14048 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

correct price by reference to an

independently published list of closing

sales prices for the date of the

transaction, the Sponsor will ensure that

the price of units of the New Series, and

distributions to holders of the Rollover

Series with regard to redemption of

their units or termination of the

Rollover Series, accurately reflect the

corrected price. To the extent that the

Sponsor disagrees with the trustee’s

corrected price, the Sponsor and the

trustee will jointly determine the correct

sales price by reference to a mutually

agreeable, independently published list

of closing sales prices for the date of the

transaction.

Applicants’ Legal Analysis

1. Section 17(a) of the Act makes it

unlawful for an affiliated person of a

registered investment company to sell

securities to, or purchase securities

from, the company. Investment

companies under common control may

be considered affiliates of one another.

Each Series will have an identical or

common Sponsor, Nike. Since the

Sponsor of each Series may be

considered to control each Series, it is

likely that each Series would be

considered an affiliate of the others.

2. Section 17(b) provides that the SEC

shall exempt a proposed transaction

from section 17(a) if evidence

establishes that: (a) the terms of the

proposed transaction are reasonable and

fair and do not involve overreaching; (b)

the proposed transaction is consistent

with the policies of the registered

investment company involved; and (c)

the proposed transaction is consistent

with the general provisions of the Act.

Under section 6(c), the SEC may exempt

classes of transactions if, and to the

extent that, such exemption is necessary

or appropriate in the public interest,

and consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the Act. Applicants believe that the

proposed transactions satisfy the

requirements of sections 6(c) and 17(b).

3. Rule 17a–7 under the Act permits

registered investment companies that

might be deemed affiliates solely by

reason of common investment advisers,

directors, and/or officers, to purchase

securities from, or sell securities, one

another at an independently determined

price, provided certain conditions are

met. Paragraph (e) of the rule requires

an investment company’s board of

directors to adopt and monitor the

procedures for these transactions to

assure compliance with the rule. A unit

investment trust does not have a board

of directors and, therefore, may not rely

on the rule. Applicants represent that

they will comply with all of the

provisions of rule 17a–7, other than

paragraph (e).

4. Applicants represent that purchases

and sales between Series will be

consistent with the policy of each

Series, as only securities that otherwise

would be brought and sold on the open

market pursuant to the policy of each

Series will be involved in the proposed

transactions. Applicants further believe

that the current practice of buying and

selling on the open market leads to

unnecessary brokerage fees and is

therefore contrary to the general

purposes of the Act.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. Each sale of Equity Securities by a

Rollover Series to a New Series will be

affected at the closing price of the

securities sold on the applicable

Exchange on the sale date, without any

brokerage charges or other remuneration

except customary transfer fees, if any.

2. The nature and conditions of such

transactions will be fully disclosed to

investors in the appropriate prospectus

of each future Rollover Series and New

Series.

3. The trustee of each Rollover Series

and New Series will (a) review the

procedures discussed in the application

relating to the sale of securities from a

Rollover Series to a New Series and (b)

make such changes to the procedures as

the trustee deems necessary that are

reasonably designed to comply with

paragraphs (a) through (d) of rule 17a–

7.

4. A written copy of these procedures

and a written record of each transaction

pursuant to this order will be

maintained as provided in rule 17a–7(f).

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6357 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

[Release No. IC–20949; 812–9442]

ML Venture Partners II, L.P. et al.;

Notice of Application

March 9, 1995.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’).

ACTION: Notice of application for an

order under the Investment Company

Act of 1940 (the ‘‘Act’’).

APPLICANTS: ML Venture Partners II, L.P.

(‘‘MLCP II’’), Merrill Lynch, Pierce,

Fenner & Smith Incorporated (‘‘Merrill

Lynch’’), and Donaldson, Lufkin &

Jenrette Securities Corporation (‘‘DLJ’’).

RELEVANT ACT SECTIONS: Order requested

under section 57(c) from section

57(a)(2).

SUMMARY OF APPLICATION: Applicants

request an order relating to the sale of

shares of common stock of Corporate

Express, Inc. by MLVP II in an

underwriting in which Merrill Lynch

and/or DLJ are members of the

underwriting syndicate.

FILING DATE: The application was filed

on January 20, 1995. Applicants have

agreed to file an amendment during the

notice period, the substance of which is

incorporated herein.

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 applicants with a

copy of the request, personally or by

mail. Hearing requests should be

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

April 3, 1995, and should be

accompanied by proof of service on the

applicants, 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 reasons for

the request, and the issues contested.

Persons who wish to be notified of a

hearing may request such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street NW., Washington, DC 20549.

MLCP II and Merrill Lynch, North

Tower, World Financial Center, New

York, New York 10281.

FOR FURTHER INFORMATION CONTACT: Fran

Pollack-Matz, Senior Attorney, (202)

942–0570, or Robert A. Robertson,

Branch Chief, (202) 942–0560 (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 from the SEC’s

Public Reference Branch.

Applicants’ Representations

1. MLVP II, a Delaware limited

partnership, is a business development

company under the Act. The investment

objective of MLVP II is to seek long-term

capital appreciation by making venture

capital investments. MLVP II has five

general partners, consisting of four

individuals (the ‘‘MLVP II Individual

General Partners’’) and one managing

general partner, MLVP II Co. L.P. (the
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14049

1Applicants do not believe that the proposed

transactions would constitute joint transactions

under section 57(a)(4) and rule 17d–1 and therefore

have not requested that the order include relief

under that section and rule. Applicants recognize

that the Commission expresses no opinion on this

issue.

‘‘MLVP II Managing General Partner’’).

The MLVP II Individual General

Partners include three MLVP II

Independent General Partners (defined

to be individuals who are not

‘‘interested persons’’ of MLVP II) and

one general partner who is an

individual and who is an affiliated

person of the MLVP II Managing

General Partner. The MLVP II Managing

General Partner, is a limited partnership

controlled by its general partner, Merrill

Lynch Venture Capital Inc. (the

‘‘Management Company’’). The

Management Company, an indirect

subsidiary of Merrill Lynch & Co., Inc.

(‘‘ML & Co.’’), performs, or arranges for

the performance of, the management

and administrative services necessary

for the operation of MLVP II. On May

23, 1991, MLVP II, the MLVP II

Managing General Partner, and the

Management Company retained DLJ

Capital Management Corporation (the

‘‘Sub-Manager’’), an indirect whollyowned subsidiary of Donaldson, Lufkin

& Jenrette, Inc., to provide management

services in connection with the venture

capital investments of MLVP II pursuant

to a Sub-Management Agreement (the

‘‘Sub-Management Agreement’’). Under

the Sub-Management Agreement, the

Sub-Manager is primarily responsible

for the venture capital investments of

MLVP II. The agreement provides that

the Sub-Manager shall, subject to the

overall supervision of the MLVP II

Individual General Partner, ‘‘make all

decisions regarding Venture Capital

Investments and, among other things,

find evaluate, structure, monitor and

liquidate such investments.’’

2. Merrill Lynch, a Delaware

corporation, is the principal subsidiary

of ML & Co. ML & Co., a Delaware

corporation, is a diversified financial

services holding company which,

through its subsidiaries, provides

investment and financing, insurance,

real estate, and related services.

3. DLJ, a Delaware corporation, is a

wholly-owned subsidiary of Donaldson,

Lufkin & Jenrette, Inc., a holding

company which through its subsidiaries

engages in investment banking,

merchant banking, public finance,

trading, distribution, and research.

Donaldson, Lufkin & Jenrette, Inc. is a

subsidiary of The Equitable Companies

Incorporated.

4. Corporate Express is a distributor of

office supplies and products that it sells

directly to large corporate customers.

Corporate Express has expanded its

operations significantly over the past

three years and currently has

annualized revenues in excess of $600

million.

5. MLVP II made an initial investment

in Corporate Express in May, 1992. At

that time, MLVP II acquired 442,136

shares of common stock and 760,800

shares of Series A Convertible Preferred

Stock for $1,392,838 ($0.22 per common

share and $1.70 per Series A Preferred

Share). MLVP II acquired these shares

from the Management Company

pursuant to the terms and conditions

contained in an SEC exemptive order

dated May 11, 1992 (the ‘‘Blanket

Exemptive Order’’) permitting coinvestments between MLVP II and

certain entities managed by DLJ Capital

Corporation. In April, 1993, MLVP II

acquired 153,450 shares of Series B

Convertible Preferred Stock for $537,075

($3.50 per share) in a follow-on

investment in Corporate Express. MLVP

II’s follow-on investment in Corporate

Express was made in accordance with

the terms and conditions of the Blanket

Exemptive Order.

6. On September 23, 1994, 7,500,000

shares of common stock of Corporate

Express were offered to the public in an

underwritten offering in which DLJ

acted as a managing underwriter and

Merrill Lynch acted as an underwriter.

In connection with that offering, MLVP

II exchanged its 914,250 Class A and B

Preferred Shares for 914,250 shares of

common stock of Corporate Express. At

the same time, Corporate Express

effected a one-for-two reverse split of its

common stock. As a result of that split,

MLVP II exchanged its 1,356,386 shares

of common stock of Corporate Express

for 678,193 shares of common stock.

Since the initial public offering, the

common stock of Corporate Express has

traded in the NASDAQ National Market

System (‘‘NASDAQ’’). In addition to the

purchasers in the public offering and in

subsequent secondary market transfers,

the stockholders of Corporate Express

include certain affiliates of DLJ,

members of management and other

employees of Corporate Express, and

other institutional investors.

7. As of December 31, 1994, MLVP II

owned 696,234 shares, or approximately

2.7%, of the outstanding common stock

of Corporate Express. At such date,

affiliates of DLJ (excluding MLVP II)

owned 2,168,471 shares, or

approximately 8.4%.

8. Although MLVP II has made no

determination as to the time at which it

would like to sell its investment in

Corporate Express, MLVP II is now

considering alternative methods of

disposing of such investment.

Applicants’ Legal Analysis

1. Applicants request an order under

section 57(c) exempting from section

57(a)(2) sales of shares of common stock

of Corporate Express by MLVP II in

underwritings in which Merrill Lynch

and/or DLJ are members of the

underwriting syndicate.1

2. Section 57(a)(2) prohibits certain

affiliates of a business development

company from purchasing any security

or other property on a principal basis

from the business development

company or from any company

controlled by the business development

company, except securities of which the

seller is the issuer. Section 57(b)

provides, in part, that the affiliates

affected by section 57(a) include any

‘‘person directly or indirectly either

controlling, controlled by or under

common control with’’ the business

development company. Section 57(c)

provides that a person may file an

application with the SEC for an order

exempting a proposed transaction from

one or more provisions of section

57(a)(1) through (3), and that the SEC

shall issue an order if evidence

establishes that: (a) the terms of the

proposed transaction, including the

consideration to be paid or received, are

reasonable and fair and do not involve

overreaching of the business

development company or its

shareholders or partners on the part of

any person concerned; (b) the proposed

transaction is consistent with the policy

of the business development company

as recited in the filings made by such

company with the SEC under the

Securities Act of 1933, its registration

statement and reports filed under the

Securities Exchange Act of 1934, and its

report to shareholders or partners; and

(c) the proposed transaction is

consistent with the general purposes of

the Act.

3. Applicants believe that the

Management Company is controlled by

ML & Co. and that ML & Co. might be

deemed to exercise and controlling

influence over MLVP II and Merrill

Lynch. Likewise, applicants believe that

the Sub-Manager is controlled by

Donaldson, Lufkin & Jenrette, Inc. and

that Donaldson, Lufkin & Jenrette, Inc.

might be deemed to exercise a

controlling influence over MLVP II and

DLJ. As a result of these affiliations,

sales of securities on a principal basis

by MLVP II to Merrill Lynch and/or DLJ

are prohibited by section 57(a) and

cannot be effected unless an order is

issued under section 57(c).
14050 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

4. Applicants believe that the

statutory standards set forth above will

be satisfied with respect to the relief

requested. In this connection, applicants

believe that the structure of the

proposed transaction has been designed

to insure that the terms of the

transaction will be fair and reasonable,

will not involve overreaching on the

part of any person concerned, and will

eliminate the possibility of abuses of the

potential conflict of interest. The terms

of the proposed transaction provide that

MLVP II will only sell shares in an

underwritten offering in which Merrill

Lynch and/or DLJ are members of the

underwriting syndicate if certain

conditions are met. The Sub-Manager

for MLVP II must initially evaluate the

proposed transaction and determine to

recommend the sale of the investments.

5. The abuses that section 57(a)(2) is

designed to deter are limited with

respect to the proposed transactions.

The shares of Corporate Express are

traded on NASDAQ and the price to be

paid for shares in an underwritten

offering will approximate the trading

price of such shares on NASDAQ less an

underwriting discount. The

underwriting terms with respect to

MLVP II’s sale of shares must be on the

same terms applicable to any selling

shareholder participating in the offering,

including terms applicable to affiliates

of ML & Co. and/or DLJ. The

underwriting terms and arrangements,

including the underwriting discount,

will be reviewed and passed upon by

the Individual General Partners, and

separately by the Independent General

Partners.

6. Liquidity in portfolio investments

is becoming increasingly important as

MLVP II approaches the ninth year of its

ten year term. The ability to sell shares

in an underwritten offering in which

Merrill Lynch and/or DLJ are acting as

underwriters may provide liquidity not

otherwise available to MLVP II. Due to

its affiliation with Corporate Express

through Merrill Lynch, sales by MLVP

II in the public market of shares of

Corporate Express are subject to the

volume limitations contained in rule

144 under the Securities Act of 1933. In

addition, because DLJ acted as managing

underwriter for Corporate Express in its

initial public offering, it is likely that

DLJ will be the managing underwriter or

otherwise a member of the underwriting

syndicate in future offerings of such

company’s securities. Thus, in the

absence of the requested relief, MLVP II

will be at a substantial disadvantage

because it will be unable to liquidate its

holdings at a time when other

institutional investors in Corporate

Express are selling shares in an

underwritten offering for which Merrill

Lynch and/or DLJ are members of the

underwriting syndicate.

7. MLVP II believes that the relief

requested is consistent with its purpose,

its stated policies and the disclosure

made to its prospective investors.

Applicants also believe that the

proposed transactions are in the best

interests of MLVP II to the extent that

such transactions permit MLVP II to

liquidate portfolio securities on

favorable terms and in a more expedited

manner than would otherwise be

available.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief shall be

subject to the following conditions:

1. If MLVP II is offered the

opportunity to sell shares of common

stock of Corporate Express in an

underwritten offering in which Merrill

Lynch and/or DLJ is a member of the

underwriting syndicate, the SubManager will review the terms of the

proposed offering. The Sub-Manager

will provide a written report to the

independent General Partners which

will set forth the Sub-Manager’s

recommendation as to whether MLVP II

should sell shares in such underwritten

offering based on the Sub-Manager’s

analysis of all factors it deems relevant,

including the terms of the proposed

underwritten offering.

2. MLVP II will be given the

opportunity to sell shares in such

underwritten offering on at least a

proportionate basis with affiliates of DLJ

and ML & Co. (if any), and on the same

terms applicable to any selling

shareholders participating in the

offering, including terms applicable to

affiliates of DLJ and ML & Co. (if any)

selling shares in such offering. In this

regard, the underwriting discount with

respect to such offering will be no larger

than the customary underwriting

discount charged by underwriters for

equity securities in similar transactions.

3. MLVP II will only participate in

such underwritten offering if the shares

to be sold continue to be traded on

NASDAQ or are listed on a national

securities exchange, as of the date of the

offering and if the offering price is

determined by reference to, and

approximates, the price of the shares on

NASDAQ, or a national securities

exchange, at the time the offering price

is determined.

4. The underwriting terms and

arrangements with respect to the

proposed transaction must be

determined by the Individual General

Partners, and a majority of the

Independent General Partners, to be fair

and reasonable.

5. If the Sub-Manager, on the basis of

its evaluation described above,

recommends that MLVP II sell shares in

such underwritten offering, the

Individual General Partners shall then

determine whether, in their view, it is

in the best interests of MLVP II to sell

shares in such underwritten offering.

MLVP II shall only sell shares in such

underwritten offering if the Individual

General Partners, including a majority of

the Independent General Partners,

determine that:

(i) the terms of the proposed

transaction, including the consideration

to be paid to MLVP II, are reasonable

and fair and do not involve

overreaching of MLVP II or its partners

on the part of any person concerned;

(ii) the proposed transaction is

consistent with the policies of MLVP II

as indicated in its filings under the

Securities Act of 1933 and the Securities

Exchange Act of 1934, and its reports to

its partners; and

(iii) participation by MLVP II in the

proposed transaction is in the best

interests of the partners of MLVP II.

6. MLVP II will maintain the records

required by section 57(f)(3) of the Act as

if each of the transactions permitted

under these conditions were approved

by the Independent General Partners

under section 57(f) of the Act.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–6356 Filed 3–14–95; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Office of the Secretary

Notice of Public Meeting and Request

for Information on the Centralization

and Computerization of DOT Dockets

AGENCIES: The Office of the Secretary

(OST), the Federal Aviation

Administration (FAA), the Federal

Highway Administration (FHWA), the

Federal Railroad Administration (FRA),

the Federal Transit Administration

(FTA), the Maritime Administration

(MARAD), the National Highway Traffic

Safety Administration (NHTSA), the

Research and Special Programs

Administration (RSPA), and the United

States Coast Guard (USCG), DOT.

ACTION: Notice of public meeting.

SUMMARY: DOT is consolidating its nine

separate docket facilities into a single,

central office, and initiating a transition