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File No. 70-9167
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM U-1
APPLICATION/DECLARATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
NEW ENGLAND ELECTRIC SYSTEM
(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 of applicant)
John G. Cochrane Kirk L. Ramsauer
Treasurer Associate General Counsel
25 Research Drive 25 Research Drive
Westborough, Massachusetts 01582 Westborough, Massachusetts 01582
(Names and addresses of agents for service)
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Form U-1 Application/Declaration dated January 28, 1998 (Commission's
File No. 70-9167), as previously amended, is hereby further amended as
follows:
Item 1 is hereby amended by the addition of the following:
On July 10, 1998, 267,592 shares were issued in connection with the
acquisition of substantiation on all of the assets of PAL Corporation.
As of June 30, 1998, the date of NEES' most recent Quarterly Report on
Form 10-Q, NEES' total capitalization was $3,138,717. Fifteen percent of that
number is $470,808. NEES' total capitalization on said date, adjusted to
reflect the sale of assets as set out in NEES' Current Report on Form 8-K,
dated September 1, 1998, was $2,837,508. Fifteen percent of that number is
$425,626.
As of September 16, 1998, NEES has contributed the following amounts to
its subsidiaries in connection with energy related company investments
pursuant to Rule 58:
Total current aggregated investment:
AllEnergy 80.2
Hydroserv 0.2
New England Water Heater 4.3
Nexus (software) 1.4
----
Total 86.1
Therefore, the aggregate investment by NEES and its subsidiaries in
energy related companies pursuant to Rule 58 does not exceed the greater of
(i) $50 million or (ii) 15% of the consolidated capitalization of NEES as
reported in NEES' most recent Annual Report on Form 10-K or Quarterly Report
of Form 10-Q. NEES and its affiliates will fully comply with the requirements
of Rule 58 in connection with acquisitions of energy-related companies.
Item 6(a) "Exhibits" is hereby amended by supplying the following
exhibits, filed herewith.
C-1 Registration Statement (Form S-4), including all financial
statements and exhibits thereto, incorporated herein by reference
to File No. 333-60315.
F-1 Opinion of counsel
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SIGNATURE
Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned company has duly caused this Post-Effective Amendment
No. 2 to Form U-1 Application/Declaration (Commission's File No. 70-9167) to
be signed on its behalf, as indicated, by the undersigned officer thereunto
duly authorized by such company.
New England Electric System
s/John G. Cochrane
By
John G. Cochrane
Treasurer
Date: October 26, 1998
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 of Massachusetts. 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 assumes or shall be held to any liability therefor.
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
C-1 Registration Statement (Form S-4), Incorporated
including all financial statements by Reference
and exhibits thereto
F-1 Opinion of counsel Filed herewith
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EXHIBIT F-1
25 RESEARCH DRIVE, WESTBOROUGH, MASSACHUSETTS 01582
=====================================================
October 26, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: Common Shares of New England Electric System
File No. 70-9167
Dear Commissioners:
The undersigned, counsel for New England Electric System (the Company),
has been of counsel for the Company in connection with its proposed issue and
sale of up to 2,000,000 additional common shares in connection with the
acquisition of assets, businesses, or securities of energy-related companies
as defined in Rule 58(b) of the Public Utility Holding Company Act of 1935
(the Act). A portion of the additional common shares have been issued prior
to the date hereof under the authority granted by Order dated march 25, 1998,
Release No. 35-26849. As such counsel, I have reviewed the various documents
and proceedings relating to said issue, including, without limiting the
foregoing, the prospectuses and registration statements and the corporate and
regulatory authority with reference to said issue. Accordingly, I am familiar
with the proceedings taken in connection with such issue. I am not opining
herein as to the laws applicable to, or the terms of, any particular
acquisition.
The proposed issuances of shares are subject to the following:
(i) compliance with the applicable provision of the Act and the
Securities Act of 1933, and the rules and regulations under each;
(ii) consummation of individual agreements for the acquisition of
assets, businesses, or securities of energy-related companies,
including any necessary regulatory approvals thereunder; and
(iii) due issue of the shares and receipt of full consideration
therefor.
Subject to the foregoing, it is my opinion, in the event the proposed
issuances of shares are consummated in accordance with the statement on Form
U-1 as amended, that:
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1. All state laws applicable to the issuance of the shares will have
been complied with.
2. The Company is a duly created and existing voluntary association
in The Commonwealth of Massachusetts. The authorized shares of the Company
consist of 150,000,000 shares of the par value of $1 each. The Board of
Directors has authorized the proposed issue and sale of up to 2,000,000 common
shares, as permitted by the Agreement and Declaration of Trust dated January
2, 1926, as amended (the Agreement). The common shares to be issued in
connection with these transactions will be treasury shares which are currently
held or may be acquired by the Company.
3. When duly issued and paid for, the additional common shares will
be validly issued, full-paid and nonassessable, and the holders thereof will
be entitled to the rights and privileges appertaining thereto set forth in the
Agreement. Article 9 of the Agreement provides in substance that no
shareholder, director, officer, or agent shall be held to any liability in
contract, tort, or otherwise; that every person shall look only to the trust
estate for payment or damages or otherwise, and that in every written
agreement or obligation reference shall be made to the Agreement and to the
substance of such part of the above provisions of Article 9 as are applicable,
and that neither the Board of Directors nor the Trustee nor any officer,
agent, or representative shall have any power or authority to enter into any
agreement or obligation on behalf of the Company except in accordance with the
provisions of said Article 9. Article 10 of the Agreement provides that no
trustee, director, officer, or agent of the Company shall be entitled to look
to the shareholders personally for indemnity against liability incurred by
them or to call upon the shareholders for the payment of any assessment except
only in the case of shares which by their express terms are issued part-paid
and assessable and then only as therein provided. In Article 27 of the
Agreement it is further provided that all shares issued and to be issued shall
be full-paid and nonassessable except to the extent otherwise specifically
provided in the certificates representing such shares. The Agreement
expressly declares in Article 39 that a trust and not a partnership is deemed
to be created and that the shareholders shall be deemed to hold only the
relationship of cestuis que trustent to the Trustee. Despite these
provisions, the shareholders of a voluntary association such as the Company
might, with respect to the liability of shareholders under Massachusetts law,
be treated in legal contemplation as partners and as such under some
circumstances might be held personally liable for certain obligations or
liabilities of the Company. I consider the possibility of any such liability
remote because, in my opinion, shareholders are protected under the laws of
Massachusetts from personal liability on contract obligations arising from
instruments containing the substance of such of said provisions of Article 9
as are applicable (it being the practice of the Company to insert such in all
contract obligations, including all debt securities), and because the Company
is a holding company so that the possibility of substantial liabilities
arising from torts or statutory liabilities or penalties, other than tax
liabilities, is not as great as in the case of companies operating physical
properties.
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Notwithstanding the fact that the Company is a holding company, in suits
and claims against its subsidiaries, including environmental claims, courts
and agencies might disregard corporate formalities and assign liability to the
Company despite traditional principles of corporate law. Further, I
understand that unincorporated voluntary associations have been treated as
general partnerships under the laws of a few states. Even so, for the reasons
cited above and because of the substantial capitalization of the Company and
its subsidiaries, I consider the possibility of personal liability of the
shareholders of the Company to be remote.
4. Consummation of the proposed issue of shares will not violate the
legal rights of the holders of any securities issued by the Company or any
associate company thereof.
I hereby give my consent to the use of this opinion as part of the
Application/Declaration on Form U-1 filed by the Company with your Commission.
Very truly yours,
s/Robert King Wulff
Robert King Wulff
Corporation Counsel
