63110 Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 / Notices

1Cogenex announced on September 28, 1995, that

it was discontinuing one of its principal business

segments involving small self-generation projects.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29920 Filed 12–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 35–26423]

Filing Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

December 1, 1995.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

December 26, 1995, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with the

request. Any request for hearing shall

identify specifically the issues of fact or

law that are disputed. A person who so

requests will be notified of any hearing,

if ordered, and will receive a copy of

any notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

Eastern Utilities Associates, et al. (70–

7287)

Eastern Utilities Associates (‘‘EUA’’),

a registered holding, and its wholly

owned nonutility subsidiary company,

EUA Cogenex, Corp. (‘‘Cogenex’’), both

at P.O. 2333, Boston, Massachusetts

02107, have filed a post-effective

amendment under sections 9(a) and 10

of the Act to their applicationdeclaration previously filed under

sections 6(a), 7, 9(a), 10, 12(c), 12(f), and

13(b) of the Act and rules 42, 45, 87, 90,

and 91 thereunder.

By prior order in this proceeding

dated December 19, 1986, the

Commission authorized EUA to acquire

Cogenex (HCAR Release No. 24273).

Subsequent orders of the Commission

authorized Cogenex to engage in

additional activities and removed

restrictions on the amount of revenues

Cogenex could receive from customers

outside New England (see, e.g., HCAR

Release Nos. 26232 (Feb. 15, 1995),

26135 (Sept. 30, 1994), 25982 (Jan. 28,

1994), and 25636 (Sept. 17, 1992)).1

Cogenex designs, finances, installs

and maintains energy conservation

systems. Cogenex provides energy

management services (‘‘EMS’’) directly

to institutional commercial, industrial

and governmental customers to reduce

their energy costs and consumption.

Cogenex employs energy efficiency

technology and equipment in its EMS

program through building automation,

lighting modifications, boiler

replacement, and other heat recovery

methods to reduce electrical energy and

fuel consumption and related energy

costs of its customers. Cogenex earns

fees for these services primarily through

shared savings agreements under which

Cogenex is paid a portion of the

customers’ energy savings.

Cogenex also participates in demand

side management (‘‘DSM’’) programs

sponsored by electric utilities as a

means to decrease base load and peak

demand on the utilities’ systems. In

DSM programs, Cogenex provides EMS

services to the utility’s customers to

reduce their energy demands. The

utility pays Cogenex based on the

reduction in demand, and Cogenex may

also receive a portion of the customer’s

savings.

Cogenex now proposes to provide

services relating to the furnishing and

conservation of water to the types of

customers to whom it furnishes EMS

services. Cogenex proposes to provide

such water services packaged with its

EMS services or on a stand alone basis.

American Electric Power Company,

Inc., et al. (70–8307)

American Electric Power Company,

Inc. (‘‘AEP’’), a registered holding

company, and its nonutility subsidiary

company, AEP Energy Services, Inc.

(‘‘AEPES’’) (collectively, ‘‘Applicants’’),

both at 1 Riverside Plaza, Columbus,

Ohio 43215, have filed a post-effective

amendment to their applicationdeclaration filed under sections 6(a), 7,

9(a), 10, 12(b), and 13(b) of the Act and

rules 45, 54, 87, 90, and 91 thereunder.

AEPES is engaged in the business of

selling management, technical and

training expertise both to certain AEP

affiliates and to non-affiliates. AEPES

requests authorization to make financial

and/or technical contributions to assist

research and development efforts of

non-affiliated entities. As a result of

such contributions, AEPES may receive

a license to use and/or a right to

sublicense intellectual property

developed by those entities (‘‘NonAffiliate Intellectual Property’’). If

AEPES became entitled to receive an

equity interest in a non-affiliated entity

to which such contributions were made,

AEPES would sell the interest to an

affiliate, AEP Investments, Inc., at its

fair market value, subject to the receipt

of any required regulatory approvals.

AEPES is also engaged in, among

other things, the business of selling or

otherwise providing access to

intellectual property developed by AEP

affiliates for their own use. Currently,

AEPES pays to any such affiliate in

perpetuity a certain portion of the

revenues realized from any disposition

of such intellectual property.

Specifically, AEPES pays the affiliate (a)

70% of the revenues from the

intellectual property until the affiliate

recovers its direct costs of making the

property available and (b) 20% of such

revenues thereafter. Additionally,

AEPES makes intellectual property it

develops available to AEP affiliates

without charge, except for actual

expenses incurred by AEPES in

connection with making such

intellectual property so available.

AEP and AEPES propose that, if

AEPES disposes of intellectual property

developed by an affiliate for its own use

and which such affiliate retains a right

to use, AEPES would pay that affiliate

an amount equal to the costs the affiliate

directly incurred in making the property

available to AEPES. For dispositions by

AEPES of intellectual property

developed by an AEP affiliate for its

own use, but which that affiliate no

longer would be able to use, AEPES

would continue to reimburse that

affiliate an amount equal to the

affiliate’s development costs. If an AEP

affiliate developed intellectual property

not for its own use but for use by

AEPES, AEPES would also pay that

affiliate an amount equal to the

affiliate’s development costs. AEPES

additionally proposes that any

disposition on Non-Affiliate Intellectual

Property to an AEP affiliate would be at

cost. Any intellectual property

developed by AEPES would be made

available to AEP affiliates at the direct

cost of making such property available.

Also, AEPES requests authority to

provide or broker financing to

customers in connection with and to

support the sale of goods or provision of
Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 / Notices 63111

2Relay developed a protective relay testing

software package, known as Ultratest, which is the

first automated relay testing software capable of

communicating with and controlling the testing

instruments made by most major relay

manufacturers.

3Relay had begun the definition phase of a

substation automation project that will combine offthe-shelf hardware with specially developed

software to provide improved substation

communications, maintenance support and testing.

4Relay established a training facility named

Power Industry Learning Center (‘‘PILC’’). Located

in Phoenix, Arizona, PILC will provide training to

electric utility personnel relating to automated

systems for relays, substations and other electric

utility facilities as well as certain basic courses in

electric generating and distribution systems. At

present, all of the formal training programs

developed by PILC relate to products developed by

the RIKA companies.

5PSOK notes that PSOK or a device manufacturer

could develop the Software independently, but

states that development by RIKA assures a more

widely acceptable product. It suggests that software

developed by PSOK would only be suitable for the

devices currently in use in the CSW system and that

a device manufacturer would have difficulty getting

the proprietary protocols of a competitor.

6The Member Agreement would also

memorialize the respective rights and obligations of

PSOK and the RIKA Companies regarding the

development of the Software and the management

of the businesses in which the RIKA Companies are

engaged or intend to engage. Among other things,

it would assure PSOK of the right to purchase a

non-exclusive license to use the Software under the

same terms and conditions as the license RIKA will

offer to non-affiliated utilities. Such license would

be a perpetual, unrestricted license to use and

modify the Software at a fee no greater than the fee

RIKA will pay Automated for the right to market

the Software to non-affiliated utilities, and would

result in the termination of PSOK’s right to license

the Software to third parties.

7Equity in a limited liability company is

represented by units of membership rather than

shares of company stock, and holders of the units

are referred to as members rather than shareholders.

An Oklahoma limited liability company is

controlled by managers rather than by a board of

directors.

8After payment in full of the Promissory Note,

PSOK’s membership interest in Automated will be

reduced from 71% to 48%.

9Management of each of the RIKA Companies

would be vested in two managers, who, in the case

of the RIKA Companies other than RIKA, would be

elected by majority vote of the voting rights of the

members of such RIKA Company at an annual or

special meeting called for that purpose.

services through direct loan, installment

purchase, operating or finance lease

arrangements (including sublease

arrangements) or loan guarantees.

Interest on loans and imputed interest

on lease payments will be at prevailing

market rates. The obligations will have

terms of one to thirty years and be

secured or unsecured. AEPES also may

assign obligations acquired from

customers to banks or other financial

institutions with or without recourse.

In addition, AEP is authorized

through December 31, 1995 to guarantee

debt of AEPES to third parties in an

amount not to exceed a total of

$51,000,000. AEP proposes to extend

this authority through December 31,

1998.

Public Service Company of Oklahoma

(70–8711)

Public Service Company of Oklahoma

(‘‘PSOK’’), located at 212 East 6th Street,

Tulsa, Oklahoma 74119–1212, a whollyowned public-utility subsidiary

company of Central and South West

Corporation, a registered holding

company, has filed an application under

sections 9(a) and 10 of the Act and rule

54 thereunder.

PSOK requests authorization to make

equity and debt investments totaling

$3,500,000 in four Oklahoma limited

liability companies, RIKA Management

Company, L.L.C (‘‘RIKA’’), Universal

Power Products Company, L.L.C

(‘‘Universal’’), Automated Substation

Development Company, L.L.C

(‘‘Automated’’) and RC Training, L.L.C,

(Training’’) (collectively, the ‘‘RIKA

Companies’’), engaged in the

development and commercialization of

computer automation technology for the

electric power industry.

The predecessor to the RIKA

Companies, Relay Concepts, Inc.

(‘‘Relay’’), reorganized its corporate

structure into the four limited liability

RIKA Companies referred to above on

July 17, 1995. As a consequence of this

reorganization, the RIKA Companies

will acquire Relay’s three existing lines

of business:

(1) relay testing software,2 (2)

electrical substation automation

systems,3 and (3) personnel training

services.4 The RIKA Companies will

derive substantially all of their revenues

from the development and

commercialization of software that

enhances the efficiency of substation

operation and maintenance, and from

the sale of training courses relating to all

phases of automated testing and

maintenance systems as well as on-site

training and consulting services.

Universal will be the primary marketing

and sales arm of the RIKA Companies.

Automated will be a research and

development company, with no sales or

support function, and will license

Universal to market and sell the

products it develops. Training will

develop, market and operate training

programs as a separate business. RIFA

will provide management oversight and

administrative support and control of

the RIKA Operating Companies. RIKA

will charge each of the RIKA Operating

Companies for all direct and allocated

costs plus a management fee equal to

5% of all cost billings.

On July 17, 1995, PSOK and RIKA

entered into a Software Application

Development Agreement (‘‘Development

Agreement’’) pursuant to which the

RIKA Companies will develop certain

substation automation software

applications for PSOK (‘‘Software’’).5

Under the Development Agreement,

PSOK and RIKA each have, with certain

limitations, a perpetual, non-exclusive

and unrestricted license to use, modify,

sublicense, sell or otherwise transfer the

Software. Notwithstanding its rights

under the Development Agreement,

PSOK states that it does not intend to

license the Software to non-affiliates

and is not requesting authority from this

Commission to engage in such activity.

PSOK further states that its right to

license the Software to third parties will

be terminated upon consummation of

the transactions, described below, for

which it is seeking authorization (see

footnote 5). Inconsideration for RIKA’s

services under the Development

Agreement, PSOK has agreed to pay

RIKA up to $3,050,000 to be made

available to RIKA in periodic

installments, commencing upon the

execution of the Development

Agreement and continuing through

March 31, 1996. As of October 30, 1995,

PSOK had paid RIKA $1,500,000 of this

amount.

Subject to approval of the investments

by the Commission, the Development

Agreement calls for PSOK and RIKA to

execute a Member Agreement (‘‘Member

Agreement’’) in accordance with which

the $3,050,000 payable to RIKA under

the Development Agreement to fund

development of the Software would be

converted into a $750,000 capital

contribution to Automated and a loan to

RIKA of up to $2,300,000. PSOK would

also make a $450,000 capital

contribution to Universal.6 Like the

original $3,050,000, the money for this

additional $450,000 investment would

come from internally generated funds.

In return, PSOK would receive RIKA’s

promissory note (‘‘Promissory Note’’),

50% of RIKA’s outstanding units of

membership,7 71% of Automated’s

outstanding units of membership,8 48%

of Universal’s outstanding units of

membership, and 48% of Training’s

outstanding units of membership.

Absent an event of default (‘‘Event of

Default’’) as defined in the Member

Agreement, PSOK would hold 4% of the

voting rights of each of the RIKA

Companies and have the right to

designate one of the two managers of

RIKA.9 Upon the occurrence of an Event

of Default, RIKA would hold one

hundred percent (100%) of the voting

rights of Universal, Automated and

Training, the holder of a majority of the
63112 Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 / Notices

10PSOK states that, under certain circumstances

following an Event of Default, PSOK could possibly

obtain a majority of the voting rights of RIKA and/

or be in a position to direct the management and

affairs of one or more of the RIKA Companies.

voting rights of RIKA would be entitled

to designate both managers of RIKA, and

the voting rights of RIKA would be

apportioned among the members of

RIKA so that the voting rights held by

PSOK on the one hand, and the other

RIKA members on the other hand,

would be in proportion to the amounts

of principal and interest then

outstanding under the Promissory Note

and any RIKA promissory notes held by

the other RIKA members, respectively.10

Mississippi Power Company (70–8737)

Mississippi Power Company

(‘‘Mississippi’’), 2992 West Beach,

Gulfport, Mississippi 39501, a wholly

owned electric public-utility subsidiary

company of The Southern Company, a

registered holding company, has filed

an application-declaration under

sections 6(a), 7, 9(a), 10, and 12(d) of the

Act and rules 44, 53, and 54 thereunder.

Mississippi proposes to incur

obligations, from time to time on or

before December 31, 2002, in

connection with the issuance and sale

by public instrumentalities of one or

more series of pollution control revenue

bonds (‘‘Revenue Bonds’’) in an

aggregate principal amount of up to $75

million.

The Revenue Bonds will be issued for

the financing or refinancing of the costs

of certain air and water pollution

control facilities and sewage and solid

waste disposal facilities at one or more

of Mississippi’s electric generating

plants or other facilities located in

various counties. It is proposed that

each such county or appropriate public

body or instrumentality (‘‘County’’) will

issue its Revenue Bonds to finance or

refinance the costs of the acquisitions,

construction, installation and equipping

of said facilities at the plant or other

facility located in its jurisdiction

(‘‘Project’’).

The Revenue Bonds will mature from

one to 40 years from the first day of the

month in which they are initially issued

and may, if it is deemed advisable for

purposes of the marketability of the

Revenue Bonds, be entitled to the

benefit of a mandatory redemption

sinking fund calculated to retire a

portion of the aggregate principal

amount of the Revenue Bonds prior to

maturity.

Mississippi proposes to enter into a

Loan or Installment Sale Agreement

with the County (‘‘Agreement’’)

pursuant to each issue of the Revenue

Bonds, and Mississippi may issue a

Note therefor, or the County will

undertake to purchase and sell the

related Project to Mississippi. The

proceeds from the sale of the Revenue

Bonds will be deposited with a trustee

(‘‘Trustee’’) under an indenture to be

entered into between the County and

such Trustee (‘‘Trust Indenture’’),

pursuant to which such Revenue Bonds

are to be issued and secured, and will

be applied by Mississippi to payment of

the cost of construction of the Project or

to refund outstanding pollution control

revenue obligations.

The Trust Indenture and the

Agreement may give the holders of the

Revenue Bonds the right, during such

time as the Revenue Bonds bear interest

at a fluctuating rate, to require

Mississippi to purchase the Revenue

Bonds from time-to-time, and

arrangements may be made for the

remarketing of any such Revenue Bonds

through a remarketing agent.

Mississippi also may be required to

purchase the Revenue Bonds, or the

Revenue Bonds may be subject to

mandatory redemption, at any time if

the interest thereon is determined to be

subject to federal income tax. Also in

the event of taxability, interest on the

Revenue Bonds may be effectively

converted to a higher variable or fixed

rate, and Mississippi also may be

required to indemnify the bondholders

against any other additions to interest,

penalties and additions to tax.

In order to obtain the benefit of

ratings for the Revenue Bonds

equivalent to the rating of Mississippi’s

first mortgage bonds outstanding under

the indenture dated as of September 1,

1941 between Mississippi and Bankers

Trust Company, as successor trustee, as

supplemented and amended

(‘‘Mortgage’’), Mississippi may

determine to secure its obligations

under the Note and/or Agreement by

delivering to the Trustee, to be held as

collateral, a series of its first mortgage

bonds (‘‘Collateral Bonds’’). The

aggregate principal amount of the

Collateral Bonds would be equal to

either: (1) the principal amount of the

Revenue Bonds; or (2) the sum of such

principal amount of the Revenue Bonds

plus interest payments thereon for a

specified period.

As a further alternative to, or in

conjunction with, securing its

obligations through the issuance of the

Collateral Bonds, Mississippi may: (1)

cause an irrevocable letter of credit

(‘‘Letter of Credit’’) to be delivered to

the Trustee; and/or (2) cause an

insurance company to issue a policy

(‘‘Policy’’) guaranteeing the payment of

the Revenue Bonds. In the event that

either the Letter of Credit is delivered to

the Trustee or the Policy is issued,

Mississippi may also convey to the

County a subordinated security interest

in the Project or other property of

Mississippi as further security for

Mississippi’s obligations under the

Agreement and/or the Note. However, in

the event that Mississippi is unable or

determines not to issue the Collateral

Bonds, deliver the Letter of Credit to the

Trustee or cause the Policy to be issued,

it proposes that it may guarantee the

payment of the principal of, premium,

if any, and interest on the Revenue

Bonds.

Mississippi also proposes to issue and

sell, at any time on or before December

31, 2002: (1) one or more series of its (a)

first mortgage bonds (‘‘Bonds’’), having

a maturity of more than 40 years and (b)

one or more series of preferred stock

(‘‘Preferred’’) in an aggregate of up to

$400 million in any combination

thereof.

The Bonds will be issued pursuant to

the Mortgage, as to be further

supplemented, and sold for the best

price obtainable, but for a price to

Mississippi of not less than 98% nor

more than 1013⁄4% of the principal

amount thereof, plus accrued interest (if

any), which may be an adjustable

interest rate determined on a periodic

basis, or a fixed interest rate. The Bonds

and/or the Preferred may be subject to

a mandatory or optional cash sinking

fund. Mississippi may enhance the

marketability of the Bonds by

purchasing an insurance policy to

guarantee the payment when due of the

Bonds.

Mississippi seeks authority to deviate

from the provisions of the Commission’s

Statement of Policy Regarding First

Mortgage Bonds and Preferred Stock

(HCAR Nos. 13105 and 13106, February

16, 1956, as amended by HCAR Nos.

16369 and 16758, May 8, 1969 and June

22, 1970, respectively) with respect to

the issuance of the Bonds and Preferred.

Indiana Michigan Power Company et

al. (70–8747)

Indiana Michigan Power Company

(‘‘I&M’’), One Summit Square, P.O. Box

60, Fort Wayne, Indiana 46801, an

electric public utility subsidiary

company of American Electric Power

Company, Inc. (‘‘AEP’’), a registered

holding company, and Blackhawk Coal

Company (‘‘Blackhawk’’), c/o American

Electric Power Service Corporation, 161

West Main Street, Lancaster, Ohio

43130, a coal-mining subsidiary of I&M,

have filed an application under sections

9(a) and 10 of the Act and rule 54

thereunder.

By order dated September 20, 1985

(HCAR No. 23834), the Commission
Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 / Notices 63113

authorized I&M and Blackhawk to enter

into transactions to implement a

settlement agreement, executed on

January 9, 1985 by AEP, its associate

companies and the staff of the Federal

Energy Regulatory Commission

(‘‘FERC’’) (‘‘Settlement Agreement’’),

concerning certain coal mining

properties located in Carbon County,

Utah, including coal reserves located

west of the Price River, together with

existing surface facilities located east of

the Price River for processing, handling

and shipping coal (‘‘Western Reserves’’).

The Settlement Agreement was

intended to dispose of all issues

remaining to be resolved in an

investigation by FERC of the coal

procurement and pricing policies of

AEP and its associate companies.

By subsequent order dated May 1,

1986 (HCAR No. 24080), the

Commission authorized Blackhawk to

transfer its coal mining operations with

respect to the Western Reserves to

Castle Gate Coal Company (‘‘Castle

Gate’’) and Meadowlark, Utah, Inc.

(‘‘Meadowlark’’), subsidiaries of AMAX,

Inc. (‘‘AMAX’’). This transfer was

accomplished by means of a set of

transactions involving leases, subleases,

conveyances and assignments with

respect to the various surface interests,

fee coal, coal preparation facilities,

federal and state leases, structures,

equipment, permits and water rights

associated with the Western Reserves.

Subsequent to May 30, 1986, Castle

Gate merged into its affiliate, Amax Coal

Company (‘‘Amax Coal’’); Meadowlark

changed its name to Amax Land

Company (‘‘Amax Land’’); and AMAX

merged into Cyprus Amax Minerals

Company (‘‘CyprusAmax’’).

Blackhawk, Amax Land and Amax

Coal now propose to amend the Lease

Transaction Agreement to provide for

the exercise by Amax Land and Amax

Coal of the purchase options for four of

the leases entered into pursuant to this

authority prior to the end of the initial

terms of the leases. The four leases will

be terminated, Amax Land and/or Amax

Coal will take title to all of the

properties and/or equipment being

leased under the four leases. In lieu of

the obligation to make the remaining

quarterly lease payments, as partial

consideration for the purchase, Amax

Land and Amax Coal will execute

promissory notes in the same amounts

and at the same dates as the remaining

lease payments under the four leases.

The notes will be guaranteed by CyprusAmax. Payment of the consideration for

the purchase of the properties will be in

the form of $5,700,000 in cash at closing

and four promissory notes, totalling

approximately $31.4 million. The

promissory notes will be secured

initially by a mortgage and security

interest in the properties transferred.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–29918 Filed 12–7–95; 8:45 am]

BILLING CODE 8010–01–M

[Rel. No. IC–21563; 811–6432]

Smith Breeden Institutional Short

Duration U.S. Government Fund;

Notice of Application

December 1, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

deregistration under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANT: Smith Breeden Institutional

Short Duration U.S. Government Fund.

RELEVANT ACT SECTION: Order requested

under section 8(f).

FILING DATES: The application was filed

on August 22, 1995 and amended on

November 2, 1995.

SUMMARY OF APPLICATION: Applicant

requests an order declaring that it has

ceased to be an investment company.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicant with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

December 26, 1995, and should be

accompanied by proof of service on

applicant, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street NW., Washington, D.C. 20549.

Applicant, 100 Europa Drive, Suite 200,

Chapel Hill, North Carolina, 27514.

FOR FURTHER INFORMATION CONTACT:

David W. Grim, Law Clerk, at (202) 942–

0571, or Robert A. Robertson, Branch

Chief, at (202) 942–0564 (Division of

Investment Management, Office of

Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch.

Applicant’s Representations

1. Applicant is a registered open-end

management investment company

organized as a business trust under the

laws of the Commonwealth of

Massachusetts. On October 8, 1991,

applicant filed a Notification of

Registration on Form N–8A pursuant to

section 8(a) of the Act and a registration

statement on Form N–1A under section

8(b) of the Act and under the Securities

Act of 1933. The registration statement

became effective on February 24, 1992,

and the initial public offering

commenced on February 25, 1992.

2. On March 1, 1995, applicant’s

Board of Trustees (the ‘‘Board’’)

unanimously determined through a

consent action that the continuation of

applicant was no longer in the best

interest of applicant or its shareholders.

The Board determined that applicant’s

shareholders would be better served by

a liquidation of applicant’s assets.

Applicant is the master fund in a

master-feeder arrangement. The masterfeeder arrangement was chosen initially

to allow flexibility in distribution. The

structure allowed applicant to be sold to

institutional investors while the Smith

Breeden Short Duration U.S.

Government Series (the ‘‘Short Series’’),

the feeder fund, was sold to retail

investors. This two-tier structure created

redundancies in expenses. As a result,

the Board concluded that the masterfeeder structure was no longer the most

economically viable alternative over the

long term. The Board consented to a

plan of liquidation whereby the assets of

applicant would be distributed in cash

or in-kind to applicant’s shareholders in

complete liquidation of applicant.

Shareholder approval of the liquidation

was not required under the terms of

applicant’s declaration of trust, and thus

no shareholder authorization was

obtained in connection with the

liquidation. Applicant did notify

shareholders of the plan of liquidation

in the form of a letter signed by a

majority of the Board and sent to the

shareholders March 15, 1995.

3. On March 31, 1995, immediately

prior to the liquidation, applicant had a

total of 22,190,030 shares of beneficial

interest outstanding. At such time,

applicant’s net asset value was

$221,304,914.56 in the aggregate and

$9.97 per share.

4. On March 31, 1995, applicant

liquidated all of its assets. Applicant

transferred cash in the amount of

$2,905,338.41 to its minority

shareholders, who held 291,315.48

shares immediately prior to the