upon Commission approval of EEIC's participation in the Stock Purchase
Agreement (defined in Section I above), EEIC will enter into a Stockholders
Agreement substantially in the form attached hereto as Exhibit B-3 (the
"Stockholders Agreement"; and together with the Stock Purchase Agreement, the
"Operative Documents"). Prior to EEIC's execution of the Stockholders
Agreement, duly authorized officers of QPS will file with the Massachusetts
Secretary of State Articles of Amendment in the form of the Proposed Articles
of Amendment attached hereto as Exhibit A-2, amending the QPS Articles of
Organization to remove existing restrictions on transfer.
In exchange for EEIC's lump sum payment of $275,000 cash to QPS, the Stock
Purchase Agreement provides for the sale of 9.9% of the total shares of common
stock of QPS to EEIC and an agreement by QPS and its founders to not at any
time issue additional shares which would result in diminishing EEIC's initial
percentage ownership position in QPS. EEIC and QPS also agreed that the
proceeds from the sale of shares to EEIC will be dedicated to the development
and marketing of QPS' uninterruptible power systems products. Under the Stock
Purchase Agreement, QPS is obligated to provide EEIC with: (a) an audited
balance sheet and statements of income and cash flows within 90 days after the
end of each fiscal year; (b) unaudited balance sheets and statements of income
and cash flow for each month and each fiscal quarter; (c) monthly management
reports of bookings, billings, cost of goods sold, administrative and marketing
expenses; (d) copies of notices, press releases, information and data
distributed to the shareholders of QPS and/or filed with the Commission, and
(e) monthly management narrative reports explaining variances from financial
forecasts and significant current developments in staffing, marketing, sales
and operations. The Stock Purchase Agreement also provides for certain
negative covenants of QPS including, among other things, the requirement of
advance written consent by EEIC to (i) any change in the nature of QPS'
business; (ii) the declaration, making or payment of dividends or distributions
on QPS capital stock; (iii) the repurchase or redemption of QPS capital stock
unless EEIC is offered the same repurchase or redemption opportunity; (iv) any
merger or consolidation with, or acquisition of substantially all the assets
of, another entity or the sale, lease or other disposition of substantially all
of QPS' assets; (v) any assignment or transfer of technology or intellectual
property rights by QPS other than in the ordinary course of business; (vi) the
entering into or altering of contractual relations between QPS and any of its
founders, directors, officers, stockholders, affiliates and "family members"
(described below in the discussion of the Stockholders Agreement); (vii) any
amendment, alteration or repeal of any provision of the QPS Articles of
Organization or By-Laws; and (viii) the issuance, sale, exchange or reservation
for issuance, sale or exchange of any QPS shares of common stock, options
rights, warrants or convertible debt securities other than those committed for
issuance to NEERI or any affiliate thereof pursuant to that certain Agreement
between QPS and NEPSCO dated June 1, 1993 (Exhibit B-1 to NEES Application).
Upon Commission approval, EEIC will enter into a Stockholders Agreement
providing for EEIC's designation of one out of six director positions on the
Board of Directors of QPS, with any vacancy in such position to be filled only
by a subsequent designee of EEIC. (Upon Commission approval of the NEES
Application, a position on the Board of Directors will be similarly designated
by NEERI.) In general, all transfers of QPS stock other than in accordance
with the provisions set forth in the Stockholders Agreement would be
prohibited. The Stockholders Agreement provides for exceptions to the general
restriction on transfer for (1) the right of each stockholder of QPS to
purchase on a pro rata basis shares offered for sale by another stockholder of
QPS (the right of first refusal), and (2) the right of each stockholder of QPS
to sell on a pro rata basis any or all of its shares on the same terms and
conditions as provided to an outside party in the event of a proposed sale of
QPS common stock by any other stockholder of QPS (the right of co-sale).
The Stockholders Agreement would also provide certain registration rights
to the QPS stockholders in the event of subsequent registration of QPS
securities under the Securities Act of 1933. EEIC and other stockholders would
receive advance written notice of any proposed registration and the right to
participate in any offering on a pro rata basis (subject to any limitations on
the number of shares which can be offered).
Under the terms of the Operative Documents, EEIC would be permitted to
transfer its rights and obligations thereunder to an Affiliate without first
obtaining the prior consent of QPS or its stockholders. An individual
stockholder of QPS would be permitted to sell, assign or transfer shares of the
common stock of QPS to such shareholder's spouse, children, grandchildren or
any trust established for the benefit of such shareholder or his spouse,
children or grandchildren, provided that the shares so transferred remain
subject to the terms and conditions of the Stockholders Agreement and such
permitted transferee deliver to QPS and to EEIC a written instrument confirming
such transferee's agreement to be so bound by the Stockholders Agreement.
EEIC would not be obligated to make any additional capital contributions,
loans or advances to QPS, nor would EEIC be involved directly with the
manufacturing, marketing and sales activities of QPS. EEIC may also permit QPS
to use its name (and that of EUA) as part of QPS' marketing efforts, such uses
to be approved in advance and in writing by EEIC.
The Applicant hereby requests authorization to enter into each of the
Operative Documents.
VI. Discussion of the Costs Addressed by the HA6000 System.
The HA6000 system provides an integrated solution for addressing power
supply concerns associated with harmonic distortion, power factor correction
and an uninterruptible supply of power. The investment amounts an utility and
customer might commit to mitigate these concerns is customer-specific. This is
due to the many variables involved in the analysis of each customer's power
requirements. However, addressing the three concerns by the utilization of a
single standardized unit should be less costly than customizing and combining
three separate correction procedures.
Establishing the cost of harmonic distortion correction is difficult
because of the many variables involved. EUA Service participated in the
preparation of a paper which was published November 29, 1993 and presented at
the IEEE/Power Engineering Society 1994 Winter Meeting ("Distribution Feeders
With Nonlinear Loads in the Northeast U.S.A.: Part II - Economic Evaluation of
Harmonic Effects"), which paper describes the estimated costs in present worth
values to an electric utility company to contend with harmonic distortion. The
costs analyzed include total (a) active power loss value, and (b) capital
invested in the design and construction of filtering stations sufficient to
maintain voltage distortion at levels below 5% to comply with IEEE 519-1992,
the industry standard on allowable harmonic distortion. The establishment of
the cost for harmonic distortion reduction equipment would include provisions
for all equipment, including back-up equipment, the costs for repair of damaged
equipment caused by failures of the filtering system, operation and maintenance
expenses and the costs associated with the redesign of the utility distribution
system to satisfy reliability, economic or maintenance requirements resulting
from the addition of the filtering system.
As previously mentioned, customers install their own power factor
correction equipment when it is appropriate to reduce their bill received from
the utility company. The value of an integrated uninterruptible power supply
is customer-dependent based on load size, time duration to provide an orderly
process shut-down, cost of lost production, cost of idle facilities and other
customer-specific factors.
VII. Request for Authorization of Funds for Investment by EEIC.
By order dated December 4, 1987, as amended January 11, 1988 (Release No.
35-24515A), EEIC was authorized, among other things, to engage in certain
research activities focused primarily on energy and energy conservation.
However, prior to acquiring an interest in any new business, EEIC was required
to seek further Commission authorization. Accordingly, EEIC hereby seeks
Commission authorization for the acquisition of a 9.9% ownership interest in
the common stock of QPS.
VIII. Services to be Provided by EUA System Companies.
QPS will have its own employees. No employee of EUA's retail electric
utilities will be assigned to any activity involving QPS nor does the Applicant
anticipate the need to hire any additional personnel in connection with the
Applicant's participation in QPS. Employees of EUA Service Corporation will
provide certain services to EEIC in connection with the transactions proposed
herein including, principally, providing representation on the QPS Board of
Directors, monitoring QPS financial results as required by the Stock Purchase
Agreement, rendering accounting functions related to preparing income
statements and tax returns for EEIC, and fulfilling reporting requirements of
the Commission and other government agencies. All such services will be
provided at cost under the existing Service Agreement between EUA Service
Corporation and EEIC, and all such costs and expenses will be reimbursed to EUA
Service Corporation by EEIC.
EEIC does not now, and will not in the future, in association with the
transaction proposed herein and without prior Commission approval, own or
operate or be an equity participant in any exempt wholesale generator or
foreign utility company, as such terms are defined in the Energy Policy Act of
1992.
3. Item 2 is hereby amended and restated in its entirety to read as follows:
ITEM 2. FEES, COMMISSIONS, AND EXPENSES.
The fees, commissions and expenses of the Applicant expected to be paid or
incurred, directly or indirectly, in connection with the transaction described
above are estimated as follows:
Securities and Exchange Commission Fees $ 2,000
EUA Service Expenses $ 8,270
Legal Fees $35,000
_______
TOTAL $45,270
4. Item 6 of the Application-Declaration is hereby amended and restated in
its entirety to read as follows:
ITEM 6. EXHIBITS AND FINANCIAL STATEMENTS
(* Filed herewith.)
(** Confidential treatment requested pursuant to Rule 104(b).)
(a) Exhibits.
* Exhibit A-1 Articles of Organization of QPS.
* Exhibit A-2 Form of proposed Articles of Amendment of
QPS.
* Exhibit A-3 By-Laws of QPS.
Exhibit B-1 License Agreement between Digital Equipment
Corporation and QPS. (New England Electric
System, File No. 70-8303.)
Exhibit B-2 Stock Purchase Agreement between
EEIC, QPS and its founders. (Previously
filed with Application-Declaration on
February 3, 1994.)
Exhibit B-3 Form of Stockholders Agreement between
EEIC, QPS, its founders and any subsequent
holders of QPS stock. (Previously filed
with Application-Declaration on February 3,
1994.)
* Exhibit F Opinion of Counsel.
** Exhibit G Analysis of Investment. (Confidential
treatment requested.)
(b) Financial Statements.
b-1 Financial Statements of EEIC at 9/30/93
Certificate of Notification Pursuant to
Rule 24 dated November 18, 1993 (File No.
70-7426).
* b-2 Balance Sheet of QPS at December 31, 1993.
* b-3 Income Statement of QPS for the ten month
period ended December 31, 1993.
5. The first signature block appearing on the signature page to Exhibit B-3
(Stock Purchase Agreement) is hereby replaced with the following signature
block:
QUALITY POWER SYSTEMS, INC.
By: /s/ Edmund Rosa
Name: Edmund Rosa
Title: President
SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act of
1935, the undersigned Applicant has duly caused this statement to be signed on
its behalf by the undersigned duly authorized individual.
EUA ENERGY INVESTMENT CORPORATION
/s/ Clifford J. Hebert, Jr.
By: ___________________________
Clifford J. Hebert, Jr.
Treasurer
Date: April 8, 1994
REVISED INDEX OF DOCUMENTS
Exhibit A-1 Articles of Organization of QPS.
Exhibit A-2 Form of Proposed Articles of Amendment of QPS.
Exhibit A-3 By-Laws of QPS.
Exhibit B-1 License Agreement between Digital Equipment
Corporation and QPS. (New England Electric
System, File No. 70-8303.)
Exhibit B-2 Stock Purchase Agreement between EEIC, QPS and its
founders.
Exhibit B-3 Form of Stockholders Agreement between
EEIC, QPS, its founders and any subsequent
holders of QPS stock.
Exhibit F Opinion of Counsel.
Exhibit G Analysis of Investment. (Confidential treatment
requested pursuant to Rule 104(b).)
Exhibit A-1
THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL J. CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF ORGANIZATION
(Under G.L. Ch. 156B)
ARTICLE I
The name of the corporation is:
Quality Power Systems, Inc.
ARTICLE II
The purpose of the corporation is to engage in the following business
activities:
To manufacture and sell both in the retail and wholesale market,
uninterruptible power systems and utility interface front end power
supplies and other electric and electronic devices and equipment and
to perform all acts and duties to accomplish this stated purpose and
all other purposes as allowed by the Massachusetts General Laws,
Chapter 156B.
ARTICLE III
The type and classes of stock and the total number of shares and par
value, if any, of each type and class of stock which the corporation
is authorized to issue is as follows:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
COMMON: 10,000 COMMON:
PREFERRED: PREFERRED:
ARTICLE IV
If more than one type, class or series is authorized, a description of
each with, if any, the preferences, voting powers, qualifications,
special or relative rights or privileges as to each type and class
thereof and any series now established.
None.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon
the transfer of shares of stock of any class are as follows:
Any stockholder, including the heirs, assigns, executors or
administrators of a deceased stockholder, desiring to sell or transfer
such stock owned by him or them shall first offer to the corporation
through the Board of Directors, in the following manner:
He shall notify the Directors of his desire to sell or transfer
by notice in writing, which notice shall contain the price at which he
is willing to sell or transfer said stock. The Directors shall within
thirty (30) days thereafter either accept the offer or by notice to
him in writing request that the American Arbitration Association
appoint an Arbitrator. It shall then be the duty of the Arbitrator to
ascertain the value of the stock.
After the acceptance of the offer or the report of the Arbitrator
as to the value of the stock, the Directors shall have thirty (30)
days within which to purchase the same at such valuation, but if at
the expiration of the thirty (30) days, the corporation shall not have
exercised the rights so to purchase, the owner of the stock shall be
at liberty to dispose of the same in any manner he may see fit. No
shares of stock shall be sold or transferred on the books of the
corporation until these provisions have been completed [sic] with,
both the Board of Directors may in any particular instance waive the
requirement.
ARTICLE VI
Other lawful provisions, if any, for the conduct and regulation of
business and affairs of the corporation, for its voluntary
dissolution, or for limiting, defining, or regulating the powers of
the corporation, or of its directors or stockholders, or of any class
of stockholders: (If there are no provisions state "None".)
None.
Note: The preceding six (6) articles are considered to be permanent
and may ONLY be changed by filing appropriate Articles of Amendment.
ARTICLE VII
The effective date of organization of the corporation shall be the
date approved and filed by the Secretary of the Commonwealth. If a
later effective date is desired, specify such date which shall not be
more than thirty days after the date of filing.
The information contained in ARTICLE VIII is NOT a PERMANENT part of
the Articles of Organization and may be changed ONLY by filing the
appropriate form provided therefor.
ARTICLE VIII
a. The street address of the corporation IN MASSACHUSETTS is: (post
office boxes are not acceptable)
147 Massachusetts Avenue, North Andover, MA 01845
b. The name, residence and post office address (if different) of the
directors and officers of the corporation are as follows:
Name Residence Post
Office
Address
President: Edmund Rosa 142 Starr Avenue,
Lowell, MA 01852
Treasurer: Donald W. Christiansen 147 Massachusetts Avenue,
North Andover, MA 01845
Clerk: Alfred P. Guertin 8 Knower Road,
Westminster, MA 01473
Directors: Edmund Rosa 142 Starr Avenue,
Lowell, MA 01852
Donald W. Christiansen 147 Massachusetts Avenue,
North Andover, MA 01845
Alfred P. Guertin 8 Knower Road,
Westminster, MA 01473
Arthur A. Berube 13 Sherry Lane,
Hampstead, NH 03841
c. The fiscal year (i.e. tax year) of the corporation shall end on
the last day of the month of: June
d. The name and BUSINESS address of the RESIDENT AGENT of the
corporation, if any, is: None.
ARTICLE IX
By-laws of the corporation have been duly adopted and the president,
treasurer, clerk and directors whose names are set forth above, have
been duly elected.
IN WITNESS WHEREOF and under the pains and penalties of perjury, I/WE,
whose signature(s) appear below as incorporator(s) and whose names and
business or residential address(es) ARE CLEARLY TYPED OR PRINTED
beneath each signature do hereby associate with the intention of
forming this corporation under the provisions of General Laws Chapter
156B and do hereby sign these Articles of Organization as
incorporator(s) this 8th day of February 1993.
/s/ Edmund Rosa
__________________________________________________
Edmund Rosa 142 Starr Ave. Lowell, MA 01852
/s/ Arthur A. Berube
__________________________________________________________
Arthur A. Berube 113 Sherry Lane Hampstead, NH 03841
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF ORGANIZATION
GENERAL LAWS, CHAPTER 156B, SECTION 12
I hereby certify that, upon an examination of these articles of
organization, duly submitted to me, it appears that the provisions of
the General Laws relative to the organization of corporations have
been complied with, and I hereby approve said articles; and the filing
fee in the amount of $200 having been paid, said articles are deemed
to have been filed with me this 22nd day of February 1993.
Effective date
/s/ Michael Joseph Connolly
MICHAEL JOSEPH CONNOLLY
Secretary of State
FILING FEE: 1/10 of 1% of the total amount of the authorized capital
stock, but not less than $200.00. For the purpose of filing, shares
of stock with a par value less than one dollar or no par stock shall
be deemed to have a par value of one dollar per share.
PHOTOCOPY OF ARTICLES OF ORGANIZATION TO BE SENT
____________________________________
____________________________________
____________________________________
Telephone:__________________________
Exhibit A-2
FORM OF
THE COMMONWEALTH OF MASSACHUSETTS
OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE
MICHAEL J. CONNOLLY, Secretary
ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108
ARTICLES OF AMENDMENT
General Laws, Chapter 156B, Section 72
Federal Identification
No.___________________
We Edmund Rosa, President, and Alfred P. Guertin, Clerk of
Quality Power Systems, Inc. located at 147 Massachusetts Avenue, North
Andover, MA 01845 do hereby certify that these ARTICLES OF AMENDMENT
affecting Articles Numbered: 5 of the Articles of Organization were
duly adopted at a meeting held on ____________ 19__, by vote of:
___________ shares of _____________________________ out of __________
type, class & series (if any)
shares outstanding,
___________ shares of _____________________________ out of __________
type, class & series (if any)
shares outstanding, and
___________ shares of _____________________________ out of __________
type, class & series (if any)
shares outstanding,
being at least a majority of each type, class or series
outstanding and entitled to vote thereon: (1)
Voted: That Article V of the Articles of Organization of the
Corporation be and hereby is deleted.
(1) For amendments adopted pursuant to Chapter 156B, Section 70.
To CHANGE the number of shares and the par value (if any) of any type,
class or series of stock which the corporation is authorized to issue,
full in the following:
The total presently authorized is:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
COMMON: COMMON:
PREFERRED: PREFERRED:
CHANGE the total authorized to:
WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
COMMON: COMMON:
PREFERRED: PREFERRED:
The foregoing amendment will become effective when these articles of
amendment are filed in accordance with Chapter 156B, Section 6 of The
General Laws unless these articles specify, in accordance with the
vote adopting the amendment, a later effective date not more than
thirty days after such filing, in which event the amendment will
become effective on such later date. EFFECTIVE DATE:________________
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
hereunto signed our names this ________ day of __________________, in
the year 19__.
__________________________________________ President
__________________________________________ Clerk
THE COMMONWEALTH OF MASSACHUSETTS
ARTICLES OF AMENDMENT
GENERAL LAWS, CHAPTER 156B, SECTION 72
I hereby approve the within articles of amendment and, the
filing fee in the amount of $___________ having been paid, said
articles are deemed to have been filed with me this _____________ day
of ____________ 19__.
MICHAEL J. CONNOLLY
Secretary of State
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT
TO:
__________________________________________________
__________________________________________________
__________________________________________________
Telephone:________________________________________
Exhibit A-3
BY-LAWS
OF
QUALITY POWER SYSTEMS, INC.
Adopted February 8, 1993
BY-LAWS
OF
Quality Power Systems, Inc.
ARTICLE I
OFFICES
The principal office of the Corporation in the State of
Massachusetts shall be located in 147 Massachusetts Avenue,
County of Essex. The Corporation may have such other offices,
either within or without the State of Massachusetts as the Board
of Directors may designate or as the business of the Corporation
may require from time to time.
ARTICLE II
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the 1st Friday in the month of
September in each year, beginning with the year 1994, at the hour
of 6 o'clock P.M., for the purpose of electing Directors and for
the transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a
legal holiday in the State of Massachusetts, such meeting shall
be held on the next succeeding business day. If the election of
Directors shall not be held on the day designated herein for any
annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be
held at a special meeting of the shareholders as soon thereafter
as conveniently may be.
SECTION 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board of Directors, and shall be called by the President at the
request of the holders of not less than 75 percent (75%) of all
the outstanding shares of the Corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Massachusetts, unless otherwise prescribed by statute, as the
place of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders entitled
to vote at a meeting may designate any place, either within or
without the State of Massachusetts, unless otherwise prescribed
by statute, as the place for the holding of such meeting. If no
designation is made, the place of meeting shall be the principal
office of the Corporation.
SECTION 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, in case of a special
meeting, the purpose or purposes for which the meeting is called,
shall unless otherwise prescribed by statute, be delivered not
less than (5) five nor more than (10) ten days before the date of
the meeting, to each shareholder of record entitled to vote at
such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States Mail, addressed to
the shareholder at his address as it appears on the stock
transfer books of the Corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record.
For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be
closed for a stated period, but not to exceed in any case fifty
(50) days. If the stock transfer books shall be closed for the
purpose of determining shareholders entitled to notice of or to
vote at a meeting of shareholders, such books shall be closed for
at least (30) thirty days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors
may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not
more than (10) ten days and, in case of a meeting of
shareholders, not less than (15) fifteen days, prior to the date
on which the particular action requiring such determination of
shareholders is to be taken. If the stock transfer books are not
closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or
the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having
charge of the stock transfer books for shares of the corporation
shall make a complete list of the shareholders entitled to vote
at each meeting of shareholders or any adjournment thereof,
arranged in alphabetical order, with the address of and the
number of shares held by each. Such list shall be produced and
kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole
time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of
the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders.
If less than a majority of the outstanding shares are represented
at a meeting, a majority of the shares so represented may adjourn
the meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing by
the shareholder or by his duly authorized attorney-in-fact. Such
proxy shall be filed with the secretary of the Corporation before
or at the time of the meeting. A meeting of the Board of
Directors may be had by means of a telephone conference or
similar communications equipment by which all persons
participating in the meeting can hear each other, and
participation in a meeting under such circumstances shall
constitute presence at the meeting.
SECTION 9. Voting of Shares. Each outstanding share
entitled to vote shall be entitled to one vote upon each matter
submitted to a vote at a meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by such
officer, agent or proxy as the By-Laws of such corporation may
prescribe or, in the absence of such provision, as the Board of
Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by
such receiver, and shares held by or under the control of a
receiver may be voted by such receiver without the transfer
thereof into his name, if authority so to do be contained in an
appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to
vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled
to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall
not be voted, directly or indirectly, at any meeting, and shall
not be counted in determining the total number of outstanding
shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless
otherwise provided by law, any action required to be taken at a
meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, may be taken without a
meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number
of directors of the Corporation shall be fixed by the Board of
Directors, but in no event shall be less than (5). Each director
shall hold office until the next annual meeting of shareholders
and until his successor shall have been elected and qualified,
with the exception of the original incorporators, who shall hold
office for a continuous period of five (5) years from date of
incorporation.
SECTION 3. Regular Meetings. A regular meeting of the
Board of Directors shall be held without other notice than this
By-Law immediately after, and at the same place as, the annual
meeting of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board
of Directors may be called by or at the request of the President
or any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place for
holding any special meeting of the Board of Directors called by
them.
SECTION 5. Notice. Notice of any special meeting shall be
given at least one (1) day previous thereto by written notice
delivered personally or mailed to each director at his business
address, or by telegram. If mailed, such notice shall be deemed
to be delivered when deposited in the United States Mail so
addressed, with postage thereon prepaid. If notice be given by
telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any directors
may waive notice of any meeting. The attendance of a director at
a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors
fixed by Section 2 of this Article III shall constitute a quorum
for the transaction of business at any meeting of the Board of
Directors, but if less than such majority is present at a
meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.
SECTION 8. Action Without a Meeting. Any action that may
be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the
action so to be taken, shall be signed before such action by all
of the directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board
of Directors may be filled by the affirmative vote of a majority
of the remaining directors though less than a quorum of the board
of Directors, unless otherwise provided by law. 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
election by the Board of Directors for a term of office
continuing only until the next election of directors by the
shareholders.
SECTION 10. Compensation. By resolution of the Board of
Directors, each director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a stated salary as director or a fixed sum for attendance at
each meeting of the Board of Directors or both. No such payment
shall preclude any director from serving the Corporation in any
other capacity and receiving compensation therefor.
SECTION 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors
at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent
shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as
the Secretary of the meeting before the adjournment thereof, or
shall forward such dissent by registered mail to the Secretary of
the Corporation immediately after the adjournment of the meeting.
Such right to dissent shall not apply to a director who voted in
favor of such action.
ARTICLE IV
OFFICERS
SECTION 1. Number. The officers of the Corporation shall
be a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of
Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of
Directors, including a Chairman of the Board. In its discretion,
the Board of Directors may leave unfilled for any such period as
it may determine any office except those of President and
Secretary. Any two or more offices may be held by the same
person, except for the offices of President and Secretary which
may not be held by the same person. Officers may be directors or
shareholders of the Corporation.
SECTION 2. Election and Term of Office. The officers of
the Corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified,
or until his death, or until he shall resign or shall have been
removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed by
the Board of Directors whenever, in its judgement, the best
interests of the Corporation will be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights, and
such appointment shall be terminable at will.
SECTION 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may
be filled by the Board of Directors for the unexpired portion of
the term.
SECTION 5. President. The President shall be the principal
executive officer of the Corporation and, subject to the control
of the Board of Directors, shall in general supervise and control
all of the business and affairs of the Corporation. He shall,
when present, preside at all meetings of the shareholders and of
the Board of Directors, unless there is a Chairman of the Board,
in which case the Chairman shall preside. He may sign, with the
Secretary or any other proper officer of the Corporation
thereunto authorized by the Board of Directors, certificates for
shares of the Corporation, any deeds, mortgages, bonds,
contracts, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the Board of
Directors or by these By-Laws to some other officer or agent of
the Corporation, or shall be required by law to be otherwise
signed or executed; and in general shall perform all duties
incident to the office of President and such other duties as may
be prescribed by the Board of Directors from time to time.
SECTION 6. Vice President. In the absence of the President
or in event of his death, inability or refusal to act, the Vice
President shall perform the duties of the President, and when so
acting, shall have all the powers of and be subject to all the
restrictions upon the President. The Vice President shall
perform such other duties as from time to time may be assigned to
him by the President or by the Board of Directors. If there is
more than one Vice President, each Vice President shall succeed
to the duties of the President in order of rank as determined by
the Board of Directors. If no such rank has been determined,
then each Vice President shall succeed to the duties of the
President in order of date of election, the earliest date having
the first rank.
SECTION 7. Secretary. The Secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the Board
of Directors in one or more minute books provided for that
purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-Laws or as required by law; (c)
be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed
to all documents, the execution of which on behalf of the
Corporation under its seal is duly authorized; (d) keep a
register of the post office address of each shareholder which
shall be furnished to the Secretary by such shareholder; (e) sign
with the President certificates for shares of the Corporation,
the issuance of which shall have been authorized by resolution of
the Board of Directors; (f) have general charge of the stock
transfer books of the Corporation; and (g) in general perform all
duties incident to the office of the Secretary and such other
duties as from time to time may be assigned to him by
the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have charge
and custody of and be responsible for all funds and securities of
the Corporation; (b) receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and
deposit all such moneys in the name of the Corporation in such
banks, trust companies or other depositories as shall be selected
in accordance with the provisions of Article VI of these By-Laws;
and (c) in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in
such sum and with such sureties as the Board of Directors shall
determine.
SECTION 9. Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors, and no officer
shall be prevented from receiving such salary by reason of the
fact that he is also a director of the Corporation.
ARTICLE V
INDEMNITY
The Corporation shall indemnify its directors, officers and
employees as follows:
(a) Every director, officer, or employee of the Corporation
shall be indemnified by the Corporation against all expenses and
liabilities, including counsel fees, reasonably incurred by or
imposed upon him in connection with any proceeding to which he
may be made a party, or in which he may become involved, by
reason of his being or having been a director, officer, employee
or agent of the Corporation or is or was serving at the request
of the Corporation as a director, officer, employee or agent of
the corporation, partnership, joint venture, trust or enterprise,
or any settlement thereof, whether or not he is a director,
officer, employee or agent at the time such expenses are
incurred, except in such cases wherein the director, officer, or
employee is adjudged guilty of willful misfeasance or malfeasance
in the performance of his duties; provided that in the event of a
settlement the indemnification herein shall apply only when the
Board of Directors approves such settlement and reimbursement as
being for the best interests of the Corporation.
(b) The Corporation shall provide to any person who is or
was a director, officer, employee, or agent of the Corporation or
is or was serving at the request of the Corporation as a
director, officer, employee or agent of the corporation,
partnership, joint venture, trust or enterprise, the indemnity
against expenses of suit, litigation or other proceedings which
is specifically permissible under applicable law.
(c) The Board of Directors may, in its discretion, direct
the purchase of liability insurance by way of implementing the
provisions of this Article V.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize
any officer or officers, agent or agents, to enter into any
contract or execute and deliver any instrument in the name of and
on behalf of the Corporation, and such authority may be general
or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf
of the Corporation and no evidences of indebtedness shall be
issued in its name unless authorized by a resolution of the Board
of Directors. Such authority may be general or confined to
specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other evidences
of indebtedness issued in the name of the Corporation, shall be
signed by such officer or officers, agent or agents of the
Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation in such banks, trust companies, or
other depositories as the Board of Directors may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates
representing shares of the Corporation shall be in such form as
shall be determined by the Board of Directors. Such certificates
shall be signed by the President and by the Secretary or by such
other officers authorized by law and by the Board of Directors so
to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer
shall be cancelled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and cancelled, except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued
therefor upon such terms and indemnity to the Corporation as the
Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate
for such shares. The person in whose name shares stand on the
books of the Corporation shall be deemed by the Corporation to be
the owner thereof for all purposes. Provided, however, that upon
any action undertaken by the shareholders to elect S Corporation
status pursuant to Section 1362 of the Internal Revenue Code and
upon any shareholders agreement thereto restricting the transfer
of said shares so as to disqualify said S Corporation status,
said restriction on transfer shall be made a part of the by-laws
so long as said agreement is in force and effect.
ARTICLE VIII
FISCAL YEAR
The fiscal year of the Corporation shall begin on the 8th
day of February and end on the 30th day of June of each year.
ARTICLE IX
DIVIDENDS
The Board of Directors may from time to time declare, and
the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and
its Articles of Incorporation.
ARTICLE X
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the
name of the Corporation and the state of incorporation and the
words, "Corporate Seal".
ARTICLE XI
WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is
required to be given to any shareholder or director of the
Corporation under the provisions of these By-Laws or under the
provisions of the Articles of Incorporation or under the
provisions of the applicable Business Corporation Act, a waiver
thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein,
shall be deemed equivalent to the giving of such notice.
ARTICLE XII
AMENDMENTS
These By-Laws may be altered, amended or repealed and new
By-Laws may be adopted by the Board of Directors at any regular
or special meeting of the Board of Directors.
The above By-Laws are certified to have been adopted by the
Board of Directors of the Corporation on the 8th day of February,
1993.
/s/ Alfred P. Guertin
_____________________________
Alfred P. Guertin
Secretary
Exhibit F
April 7, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington D.C. 20549
Re: File No. 70-8351 -- Application/Declaration with
Respect to an Investment by EUA Energy Investment
Corporation in a Power Line Conditioning and
Uninterruptible Power Supply Manufacturer
Ladies and Gentlemen:
As counsel for EUA Energy Investment Corporation ("EEIC"), we are
furnishing this opinion to be used in connection with the application-
declaration on Form U-1 under the Public Utility Holding Company Act
of 1935 (the "Act") filed by EEIC with the Securities and Exchange
Commission (the "Commission") on February 3, 1994, File No. 70-8351,
as amended, (the "Application-Declaration"). In the Application-
Declaration, EEIC requests Commission authorization to acquire 9.9% of
the total common stock of Quality Power Systems, Inc., a Massachusetts
corporation engaged in the manufacture, marketing and sale of
uninterruptible power systems, utility interface front-end power
supplies and other electric and electronic devices and equipment.
It is our opinion, subject to the assumptions hereinafter stated
that, in the event the transactions for which EEIC has requested
authorization as described above (the "Proposed Transactions") are
consummated in accordance with the Application-Declaration as amended:
(a) All Massachusetts state laws applicable to the Proposed
Transactions will have been complied with by EEIC;
(b) EEIC is a validly organized and duly existing corporation
under the laws of The Commonwealth of Massachusetts and EEIC's
obligations under each of the Stock Purchase Agreement and the
Stockholders Agreement (Exhibits B-2 and B-3 to the Application-
Declaration) and each of the agreements contemplated thereunder will
be EEIC's valid and binding obligations in accordance with the
respective terms thereof; and
(c) The consummation of the Proposed Transactions will not
violate the legal rights of the holders of any of the securities
issued by EEIC or any of its associate companies, Eastern Utilities
Associates ("EUA"), Blackstone Valley Electric Company ("Blackstone"),
EUA Cogenex Corporation ("Cogenex"), Eastern Edison Company ("Eastern
Edison"), EUA Service Corporation ("EUA Service"), Montaup Electric
Company ("Montaup"), Newport Electric Corporation ("Newport"), EUA
Energy Investment Corporation ("EUA Energy Investment"), EUA Ocean
State Corporation ("EUA Ocean State"), Ocean State Power ("OSP I"),
Ocean State Power II ("OSP II"), OSP Finance Company ("OSP Finance"),
EUA TransCapacity, Inc. ("EUA TransCapacity") and Northeast Energy
Management, Inc. ("NEM").
This opinion, in addition to being subject to the consummation of
the Proposed Transactions in accordance with the Application-
Declaration, is also subject to the following additional assumptions:
(1) compliance with such orders as the Commission may issue from
time to time upon the Application-Declaration, as amended; and
(2) the accuracy of information furnished to us (a) as to the
outstanding securities of EEIC's associate companies, EUA, Eastern
Edison, Cogenex, EUA Service, Montaup, Newport, EUA Energy Investment,
EUA Ocean State, OSP I, OSP II, OSP Finance, EUA TransCapacity and
NEM, and (b) that there is no provision or condition in any note or
other document in connection with outstanding short-term notes of any
of EEIC and its aforementioned associate companies limiting the
Proposed Transactions.
This opinion relates only to Federal law and the laws of The
Commonwealth of Massachusetts.
We consent to the use of this opinion in connection with the
Application-Declaration filed with the Commission.
Very truly yours,
/s/ McDermott, Will & Emery
McDermott, Will & Emery
b-2
<TABLE>
Quality Power Systems Inc.
Balance Sheet
December 31, 1993
<CAPTION>
Assets
<S> <C>
Current Assets
1020 Cash Checking 4,900.79
1025 Cash Savings 20.27
1050 Fidelity Investment 2,273.00
1125 Subscription Recvble 10,000.00
1150 Due from L-CAD 14,000.00
1200 Inventory Components 150,000.00
_____________
Total Current Assets $ 181,194.06
Property & Equipment
1410 Software 111.40
1420 Equipment 1,007.00
________
Total Property & Equipment 1,118.40
Less: Accumulated Depr ______________
Net Property & Equipment $ 1,118.40
Other Assets
1610 Organization 200.00
1620 HA 6000 License 375,000.00
___________
Total Other Assets $ 375,200.00
____________
Total Assets $ 557,512.46
</TABLE>
<TABLE>
SEE ACCOUNTANT'S COMPILATION REPORT
Quality Power Systems Inc.
Balance Sheet
December 31, 1993
Liabilities & Stockholders Equity
<CAPTION>
<S> <C>
Current Liabilities
2210 Due to E. Rosa 7,700.00
2220 Due to DWC 7,600.00
__________
Total Current Liabilities $ 15,300.00
Long Term Debt
2520 Note Pay-Digital 250,000.00
2530 Loan Pay-Digital 150,000.00
___________
Total Long Term Debt $400,000.00
_____________
Total Liabilities $ 415,300.00
Stockholders Equity
2710 Capital 50,000.00
2740 Note Pay NEES 250,000.00
Net Income (157,787.54)
____________
Total Stockholders Equity $ 142,212.46
_____________
Total Liabilities &
Stockholders Equity $ 557,512.46
</TABLE>
<TABLE>
SEE ACCOUNTANT'S COMPILATION REPORT
b-3
Quality Power Systems Inc.
Income Statement
December 31, 1993
<CAPTION>
Amount Percent
<S> <C> <C>
______ _______
Sales
Total Sales ______ _______
Cost of Sales
4070 Shop Expenses $239.20 ________
_______
Total Cost of Sales $239.20
_______
Gross Profit $ (239.20)
Selling Expenses
5570 Meals & Entertainment 35.60
_____
Total Selling Expenses 35.60
Gen & Admin Expenses
6270 Bank Charges 61.20
6600 Office Expenses 217.33
6680 Rent 200.00
6850 Utilities 22.34
6858 Tax Other 110.00
______
Total Gen & Admin Exp 610.87
Net Operating Income $ (885.67)
Other Inc & (Expenses)
7101 Research & Development (87,800.00)
7011 R&D Contract Professional (40,028.00)
7012 R&D Misc Contract (25,500.00)
7013 R&D HA 6000 Parts ( 3,323.48)
7040 Interest Earned 20.34
7045 Dividends 2,273.00
7050 Interest Expense ( 1,972.15)
7060 Loan Expense ( 571.58)
___________
Total Other Income $ (156,901.87)
Income Before Taxes $ (157,787.54)
Net Income $ (157,787.54)
==============
</TABLE>
SEE ACCOUNTANT'S COMPILATION REPORT
CURTIS P. CHRISTIANSEN CPA
BOX 326
NORTH ANDOVER, MA 01845
Quality Power Systems, Inc.
February 3, 1994
ACCOUNTANT'S COMPILATION REPORT
FOR INTERNAL USE ONLY
I have compiled the accompanying balance sheet and the related
statement of income in accordance with Statements on Standards for
Accounting and Review Services issued by the American Institute of
Certified Public Accountants.
A compilation is limited to presenting in the form of financial
statements information that is the representation of management. I
have not audited or reviewed the accompanying financial statements
and, accordingly, do not express an opinion or any other form of
assurance on them.
Management has elected to omit sudstantially [sic] all of the
disclosures and the statement of cash flows required by generally
accepted accounting principles. If the omitted disclosures were
included in the financial statements, they might influence the user's
conclusions about the company's financial position and results of
operations. Accordingly, these financial statements are not designed
for those who are not informed about such matters.
/s/ Curtis P. Christiansen CPA
______________________________
Curtis P. Christiansen CPA
