Prohibited Transaction Exemptions and Grant of Individual Exemptions Involving: 2009-15, D-11493, Schloer Enterprises, Inc., 2009-16, D-11519, Amendment to Prohibited Transaction Exemption (PTE) 90-29, 55 FR 21459 (May 24, 1990), as Amended by PTE 97-34, 62 FR 39021 (July 21, 1997), PTE 2000-58, 65 FR 67765 (November 13, 2000), PTE 2002-41, 67 FR 54487 (August 22, 2002) and PTE 2007-05, 72 FR 13130 (March 20, 2007) as Corrected at 72 FR 16385 (April 4, 2007) (PTE 2007-05), (PTE 90-29), Involving Merrill Lynch, Pierce, Fenner & Smith, Inc., the Principal Subsidiary of Merrill Lynch & Co., Inc. and Its Affiliates (Merrill Lynch) and to PTE 2002-19, 67 FR 14979 (March 28, 2002) as Amended by PTE 2007-05, (PTE 2002-19), Involving J.P. Morgan Chase & Company and Its Affiliates 2009-17, D-11536 Through D-11550, Individual Retirement Accounts (the IRAs) for Ralph Hartwell, Harold Latin, Kenlon Johnson, Carol Johnson, Shanon Taylor, Michael Ball, Dianne Barkas, Roy Barkas, Harry DeWall, Alice Pike, Steven Larsen, C. , 30622-30631 [E9-15158]
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<![CDATA[
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Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices
telephone number (202) 693–3008 (this
is not a toll-free number) or by e-mail:
gibbons.scott@dol.gov.
Signed in Washington, DC, this 19th day of
June 2009.
Douglas F. Small,
Deputy Assistant Secretary, Employment and
Training Administration.
[FR Doc. E9–15164 Filed 6–25–09; 8:45 am]
BILLING CODE 4510–FW–P
S–4231, Washington, DC 20210,
telephone number (202) 693–3008 (this
is not a toll-free number) or by e-mail:
gibbons.scott@dol.gov.
Signed in Washington, DC, this 19th day of
June 2009.
Douglas F. Small,
Deputy Assistant Secretary, Employment and
Training Administration.
[FR Doc. E9–15166 Filed 6–25–09; 8:45 am]
is not a toll-free number) or by e-mail:
gibbons.scott@dol.gov.
Signed in Washington, DC, this 19th day of
June 2009.
Douglas F. Small,
Deputy Assistant Secretary, Employment and
Training Administration.
[FR Doc. E9–15165 Filed 6–25–09; 8:45 am]
BILLING CODE 4510–FW–P
BILLING CODE 4510–FW–P
DEPARTMENT OF LABOR
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
DEPARTMENT OF LABOR
Employment and Training
Administration
Employment and Training
Administration
Notice of a Change in Status of an
Extended Benefit (EB) Period for
Florida
Notice of a Change in Status of an
Extended Benefit (EB) Period for Ohio
AGENCY: Employment and Training
Administration, Labor.
ACTION: Notice.
AGENCY: Employment and Training
Administration, Labor.
ACTION: Notice.
SUMMARY: This notice announces a
change in benefit period eligibility
under the EB program for Florida.
The following change has occurred
since the publication of the last notice
regarding Florida’s EB status:
• Florida has modified its law by
adding a total unemployment rate (TUR)
trigger retroactive to February 1, 2009.
As a result, Florida has retroactively
triggered ‘‘on’’ to a high unemployment
period (HUP) for weeks of
unemployment beginning February 22,
2009, and eligible unemployed workers
will be able to collect up to an
additional 20 weeks of unemployment
insurance benefits.
SUMMARY: This notice announces a
change in benefit period eligibility
under the EB program for Ohio.
The following change has occurred
since the publication of the last notice
regarding the State’s EB status:
• Ohio has modified its law by
adding a total unemployment rate (TUR)
trigger retroactive to February 22, 2009.
As a result, Ohio has retroactively
triggered ‘‘on’’ to a high unemployment
period (HUP) for weeks of
unemployment beginning March 15,
2009, and eligible unemployed workers
will be able to collect up to an
additional 20 weeks of unemployment
insurance benefits.
Information for Claimants
The duration of benefits payable in
the EB program, and the terms and
conditions on which they are payable,
are governed by the Federal-State
Extended Unemployment Compensation
Act of 1970, as amended, and the
operating instructions issued to the
states by the U.S. Department of Labor.
In the case of a state beginning an HUP,
the State Workforce Agency will furnish
a written notice of potential entitlement
to each individual who has exhausted
all rights to regular benefits and is
potentially eligible for EB (20 CFR
615.13(c)(1)). Persons who believe they
may be entitled to EB or who wish to
inquire about their rights under the
program should contact their State
Workforce Agency.
FOR FURTHER INFORMATION CONTACT:
Scott Gibbons, U.S. Department of
Labor, Employment and Training
Administration, Office of Workforce
Security, 200 Constitution Avenue,
NW., Frances Perkins Building, Room
Information for Claimants
The duration of benefits payable in
the EB Program, and the terms and
conditions on which they are payable,
are governed by the Federal-State
Extended Unemployment Compensation
Act of 1970, as amended, and the
operating instructions issued to the
states by the U.S. Department of Labor.
In the case of a state beginning an HUP,
the State Workforce Agency will furnish
a written notice of potential entitlement
to each individual who may be eligible
for increased benefits due to the HUP
(20 CFR 615.13(c)(1)). Persons who wish
to inquire about their rights under the
program should contact their State
Workforce Agency.
FOR FURTHER INFORMATION CONTACT:
Scott Gibbons, U.S. Department of
Labor, Employment and Training
Administration, Office of Workforce
Security, 200 Constitution Avenue,
NW., Frances Perkins Building, Room
S–4231, Washington, DC 20210,
telephone number (202) 693–3008 (this
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16:39 Jun 25, 2009
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Prohibited Transaction Exemptions
and Grant of Individual Exemptions
Involving: 2009–15, D–11493, Schloer
Enterprises, Inc., 2009–16, D–11519,
Amendment to Prohibited Transaction
Exemption (PTE) 90–29, 55 FR 21459
(May 24, 1990), as Amended by PTE
97–34, 62 FR 39021 (July 21, 1997),
PTE 2000–58, 65 FR 67765 (November
13, 2000), PTE 2002–41, 67 FR 54487
(August 22, 2002) and PTE 2007–05, 72
FR 13130 (March 20, 2007) as
Corrected at 72 FR 16385 (April 4,
2007) (PTE 2007–05), (PTE 90–29),
Involving Merrill Lynch, Pierce, Fenner
& Smith, Inc., the Principal Subsidiary
of Merrill Lynch & Co., Inc. and Its
Affiliates (Merrill Lynch) and to PTE
2002–19, 67 FR 14979 (March 28, 2002)
as Amended by PTE 2007–05, (PTE
2002–19), Involving J.P. Morgan Chase
& Company and Its Affiliates 2009–17,
D–11536 Through D–11550, Individual
Retirement Accounts (the IRAs) for
Ralph Hartwell, Harold Latin, Kenlon
Johnson, Carol Johnson, Shanon
Taylor, Michael Ball, Dianne Barkas,
Roy Barkas, Harry DeWall, Alice Pike,
Steven Larsen, C. Timothy Hopkins,
Wayne Meuleman, Robert L. Miller, and
Richard T. Scott, Collectively, the
Participants
AGENCY: Employee Benefits Security
Administration, Labor.
ACTION: Grant of individual exemptions.
SUMMARY: This document contains
exemptions issued by the Department of
Labor (the Department) from certain of
the prohibited transaction restrictions of
the Employee Retirement Income
Security Act of 1974 (ERISA or the Act)
and/or the Internal Revenue Code of
1986 (the Code).
A notice was published in the Federal
Register of the pendency before the
Department of a proposal to grant such
exemption. The notice set forth a
summary of facts and representations
contained in the application for
exemption and referred interested
persons to the application for a
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Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices
complete statement of the facts and
representations. The application has
been available for public inspection at
the Department in Washington, DC. The
notice also invited interested persons to
submit comments on the requested
exemption to the Department. In
addition the notice stated that any
interested person might submit a
written request that a public hearing be
held (where appropriate). The applicant
has represented that it has complied
with the requirements of the notification
to interested persons. No requests for a
hearing were received by the
Department. Public comments were
received by the Department as described
in the granted exemption.
The notice of proposed exemption
was issued and the exemption is being
granted solely by the Department
because, effective December 31, 1978,
section 102 of Reorganization Plan No.
4 of 1978, 5 U.S.C. App. 1 (1996),
transferred the authority of the Secretary
of the Treasury to issue exemptions of
the type proposed to the Secretary of
Labor.
Statutory Findings
In accordance with section 408(a) of
the Act and/or section 4975(c)(2) of the
Code and the procedures set forth in 29
CFR part 2570, subpart B (55 FR 32836,
32847, August 10, 1990) and based upon
the entire record, the Department makes
the following findings:
(a) The exemption is administratively
feasible;
(b) The exemption is in the interests
of the plan and its participants and
beneficiaries; and
(c) The exemption is protective of the
rights of the participants and
beneficiaries of the plan.
Schloer Enterprises, Inc., 401(k) Profit
Sharing Plan (the Plan), Located in
Pottstown, PA
[Prohibited Transaction Exemption 2009–15;
Exemption Application No. D–11493]
Exemption
The restrictions of sections
406(a)(1)(A), 406(a)(1)(D), and 406(b)(1)
and (b)(2) of the Act and the sanctions
resulting from the application of section
4975 of the Code, by reason of section
4975(c)(1)(A) and (c)(1)(D) through (E)
of the Code, shall not apply to the sale
of a certain parcel of real property (the
Property) by the Plan to Craig J. Schloer,
a party in interest with respect to the
Plan, provided that the following
conditions are satisfied:
(a) The sale is a one-time transaction
for cash;
(b) The terms and conditions of the
sale are at least as favorable to the Plan
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16:39 Jun 25, 2009
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as those that the Plan could obtain in an
arm’s length transaction with an
unrelated party;
(c) The sales price is the greater of
$381,991 or the fair market value of the
Property as of the date of the
transaction, as determined by a
qualified, independent appraiser;
(d) The Plan pays no commissions,
costs, or other expenses in connection
with the sale; and
(e) The Plan fiduciary will review and
approve the methodology used by the
qualified, independent appraiser, ensure
that such methodology is properly
applied in determining the Property’s
fair market value, and will also
determine whether it is prudent to go
forward with the transaction.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the notice of
proposed exemption published on
February 25, 2009 at 72 FR 8579.
FOR FURTHER INFORMATION CONTACT: Ms.
Karin Weng of the Department,
telephone (202) 693–8557. (This is not
a toll-free number).
Amendment to Prohibited Transaction
Exemption (PTE) 90–29, 55 FR 21459
(May 24, 1990), as Amended by PTE 97–
34, 62 FR 39021 (July 21, 1997), PTE
2000–58, 65 FR 67765 (November 13,
2000), PTE 2002–41, 67 FR 54487
(August 22, 2002) and PTE 2007–05, 72
FR 13130 (March 20, 2007) as Corrected
at 72 FR 16385 (April 4, 2007) (PTE
2007–05), (PTE 90–29), Involving
Merrill Lynch, Pierce, Fenner & Smith,
Inc., the Principal Subsidiary of Merrill
Lynch & Co., Inc. and Its Affiliates
(Merrill Lynch) and to PTE 2002–19, 67
FR 14979 (March 28, 2002) as Amended
by PTE 2007–05, (PTE 2002–19),
Involving J.P. Morgan Chase &
Company and Its Affiliates
[Prohibited Transaction Exemption 2009–16;
Exemption Application Number D–11519]
Exemption
In accordance with section 408(a) of
the Act and section 4975(c)(2) of the
Code and the procedures set forth in 29
CFR part 2570, subpart B (55 FR 32836,
August 10, 1990) and based upon the
entire record, the Department amends
PTE 90–29, 55 FR 21459 (May 24, 1990),
as amended by PTE 97–34, 62 FR 39021
(July 21, 1997), PTE 2000–58, 65 FR
67765 (November 13, 2000), PTE 2002–
41, 67 FR 54487 (August 22, 2002) and
PTE 2007–05, 72 FR 13130 (March 20,
2007), as corrected at 72 FR 16385
(April 4, 2007) (PTE 2007–05), (PTE 90–
29) and PTE 2002–19, 67 FR 14979
(March 28, 2002) as amended by PTE
2007–05 (PTE 2002–19).
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30623
I. Transactions
A. Effective January 1, 2009, the
restrictions of sections 406(a) and 407(a)
of the Act, and the taxes imposed by
sections 4975(a) and (b) of the Code, by
reason of section 4975(c)(1)(A) through
(D) of the Code shall not apply to the
following transactions involving Issuers
and Securities evidencing interests
therein:
(1) The direct or indirect sale,
exchange or transfer of Securities in the
initial issuance of Securities between
the Sponsor or Underwriter and an
employee benefit plan when the
Sponsor, Servicer, Trustee or Insurer of
an Issuer, the Underwriter of the
Securities representing an interest in the
Issuer, or an Obligor is a party in
interest with respect to such plan;
(2) The direct or indirect acquisition
or disposition of Securities by a plan in
the secondary market for such
Securities; and
(3) The continued holding of
Securities acquired by a plan pursuant
to subsection I.A.(1) or (2).
Notwithstanding the foregoing,
section I.A. does not provide an
exemption from the restrictions of
sections 406(a)(1)(E), 406(a)(2) and 407
of the Act for the acquisition or holding
of a Security on behalf of an Excluded
Plan by any person who has
discretionary authority or renders
investment advice with respect to the
assets of that Excluded Plan.1
B. Effective January 1, 2009, the
restrictions of sections 406(b)(1) and
406(b)(2) of the Act and the taxes
imposed by sections 4975(a) and (b) of
the Code, by reason of section
4975(c)(1)(E) of the Code, shall not
apply to:
(1) The direct or indirect sale,
exchange or transfer of Securities in the
initial issuance of Securities between
the Sponsor or Underwriter and a plan
when the person who has discretionary
authority or renders investment advice
with respect to the investment of plan
assets in the Securities is (a) an Obligor
with respect to 5 percent or less of the
fair market value of obligations or
receivables contained in the Issuer, or
(b) an Affiliate of a person described in
(a); if:
(i) The plan is not an Excluded Plan;
(ii) Solely in the case of an acquisition
of Securities in connection with the
initial issuance of the Securities, at least
50 percent of each class of Securities in
which plans have invested is acquired
1 Section I.A. provides no relief from sections
406(a)(1)(E), 406(a)(2) and 407 of the Act for any
person rendering investment advice to an Excluded
Plan within the meaning of section 3(21)(A)(ii) of
the Act, and regulation 29 CFR 2510.3–21(c).
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by persons independent of the members
of the Restricted Group and at least 50
percent of the aggregate interest in the
Issuer is acquired by persons
independent of the Restricted Group;
(iii) A plan’s investment in each class
of Securities does not exceed 25 percent
of all of the Securities of that class
outstanding at the time of the
acquisition; and
(iv) Immediately after the acquisition
of the Securities, no more than 25
percent of the assets of a plan with
respect to which the person has
discretionary authority or renders
investment advice are invested in
Securities representing an interest in an
Issuer containing assets sold or serviced
by the same entity.2 For purposes of this
paragraph (iv) only, an entity will not be
considered to service assets contained
in an Issuer if it is merely a Subservicer
of that Issuer;
(2) The direct or indirect acquisition
or disposition of Securities by a plan in
the secondary market for such
Securities, provided that the conditions
set forth in paragraphs (i), (iii) and (iv)
of subsection I.B.(1) are met; and
(3) The continued holding of
Securities acquired by a plan pursuant
to subsection I.B.(1) or (2).
C. Effective January 1, 2009, the
restrictions of sections 406(a), 406(b)
and 407(a) of the Act, and the taxes
imposed by section 4975(a) and (b) of
the Code by reason of section 4975(c) of
the Code, shall not apply to transactions
in connection with the servicing,
management and operation of an Issuer,
including the use of any Eligible Swap
transaction; or the defeasance of a
mortgage obligation held as an asset of
the Issuer through the substitution of a
new mortgage obligation in a
commercial mortgage-backed
Designated Transaction, provided:
(1) Such transactions are carried out
in accordance with the terms of a
binding Pooling and Servicing
Agreement;
(2) The Pooling and Servicing
Agreement is provided to, or described
in all material respects in the prospectus
or private placement memorandum
provided to, investing plans before they
purchase Securities issued by the
Issuer; 3 and
2 For purposes of this Underwriter Exemption,
each plan participating in a commingled fund (such
as a bank collective trust fund or insurance
company pooled separate account) shall be
considered to own the same proportionate
undivided interest in each asset of the commingled
fund as its proportionate interest in the total assets
of the commingled fund as calculated on the most
recent preceding valuation date of the fund.
3 In the case of a private placement memorandum,
such memorandum must contain substantially the
same information that would be disclosed in a
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(3) The defeasance of a mortgage
obligation and the substitution of a new
mortgage obligation in a commercial
mortgage-backed Designated
Transaction meet the terms and
conditions for such defeasance and
substitution as are described in the
prospectus or private placement
memorandum for such Securities,
which terms and conditions have been
approved by a Rating Agency and does
not result in the Securities receiving a
lower credit rating from the Rating
Agency than the current rating of the
Securities.
Notwithstanding the foregoing,
section I.C. does not provide an
exemption from the restrictions of
section 406(b) of the Act or from the
taxes imposed by reason of section
4975(c) of the Code for the receipt of a
fee by a Servicer of the Issuer from a
person other than the Trustee or
Sponsor, unless such fee constitutes a
Qualified Administrative Fee.
D. Effective January 1, 2009, the
restrictions of sections 406(a) and 407(a)
of the Act, and the taxes imposed by
section 4975(a) and (b) of the Code by
reason of section 4975(c)(1)(A) through
(D) of the Code, shall not apply to any
transactions to which those restrictions
or taxes would otherwise apply merely
because a person is deemed to be a party
in interest or disqualified person
(including a fiduciary) with respect to a
plan by virtue of providing services to
the plan (or by virtue of having a
relationship to such service provider
described in section 3(14)(F), (G), (H) or
(I) of the Act or section 4975(e)(2)(F),
(G), (H) or (I) of the Code), solely
because of the plan’s ownership of
Securities.
II. General Conditions
A. The relief provided under section
I. is available only if the following
conditions are met:
(1) The acquisition of Securities by a
plan is on terms (including the Security
price) that are at least as favorable to the
plan as they would be in an arm’slength transaction with an unrelated
party;
(2) The rights and interests evidenced
by the Securities are not subordinated to
the rights and interests evidenced by
other Securities of the same Issuer,
prospectus if the offering of the securities were
made in a registered public offering under the
Securities Act of 1933. In the Department’s view,
the private placement memorandum must contain
sufficient information to permit plan fiduciaries to
make informed investment decisions. For purposes
of this exemption, references to ‘‘prospectus’’
include any related prospectus supplement thereto,
pursuant to which Securities are offered to
investors.
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unless the Securities are issued in a
Designated Transaction;
(3) The Securities acquired by the
plan have received a rating from a
Rating Agency at the time of such
acquisition that is in one of the three (or
in the case of Designated Transactions,
four) highest generic rating categories;
(4) The Trustee is not an Affiliate of
any member of the Restricted Group,
other than an Underwriter. For purposes
of this requirement:
(a) The Trustee shall not be
considered to be an Affiliate of a
Servicer solely because the Trustee has
succeeded to the rights and
responsibilities of the Servicer pursuant
to the terms of a Pooling and Servicing
Agreement providing for such
succession upon the occurrence of one
or more events of default by the
Servicer; and
(b) Subsection II.A.(4) will be deemed
satisfied notwithstanding a Servicer
becoming an Affiliate of the Trustee as
the result of a merger or acquisition
involving the Trustee, such Servicer
and/or their Affiliates which occurs
after the initial issuance of the
Securities, provided that:
(i) Such Servicer ceases to be an
Affiliate of the Trustee no later than six
months after the date such Servicer
became an Affiliate of the Trustee; and
(ii) Such Servicer did not breach any
of its obligations under the Pooling and
Servicing Agreement, unless such
breach was immaterial and timely cured
in accordance with the terms of such
agreement, during the period from the
closing date of such merger or
acquisition transaction through the date
the Servicer ceased to be an Affiliate of
the Trustee;
(c) Effective January 1, 2009 through
July 1, 2009, Bank of America, N.A., the
Trustee, shall not be considered to be an
Affiliate of any member of the Restricted
Group solely as the result of the
acquisition of Merrill Lynch & Co., Inc.
and its affiliates (Merrill Lynch) by Bank
of America Corporation and its
subsidiaries (Bank of America), the
parent holding company of Bank of
America, N.A. (the Acquisition), which
occurred after the initial issuance of the
Securities, provided that:
(i) The Trustee, Bank of America,
N.A., ceases to be an Affiliate of any
member of the Restricted Group no later
than July 1, 2009;
(ii) Any member of the Restricted
Group that is an Affiliate of the Trustee,
Bank of America, N.A., did not breach
any of its obligations under the Pooling
and Servicing Agreement, unless such
breach was immaterial and timely cured
in accordance with the terms of such
agreement, during the period from
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January 1, 2009 through the date the
member of the Restricted Group ceased
to be an Affiliate of the Trustee, Bank
of America, N.A.; and
(iii) In accordance with each Pooling
and Servicing Agreement, the Trustee,
Bank of America, N.A., appoints a cotrustee, which is not an Affiliate of
Merrill Lynch or any other member of
the Restricted Group, no later than the
earlier of (A) April 1, 2009 or (B) five
business days after Bank of America,
N.A. becomes aware of a conflict
between the Trustee and any member of
the Restricted Group that is an Affiliate
of the Trustee. The co-trustee will be
responsible for resolving any conflict
between the Trustee and any member of
the Restricted Group that has become an
Affiliate of the Trustee as a result of the
Acquisition; provided, that if the
Trustee has resigned on or prior to April
1, 2009 and no event described in clause
(B) has occurred, no co-trustee shall be
required.4
(iv) For purposes of this subsection
II.A.(4)(c), a conflict arises whenever (A)
Merrill Lynch, as a member of the
Restricted Group, fails to perform in
accordance with the timeframes
contained in the relevant Pooling and
Servicing Agreement following a request
for performance from Bank of America,
N.A., as Trustee, or (B) Bank of America,
N.A., as Trustee, fails to perform in
accordance with the timeframes
contained in the relevant Pooling and
Servicing Agreement following a request
for performance from Merrill Lynch, a
member of the Restricted Group.
The time as of which a conflict occurs
is the earlier of: the day immediately
following the last day on which
compliance is required under the
relevant Pooling and Servicing
Agreement; or the day on which a party
affirmatively responds that it will not
comply with a request for performance.
For purposes of this subsection
II.A.(4)(c), the term ‘‘conflict’’ includes
but is not limited to, the following: (1)
Merrill Lynch’s failure, as Sponsor, to
repurchase a loan for breach of
representation within the time period
prescribed in the relevant Pooling and
Servicing Agreement, following Bank of
America, N.A.’s request, as Trustee, for
performance; (2) Merrill Lynch, as
Sponsor, notifies Bank of America, N.A.,
as Trustee, that it will not repurchase a
loan for breach of representation,
following Bank of America, N.A.’s
request that Merrill Lynch repurchase
such loan within the time period
4 On March 16, 2009, Bank of America, N.A.
informed the Department that for all 49 of the
transactions on the Securitization List at Sec. III.KK,
the replacement trustees will be in place as of
March 31, 2009.
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16:39 Jun 25, 2009
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prescribed in the relevant Pooling and
Servicing Agreement (the notification
occurs prior to the expiration of the
prescribed time period for the
repurchase); and (3) Merrill Lynch, as
Swap Counterparty, makes or requests a
payment based on a value of the London
Interbank Offered Rate (LIBOR) that
Bank of America, N.A., as Trustee,
considers erroneous.
(5) The sum of all payments made to
and retained by the Underwriters in
connection with the distribution or
placement of Securities represents not
more than Reasonable Compensation for
underwriting or placing the Securities;
the sum of all payments made to and
retained by the Sponsor pursuant to the
assignment of obligations (or interests
therein) to the Issuer represents not
more than the fair market value of such
obligations (or interests); and the sum of
all payments made to and retained by
the Servicer represents not more than
Reasonable Compensation for the
Servicer’s services under the Pooling
and Servicing Agreement and
reimbursement of the Servicer’s
reasonable expenses in connection
therewith;
(6) The plan investing in such
Securities is an ‘‘accredited investor’’ as
defined in Rule 501(a)(1) of Regulation
D of the Securities and Exchange
Commission under the Securities Act of
1933; and
(7) In the event that the obligations
used to fund a Issuer have not all been
transferred to the Issuer on the Closing
Date, additional obligations of the types
specified in subsection III.B.(1) may be
transferred to the Issuer during the PreFunding Period in exchange for
amounts credited to the Pre-Funding
Account, provided that:
(a) The Pre-Funding Limit is not
exceeded;
(b) All such additional obligations
meet the same terms and conditions for
determining the eligibility of the
original obligations used to create the
Issuer (as described in the prospectus or
private placement memorandum and/or
Pooling and Servicing Agreement for
such Securities), which terms and
conditions have been approved by a
Rating Agency.
Notwithstanding the foregoing, the
terms and conditions for determining
the eligibility of an obligation may be
changed if such changes receive prior
approval either by a majority vote of the
outstanding securityholders or by a
Rating Agency;
(c) The transfer of such additional
obligations to the Issuer during the PreFunding Period does not result in the
Securities receiving a lower credit rating
from a Rating Agency upon termination
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30625
of the Pre-Funding Period than the
rating that was obtained at the time of
the initial issuance of the Securities by
the Issuer;
(d) The weighted average annual
percentage interest rate (the average
interest rate) for all of the obligations
held by the Issuer at the end of the PreFunding Period will not be more than
100 basis points lower than the average
interest rate for the obligations which
were transferred to the Issuer on the
Closing Date;
(e) In order to ensure that the
characteristics of the receivables
actually acquired during the PreFunding Period are substantially similar
to those which were acquired as of the
Closing Date, the characteristics of the
additional obligations will either be
monitored by a credit support provider
or other insurance provider which is
independent of the Sponsor or an
independent accountant retained by the
Sponsor will provide the Sponsor with
a letter (with copies provided to the
Rating Agency, the Underwriter and the
Trustee) stating whether or not the
characteristics of the additional
obligations conform to the
characteristics of such obligations
described in the prospectus, private
placement memorandum and/or Pooling
and Servicing Agreement. In preparing
such letter, the independent accountant
will use the same type of procedures as
were applicable to the obligations which
were transferred as of the Closing Date;
(f) The Pre-Funding Period shall be
described in the prospectus or private
placement memorandum provided to
investing plans; and
(g) The Trustee of the Trust (or any
agent with which the Trustee contracts
to provide Trust services) will be a
substantial financial institution or trust
company experienced in trust activities
and familiar with its duties,
responsibilities and liabilities as a
fiduciary under the Act. The Trustee, as
the legal owner of the obligations in the
Trust or the holder of a security interest
in the obligations held by the Issuer,
will enforce all the rights created in
favor of securityholders of the Issuer,
including employee benefit plans
subject to the Act;
(8) In order to insure that the assets
of the Issuer may not be reached by
creditors of the Sponsor in the event of
bankruptcy or other insolvency of the
Sponsor:
(a) The legal documents establishing
the Issuer will contain:
(i) Restrictions on the Issuer’s ability
to borrow money or issue debt other
than in connection with the
securitization;
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(ii) Restrictions on the Issuer merging
with another entity, reorganizing,
liquidating or selling assets (other than
in connection with the securitization);
(iii) Restrictions limiting the
authorized activities of the Issuer to
activities relating to the securitization;
(iv) If the Issuer is not a Trust,
provisions for the election of at least one
independent director/partner/member
whose affirmative consent is required
before a voluntary bankruptcy petition
can be filed by the Issuer; and
(v) If the Issuer is not a Trust,
requirements that each independent
director/partner/member must be an
individual that does not have a
significant interest in, or other
relationships with, the Sponsor or any
of its Affiliates; and
(b) The Pooling and Servicing
Agreement and/or other agreements
establishing the contractual
relationships between the parties to the
securitization transaction will contain
covenants prohibiting all parties thereto
from filing an involuntary bankruptcy
petition against the Issuer or initiating
any other form of insolvency proceeding
until after the Securities have been paid;
and
(c) Prior to the issuance by the Issuer
of any Securities, a legal opinion is
received which states that either:
(i) A ‘‘true sale’’ of the assets being
transferred to the Issuer by the Sponsor
has occurred and that such transfer is
not being made pursuant to a financing
of the assets by the Sponsor; or
(ii) In the event of insolvency or
receivership of the Sponsor, the assets
transferred to the Issuer will not be part
of the estate of the Sponsor;
(9) If a particular class of Securities
held by any plan involves a Ratings
Dependent or Non-Ratings Dependent
Swap entered into by the Issuer, then
each particular swap transaction
relating to such Securities:
(a) Shall be an Eligible Swap;
(b) Shall be with an Eligible Swap
Counterparty;
(c) In the case of a Ratings Dependent
Swap, shall provide that if the credit
rating of the counterparty is withdrawn
or reduced by any Rating Agency below
a level specified by the Rating Agency,
the Servicer (as agent for the Trustee)
shall, within the period specified under
the Pooling and Servicing Agreement:
(i) Obtain a replacement swap
agreement with an Eligible Swap
Counterparty which is acceptable to the
Rating Agency and the terms of which
are substantially the same as the current
swap agreement (at which time the
earlier swap agreement shall terminate);
or
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(ii) Cause the swap counterparty to
establish any collateralization or other
arrangement satisfactory to the Rating
Agency such that the then current rating
by the Rating Agency of the particular
class of Securities will not be
withdrawn or reduced.
In the event that the Servicer fails to
meet its obligations under this
subsection II.A.(9)(c), plan
securityholders will be notified in the
immediately following Trustee’s
periodic report which is provided to
securityholders, and sixty days after the
receipt of such report, the exemptive
relief provided under section I.C. will
prospectively cease to be applicable to
any class of Securities held by a plan
which involves such Ratings Dependent
Swap; provided that in no event will
such plan securityholders be notified
any later than the end of the second
month that begins after the date on
which such failure occurs.
(d) In the case of a Non-Ratings
Dependent Swap, shall provide that, if
the credit rating of the counterparty is
withdrawn or reduced below the lowest
level specified in section III.GG., the
Servicer (as agent for the Trustee) shall
within a specified period after such
rating withdrawal or reduction:
(i) Obtain a replacement swap
agreement with an Eligible Swap
Counterparty, the terms of which are
substantially the same as the current
swap agreement (at which time the
earlier swap agreement shall terminate);
or
(ii) Cause the swap counterparty to
post collateral with the Trustee in an
amount equal to all payments owed by
the counterparty if the swap transaction
were terminated; or
(iii) Terminate the swap agreement in
accordance with its terms; and
(e) Shall not require the Issuer to
make any termination payments to the
counterparty (other than a currently
scheduled payment under the swap
agreement) except from Excess Spread
or other amounts that would otherwise
be payable to the Servicer or the
Sponsor;
(10) Any class of Securities, to which
one or more swap agreements entered
into by the Issuer applies, may be
acquired or held in reliance upon this
Underwriter Exemption only by
Qualified Plan Investors; and
(11) Prior to the issuance of any debt
securities, a legal opinion is received
which states that the debt holders have
a perfected security interest in the
Issuer’s assets.
B. Neither any Underwriter, Sponsor,
Trustee, Servicer, Insurer or any
Obligor, unless it or any of its Affiliates
has discretionary authority or renders
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investment advice with respect to the
plan assets used by a plan to acquire
Securities, shall be denied the relief
provided under section I., if the
provision of subsection II.A.(6) is not
satisfied with respect to acquisition or
holding by a plan of such Securities,
provided that (1) such condition is
disclosed in the prospectus or private
placement memorandum; and (2) in the
case of a private placement of
Securities, the Trustee obtains a
representation from each initial
purchaser which is a plan that it is in
compliance with such condition, and
obtains a covenant from each initial
purchaser to the effect that, so long as
such initial purchaser (or any transferee
of such initial purchaser’s Securities) is
required to obtain from its transferee a
representation regarding compliance
with the Securities Act of 1933, any
such transferees will be required to
make a written representation regarding
compliance with the condition set forth
in subsection II.A.(6).
III. Definitions
For purposes of this exemption:
A. ‘‘Security’’ means:
(1) A pass-through certificate or trust
certificate that represents a beneficial
ownership interest in the assets of an
Issuer which is a Trust and which
entitles the holder to payments of
principal, interest and/or other
payments made with respect to the
assets of such Trust; or
(2) A security which is denominated
as a debt instrument that is issued by,
and is an obligation of, an Issuer; with
respect to which the Underwriter is
either (i) the sole underwriter or the
manager or co-manager of the
underwriting syndicate, or (ii) a selling
or placement agent.
B. ‘‘Issuer’’ means an investment pool,
the corpus or assets of which are held
in trust (including a grantor or owner
Trust) or whose assets are held by a
partnership, special purpose
corporation or limited liability company
(which Issuer may be a Real Estate
Mortgage Investment Conduit (REMIC)
or a Financial Asset Securitization
Investment Trust (FASIT) within the
meaning of section 860D(a) or section
860L, respectively, of the Code); and the
corpus or assets of which consist solely
of:
(1)(a) Secured consumer receivables
that bear interest or are purchased at a
discount (including, but not limited to,
home equity loans and obligations
secured by shares issued by a
cooperative housing association); and/or
(b) Secured credit instruments that
bear interest or are purchased at a
discount in transactions by or between
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business entities (including, but not
limited to, Qualified Equipment Notes
Secured by Leases); and/or
(c) Obligations that bear interest or are
purchased at a discount and which are
secured by single-family residential,
multi-family residential and/or
commercial real property (including
obligations secured by leasehold
interests on residential or commercial
real property); and/or
(d) Obligations that bear interest or
are purchased at a discount and which
are secured by motor vehicles or
equipment, or Qualified Motor Vehicle
Leases; and/or
(e) Guaranteed governmental
mortgage pool certificates, as defined in
29 CFR 2510.3–101(i)(2); 5 and/or
(f) Fractional undivided interests in
any of the obligations described in
clauses (a)–(e) of this subsection B.(1).6
Notwithstanding the foregoing,
residential and home equity loan
receivables issued in Designated
Transactions may be less than fully
secured, provided that: (i) The rights
and interests evidenced by the
Securities issued in such Designated
Transactions (as defined in section
III.DD.) are not subordinated to the
rights and interests evidenced by
Securities of the same Issuer; (ii) such
Securities acquired by the plan have
received a rating from a Rating Agency
at the time of such acquisition that is in
one of the two highest generic rating
categories; and (iii) any obligation
included in the corpus or assets of the
Issuer must be secured by collateral
whose fair market value on the Closing
Date of the Designated Transaction is at
least equal to 80% of the sum of: (I) The
outstanding principal balance due
under the obligation which is held by
the Issuer and (II) the outstanding
principal balance(s) of any other
obligation(s) of higher priority (whether
5 In ERISA Advisory Opinion 99–05A (Feb. 22,
1999), the Department expressed its view that
mortgage pool certificates guaranteed and issued by
the Federal Agricultural Mortgage Corporation
(‘‘Farmer Mac’’) meet the definition of a guaranteed
governmental mortgage pool certificate as defined
in 29 CFR 2510.3–101(i)(2).
6 It is the Department’s view that the definition
of Issuer contained in subsection III.B. includes a
two-tier structure under which Securities issued by
the first Issuer, which contains a pool of receivables
described above, are transferred to a second Issuer
which issues Securities that are sold to plans.
However, the Department is of the further view that,
since the Underwriter Exemption generally
provides relief only for the direct or indirect
acquisition or disposition of Securities that are not
subordinated, no relief would be available if the
Securities held by the second Issuer were
subordinated to the rights and interests evidenced
by other Securities issued by the first Issuer, unless
such Securities were issued in a Designated
Transaction.
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or not held by the Issuer) which are
secured by the same collateral.
(2) Property which had secured any of
the obligations described in subsection
III.B.(1);
(3)(a) Undistributed cash or temporary
investments made therewith maturing
no later than the next date on which
distributions are made to
securityholders; and/or
(b) Cash or investments made
therewith which are credited to an
account to provide payments to
securityholders pursuant to any Eligible
Swap Agreement meeting the conditions
of subsection II.A.(9) or pursuant to any
Eligible Yield Supplement Agreement;
and/or
(c) Cash transferred to the Issuer on
the Closing Date and permitted
investments made therewith which:
(i) Are credited to a Pre-Funding
Account established to purchase
additional obligations with respect to
which the conditions set forth in
paragraphs (a)–(g) of subsection II.A.(7)
are met; and/or
(ii) Are credited to a Capitalized
Interest Account; and
(iii) Are held by the Issuer for a period
ending no later than the first
distribution date to securityholders
occurring after the end of the PreFunding Period.
For purposes of this paragraph (c) of
subsection III.B.(3), the term ‘‘permitted
investments’’ means investments which:
(i) Are either: (x) Direct obligations of,
or obligations fully guaranteed as to
timely payment of principal and interest
by, the United States or any agency or
instrumentality thereof, provided that
such obligations are backed by the full
faith and credit of the United States or
(y) have been rated (or the Obligor has
been rated) in one of the three highest
generic rating categories by a Rating
Agency; (ii) are described in the Pooling
and Servicing Agreement; and (iii) are
permitted by the Rating Agency.
(4) Rights of the Trustee under the
Pooling and Servicing Agreement, and
rights under any insurance policies,
third-party guarantees, contracts of
suretyship, Eligible Yield Supplement
Agreements, Eligible Swap Agreements
meeting the conditions of subsection
II.A.(9) or other credit support
arrangements with respect to any
obligations described in subsection
III.B.(1).
Notwithstanding the foregoing, the
term ‘‘Issuer’’ does not include any
investment pool unless: (i) The assets of
the type described in paragraphs (a)–(f)
of subsection III.B.(1) which are
contained in the investment pool have
been included in other investment
pools, (ii) Securities evidencing
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30627
interests in such other investment pools
have been rated in one of the three (or
in the case of Designated Transactions,
four) highest generic rating categories by
a Rating Agency for at least one year
prior to the plan’s acquisition of
Securities pursuant to this Underwriter
Exemption, and (iii) Securities
evidencing interests in such other
investment pools have been purchased
by investors other than plans for at least
one year prior to the plan’s acquisition
of Securities pursuant to this
Underwriter Exemption.
C. ‘‘Underwriter’’ means:
(1) Merrill Lynch;
(2) Any person directly or indirectly,
through one or more intermediaries,
controlling, controlled by or under
common control with Merrill Lynch; or
(3) Any member of an underwriting
syndicate or selling group of which a
person described in subsections III.C.(1)
or (2) is a manager or co-manager with
respect to the Securities.
Effective January 1, 2009 through July
1, 2009, ‘‘Underwriter’’ means:
(1) Merrill Lynch or J.P. Morgan
Securities Inc.;
(2) Any person directly or indirectly,
through one or more intermediaries,
controlling, controlled by or under
common control with such entities; or
(3) Any member of an underwriting
syndicate or selling group of which such
firm or person described in subsections
III.C.(1) or (2) is a manager or comanager with respect to the Securities.
D. ‘‘Sponsor’’ means:
(1) The entity that organizes an Issuer
by depositing obligations therein in
exchange for Securities; or
(2) Effective January 1, 2009 through
July 1, 2009, for those transactions listed
on the Securitization List at section
III.KK., Merrill Lynch.
E. ‘‘Master Servicer’’ means the entity
that is a party to the Pooling and
Servicing Agreement relating to assets of
the Issuer and is fully responsible for
servicing, directly or through
Subservicers, the assets of the Issuer.
F. ‘‘Subservicer’’ means an entity
which, under the supervision of and on
behalf of the Master Servicer, services
loans contained in the Issuer, but is not
a party to the Pooling and Servicing
Agreement.
G. ‘‘Servicer’’ means any entity which
services loans contained in the Issuer,
including the Master Servicer and any
Subservicer.
H. ‘‘Trust’’ means an Issuer which is
a trust (including an owner trust,
grantor trust or a REMIC or FASIT
which is organized as a Trust).
I. ‘‘Trustee’’ means the Trustee of any
Trust which issues Securities and also
includes an Indenture Trustee.
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‘‘Indenture Trustee’’ means the Trustee
appointed under the indenture pursuant
to which the subject Securities are
issued, the rights of holders of the
Securities are set forth and a security
interest in the Trust assets in favor of
the holders of the Securities is created.
The Trustee or the Indenture Trustee is
also a party to or beneficiary of all the
documents and instruments transferred
to the Issuer, and as such, has both the
authority to, and the responsibility for,
enforcing all the rights created thereby
in favor of holders of the Securities,
including those rights arising in the
event of default by the Servicer.
J. ‘‘Insurer’’ means the insurer or
guarantor of, or provider of other credit
support for, an Issuer. Notwithstanding
the foregoing, a person is not an insurer
solely because it holds Securities
representing an interest in an Issuer
which are of a class subordinated to
Securities representing an interest in the
same Issuer.
K. ‘‘Obligor’’ means any person, other
than the Insurer, that is obligated to
make payments with respect to any
obligation or receivable included in the
Issuer. Where an Issuer contains
Qualified Motor Vehicle Leases or
Qualified Equipment Notes Secured by
Leases, ‘‘Obligor’’ shall also include any
owner of property subject to any lease
included in the Issuer, or subject to any
lease securing an obligation included in
the Issuer.
L. ‘‘Excluded Plan’’ means any plan
with respect to which any member of
the Restricted Group is a ‘‘plan sponsor’’
within the meaning of section 3(16)(B)
of the Act.
M. ‘‘Restricted Group’’ with respect to
a class of Securities means:
(1) Each Underwriter;
(2) Each Insurer;
(3) The Sponsor;
(4) The Trustee;
(5) Each Servicer;
(6) Any Obligor with respect to
obligations or receivables included in
the Issuer constituting more than 5
percent of the aggregate unamortized
principal balance of the assets in the
Issuer, determined on the date of the
initial issuance of Securities by the
Issuer;
(7) Each counterparty in an Eligible
Swap Agreement; or
(8) Any Affiliate of a person described
in subsections III.M.(1)–(7).
N. ‘‘Affiliate’’ of another person
includes:
(1) Any person directly or indirectly,
through one or more intermediaries,
controlling, controlled by, or under
common control with such other
person;
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(2) Any officer, director, partner,
employee, relative (as defined in section
3(15) of the Act), a brother, a sister, or
a spouse of a brother or sister of such
other person; and
(3) Any corporation or partnership of
which such other person is an officer,
director or partner.
O. ‘‘Control’’ means the power to
exercise a controlling influence over the
management or policies of a person
other than an individual.
P. A person will be ‘‘independent’’ of
another person only if:
(1) Such person is not an Affiliate of
that other person; and
(2) The other person, or an Affiliate
thereof, is not a fiduciary who has
investment management authority or
renders investment advice with respect
to any assets of such person.
Q. ‘‘Sale’’ includes the entrance into
a Forward Delivery Commitment,
provided:
(1) The terms of the Forward Delivery
Commitment (including any fee paid to
the investing plan) are no less favorable
to the plan than they would be in an
arm’s-length transaction with an
unrelated party;
(2) The prospectus or private
placement memorandum is provided to
an investing plan prior to the time the
plan enters into the Forward Delivery
Commitment; and
(3) At the time of the delivery, all
conditions of this Underwriter
Exemption applicable to sales are met.
R. ‘‘Forward Delivery Commitment’’
means a contract for the purchase or
sale of one or more Securities to be
delivered at an agreed future settlement
date. The term includes both mandatory
contracts (which contemplate obligatory
delivery and acceptance of the
Securities) and optional contracts
(which give one party the right but not
the obligation to deliver Securities to, or
demand delivery of Securities from, the
other party).
S. ‘‘Reasonable Compensation’’ has
the same meaning as that term is
defined in 29 CFR 2550.408c–2.
T. ‘‘Qualified Administrative Fee’’
means a fee which meets the following
criteria:
(1) The fee is triggered by an act or
failure to act by the Obligor other than
the normal timely payment of amounts
owing in respect of the obligations;
(2) The Servicer may not charge the
fee absent the act or failure to act
referred to in subsection III.T.(1);
(3) The ability to charge the fee, the
circumstances in which the fee may be
charged, and an explanation of how the
fee is calculated are set forth in the
Pooling and Servicing Agreement; and
(4) The amount paid to investors in
the Issuer will not be reduced by the
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amount of any such fee waived by the
Servicer.
U. ‘‘Qualified Equipment Note
Secured By A Lease’’ means an
equipment note:
(1) Which is secured by equipment
which is leased;
(2) Which is secured by the obligation
of the lessee to pay rent under the
equipment lease; and
(3) With respect to which the Issuer’s
security interest in the equipment is at
least as protective of the rights of the
Issuer as the Issuer would have if the
equipment note were secured only by
the equipment and not the lease.
V. ‘‘Qualified Motor Vehicle Lease’’
means a lease of a motor vehicle where:
(1) The Issuer owns or holds a
security interest in the lease;
(2) The Issuer owns or holds a
security interest in the leased motor
vehicle; and
(3) The Issuer’s security interest in the
leased motor vehicle is at least as
protective of the Issuer’s rights as the
Issuer would receive under a motor
vehicle installment loan contract.
W. ‘‘Pooling and Servicing
Agreement’’ means the agreement or
agreements among a Sponsor, a Servicer
and the Trustee establishing a Trust.
‘‘Pooling and Servicing Agreement’’ also
includes the indenture entered into by
the Issuer and the Indenture Trustee.
X. ‘‘Rating Agency’’ means Standard &
Poor’s Ratings Services, a division of
The McGraw-Hill Companies, Inc.;
Moody’s Investors Service, Inc.;
FitchRatings, Inc.; DBRS Limited, or
DBRS, Inc.; or any successors thereto.
Y. ‘‘Capitalized Interest Account’’
means an Issuer account: (i) Which is
established to compensate
securityholders for shortfalls, if any,
between investment earnings on the PreFunding Account and the interest rate
payable under the Securities; and (ii)
which meets the requirements of
paragraph (c) of subsection III.B.(3).
Z. ‘‘Closing Date’’ means the date the
Issuer is formed, the Securities are first
issued and the Issuer’s assets (other than
those additional obligations which are
to be funded from the Pre-Funding
Account pursuant to subsection II.A.(7))
are transferred to the Issuer.
AA. ‘‘Pre-Funding Account’’ means
an Issuer account: (i) Which is
established to purchase additional
obligations, which obligations meet the
conditions set forth in paragraph (a)–(g)
of subsection II.A.(7); and (ii) which
meets the requirements of paragraph (c)
of subsection III.B.(3).
BB. ‘‘Pre-Funding Limit’’ means a
percentage or ratio of the amount
allocated to the Pre-Funding Account,
as compared to the total principal
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amount of the Securities being offered,
which is less than or equal to 25
percent.
CC. ‘‘Pre-Funding Period’’ means the
period commencing on the Closing Date
and ending no later than the earliest to
occur of: (i) The date the amount on
deposit in the Pre-Funding Account is
less than the minimum dollar amount
specified in the Pooling and Servicing
Agreement; (ii) the date on which an
event of default occurs under the
Pooling and Servicing Agreement; or
(iii) the date which is the later of three
months or ninety days after the Closing
Date.
DD. ‘‘Designated Transaction’’ means
a securitization transaction in which the
assets of the Issuer consist of secured
consumer receivables, secured credit
instruments or secured obligations that
bear interest or are purchased at a
discount and are: (i) Motor vehicle,
home equity and/or manufactured
housing consumer receivables; and/or
(ii) motor vehicle credit instruments in
transactions by or between business
entities; and/or (iii) single-family
residential, multi-family residential,
home equity, manufactured housing
and/or commercial mortgage obligations
that are secured by single-family
residential, multi-family residential,
commercial real property or leasehold
interests therein. For purposes of this
section III.DD., the collateral securing
motor vehicle consumer receivables or
motor vehicle credit instruments may
include motor vehicles and/or Qualified
Motor Vehicle Leases.
EE. ‘‘Ratings Dependent Swap’’ means
an interest rate swap, or (if purchased
by or on behalf of the Issuer) an interest
rate cap contract, that is part of the
structure of a class of Securities where
the rating assigned by the Rating Agency
to any class of Securities held by any
plan is dependent on the terms and
conditions of the swap and the rating of
the counterparty, and if such Security
rating is not dependent on the existence
of the swap and rating of the
counterparty, such swap or cap shall be
referred to as a ‘‘Non-Ratings Dependent
Swap’’. With respect to a Non-Ratings
Dependent Swap, each Rating Agency
rating the Securities must confirm, as of
the date of issuance of the Securities by
the Issuer, that entering into an Eligible
Swap with such counterparty will not
affect the rating of the Securities.
FF. ‘‘Eligible Swap’’ means a Ratings
Dependent or Non-Ratings Dependent
Swap:
(1) Which is denominated in U.S.
dollars;
(2) Pursuant to which the Issuer pays
or receives, on or immediately prior to
the respective payment or distribution
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date for the class of Securities to which
the swap relates, a fixed rate of interest,
or a floating rate of interest based on a
publicly available index (e.g., LIBOR or
the U.S. Federal Reserve’s Cost of Funds
Index (COFI)), with the Issuer receiving
such payments on at least a quarterly
basis and obligated to make separate
payments no more frequently than the
counterparty, with all simultaneous
payments being netted;
(3) Which has a notional amount that
does not exceed either: (i) The principal
balance of the class of Securities to
which the swap relates, or (ii) the
portion of the principal balance of such
class represented solely by those types
of corpus or assets of the Issuer referred
to in subsections III.B.(1), (2) and (3);
(4) Which is not leveraged (i.e.,
payments are based on the applicable
notional amount, the day count
fractions, the fixed or floating rates
designated in subsection III.FF.(2), and
the difference between the products
thereof, calculated on a one to one ratio
and not on a multiplier of such
difference);
(5) Which has a final termination date
that is either the earlier of the date on
which the Issuer terminates or the
related class of securities is fully repaid;
and
(6) Which does not incorporate any
provision which could cause a
unilateral alteration in any provision
described in subsections III.FF.(1)
through (4) without the consent of the
Trustee.
GG. ‘‘Eligible Swap Counterparty’’
means a bank or other financial
institution which has a rating, at the
date of issuance of the Securities by the
Issuer, which is in one of the three
highest long-term credit rating
categories, or one of the two highest
short-term credit rating categories,
utilized by at least one of the Rating
Agencies rating the Securities; provided
that, if a swap counterparty is relying on
its short-term rating to establish
eligibility under the Underwriter
Exemption, such swap counterparty
must either have a long-term rating in
one of the three highest long-term rating
categories or not have a long-term rating
from the applicable Rating Agency, and
provided further that if the class of
Securities with which the swap is
associated has a final maturity date of
more than one year from the date of
issuance of the Securities, and such
swap is a Ratings Dependent Swap, the
swap counterparty is required by the
terms of the swap agreement to establish
any collateralization or other
arrangement satisfactory to the Rating
Agencies in the event of a ratings
downgrade of the swap counterparty.
PO 00000
Frm 00130
Fmt 4703
Sfmt 4703
30629
HH. ‘‘Qualified Plan Investor’’ means
a plan investor or group of plan
investors on whose behalf the decision
to purchase Securities is made by an
appropriate independent fiduciary that
is qualified to analyze and understand
the terms and conditions of any swap
transaction used by the Issuer and the
effect such swap would have upon the
credit ratings of the Securities. For
purposes of the Underwriter Exemption,
such a fiduciary is either:
(1) A ‘‘qualified professional asset
manager’’ (QPAM),7 as defined under
Part V(a) of PTE 84–14, 49 FR 9494,
9506 (March 13, 1984), as amended by
70 FR 49305 (August 23, 2005);
(2) An ‘‘in-house asset manager’’
(INHAM),8 as defined under Part IV(a)
of PTE 96–23, 61 FR 15975, 15982
(April 10, 1996); or
(3) A plan fiduciary with total assets
under management of at least $100
million at the time of the acquisition of
such Securities.
II. ‘‘Excess Spread’’ means, as of any
day funds are distributed from the
Issuer, the amount by which the interest
allocated to Securities exceeds the
amount necessary to pay interest to
securityholders, servicing fees and
expenses.
JJ. ‘‘Eligible Yield Supplement
Agreement’’ means any yield
supplement agreement, similar yield
maintenance arrangement or, if
purchased by or on behalf of the Issuer,
an interest rate cap contract to
supplement the interest rates otherwise
payable on obligations described in
subsection III.B.(1). Such an agreement
or arrangement may involve a notional
principal contract provided that:
(1) It is denominated in U.S. dollars;
(2) The Issuer receives on, or
immediately prior to the respective
payment date for the Securities covered
by such agreement or arrangement, a
fixed rate of interest or a floating rate of
interest based on a publicly available
index (e.g., LIBOR or COFI), with the
7 PTE 84–14 provides a class exemption for
transactions between a party in interest with respect
to an employee benefit plan and an investment fund
(including either a single customer or pooled
separate account) in which the plan has an interest,
and which is managed by a QPAM, provided
certain conditions are met. QPAMs (e.g., banks,
insurance companies, registered investment
advisers with total client assets under management
in excess of $85 million) are considered to be
experienced investment managers for plan investors
that are aware of their fiduciary duties under
ERISA.
8 PTE 96–23 permits various transactions
involving employee benefit plans whose assets are
managed by an INHAM, an entity which is
generally a subsidiary of an employer sponsoring
the plan which is a registered investment adviser
with management and control of total assets
attributable to plans maintained by the employer
and its affiliates which are in excess of $50 million.
E:\FR\FM\26JNN1.SGM
26JNN1
30630
Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices
Issuer receiving such payments on at
least a quarterly basis;
(3) It is not ‘‘leveraged’’ as described
in subsection III.FF.(4);
(4) It does not incorporate any
provision which would cause a
unilateral alteration in any provision
described in subsections III.JJ.(1)–(3)
without the consent of the Trustee;
(5) It is entered into by the Issuer with
an Eligible Swap Counterparty; and
(6) It has a notional amount that does
not exceed either: (i) The principal
balance of the class of Securities to
which such agreement or arrangement
relates, or (ii) the portion of the
principal balance of such class
represented solely by those types of
corpus or assets of the Issuer referred to
in subsections III.B.(1), (2) and (3).
KK. Effective January 1, 2009 through
July 1, 2009, ‘‘Securitization List’’
means:
Name
Issuance
type
CMAC Series 1997 ML1 ..................................................................................................................................................
WFPD 1996 WFP–D .......................................................................................................................................................
Merrill Lynch 2003–KEY 1 ...............................................................................................................................................
Merrill Lynch Series 1997–C1 .........................................................................................................................................
Merrill Lynch Series 2004–KEY 2 ...................................................................................................................................
Merrill Lynch Series 2006–C2 .........................................................................................................................................
Mezz Cap 2004–C2 .........................................................................................................................................................
C–BASS 2007–CB4 .........................................................................................................................................................
First Franklin MLT 2006–FF18 ........................................................................................................................................
First Franklin MLT 2007–01 ............................................................................................................................................
First Franklin MLT 2007–02 ............................................................................................................................................
First Franklin MLT 2007–03 ............................................................................................................................................
First Franklin MLT 2007–4 ..............................................................................................................................................
First Franklin MLT 2007–5 ..............................................................................................................................................
First Franklin MLT 2007–A ..............................................................................................................................................
First Franklin MLT 2007–FF1 ..........................................................................................................................................
First Franklin MLT 2007–FF2 ..........................................................................................................................................
First Franklin MLT 2007–FFA ..........................................................................................................................................
First Franklin MLT 2007–FFC .........................................................................................................................................
First Franklin MLT 2007–H1 ............................................................................................................................................
Merrill Lynch Series 2005–SL3 .......................................................................................................................................
Merrill Lynch Series 2006–AHL1 .....................................................................................................................................
Merrill Lynch Series 2006–AR1 .......................................................................................................................................
Merrill Lynch Series 2006–FF1 .......................................................................................................................................
Merrill Lynch Series 2006–FM1 .......................................................................................................................................
Merrill Lynch Series 2006–HE2 .......................................................................................................................................
Merrill Lynch Series 2006–HE3 .......................................................................................................................................
Merrill Lynch Series 2006–HE4 .......................................................................................................................................
Merrill Lynch Series 2006–HE6 .......................................................................................................................................
Merrill Lynch Series 2006–MLN1 ....................................................................................................................................
Merrill Lynch Series 2006–OPT1 ....................................................................................................................................
Merrill Lynch Series 2006–RM1 ......................................................................................................................................
Merrill Lynch Series 2006–RM2 ......................................................................................................................................
Merrill Lynch Series 2006–RM3 ......................................................................................................................................
Merrill Lynch Series 2006–RM4 ......................................................................................................................................
Merrill Lynch Series 2006–RM5 ......................................................................................................................................
Merrill Lynch Series 2006–SD1 .......................................................................................................................................
Merrill Lynch Series 2006–SL1 .......................................................................................................................................
Merrill Lynch Series 2006–WMC2 ...................................................................................................................................
Merrill Lynch Series 2007–HE1 .......................................................................................................................................
Merrill Lynch Series 2007–HE3 .......................................................................................................................................
Merrill Lynch Series 2007–SD1 .......................................................................................................................................
MLMI Trust 2002–AFC1 ..................................................................................................................................................
Ownit Mort Loan ABS 2006–3 .........................................................................................................................................
Ownit Mort Loan ABS 2006–4 .........................................................................................................................................
Ownit Mort Loan ABS 2006–5 .........................................................................................................................................
Ownit Mort Loan ABS 2006–6 .........................................................................................................................................
Ownit Mort Loan ABS 2006–7 .........................................................................................................................................
JP Morgan Chase 2003–ML1 (U–JP Morgan Securities Inc.) ........................................................................................
C
C
C
C
C
C
C
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
C
MLynch role
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S,
S, U
S, U
S, U
S, U
S, U
S, U
S, U
S, U
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
S, U
U, MS
U, MS
S, U
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
U, MS
S, U
S, U
S, U
S, U
S, U
S, U
S
Legend:
C = Commercial mortgage-backed securitizations.
R = Residential mortgage-backed securitizations.
U = Underwriter.
S = Sponsor.
MS = Master Servicer.
MLynch = Merrill Lynch.
Effective Date: This amendment was
effective January 1, 2009.
For a more complete statement of the
facts and representations supporting the
VerDate Nov<24>2008
16:39 Jun 25, 2009
Jkt 217001
Department’s decision to amend PTE
90–29 and PTE 2002–19, refer to the
notice of proposed exemption that was
PO 00000
published on May 6, 2009 in the
Federal Register at 74 FR 21002.
FOR FURTHER INFORMATION CONTACT:
Wendy M. McColough of the
Frm 00131
Fmt 4703
Sfmt 4703
E:\FR\FM\26JNN1.SGM
26JNN1
Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices
Department, telephone (202) 693–8540
(This is not a toll-free number).
Individual Retirement Accounts (the
IRAs) for Ralph Hartwell, Harold Latin,
Kenlon Johnson, Carol Johnson, Shanon
Taylor, Michael Ball, Dianne Barkas,
Roy Barkas, Harry DeWall, Alice Pike,
Steven Larsen, C. Timothy Hopkins,
Wayne Meuleman, Robert L. Miller,
and Richard T. Scott (Collectively, the
Participants), Located in Idaho Falls,
Idaho, and Elsewhere
[Prohibited Transaction Exemption 2009–17;
Exemption Application Numbers D–11536
through D–11550]
Exemption
The sanctions resulting from the
application of section 4975 of the Code,
by reason of sections 4975(c)(1)(A),(D),
and (E) of the Code, shall not apply to
the cash sales (the Sales) of certain
shares of closely held common stock
(the Stock) of the Bank of Idaho Holding
Company (the Company) by the IRAs 9
to the Participants, disqualified persons
with respect to their respective IRAs,
provided that the following conditions
are satisfied:
(a) The Sale of the Stock by each IRA
is a one-time transaction for cash;
(b) The terms and conditions of each
Sale are at least as favorable to each IRA
as those obtainable in an arm’s length
transaction with an unrelated party;
(c) Each IRA receives the fair market
value of the Stock on the date of the
Sale as determined by a qualified,
independent appraiser; and
(d) Each IRA does not pay any
commissions, costs, or other expenses in
connection with each Sale.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, refer to the text of the Notice
of Proposed Exemption published in the
Federal Register on March 26, 2009 at
74 FR 13258.
FOR FURTHER INFORMATION CONTACT: Mr.
Mark Judge of the Department,
telephone (202) 693–8339 (This is not a
toll-free number).
General Information
The attention of interested persons is
directed to the following:
(1) The fact that a transaction is the
subject of an exemption under section
408(a) of the Act and/or section
4975(c)(2) of the Code does not relieve
a fiduciary or other party in interest or
disqualified person from certain other
provisions to which the exemption does
9 Because each IRA has only one Participant,
there is no jurisdiction under 29 CFR 2510.3–3(b).
However, there is jurisdiction under Title II of the
Act pursuant to section 4975 of the Code.
VerDate Nov<24>2008
16:39 Jun 25, 2009
Jkt 217001
not apply and the general fiduciary
responsibility provisions of section 404
of the Act, which among other things
require a fiduciary to discharge his
duties respecting the plan solely in the
interest of the participants and
beneficiaries of the plan and in a
prudent fashion in accordance with
section 404(a)(1)(B) of the Act; nor does
it affect the requirement of section
401(a) of the Code that the plan must
operate for the exclusive benefit of the
employees of the employer maintaining
the plan and their beneficiaries;
(2) This exemption is supplemental to
and not in derogation of, any other
provisions of the Act and/or the Code,
including statutory or administrative
exemptions and transactional rules.
Furthermore, the fact that a transaction
is subject to an administrative or
statutory exemption is not dispositive of
whether the transaction is in fact a
prohibited transaction; and
(3) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describe all material terms of the
transaction which is the subject of the
exemption.
Signed at Washington, DC, this 22nd day
of June, 2009.
Ivan Strasfeld,
Director of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. E9–15158 Filed 6–25–09; 8:45 am]
BILLING CODE 4510–29–P
DEPARTMENT OF LABOR
Employee Benefits Security
Administration
[Application Nos. and Proposed
Exemptions; D–11432, Iron Workers Local
17 Pension Fund (the Plan); D–11483
Urology Clinics of North Texas, P.A. 401(k)
Profit Sharing Plan and Trust (The Plan);
and L–11451, Ford Motor Corporation and
Its Affiliates (collectively, Ford), et al.]
Notice of Proposed Exemptions
AGENCY: Employee Benefits Security
Administration, Labor.
ACTION: Notice of Proposed Exemptions.
SUMMARY: This document contains
notices of pendency before the
Department of Labor (the Department) of
proposed exemptions from certain of the
prohibited transaction restrictions of the
Employee Retirement Income Security
Act of 1974 (ERISA or the Act) and/or
the Internal Revenue Code of 1986 (the
Code).
PO 00000
Frm 00132
Fmt 4703
Sfmt 4703
30631
Written Comments and Hearing
Requests
All interested persons are invited to
submit written comments or requests for
a hearing on the pending exemptions,
unless otherwise stated in the Notice of
Proposed Exemption, within 45 days
from the date of publication of this
Federal Register Notice. Comments and
requests for a hearing should state: (1)
The name, address, and telephone
number of the person making the
comment or request, and (2) the nature
of the person’s interest in the exemption
and the manner in which the person
would be adversely affected by the
exemption. A request for a hearing must
also state the issues to be addressed and
include a general description of the
evidence to be presented at the hearing.
ADDRESSES: All written comments and
requests for a hearing (at least three
copies) should be sent to the Employee
Benefits Security Administration
(EBSA), Office of Exemption
Determinations, Room N–5700, U.S.
Department of Labor, 200 Constitution
Avenue, NW., Washington, DC 20210.
Attention: Application No. lll stated
in each Notice of Proposed Exemption.
Interested persons are also invited to
submit comments and/or hearing
requests to EBSA via e-mail or FAX.
Any such comments or requests should
be sent either by e-mail to:
‘‘moffitt.betty@dol.gov’’, or by FAX to
(202) 219–0204 by the end of the
scheduled comment period. The
applications for exemption and the
comments received will be available for
public inspection in the Public
Documents Room of the Employee
Benefits Security Administration, U.S.
Department of Labor, Room N–1513,
200 Constitution Avenue, NW.,
Washington, DC 20210.
Notice to Interested Persons
Notice of the proposed exemptions
will be provided to all interested
persons in the manner agreed upon by
the applicant and the Department
within 15 days of the date of publication
in the Federal Register. Such notice
shall include a copy of the notice of
proposed exemption as published in the
Federal Register and shall inform
interested persons of their right to
comment and to request a hearing
(where appropriate).
SUPPLEMENTARY INFORMATION: The
proposed exemptions were requested in
applications filed pursuant to section
408(a) of the Act and/or section
4975(c)(2) of the Code, and in
accordance with procedures set forth in
29 CFR part 2570, subpart B (55 FR
32836, 32847, August 10, 1990).
E:\FR\FM\26JNN1.SGM
26JNN1
]]>Agencies
[Federal Register Volume 74, Number 122 (Friday, June 26, 2009)]
[Notices]
[Pages 30622-30631]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-15158]
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employee Benefits Security Administration
Prohibited Transaction Exemptions and Grant of Individual
Exemptions Involving: 2009-15, D-11493, Schloer Enterprises, Inc.,
2009-16, D-11519, Amendment to Prohibited Transaction Exemption (PTE)
90-29, 55 FR 21459 (May 24, 1990), as Amended by PTE 97-34, 62 FR 39021
(July 21, 1997), PTE 2000-58, 65 FR 67765 (November 13, 2000), PTE
2002-41, 67 FR 54487 (August 22, 2002) and PTE 2007-05, 72 FR 13130
(March 20, 2007) as Corrected at 72 FR 16385 (April 4, 2007) (PTE 2007-
05), (PTE 90-29), Involving Merrill Lynch, Pierce, Fenner & Smith,
Inc., the Principal Subsidiary of Merrill Lynch & Co., Inc. and Its
Affiliates (Merrill Lynch) and to PTE 2002-19, 67 FR 14979 (March 28,
2002) as Amended by PTE 2007-05, (PTE 2002-19), Involving J.P. Morgan
Chase & Company and Its Affiliates 2009-17, D-11536 Through D-11550,
Individual Retirement Accounts (the IRAs) for Ralph Hartwell, Harold
Latin, Kenlon Johnson, Carol Johnson, Shanon Taylor, Michael Ball,
Dianne Barkas, Roy Barkas, Harry DeWall, Alice Pike, Steven Larsen, C.
Timothy Hopkins, Wayne Meuleman, Robert L. Miller, and Richard T.
Scott, Collectively, the Participants
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Grant of individual exemptions.
-----------------------------------------------------------------------
SUMMARY: This document contains exemptions issued by the Department of
Labor (the Department) from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code).
A notice was published in the Federal Register of the pendency
before the Department of a proposal to grant such exemption. The notice
set forth a summary of facts and representations contained in the
application for exemption and referred interested persons to the
application for a
[[Page 30623]]
complete statement of the facts and representations. The application
has been available for public inspection at the Department in
Washington, DC. The notice also invited interested persons to submit
comments on the requested exemption to the Department. In addition the
notice stated that any interested person might submit a written request
that a public hearing be held (where appropriate). The applicant has
represented that it has complied with the requirements of the
notification to interested persons. No requests for a hearing were
received by the Department. Public comments were received by the
Department as described in the granted exemption.
The notice of proposed exemption was issued and the exemption is
being granted solely by the Department because, effective December 31,
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1
(1996), transferred the authority of the Secretary of the Treasury to
issue exemptions of the type proposed to the Secretary of Labor.
Statutory Findings
In accordance with section 408(a) of the Act and/or section
4975(c)(2) of the Code and the procedures set forth in 29 CFR part
2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon
the entire record, the Department makes the following findings:
(a) The exemption is administratively feasible;
(b) The exemption is in the interests of the plan and its
participants and beneficiaries; and
(c) The exemption is protective of the rights of the participants
and beneficiaries of the plan.
Schloer Enterprises, Inc., 401(k) Profit Sharing Plan (the Plan),
Located in Pottstown, PA
[Prohibited Transaction Exemption 2009-15; Exemption Application No. D-
11493]
Exemption
The restrictions of sections 406(a)(1)(A), 406(a)(1)(D), and
406(b)(1) and (b)(2) of the Act and the sanctions resulting from the
application of section 4975 of the Code, by reason of section
4975(c)(1)(A) and (c)(1)(D) through (E) of the Code, shall not apply to
the sale of a certain parcel of real property (the Property) by the
Plan to Craig J. Schloer, a party in interest with respect to the Plan,
provided that the following conditions are satisfied:
(a) The sale is a one-time transaction for cash;
(b) The terms and conditions of the sale are at least as favorable
to the Plan as those that the Plan could obtain in an arm's length
transaction with an unrelated party;
(c) The sales price is the greater of $381,991 or the fair market
value of the Property as of the date of the transaction, as determined
by a qualified, independent appraiser;
(d) The Plan pays no commissions, costs, or other expenses in
connection with the sale; and
(e) The Plan fiduciary will review and approve the methodology used
by the qualified, independent appraiser, ensure that such methodology
is properly applied in determining the Property's fair market value,
and will also determine whether it is prudent to go forward with the
transaction.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on February 25, 2009 at 72
FR 8579.
FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,
telephone (202) 693-8557. (This is not a toll-free number).
Amendment to Prohibited Transaction Exemption (PTE) 90-29, 55 FR 21459
(May 24, 1990), as Amended by PTE 97-34, 62 FR 39021 (July 21, 1997),
PTE 2000-58, 65 FR 67765 (November 13, 2000), PTE 2002-41, 67 FR 54487
(August 22, 2002) and PTE 2007-05, 72 FR 13130 (March 20, 2007) as
Corrected at 72 FR 16385 (April 4, 2007) (PTE 2007-05), (PTE 90-29),
Involving Merrill Lynch, Pierce, Fenner & Smith, Inc., the Principal
Subsidiary of Merrill Lynch & Co., Inc. and Its Affiliates (Merrill
Lynch) and to PTE 2002-19, 67 FR 14979 (March 28, 2002) as Amended by
PTE 2007-05, (PTE 2002-19), Involving J.P. Morgan Chase & Company and
Its Affiliates
[Prohibited Transaction Exemption 2009-16; Exemption Application Number
D-11519]
Exemption
In accordance with section 408(a) of the Act and section 4975(c)(2)
of the Code and the procedures set forth in 29 CFR part 2570, subpart B
(55 FR 32836, August 10, 1990) and based upon the entire record, the
Department amends PTE 90-29, 55 FR 21459 (May 24, 1990), as amended by
PTE 97-34, 62 FR 39021 (July 21, 1997), PTE 2000-58, 65 FR 67765
(November 13, 2000), PTE 2002-41, 67 FR 54487 (August 22, 2002) and PTE
2007-05, 72 FR 13130 (March 20, 2007), as corrected at 72 FR 16385
(April 4, 2007) (PTE 2007-05), (PTE 90-29) and PTE 2002-19, 67 FR 14979
(March 28, 2002) as amended by PTE 2007-05 (PTE 2002-19).
I. Transactions
A. Effective January 1, 2009, the restrictions of sections 406(a)
and 407(a) of the Act, and the taxes imposed by sections 4975(a) and
(b) of the Code, by reason of section 4975(c)(1)(A) through (D) of the
Code shall not apply to the following transactions involving Issuers
and Securities evidencing interests therein:
(1) The direct or indirect sale, exchange or transfer of Securities
in the initial issuance of Securities between the Sponsor or
Underwriter and an employee benefit plan when the Sponsor, Servicer,
Trustee or Insurer of an Issuer, the Underwriter of the Securities
representing an interest in the Issuer, or an Obligor is a party in
interest with respect to such plan;
(2) The direct or indirect acquisition or disposition of Securities
by a plan in the secondary market for such Securities; and
(3) The continued holding of Securities acquired by a plan pursuant
to subsection I.A.(1) or (2).
Notwithstanding the foregoing, section I.A. does not provide an
exemption from the restrictions of sections 406(a)(1)(E), 406(a)(2) and
407 of the Act for the acquisition or holding of a Security on behalf
of an Excluded Plan by any person who has discretionary authority or
renders investment advice with respect to the assets of that Excluded
Plan.\1\
---------------------------------------------------------------------------
\1\ Section I.A. provides no relief from sections 406(a)(1)(E),
406(a)(2) and 407 of the Act for any person rendering investment
advice to an Excluded Plan within the meaning of section
3(21)(A)(ii) of the Act, and regulation 29 CFR 2510.3-21(c).
---------------------------------------------------------------------------
B. Effective January 1, 2009, the restrictions of sections
406(b)(1) and 406(b)(2) of the Act and the taxes imposed by sections
4975(a) and (b) of the Code, by reason of section 4975(c)(1)(E) of the
Code, shall not apply to:
(1) The direct or indirect sale, exchange or transfer of Securities
in the initial issuance of Securities between the Sponsor or
Underwriter and a plan when the person who has discretionary authority
or renders investment advice with respect to the investment of plan
assets in the Securities is (a) an Obligor with respect to 5 percent or
less of the fair market value of obligations or receivables contained
in the Issuer, or (b) an Affiliate of a person described in (a); if:
(i) The plan is not an Excluded Plan;
(ii) Solely in the case of an acquisition of Securities in
connection with the initial issuance of the Securities, at least 50
percent of each class of Securities in which plans have invested is
acquired
[[Page 30624]]
by persons independent of the members of the Restricted Group and at
least 50 percent of the aggregate interest in the Issuer is acquired by
persons independent of the Restricted Group;
(iii) A plan's investment in each class of Securities does not
exceed 25 percent of all of the Securities of that class outstanding at
the time of the acquisition; and
(iv) Immediately after the acquisition of the Securities, no more
than 25 percent of the assets of a plan with respect to which the
person has discretionary authority or renders investment advice are
invested in Securities representing an interest in an Issuer containing
assets sold or serviced by the same entity.\2\ For purposes of this
paragraph (iv) only, an entity will not be considered to service assets
contained in an Issuer if it is merely a Subservicer of that Issuer;
---------------------------------------------------------------------------
\2\ For purposes of this Underwriter Exemption, each plan
participating in a commingled fund (such as a bank collective trust
fund or insurance company pooled separate account) shall be
considered to own the same proportionate undivided interest in each
asset of the commingled fund as its proportionate interest in the
total assets of the commingled fund as calculated on the most recent
preceding valuation date of the fund.
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(2) The direct or indirect acquisition or disposition of Securities
by a plan in the secondary market for such Securities, provided that
the conditions set forth in paragraphs (i), (iii) and (iv) of
subsection I.B.(1) are met; and
(3) The continued holding of Securities acquired by a plan pursuant
to subsection I.B.(1) or (2).
C. Effective January 1, 2009, the restrictions of sections 406(a),
406(b) and 407(a) of the Act, and the taxes imposed by section 4975(a)
and (b) of the Code by reason of section 4975(c) of the Code, shall not
apply to transactions in connection with the servicing, management and
operation of an Issuer, including the use of any Eligible Swap
transaction; or the defeasance of a mortgage obligation held as an
asset of the Issuer through the substitution of a new mortgage
obligation in a commercial mortgage-backed Designated Transaction,
provided:
(1) Such transactions are carried out in accordance with the terms
of a binding Pooling and Servicing Agreement;
(2) The Pooling and Servicing Agreement is provided to, or
described in all material respects in the prospectus or private
placement memorandum provided to, investing plans before they purchase
Securities issued by the Issuer; \3\ and
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\3\ In the case of a private placement memorandum, such
memorandum must contain substantially the same information that
would be disclosed in a prospectus if the offering of the securities
were made in a registered public offering under the Securities Act
of 1933. In the Department's view, the private placement memorandum
must contain sufficient information to permit plan fiduciaries to
make informed investment decisions. For purposes of this exemption,
references to ``prospectus'' include any related prospectus
supplement thereto, pursuant to which Securities are offered to
investors.
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(3) The defeasance of a mortgage obligation and the substitution of
a new mortgage obligation in a commercial mortgage-backed Designated
Transaction meet the terms and conditions for such defeasance and
substitution as are described in the prospectus or private placement
memorandum for such Securities, which terms and conditions have been
approved by a Rating Agency and does not result in the Securities
receiving a lower credit rating from the Rating Agency than the current
rating of the Securities.
Notwithstanding the foregoing, section I.C. does not provide an
exemption from the restrictions of section 406(b) of the Act or from
the taxes imposed by reason of section 4975(c) of the Code for the
receipt of a fee by a Servicer of the Issuer from a person other than
the Trustee or Sponsor, unless such fee constitutes a Qualified
Administrative Fee.
D. Effective January 1, 2009, the restrictions of sections 406(a)
and 407(a) of the Act, and the taxes imposed by section 4975(a) and (b)
of the Code by reason of section 4975(c)(1)(A) through (D) of the Code,
shall not apply to any transactions to which those restrictions or
taxes would otherwise apply merely because a person is deemed to be a
party in interest or disqualified person (including a fiduciary) with
respect to a plan by virtue of providing services to the plan (or by
virtue of having a relationship to such service provider described in
section 3(14)(F), (G), (H) or (I) of the Act or section 4975(e)(2)(F),
(G), (H) or (I) of the Code), solely because of the plan's ownership of
Securities.
II. General Conditions
A. The relief provided under section I. is available only if the
following conditions are met:
(1) The acquisition of Securities by a plan is on terms (including
the Security price) that are at least as favorable to the plan as they
would be in an arm's-length transaction with an unrelated party;
(2) The rights and interests evidenced by the Securities are not
subordinated to the rights and interests evidenced by other Securities
of the same Issuer, unless the Securities are issued in a Designated
Transaction;
(3) The Securities acquired by the plan have received a rating from
a Rating Agency at the time of such acquisition that is in one of the
three (or in the case of Designated Transactions, four) highest generic
rating categories;
(4) The Trustee is not an Affiliate of any member of the Restricted
Group, other than an Underwriter. For purposes of this requirement:
(a) The Trustee shall not be considered to be an Affiliate of a
Servicer solely because the Trustee has succeeded to the rights and
responsibilities of the Servicer pursuant to the terms of a Pooling and
Servicing Agreement providing for such succession upon the occurrence
of one or more events of default by the Servicer; and
(b) Subsection II.A.(4) will be deemed satisfied notwithstanding a
Servicer becoming an Affiliate of the Trustee as the result of a merger
or acquisition involving the Trustee, such Servicer and/or their
Affiliates which occurs after the initial issuance of the Securities,
provided that:
(i) Such Servicer ceases to be an Affiliate of the Trustee no later
than six months after the date such Servicer became an Affiliate of the
Trustee; and
(ii) Such Servicer did not breach any of its obligations under the
Pooling and Servicing Agreement, unless such breach was immaterial and
timely cured in accordance with the terms of such agreement, during the
period from the closing date of such merger or acquisition transaction
through the date the Servicer ceased to be an Affiliate of the Trustee;
(c) Effective January 1, 2009 through July 1, 2009, Bank of
America, N.A., the Trustee, shall not be considered to be an Affiliate
of any member of the Restricted Group solely as the result of the
acquisition of Merrill Lynch & Co., Inc. and its affiliates (Merrill
Lynch) by Bank of America Corporation and its subsidiaries (Bank of
America), the parent holding company of Bank of America, N.A. (the
Acquisition), which occurred after the initial issuance of the
Securities, provided that:
(i) The Trustee, Bank of America, N.A., ceases to be an Affiliate
of any member of the Restricted Group no later than July 1, 2009;
(ii) Any member of the Restricted Group that is an Affiliate of the
Trustee, Bank of America, N.A., did not breach any of its obligations
under the Pooling and Servicing Agreement, unless such breach was
immaterial and timely cured in accordance with the terms of such
agreement, during the period from
[[Page 30625]]
January 1, 2009 through the date the member of the Restricted Group
ceased to be an Affiliate of the Trustee, Bank of America, N.A.; and
(iii) In accordance with each Pooling and Servicing Agreement, the
Trustee, Bank of America, N.A., appoints a co-trustee, which is not an
Affiliate of Merrill Lynch or any other member of the Restricted Group,
no later than the earlier of (A) April 1, 2009 or (B) five business
days after Bank of America, N.A. becomes aware of a conflict between
the Trustee and any member of the Restricted Group that is an Affiliate
of the Trustee. The co-trustee will be responsible for resolving any
conflict between the Trustee and any member of the Restricted Group
that has become an Affiliate of the Trustee as a result of the
Acquisition; provided, that if the Trustee has resigned on or prior to
April 1, 2009 and no event described in clause (B) has occurred, no co-
trustee shall be required.\4\
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\4\ On March 16, 2009, Bank of America, N.A. informed the
Department that for all 49 of the transactions on the Securitization
List at Sec. III.KK, the replacement trustees will be in place as of
March 31, 2009.
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(iv) For purposes of this subsection II.A.(4)(c), a conflict arises
whenever (A) Merrill Lynch, as a member of the Restricted Group, fails
to perform in accordance with the timeframes contained in the relevant
Pooling and Servicing Agreement following a request for performance
from Bank of America, N.A., as Trustee, or (B) Bank of America, N.A.,
as Trustee, fails to perform in accordance with the timeframes
contained in the relevant Pooling and Servicing Agreement following a
request for performance from Merrill Lynch, a member of the Restricted
Group.
The time as of which a conflict occurs is the earlier of: the day
immediately following the last day on which compliance is required
under the relevant Pooling and Servicing Agreement; or the day on which
a party affirmatively responds that it will not comply with a request
for performance.
For purposes of this subsection II.A.(4)(c), the term ``conflict''
includes but is not limited to, the following: (1) Merrill Lynch's
failure, as Sponsor, to repurchase a loan for breach of representation
within the time period prescribed in the relevant Pooling and Servicing
Agreement, following Bank of America, N.A.'s request, as Trustee, for
performance; (2) Merrill Lynch, as Sponsor, notifies Bank of America,
N.A., as Trustee, that it will not repurchase a loan for breach of
representation, following Bank of America, N.A.'s request that Merrill
Lynch repurchase such loan within the time period prescribed in the
relevant Pooling and Servicing Agreement (the notification occurs prior
to the expiration of the prescribed time period for the repurchase);
and (3) Merrill Lynch, as Swap Counterparty, makes or requests a
payment based on a value of the London Interbank Offered Rate (LIBOR)
that Bank of America, N.A., as Trustee, considers erroneous.
(5) The sum of all payments made to and retained by the
Underwriters in connection with the distribution or placement of
Securities represents not more than Reasonable Compensation for
underwriting or placing the Securities; the sum of all payments made to
and retained by the Sponsor pursuant to the assignment of obligations
(or interests therein) to the Issuer represents not more than the fair
market value of such obligations (or interests); and the sum of all
payments made to and retained by the Servicer represents not more than
Reasonable Compensation for the Servicer's services under the Pooling
and Servicing Agreement and reimbursement of the Servicer's reasonable
expenses in connection therewith;
(6) The plan investing in such Securities is an ``accredited
investor'' as defined in Rule 501(a)(1) of Regulation D of the
Securities and Exchange Commission under the Securities Act of 1933;
and
(7) In the event that the obligations used to fund a Issuer have
not all been transferred to the Issuer on the Closing Date, additional
obligations of the types specified in subsection III.B.(1) may be
transferred to the Issuer during the Pre-Funding Period in exchange for
amounts credited to the Pre-Funding Account, provided that:
(a) The Pre-Funding Limit is not exceeded;
(b) All such additional obligations meet the same terms and
conditions for determining the eligibility of the original obligations
used to create the Issuer (as described in the prospectus or private
placement memorandum and/or Pooling and Servicing Agreement for such
Securities), which terms and conditions have been approved by a Rating
Agency.
Notwithstanding the foregoing, the terms and conditions for
determining the eligibility of an obligation may be changed if such
changes receive prior approval either by a majority vote of the
outstanding securityholders or by a Rating Agency;
(c) The transfer of such additional obligations to the Issuer
during the Pre-Funding Period does not result in the Securities
receiving a lower credit rating from a Rating Agency upon termination
of the Pre-Funding Period than the rating that was obtained at the time
of the initial issuance of the Securities by the Issuer;
(d) The weighted average annual percentage interest rate (the
average interest rate) for all of the obligations held by the Issuer at
the end of the Pre-Funding Period will not be more than 100 basis
points lower than the average interest rate for the obligations which
were transferred to the Issuer on the Closing Date;
(e) In order to ensure that the characteristics of the receivables
actually acquired during the Pre-Funding Period are substantially
similar to those which were acquired as of the Closing Date, the
characteristics of the additional obligations will either be monitored
by a credit support provider or other insurance provider which is
independent of the Sponsor or an independent accountant retained by the
Sponsor will provide the Sponsor with a letter (with copies provided to
the Rating Agency, the Underwriter and the Trustee) stating whether or
not the characteristics of the additional obligations conform to the
characteristics of such obligations described in the prospectus,
private placement memorandum and/or Pooling and Servicing Agreement. In
preparing such letter, the independent accountant will use the same
type of procedures as were applicable to the obligations which were
transferred as of the Closing Date;
(f) The Pre-Funding Period shall be described in the prospectus or
private placement memorandum provided to investing plans; and
(g) The Trustee of the Trust (or any agent with which the Trustee
contracts to provide Trust services) will be a substantial financial
institution or trust company experienced in trust activities and
familiar with its duties, responsibilities and liabilities as a
fiduciary under the Act. The Trustee, as the legal owner of the
obligations in the Trust or the holder of a security interest in the
obligations held by the Issuer, will enforce all the rights created in
favor of securityholders of the Issuer, including employee benefit
plans subject to the Act;
(8) In order to insure that the assets of the Issuer may not be
reached by creditors of the Sponsor in the event of bankruptcy or other
insolvency of the Sponsor:
(a) The legal documents establishing the Issuer will contain:
(i) Restrictions on the Issuer's ability to borrow money or issue
debt other than in connection with the securitization;
[[Page 30626]]
(ii) Restrictions on the Issuer merging with another entity,
reorganizing, liquidating or selling assets (other than in connection
with the securitization);
(iii) Restrictions limiting the authorized activities of the Issuer
to activities relating to the securitization;
(iv) If the Issuer is not a Trust, provisions for the election of
at least one independent director/partner/member whose affirmative
consent is required before a voluntary bankruptcy petition can be filed
by the Issuer; and
(v) If the Issuer is not a Trust, requirements that each
independent director/partner/member must be an individual that does not
have a significant interest in, or other relationships with, the
Sponsor or any of its Affiliates; and
(b) The Pooling and Servicing Agreement and/or other agreements
establishing the contractual relationships between the parties to the
securitization transaction will contain covenants prohibiting all
parties thereto from filing an involuntary bankruptcy petition against
the Issuer or initiating any other form of insolvency proceeding until
after the Securities have been paid; and
(c) Prior to the issuance by the Issuer of any Securities, a legal
opinion is received which states that either:
(i) A ``true sale'' of the assets being transferred to the Issuer
by the Sponsor has occurred and that such transfer is not being made
pursuant to a financing of the assets by the Sponsor; or
(ii) In the event of insolvency or receivership of the Sponsor, the
assets transferred to the Issuer will not be part of the estate of the
Sponsor;
(9) If a particular class of Securities held by any plan involves a
Ratings Dependent or Non-Ratings Dependent Swap entered into by the
Issuer, then each particular swap transaction relating to such
Securities:
(a) Shall be an Eligible Swap;
(b) Shall be with an Eligible Swap Counterparty;
(c) In the case of a Ratings Dependent Swap, shall provide that if
the credit rating of the counterparty is withdrawn or reduced by any
Rating Agency below a level specified by the Rating Agency, the
Servicer (as agent for the Trustee) shall, within the period specified
under the Pooling and Servicing Agreement:
(i) Obtain a replacement swap agreement with an Eligible Swap
Counterparty which is acceptable to the Rating Agency and the terms of
which are substantially the same as the current swap agreement (at
which time the earlier swap agreement shall terminate); or
(ii) Cause the swap counterparty to establish any collateralization
or other arrangement satisfactory to the Rating Agency such that the
then current rating by the Rating Agency of the particular class of
Securities will not be withdrawn or reduced.
In the event that the Servicer fails to meet its obligations under
this subsection II.A.(9)(c), plan securityholders will be notified in
the immediately following Trustee's periodic report which is provided
to securityholders, and sixty days after the receipt of such report,
the exemptive relief provided under section I.C. will prospectively
cease to be applicable to any class of Securities held by a plan which
involves such Ratings Dependent Swap; provided that in no event will
such plan securityholders be notified any later than the end of the
second month that begins after the date on which such failure occurs.
(d) In the case of a Non-Ratings Dependent Swap, shall provide
that, if the credit rating of the counterparty is withdrawn or reduced
below the lowest level specified in section III.GG., the Servicer (as
agent for the Trustee) shall within a specified period after such
rating withdrawal or reduction:
(i) Obtain a replacement swap agreement with an Eligible Swap
Counterparty, the terms of which are substantially the same as the
current swap agreement (at which time the earlier swap agreement shall
terminate); or
(ii) Cause the swap counterparty to post collateral with the
Trustee in an amount equal to all payments owed by the counterparty if
the swap transaction were terminated; or
(iii) Terminate the swap agreement in accordance with its terms;
and
(e) Shall not require the Issuer to make any termination payments
to the counterparty (other than a currently scheduled payment under the
swap agreement) except from Excess Spread or other amounts that would
otherwise be payable to the Servicer or the Sponsor;
(10) Any class of Securities, to which one or more swap agreements
entered into by the Issuer applies, may be acquired or held in reliance
upon this Underwriter Exemption only by Qualified Plan Investors; and
(11) Prior to the issuance of any debt securities, a legal opinion
is received which states that the debt holders have a perfected
security interest in the Issuer's assets.
B. Neither any Underwriter, Sponsor, Trustee, Servicer, Insurer or
any Obligor, unless it or any of its Affiliates has discretionary
authority or renders investment advice with respect to the plan assets
used by a plan to acquire Securities, shall be denied the relief
provided under section I., if the provision of subsection II.A.(6) is
not satisfied with respect to acquisition or holding by a plan of such
Securities, provided that (1) such condition is disclosed in the
prospectus or private placement memorandum; and (2) in the case of a
private placement of Securities, the Trustee obtains a representation
from each initial purchaser which is a plan that it is in compliance
with such condition, and obtains a covenant from each initial purchaser
to the effect that, so long as such initial purchaser (or any
transferee of such initial purchaser's Securities) is required to
obtain from its transferee a representation regarding compliance with
the Securities Act of 1933, any such transferees will be required to
make a written representation regarding compliance with the condition
set forth in subsection II.A.(6).
III. Definitions
For purposes of this exemption:
A. ``Security'' means:
(1) A pass-through certificate or trust certificate that represents
a beneficial ownership interest in the assets of an Issuer which is a
Trust and which entitles the holder to payments of principal, interest
and/or other payments made with respect to the assets of such Trust; or
(2) A security which is denominated as a debt instrument that is
issued by, and is an obligation of, an Issuer; with respect to which
the Underwriter is either (i) the sole underwriter or the manager or
co-manager of the underwriting syndicate, or (ii) a selling or
placement agent.
B. ``Issuer'' means an investment pool, the corpus or assets of
which are held in trust (including a grantor or owner Trust) or whose
assets are held by a partnership, special purpose corporation or
limited liability company (which Issuer may be a Real Estate Mortgage
Investment Conduit (REMIC) or a Financial Asset Securitization
Investment Trust (FASIT) within the meaning of section 860D(a) or
section 860L, respectively, of the Code); and the corpus or assets of
which consist solely of:
(1)(a) Secured consumer receivables that bear interest or are
purchased at a discount (including, but not limited to, home equity
loans and obligations secured by shares issued by a cooperative housing
association); and/or
(b) Secured credit instruments that bear interest or are purchased
at a discount in transactions by or between
[[Page 30627]]
business entities (including, but not limited to, Qualified Equipment
Notes Secured by Leases); and/or
(c) Obligations that bear interest or are purchased at a discount
and which are secured by single-family residential, multi-family
residential and/or commercial real property (including obligations
secured by leasehold interests on residential or commercial real
property); and/or
(d) Obligations that bear interest or are purchased at a discount
and which are secured by motor vehicles or equipment, or Qualified
Motor Vehicle Leases; and/or
(e) Guaranteed governmental mortgage pool certificates, as defined
in 29 CFR 2510.3-101(i)(2); \5\ and/or
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\5\ In ERISA Advisory Opinion 99-05A (Feb. 22, 1999), the
Department expressed its view that mortgage pool certificates
guaranteed and issued by the Federal Agricultural Mortgage
Corporation (``Farmer Mac'') meet the definition of a guaranteed
governmental mortgage pool certificate as defined in 29 CFR 2510.3-
101(i)(2).
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(f) Fractional undivided interests in any of the obligations
described in clauses (a)-(e) of this subsection B.(1).\6\
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\6\ It is the Department's view that the definition of Issuer
contained in subsection III.B. includes a two-tier structure under
which Securities issued by the first Issuer, which contains a pool
of receivables described above, are transferred to a second Issuer
which issues Securities that are sold to plans. However, the
Department is of the further view that, since the Underwriter
Exemption generally provides relief only for the direct or indirect
acquisition or disposition of Securities that are not subordinated,
no relief would be available if the Securities held by the second
Issuer were subordinated to the rights and interests evidenced by
other Securities issued by the first Issuer, unless such Securities
were issued in a Designated Transaction.
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Notwithstanding the foregoing, residential and home equity loan
receivables issued in Designated Transactions may be less than fully
secured, provided that: (i) The rights and interests evidenced by the
Securities issued in such Designated Transactions (as defined in
section III.DD.) are not subordinated to the rights and interests
evidenced by Securities of the same Issuer; (ii) such Securities
acquired by the plan have received a rating from a Rating Agency at the
time of such acquisition that is in one of the two highest generic
rating categories; and (iii) any obligation included in the corpus or
assets of the Issuer must be secured by collateral whose fair market
value on the Closing Date of the Designated Transaction is at least
equal to 80% of the sum of: (I) The outstanding principal balance due
under the obligation which is held by the Issuer and (II) the
outstanding principal balance(s) of any other obligation(s) of higher
priority (whether or not held by the Issuer) which are secured by the
same collateral.
(2) Property which had secured any of the obligations described in
subsection III.B.(1);
(3)(a) Undistributed cash or temporary investments made therewith
maturing no later than the next date on which distributions are made to
securityholders; and/or
(b) Cash or investments made therewith which are credited to an
account to provide payments to securityholders pursuant to any Eligible
Swap Agreement meeting the conditions of subsection II.A.(9) or
pursuant to any Eligible Yield Supplement Agreement; and/or
(c) Cash transferred to the Issuer on the Closing Date and
permitted investments made therewith which:
(i) Are credited to a Pre-Funding Account established to purchase
additional obligations with respect to which the conditions set forth
in paragraphs (a)-(g) of subsection II.A.(7) are met; and/or
(ii) Are credited to a Capitalized Interest Account; and
(iii) Are held by the Issuer for a period ending no later than the
first distribution date to securityholders occurring after the end of
the Pre-Funding Period.
For purposes of this paragraph (c) of subsection III.B.(3), the
term ``permitted investments'' means investments which: (i) Are either:
(x) Direct obligations of, or obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
or instrumentality thereof, provided that such obligations are backed
by the full faith and credit of the United States or (y) have been
rated (or the Obligor has been rated) in one of the three highest
generic rating categories by a Rating Agency; (ii) are described in the
Pooling and Servicing Agreement; and (iii) are permitted by the Rating
Agency.
(4) Rights of the Trustee under the Pooling and Servicing
Agreement, and rights under any insurance policies, third-party
guarantees, contracts of suretyship, Eligible Yield Supplement
Agreements, Eligible Swap Agreements meeting the conditions of
subsection II.A.(9) or other credit support arrangements with respect
to any obligations described in subsection III.B.(1).
Notwithstanding the foregoing, the term ``Issuer'' does not include
any investment pool unless: (i) The assets of the type described in
paragraphs (a)-(f) of subsection III.B.(1) which are contained in the
investment pool have been included in other investment pools, (ii)
Securities evidencing interests in such other investment pools have
been rated in one of the three (or in the case of Designated
Transactions, four) highest generic rating categories by a Rating
Agency for at least one year prior to the plan's acquisition of
Securities pursuant to this Underwriter Exemption, and (iii) Securities
evidencing interests in such other investment pools have been purchased
by investors other than plans for at least one year prior to the plan's
acquisition of Securities pursuant to this Underwriter Exemption.
C. ``Underwriter'' means:
(1) Merrill Lynch;
(2) Any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with
Merrill Lynch; or
(3) Any member of an underwriting syndicate or selling group of
which a person described in subsections III.C.(1) or (2) is a manager
or co-manager with respect to the Securities.
Effective January 1, 2009 through July 1, 2009, ``Underwriter''
means:
(1) Merrill Lynch or J.P. Morgan Securities Inc.;
(2) Any person directly or indirectly, through one or more
intermediaries, controlling, controlled by or under common control with
such entities; or
(3) Any member of an underwriting syndicate or selling group of
which such firm or person described in subsections III.C.(1) or (2) is
a manager or co-manager with respect to the Securities.
D. ``Sponsor'' means:
(1) The entity that organizes an Issuer by depositing obligations
therein in exchange for Securities; or
(2) Effective January 1, 2009 through July 1, 2009, for those
transactions listed on the Securitization List at section III.KK.,
Merrill Lynch.
E. ``Master Servicer'' means the entity that is a party to the
Pooling and Servicing Agreement relating to assets of the Issuer and is
fully responsible for servicing, directly or through Subservicers, the
assets of the Issuer.
F. ``Subservicer'' means an entity which, under the supervision of
and on behalf of the Master Servicer, services loans contained in the
Issuer, but is not a party to the Pooling and Servicing Agreement.
G. ``Servicer'' means any entity which services loans contained in
the Issuer, including the Master Servicer and any Subservicer.
H. ``Trust'' means an Issuer which is a trust (including an owner
trust, grantor trust or a REMIC or FASIT which is organized as a
Trust).
I. ``Trustee'' means the Trustee of any Trust which issues
Securities and also includes an Indenture Trustee.
[[Page 30628]]
``Indenture Trustee'' means the Trustee appointed under the indenture
pursuant to which the subject Securities are issued, the rights of
holders of the Securities are set forth and a security interest in the
Trust assets in favor of the holders of the Securities is created. The
Trustee or the Indenture Trustee is also a party to or beneficiary of
all the documents and instruments transferred to the Issuer, and as
such, has both the authority to, and the responsibility for, enforcing
all the rights created thereby in favor of holders of the Securities,
including those rights arising in the event of default by the Servicer.
J. ``Insurer'' means the insurer or guarantor of, or provider of
other credit support for, an Issuer. Notwithstanding the foregoing, a
person is not an insurer solely because it holds Securities
representing an interest in an Issuer which are of a class subordinated
to Securities representing an interest in the same Issuer.
K. ``Obligor'' means any person, other than the Insurer, that is
obligated to make payments with respect to any obligation or receivable
included in the Issuer. Where an Issuer contains Qualified Motor
Vehicle Leases or Qualified Equipment Notes Secured by Leases,
``Obligor'' shall also include any owner of property subject to any
lease included in the Issuer, or subject to any lease securing an
obligation included in the Issuer.
L. ``Excluded Plan'' means any plan with respect to which any
member of the Restricted Group is a ``plan sponsor'' within the meaning
of section 3(16)(B) of the Act.
M. ``Restricted Group'' with respect to a class of Securities
means:
(1) Each Underwriter;
(2) Each Insurer;
(3) The Sponsor;
(4) The Trustee;
(5) Each Servicer;
(6) Any Obligor with respect to obligations or receivables included
in the Issuer constituting more than 5 percent of the aggregate
unamortized principal balance of the assets in the Issuer, determined
on the date of the initial issuance of Securities by the Issuer;
(7) Each counterparty in an Eligible Swap Agreement; or
(8) Any Affiliate of a person described in subsections III.M.(1)-
(7).
N. ``Affiliate'' of another person includes:
(1) Any person directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control
with such other person;
(2) Any officer, director, partner, employee, relative (as defined
in section 3(15) of the Act), a brother, a sister, or a spouse of a
brother or sister of such other person; and
(3) Any corporation or partnership of which such other person is an
officer, director or partner.
O. ``Control'' means the power to exercise a controlling influence
over the management or policies of a person other than an individual.
P. A person will be ``independent'' of another person only if:
(1) Such person is not an Affiliate of that other person; and
(2) The other person, or an Affiliate thereof, is not a fiduciary
who has investment management authority or renders investment advice
with respect to any assets of such person.
Q. ``Sale'' includes the entrance into a Forward Delivery
Commitment, provided:
(1) The terms of the Forward Delivery Commitment (including any fee
paid to the investing plan) are no less favorable to the plan than they
would be in an arm's-length transaction with an unrelated party;
(2) The prospectus or private placement memorandum is provided to
an investing plan prior to the time the plan enters into the Forward
Delivery Commitment; and
(3) At the time of the delivery, all conditions of this Underwriter
Exemption applicable to sales are met.
R. ``Forward Delivery Commitment'' means a contract for the
purchase or sale of one or more Securities to be delivered at an agreed
future settlement date. The term includes both mandatory contracts
(which contemplate obligatory delivery and acceptance of the
Securities) and optional contracts (which give one party the right but
not the obligation to deliver Securities to, or demand delivery of
Securities from, the other party).
S. ``Reasonable Compensation'' has the same meaning as that term is
defined in 29 CFR 2550.408c-2.
T. ``Qualified Administrative Fee'' means a fee which meets the
following criteria:
(1) The fee is triggered by an act or failure to act by the Obligor
other than the normal timely payment of amounts owing in respect of the
obligations;
(2) The Servicer may not charge the fee absent the act or failure
to act referred to in subsection III.T.(1);
(3) The ability to charge the fee, the circumstances in which the
fee may be charged, and an explanation of how the fee is calculated are
set forth in the Pooling and Servicing Agreement; and
(4) The amount paid to investors in the Issuer will not be reduced
by the amount of any such fee waived by the Servicer.
U. ``Qualified Equipment Note Secured By A Lease'' means an
equipment note:
(1) Which is secured by equipment which is leased;
(2) Which is secured by the obligation of the lessee to pay rent
under the equipment lease; and
(3) With respect to which the Issuer's security interest in the
equipment is at least as protective of the rights of the Issuer as the
Issuer would have if the equipment note were secured only by the
equipment and not the lease.
V. ``Qualified Motor Vehicle Lease'' means a lease of a motor
vehicle where:
(1) The Issuer owns or holds a security interest in the lease;
(2) The Issuer owns or holds a security interest in the leased
motor vehicle; and
(3) The Issuer's security interest in the leased motor vehicle is
at least as protective of the Issuer's rights as the Issuer would
receive under a motor vehicle installment loan contract.
W. ``Pooling and Servicing Agreement'' means the agreement or
agreements among a Sponsor, a Servicer and the Trustee establishing a
Trust. ``Pooling and Servicing Agreement'' also includes the indenture
entered into by the Issuer and the Indenture Trustee.
X. ``Rating Agency'' means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.; Moody's Investors Service,
Inc.; FitchRatings, Inc.; DBRS Limited, or DBRS, Inc.; or any
successors thereto.
Y. ``Capitalized Interest Account'' means an Issuer account: (i)
Which is established to compensate securityholders for shortfalls, if
any, between investment earnings on the Pre-Funding Account and the
interest rate payable under the Securities; and (ii) which meets the
requirements of paragraph (c) of subsection III.B.(3).
Z. ``Closing Date'' means the date the Issuer is formed, the
Securities are first issued and the Issuer's assets (other than those
additional obligations which are to be funded from the Pre-Funding
Account pursuant to subsection II.A.(7)) are transferred to the Issuer.
AA. ``Pre-Funding Account'' means an Issuer account: (i) Which is
established to purchase additional obligations, which obligations meet
the conditions set forth in paragraph (a)-(g) of subsection II.A.(7);
and (ii) which meets the requirements of paragraph (c) of subsection
III.B.(3).
BB. ``Pre-Funding Limit'' means a percentage or ratio of the amount
allocated to the Pre-Funding Account, as compared to the total
principal
[[Page 30629]]
amount of the Securities being offered, which is less than or equal to
25 percent.
CC. ``Pre-Funding Period'' means the period commencing on the
Closing Date and ending no later than the earliest to occur of: (i) The
date the amount on deposit in the Pre-Funding Account is less than the
minimum dollar amount specified in the Pooling and Servicing Agreement;
(ii) the date on which an event of default occurs under the Pooling and
Servicing Agreement; or (iii) the date which is the later of three
months or ninety days after the Closing Date.
DD. ``Designated Transaction'' means a securitization transaction
in which the assets of the Issuer consist of secured consumer
receivables, secured credit instruments or secured obligations that
bear interest or are purchased at a discount and are: (i) Motor
vehicle, home equity and/or manufactured housing consumer receivables;
and/or (ii) motor vehicle credit instruments in transactions by or
between business entities; and/or (iii) single-family residential,
multi-family residential, home equity, manufactured housing and/or
commercial mortgage obligations that are secured by single-family
residential, multi-family residential, commercial real property or
leasehold interests therein. For purposes of this section III.DD., the
collateral securing motor vehicle consumer receivables or motor vehicle
credit instruments may include motor vehicles and/or Qualified Motor
Vehicle Leases.
EE. ``Ratings Dependent Swap'' means an interest rate swap, or (if
purchased by or on behalf of the Issuer) an interest rate cap contract,
that is part of the structure of a class of Securities where the rating
assigned by the Rating Agency to any class of Securities held by any
plan is dependent on the terms and conditions of the swap and the
rating of the counterparty, and if such Security rating is not
dependent on the existence of the swap and rating of the counterparty,
such swap or cap shall be referred to as a ``Non-Ratings Dependent
Swap''. With respect to a Non-Ratings Dependent Swap, each Rating
Agency rating the Securities must confirm, as of the date of issuance
of the Securities by the Issuer, that entering into an Eligible Swap
with such counterparty will not affect the rating of the Securities.
FF. ``Eligible Swap'' means a Ratings Dependent or Non-Ratings
Dependent Swap:
(1) Which is denominated in U.S. dollars;
(2) Pursuant to which the Issuer pays or receives, on or
immediately prior to the respective payment or distribution date for
the class of Securities to which the swap relates, a fixed rate of
interest, or a floating rate of interest based on a publicly available
index (e.g., LIBOR or the U.S. Federal Reserve's Cost of Funds Index
(COFI)), with the Issuer receiving such payments on at least a
quarterly basis and obligated to make separate payments no more
frequently than the counterparty, with all simultaneous payments being
netted;
(3) Which has a notional amount that does not exceed either: (i)
The principal balance of the class of Securities to which the swap
relates, or (ii) the portion of the principal balance of such class
represented solely by those types of corpus or assets of the Issuer
referred to in subsections III.B.(1), (2) and (3);
(4) Which is not leveraged (i.e., payments are based on the
applicable notional amount, the day count fractions, the fixed or
floating rates designated in subsection III.FF.(2), and the difference
between the products thereof, calculated on a one to one ratio and not
on a multiplier of such difference);
(5) Which has a final termination date that is either the earlier
of the date on which the Issuer terminates or the related class of
securities is fully repaid; and
(6) Which does not incorporate any provision which could cause a
unilateral alteration in any provision described in subsections
III.FF.(1) through (4) without the consent of the Trustee.
GG. ``Eligible Swap Counterparty'' means a bank or other financial
institution which has a rating, at the date of issuance of the
Securities by the Issuer, which is in one of the three highest long-
term credit rating categories, or one of the two highest short-term
credit rating categories, utilized by at least one of the Rating
Agencies rating the Securities; provided that, if a swap counterparty
is relying on its short-term rating to establish eligibility under the
Underwriter Exemption, such swap counterparty must either have a long-
term rating in one of the three highest long-term rating categories or
not have a long-term rating from the applicable Rating Agency, and
provided further that if the class of Securities with which the swap is
associated has a final maturity date of more than one year from the
date of issuance of the Securities, and such swap is a Ratings
Dependent Swap, the swap counterparty is required by the terms of the
swap agreement to establish any collateralization or other arrangement
satisfactory to the Rating Agencies in the event of a ratings downgrade
of the swap counterparty.
HH. ``Qualified Plan Investor'' means a plan investor or group of
plan investors on whose behalf the decision to purchase Securities is
made by an appropriate independent fiduciary that is qualified to
analyze and understand the terms and conditions of any swap transaction
used by the Issuer and the effect such swap would have upon the credit
ratings of the Securities. For purposes of the Underwriter Exemption,
such a fiduciary is either:
(1) A ``qualified professional asset manager'' (QPAM),\7\ as
defined under Part V(a) of PTE 84-14, 49 FR 9494, 9506 (March 13,
1984), as amended by 70 FR 49305 (August 23, 2005);
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\7\ PTE 84-14 provides a class exemption for transactions
between a party in interest with respect to an employee benefit plan
and an investment fund (including either a single customer or pooled
separate account) in which the plan has an interest, and which is
managed by a QPAM, provided certain conditions are met. QPAMs (e.g.,
banks, insurance companies, registered investment advisers with
total client assets under management in excess of $85 million) are
considered to be experienced investment managers for plan investors
that are aware of their fiduciary duties under ERISA.
---------------------------------------------------------------------------
(2) An ``in-house asset manager'' (INHAM),\8\ as defined under Part
IV(a) of PTE 96-23, 61 FR 15975, 15982 (April 10, 1996); or
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\8\ PTE 96-23 permits various transactions involving employee
benefit plans whose assets are managed by an INHAM, an entity which
is generally a subsidiary of an employer sponsoring the plan which
is a registered investment adviser with management and control of
total assets attributable to plans maintained by the employer and
its affiliates which are in excess of $50 million.
---------------------------------------------------------------------------
(3) A plan fiduciary with total assets under management of at least
$100 million at the time of the acquisition of such Securities.
II. ``Excess Spread'' means, as of any day funds are distributed
from the Issuer, the amount by which the interest allocated to
Securities exceeds the amount necessary to pay interest to
securityholders, servicing fees and expenses.
JJ. ``Eligible Yield Supplement Agreement'' means any yield
supplement agreement, similar yield maintenance arrangement or, if
purchased by or on behalf of the Issuer, an interest rate cap contract
to supplement the interest rates otherwise payable on obligations
described in subsection III.B.(1). Such an agreement or arrangement may
involve a notional principal contract provided that:
(1) It is denominated in U.S. dollars;
(2) The Issuer receives on, or immediately prior to the respective
payment date for the Securities covered by such agreement or
arrangement, a fixed rate of interest or a floating rate of interest
based on a publicly available index (e.g., LIBOR or COFI), with the
[[Page 30630]]
Issuer receiving such payments on at least a quarterly basis;
(3) It is not ``leveraged'' as described in subsection III.FF.(4);
(4) It does not incorporate any provision which would cause a
unilateral alteration in any provision described in subsections
III.JJ.(1)-(3) without the consent of the Trustee;
(5) It is entered into by the Issuer with an Eligible Swap
Counterparty; and
(6) It has a notional amount that does not exceed either: (i) The
principal balance of the class of Securities to which such agreement or
arrangement relates, or (ii) the portion of the principal balance of
such class represented solely by those types of corpus or assets of the
Issuer referred to in subsections III.B.(1), (2) and (3).
KK. Effective January 1, 2009 through July 1, 2009,
``Securitization List'' means:
------------------------------------------------------------------------
Issuance
Name type MLynch role
------------------------------------------------------------------------
CMAC Series 1997 ML1......................... C S, U
WFPD 1996 WFP-D.............................. C S, U
Merrill Lynch 2003-KEY 1..................... C S, U
Merrill Lynch Series 1997-C1................. C S, U
Merrill Lynch Series 2004-KEY 2.............. C S, U
Merrill Lynch Series 2006-C2................. C S, U
Mezz Cap 2004-C2............................. C S, U
C-BASS 2007-CB4.............................. R S, U
First Franklin MLT 2006-FF18................. R S, U, MS
First Franklin MLT 2007-01................... R S, U, MS
First Franklin MLT 2007-02................... R U, MS
First Franklin MLT 2007-03................... R U, MS
First Franklin MLT 2007-4.................... R S, U, MS
First Franklin MLT 2007-5.................... R S, U, MS
First Franklin MLT 2007-A.................... R S, U, MS
First Franklin MLT 2007-FF1.................. R S, U, MS
First Franklin MLT 2007-FF2.................. R S, U, MS
First Franklin MLT 2007-FFA.................. R S, U, MS
First Franklin MLT 2007-FFC.................. R S, U, MS
First Franklin MLT 2007-H1................... R S, U, MS
Merrill Lynch Series 2005-SL3................ R S, U, MS
Merrill Lynch Series 2006-AHL1............... R S, U, MS
Merrill Lynch Series 2006-AR1................ R S, U, MS
Merrill Lynch Series 2006-FF1................ R S, U, MS
Merrill Lynch Series 2006-FM1................ R S, U, MS
Merrill Lynch Series 2006-HE2................ R S, U, MS
Merrill Lynch Series 2006-HE3................ R S, U, MS
Merrill Lynch Series 2006-HE4................ R S, U, MS
Merrill Lynch Series 2006-HE6................ R S, U, MS
Merrill Lynch Series 2006-MLN1............... R S, U, MS
Merrill Lynch Series 2006-OPT1............... R S, U
Merrill Lynch Series 2006-RM1................ R S, U, MS
Merrill Lynch Series 2006-RM2................ R S, U, MS
Merrill Lynch Series 2006-RM3................ R S, U
Merrill Lynch Series 2006-RM4................ R S, U, MS
Merrill Lynch Series 2006-RM5................ R S, U, MS
Merrill Lynch Series 2006-SD1................ R S, U, MS
Merrill Lynch Series 2006-SL1................ R S, U, MS
Merrill Lynch Series 2006-WMC2............... R S, U, MS
Merrill Lynch Series 2007-HE1................ R S, U, MS
Merrill Lynch Series 2007-HE3................ R S, U, MS
Merrill Lynch Series 2007-SD1................ R S, U, MS
MLMI Trust 2002-AFC1......................... R S, U
Ownit Mort Loan ABS 2006-3................... R S, U
Ownit Mort Loan ABS 2006-4................... R S, U
Ownit Mort Loan ABS 2006-5................... R S, U
Ownit Mort Loan ABS 2006-6................... R S, U
Ownit Mort Loan ABS 2006-7................... R S, U
JP Morgan Chase 2003-ML1 (U-JP Morgan C S
Securities Inc.)............................
------------------------------------------------------------------------
Legend:
C = Commercial mortgage-backed securitizations.
R = Residential mortgage-backed securitizations.
U = Underwriter.
S = Sponsor.
MS = Master Servicer.
MLynch = Merrill Lynch.
Effective Date: This amendment was effective January 1, 2009.
For a more complete statement of the facts and representations
supporting the Department's decision to amend PTE 90-29 and PTE 2002-
19, refer to the notice of proposed exemption that was published on May
6, 2009 in the Federal Register at 74 FR 21002.
FOR FURTHER INFORMATION CONTACT: Wendy M. McColough of the
[[Page 30631]]
Department, telephone (202) 693-8540 (This is not a toll-free number).
Individual Retirement Accounts (the IRAs) for Ralph Hartwell, Harold
Latin, Kenlon Johnson, Carol Johnson, Shanon Taylor, Michael Ball,
Dianne Barkas, Roy Barkas, Harry DeWall, Alice Pike, Steven Larsen, C.
Timothy Hopkins, Wayne Meuleman, Robert L. Miller, and Richard T. Scott
(Collectively, the Participants), Located in Idaho Falls, Idaho, and
Elsewhere
[Prohibited Transaction Exemption 2009-17; Exemption Application
Numbers D-11536 through D-11550]
Exemption
The sanctions resulting from the application of section 4975 of the
Code, by reason of sections 4975(c)(1)(A),(D), and (E) of the Code,
shall not apply to the cash sales (the Sales) of certain shares of
closely held common stock (the Stock) of the Bank of Idaho Holding
Company (the Company) by the IRAs \9\ to the Participants, disqualified
persons with respect to their respective IRAs, provided that the
following conditions are satisfied:
---------------------------------------------------------------------------
\9\ Because each IRA has only one Participant, there is no
jurisdiction under 29 CFR 2510.3-3(b). However, there is
jurisdiction under Title II of the Act pursuant to section 4975 of
the Code.
---------------------------------------------------------------------------
(a) The Sale of the Stock by each IRA is a one-time transaction for
cash;
(b) The terms and conditions of each Sale are at least as favorable
to each IRA as those obtainable in an arm's length transaction with an
unrelated party;
(c) Each IRA receives the fair market value of the Stock on the
date of the Sale as determined by a qualified, independent appraiser;
and
(d) Each IRA does not pay any commissions, costs, or other expenses
in connection with each Sale.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the text of the Notice of Proposed Exemption published in the Federal
Register on March 26, 2009 at 74 FR 13258.
FOR FURTHER INFORMATION CONTACT: Mr. Mark Judge of the Department,
telephone (202) 693-8339 (This is not a toll-free number).
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemption does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
