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File No. 70-8303
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
AMENDMENT NO. 2
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, is
further amended as follows:
The second and third paragraphs are 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) Such right
expires on April 1, 1994 unless extended. 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.) Since NEERI has no
direct need for the UPS, it currently intends to exercise its
right to receive QPS's convertible debentures promptly upon
receipt of said approvals.
The convertible debentures would pay quarterly interest
after June 1, 1994, at the Bank of Boston base rate plus 2% and
if not converted as hereinafter described, would have a maturity
of ten years from date of issuance. These debentures would not
have sinking fund provisions nor prepayment provisions nor
general voting rights. On or before December 31, 1995, the
$250,000 of convertible debentures may be converted by NEERI into
9.9% of the common stock of QPS (990 shares of a total of 10,000
shares). QPS's common stock has no par value. NEERI understands
that a subsidiary of Eastern Utilities Associates (EUA), a
registered holding company under the Act, is also acquiring 9.9%
of the common stock of QPS. The acquisition of common stock of
QPS by an EUA subsidiary is not covered by this filing. NEERI
would be allowed to have one member on the Board of Directors of
QPS. The Board would have six or seven members.
The fifth and sixth paragraphs are deleted and replaced with
the following:
NEERI requests authority to exercise its right to such
convertible debentures on or before July 1, 1994, and if it so
elects, to convert these debentures on or before December 31,
1995 to 9.9% of the common stock of QPS. In addition, NEERI
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requests the authority to invest up to an additional $100,000 in
QPS on or before December 31, 1995, in the form of subordinated
loans having an interest rate no lower than the Bank of Boston
base rate plus 2% and a maturity not in excess of five years.
QPS, as a start-up company, may require additional funds prior to
full commercialization of its product and NEERI wants to be in a
position to make limited additional investments in a prompt
manner. As a start-up company, QPS has limited financial
resources to meet financial emergencies.
NEERI will not be directly involved in the manufacture,
marketing or selling of the UPS. However, it may offer marketing
advise and consulting services to QPS and permit its name to be
used as part of marketing efforts.
The sixth paragraph entitled "Financing by NEES" is deleted
and replaced with the following:
Financing by NEES
The Commission previously granted authority for NEES to
provide financing to NEERI in an amount not to exceed $1 million.
(See Order dated September 4, 1992, Release 35-25621.) The
$250,000 grant made to QPS is currently carried on NEES's books
as an investment. NEES proposes to transfer this amount to
NEERI's books and NEERI would treat it as an investment in QPS.
To the extent that this transfer is viewed as a contribution of
capital by NEES, NEES proposes that this be authorized in
addition to the $1 million previously authorized. If NEERI
invests up to an additional $100,000 in QPS, NEERI may use funds
from NEES provided under its existing $1 million authority.
Item 3. Applicable Statutory Provisions, as amended and
restated in Amendment No. 1, is deleted and replaced with the
following:
Section 9(a), 10, 12(b), and Rule 45 are believed to be
applicable to the making of capital contributions by NEES to
NEERI.
Sections 9(a) and 10 are believed to be applicable to the
acquisition by NEERI of the convertible debentures of QPS and
common stock of QPS and to the ownership by NEERI as entering
into a new business. These Sections are also believed to be
applicable to additional $100,000 investment in QPS, if required
in the form of subordinated loans.
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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. 2 to Application/Declaration on Form U-1 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: March 15, 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.
