-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GYQ63gA7+e0Y6HVwNABGXbpffHx54+ovAamABYEhKtFYFls9mS9B+L5sT/kKVoep 1cXc7Xn0rRjdX268DUN/Ig== 0000031224-94-000059.txt : 19940411 0000031224-94-000059.hdr.sgml : 19940411 ACCESSION NUMBER: 0000031224-94-000059 CONFORMED SUBMISSION TYPE: U-1/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19940408 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EASTERN UTILITIES ASSOCIATES CENTRAL INDEX KEY: 0000031224 STANDARD INDUSTRIAL CLASSIFICATION: 4911 IRS NUMBER: 041271872 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: U-1/A SEC ACT: 35 SEC FILE NUMBER: 070-08351 FILM NUMBER: 94521151 BUSINESS ADDRESS: STREET 1: ONE LIBERTY SQ STREET 2: P O BOX 2333 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173579590 U-1/A 1 EUA ENERGY INVESTMENT FORM U-1 70-8351 APP/DECL 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).) EX-99.A-1 2 ARTICLES OF ORGANIZATION 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:__________________________ EX-99.A-2 3 ARTICLES OF ORGANIZATION 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:________________________________________ EX-99.A-3 4 ARTICLE I OF OFFICES 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 EX-5.F 5 OPINION OF COUNSEL EXHIBT F 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 EX-99.B-2 6 ARTICLE I OF OFFICES b-2 Quality Power Systems Inc. Balance Sheet December 31, 1993
Assets 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
SEE ACCOUNTANT'S COMPILATION REPORT Quality Power Systems Inc. Balance Sheet December 31, 1993 Liabilities & Stockholders Equity
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
EX-99.B-3 7 ARTICLE I OF OFFICES SEE ACCOUNTANT'S COMPILATION REPORT b-3 Quality Power Systems Inc. Income Statement December 31, 1993
Amount Percent ______ _______ 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) ==============
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 -----END PRIVACY-ENHANCED MESSAGE-----