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File No. 70-8785
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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.
25 Research Drive
Westborough, Massachusetts 01582
(Names of companies filing this statement
and address of principal executive offices)
NEW ENGLAND ELECTRIC SYSTEM
(Name of top registered holding company in parent system)
John G. Cochrane Robert King Wulff
Treasurer Corporation Counsel
25 Research Drive 25 Research Drive
Westborough, MA 01582 Westborough, MA 01582
(Names and Addresses of agents for service)
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PAGE 2
A. Item 6(a) is amended by deleting Exhibit B, "Agreement with MTC", and
replacing it with the following:
------------------------------------------
*B-1 Series E Preferred Stock and Warrant Purchase
Agreement
*B-2 Research and Site Access Agreement
*To be filed with Certificate of Notification
B. Item 6(a) is further amended by supplying the following exhibit:
--------
F Opinion of Counsel
C. Item 6(b) is further amended by supplying the following financial
statements and by adding the following paragraph:
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*3-A Balance Sheet of MTC at September 30, 1995
*3-B Income Statement of MTC for twelve months ended
September 30, 1995
*3-C Financial Statements for MTC for fiscal years 1991,
1992, 1993 and 1994.
* Filed under cover of Form SE for confidentiality purposes
Pursuant to Section 22 and Rule 104, NEERI hereby objects to the
public disclosure of any part or parts of Financial Statements 3-A, 3-B and
3-C and requests confidential treatment therefor. The information contained
in Financial Statements 3-A, 3-B, and 3-C is commercially and financially
sensitive and the public disclosure of any information contained therein has
the potential to harm the development of commercial prospects and for projects
involving MTC. Since the contents of these financial statements are of a
proprietary nature, public disclosure of such information is not necessary or
appropriate in the public interest or for the protection of consumers or
investors.
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PAGE 3
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 Commission's File No. 70-8785) to be
signed on their behalf by the undersigned officers thereunto duly authorized
by such companies.
NEW ENGLAND ELECTRIC SYSTEM
s/Michael E. Jesanis
By
Michael E. Jesanis
Treasurer
NEW ENGLAND ELECTRIC RESOURCES, INC.
s/John G. Cochrane
By _____________________________
John G. Cochrane
Treasurer
Dated: June 27, 1996
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 AND FINANCIAL STATEMENT INDEX
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
B-1 Series E Preferred Stock and To be filed
Warrant Purchase Agreement with
Certificate of
Notification
B-2 Research and Site Access To be filed
Agreement with Certificate
of
Notification
F Opinion of Counsel Filed herewith
G Financial Data Schedules Previously filed
H Proposed Form of Notice Previously filed
FINANCIAL
STATEMENT NO.
- -------------
1-A Balance Sheet of NEERI at Previously
September 30, 1995, Actual filed
and Pro Forma
1-B Statement of Income and Retained Previously
Deficit for NEERI for twelve filed
months ended September 30, 1995,
Actual and Pro Forma
2-A Consolidated Balance Sheet Previously
of NEES at September 30, 1995, filed
Actual and Pro Forma
2-B Statement of Consolidated Income Previously
and Retained Earnings for NEES filed
for twelve months ended September
30, 1995, Actual and Pro Forma
3-A Balance Sheet of MTC at Filed
September 30, 1995 under cover of
Form SE for
confidentiality
purposes
3-B Income Statement of MTC for Filed
twelve months ended September under cover of
30, 1995 Form SE for
confidentiality
purposes
3-C Financial Statements for MTC for Filed
fiscal years 1991, 1992, 1993 under cover of
and 1994 Form SE for
confidentiality
purposes
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Exhibit F
25 Research Drive, Westborough, Massachusetts 01582
===================================================
June 27, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: File No. 70-87875
Dear Commissioners:
New England Electric System (NEES) and New England Electric Resources,
Inc. (NEERI) filed a Statement on Form U-1 with your Commission dated January
29, 1996 and an Amendment No. 1 thereto dated February 26, 1996 (the
Statement), requesting authorization for NEERI to make an equity investment of
$500,000 in Monitoring Technology Corporation (MTC), the developer of a
vibration monitoring technology for the risk management and performance
monitoring of power turbines. In return for NEERI's investment, MTC will (1)
issue shares of preferred stock and warrants to NEERI; (2) waive the
participation fee, currently estimated at $200,000, for NEERI's power company
affiliate, New England Power (NEP), to participate as a testing site for MTC's
technology; and (3) offer NEP significant discounts on certain future services
from MTC. The Statement also requests authorization for NEERI to invest up to
an additional $500,000 in MTC, in the form of preferred stock, common stock,
warrants, or debt which may be convertible into equity.
It is my opinion that NEES, a voluntary association duly created in the
Commonwealth of Massachusetts under an Agreement and Declaration of Trust
dated as of January 2, 1926, as amended, and NEERI, a Massachusetts
corporation, have all approvals necessary for the transactions contemplated in
the Statement. No approval of any state or federal commission is necessary to
take these actions other than the Securities and Exchange Commission.
Based upon the foregoing and subject to appropriate action by the
Securities and Exchange Commission under the Act, it is my opinion that, in
the event the proposed transactions are consummated in accordance with the
Statement:
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Securities and Exchange Commission
June 27, 1996
Page Two
(a) All state laws applicable to the proposed transactions will have been
complied with;
(b) NEERI and NEES will be validly organized and duly existing; the
shares of MTC acquired by NEERI will be validly issued, fully paid,
and nonassessable and NEERI will be entitled to the rights and
privileges appertaining thereto;
(c) NEERI will legally acquire said shares of MTC; and
(d) The consummation of the proposed transactions will not violate the
legal rights of any holder of any securities issued by NEERI, NEES or
any associate company thereof.
I hereby consent to the use of this opinion in connection with the
statement on Form U-1, as amended, filed with the Securities and Exchange
Commission with reference to the proposed transactions.
Very truly yours,
s/Kirk L. Ramsauer
Kirk L. Ramsauer
Associate General Counsel
