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File No. 70-8303
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 3
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NEW ENGLAND ELECTRIC SYSTEM
and
NEW ENGLAND ELECTRIC RESOURCES, INC.
(Name of company filing this statement)
25 Research Drive, Westborough, Massachusetts 01582
(Address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company parent in system)
Michael E. Jesanis Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
(Names and addresses of agents for service)
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Item 1, as amended and restated by Amendment No. 1, and
further amended by Amendment No. 2, is further amended as
follows:
The second paragraph as set forth in Amendment No. 2 is
deleted and replaced with the following:
QPS intends to develop, manufacture and market UPS and is
committed to locating its manufacturing facility for UPS in
either Massachusetts or New Hampshire within the retail electric
service territory of NEES's retail electric company subsidiaries.
In mid 1993, NEES made a research and development grant of
$250,000 to QPS to assist in the development of UPS. In return
for this grant and to encourage our continued support, QPS and
NEPSCO entered into an Agreement, under which QPS gave NEPSCO the
right to receive at no cost $250,000 of QPS's convertible
debentures. (See Exhibit B-1) NEPSCO has assigned this right to
NEERI effective January 1, 1994. (See Exhibit B-1A) Before
exercising its rights to receive these convertible debentures, it
was made clear to QPS that appropriate approvals under the Act
were required. If NEERI receives said approvals and exercises
its right to receive QPS's convertible debentures, all rights to
receive a product grant of two UPS per year for the first four
years of commercial production would terminate. (See Section 3
of the Agreement as amended, Exhibits B-1 and B-1A.) NEERI
currently intends to exercise its right to receive QPS's
convertible debentures promptly upon receipt of said approvals.
The following paragraph is added after the fourth paragraph
as set forth in Amendment No. 1:
NEERI believes that its investment in QPS meets the criteria
set forth by the Commission for ownership of non-utility
functionally related business (see CSW Credit Inc. HCAR No. 25995
and Jersey Central Power & Light HCAR No. 24348) as follows:
NEERI's investment will evolve from the overall electric utility
business of the NEES system; NEERI's investment in QPS will not
be significant in relation to the NEES system's total financial
resources; and the successful development, manufacture and
marketing of UPS has the potential to benefit electric customers
of NEERI's affiliates as well as be a beneficial investment for
NEERI. As described above, the UPS should be a valuable tool in
meeting the power quality needs of electric consumers including
those of NEERI's affiliates.
The paragraph under "Long-Term Plans with QPS" as set forth
in Amendment No. 1 is deleted and replaced with the following:
NEERI's interests in holding an equity position in QPS are
limited to promoting the development of the UPS and assisting a
local company in this development. The UPS will have a limited
product life and NEERI recognizes that at an appropriate time in
the future it may no longer be consistent with its long term
interests to continue its equity position. Unless otherwise
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authorized by the Commission, NEERI will divest its entire
ownership interest in QPS on or before January 1, 2005, and its
representation on the Board of Directors of QPS will cease at the
time of divestment.
Item 6, is further amended by supplying the following
exhibits:
A-1: Form of Convertible Debenture
A-2: Form of Stock Certificate
F: Opinion of Counsel
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this Amendment No. 3 to Application/Declaration on Form U-1
(Commission's File No. 70-8303) to be signed on their behalf, as
indicated by the undersigned officers thereunto duly authorized
by such companies.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
Michael E. Jesanis, Treasurer
NEW ENGLAND ELECTRIC RESOURCES, INC.
s/John G. Cochrane
John G. Cochrane, Treasurer
Dated: May 13, 1994
The name "New England Electric System" means the trustee or
trustees for the time being (as trustee or trustees but not
personally) under an agreement and declaration of trust dated
January 2, 1926, as amended, which is hereby referred to, and a
copy of which as amended has been filed with the Secretary of the
Commonwealth. Any agreement, obligation or liability made,
entered into or incurred by or on behalf of New England Electric
System binds only its trust estate, and no shareholder, director,
trustee, officer or agent thereof assumed or shall be held to any
liability therefore.
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EXHIBIT INDEX
Exhibit No. Description Page
- ----------- ----------- ----
A-1 Form of Convertible Debenture Filed herewith
A-2 Form of Stock Certificate Filed under
cover of
Form SE
F Opinion of Counsel Filed herewith
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Exhibit A-1
DRAFT
CONVERTIBLE DEBENTURE NOTE
U.S. $250,000.00 Dated: June 1, 1994
FOR VALUE RECEIVED, the undersigned, Quality Power Systems,
Inc. (QPS), hereby promises to pay to the order of New England
Electric Resources, Inc. (NEERI) the amount of two hundred fifty
thousand dollars ($250,000.00) plus interest on this amount as
described below. Such payment is to be made in lawful money of
the United States of America in same day funds.
QPS shall pay in full to NEERI said principal amount plus
interest accrued but not yet paid on June 1, 2004 unless NEERI
has elected to convert this Note into common stock of QPS as
described below.
QPS shall pay interest on the outstanding principal amount of
this Note plus previously unpaid interest quarterly to NEERI
after June 1, 1994, at the Bank of Boston base rate plus 2%. The
first interest payment is due on September 1, 1994.
On or before December 31, 1995, NEERI may convert this Note
into nine hundred ninety shares of the common stock of QPS having
general voting rights. At the time of this conversion, QPS will
be relieved of its obligation to pay the principal amount of this
note but will continue to be obligated to pay any unpaid
interest. Upon payment of any such unpaid interest, this Note
will be fully paid and canceled.
This Note shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts.
Quality Power Systems, Inc.
By:
[This Note is a draft that may be changed as a result of
further discussions with QPS. A copy of the actual Note will
be filed post-effectively with the Commission.]
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Exhibit F
25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582
----------------------------------------------------
May 13, 1994
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street
Washington, D.C. 20549
Re: File No. 70-8303
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Ladies and Gentlemen:
New England Electric Resources, Inc. (NEERI), is a wholly
owned, non-utility subsidiary of New England Electric System
(NEES), a Massachusetts voluntary association. NEES is a
registered holding company under the Public Utility Holding
Company Act of 1935 (the Act).
NEERI requests authority to acquire $250,000.00 principal
amount of convertible debentures of Quality Power Systems, Inc.
(QPS), to have the right to convert said convertible debentures
into 9.9% of the common stock of QPS, and to lend up to an
additional $100,000 to QPS. NEES requests approval to transfer
to NEERI the $250,000 grant made by it to QPS. NEERI will treat
this transfer as an investment in QPS.
No approvals other than the approval of the Commission under
the Act are required for the transactions contemplated by the
statement on Form U-1, as amended, in the above captioned file.
Subject to the foregoing, it is my opinion that in the event
the proposed transactions are consummated in accordance with the
statement on Form U-1, as amended:
(a) All state laws applicable thereto will have been complied
with;
(b) NEERI and NEES will be validly organized and duly
existing; the convertible debentures and common stock of
QPS acquired by NEERI will be validly issued, full paid,
and nonassessable; and NEERI will be entitled to the
rights and privileges appertaining thereto.
(c) NEERI will legally acquire said convertible debentures
and common stock of QPS.
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(d) Consummation of the proposed transactions will not
violate the legal rights of the holders of any securities
issued by NEERI, NEES, or any associate company thereof.
I hereby consent to the use of this opinion as part of the
statement on Form U-1, as amended, filed by NEES and NEERI in
connection with the proposed transactions.
Very truly yours,
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Assistant General Counsel
