Grant of Individual Exemptions; Univar Corporation UniSaver Tax

Federal RegisterJan 14, 1997

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DEPARTMENT OF LABOR

[Prohibited Transaction Exemption 97-01; Exemption Application No. D-

10143, et al.]

Grant of Individual Exemptions; Univar Corporation UniSaver Tax

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of individual exemptions.

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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

(the Act) and/or the Internal Revenue Code of 1986 (the Code).

Notices were published in the Federal Register of the pendency

before the Department of proposals to grant such exemptions. The

notices set forth a summary of facts and representations contained in

each application for exemption and referred interested persons to the

respective applications for a complete statement of the facts and

representations. The applications have been available for public

inspection at the Department in Washington, D.C. The notices also

invited interested persons to submit comments on the requested

exemptions to the Department. In addition the notices stated that any

interested person might submit a written request that a public hearing

be held (where appropriate). The applicants have represented that they

have complied with the requirements of the notification to interested

persons. No public comments and no requests for a hearing, unless

otherwise stated, were received by the Department.

The notices of proposed exemption were issued and the exemptions

are being granted solely by the Department because, effective December

31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR

47713, October 17, 1978) 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 exemptions are administratively feasible;

(b) They are in the interests of the plans and their participants

and beneficiaries; and

beneficiaries of the plans.

Univar Corporation UniSaver Tax Savings Investment Plan (the Plan)

Located In Kirkland, Washington

[Prohibited Transaction Exemption 97-01; Exemption Application No. D-

10143]

Exemption

The restrictions of sections 406(a) 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) through (E) of

the Code, shall not apply to the extension of credit in the form of

guarantees and loans of funds (the Loans), not to exceed $1,466,785.38,

to the Plan by Univar Corporation (the Employer), the sponsor of the

Plan, or it successors, with respect to Guaranteed Investment Contract

No. 62127 (the GIC) issued by Confederation Life Insurance Company of

Canada (Confederation), and the repayment of the Loans by the Plan to

the Employer, or its successors, provided the following conditions are

satisfied: (a) All terms and conditions of the transactions are no less

favorable to the Plan than those the Plan could receive in arm's length

transactions with unrelated parties; (b) No interest payments or other

expenses will be incurred by the Plan with respect to the transactions;

GIC (the GIC Proceeds) as paid to the Plan by Confederation, its

successors, or any other third party, and made only if the repayments

do not interfere with the liquidity needs of the Plan for payment of

benefits, transfers of investments, hardship withdrawals, or loans as

determined by BZW Barclays Global Investors, N.A., the Plan trustee;

(d) Repayment of the Loans will be waived by the Employer and its

successors to the extent the Loans exceed the GIC Proceeds; and (e) All

unpaid principal and interest that was due under the GIC on August 12,

1994, minus any Loans from the Employer and its successors, and/or

payments received under the GIC after August 12, 1994, will be

completely paid by January 1, 2000, by a Loan to the Plan from the

Employer or its successors.

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 November 6, 1996, at 61

FR 57467.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

Wayne Obstetrical Group, P.A. Money Purchase Retirement Plan (the Wayne

Plan); Pediatric Professional Associates, P.A. Profit Sharing Plan (the

Pediatric Plan); Physicians for Women, P.A. Profit-Sharing Plan and

Trust (the Physicians Plan; collectively, the Plans) Located in Wayne,

New Jersey

[Prohibited Transaction Exemption 97-02; Exemption Application Nos. D-

10262, D-10263, and D-10264]

Exemption

The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the

Act and the

[[Page 1926]]

sanctions resulting from the application of section 4975 of the Code,

by reason of section 4975(c)(1)(A) through (E) of the Code, shall not

apply to the loans totalling $530,000 by the Plans to

S & D Associates (S & D), provided that the following conditions are

satisfied:

(a) The terms and conditions of the loans are at least as favorable

to the Plans as those the Plans could obtain in comparable arm's length

transactions with unrelated parties;

(b) At all times, the loans are secured by a first mortgage on

certain real property (the Property), which is duly recorded under New

Jersey State law;

established by a qualified, independent appraiser, equals at least 150%

of the total outstanding balances of the loans;

(d) At all times, no more than 25% of the assets of each lending

Plan are invested in the loans;

(e) A qualified, independent fiduciary has determined that the

loans are in the best interests of the Plans; and

(f) At all times, the independent fiduciary enforces compliance

with the terms and conditions of the loans and of the exemption,

including foreclosure on the Property in the event of default.

EFFECTIVE DATE: The exemption is effective as of January 1, 1997.

In response to a comment from the applicants, the Department has

agreed to modify the Summary of Facts and Representations (the Summary)

in the notice of proposed exemption to reflect a modification to the

terms of the loans. Accordingly, on page 55323 of such notice, the

first subparagraph in Paragraph 4 of the Summary should be corrected to

read as follows:

The loans, as evidenced by promissory notes, will each provide

for a term of 15 years and a fixed interest rate of 11 percent per

annum for the first 10 years. Thereafter, the interest rate will

become adjustable annually, based upon the greater of: (a) 11

percent, or (b) three percent above the five-year Treasury note

yield as published in The Wall Street Journal, determined as of the

10th anniversary of the loans and each subsequent anniversary

thereof. The promissory notes will require S & D Associates to make

monthly payments of principal and interest on the loans, to be fully

amortized over the 15-year term. The Plans will pay no fees nor

other expenses relating to the loans.

A ``Supplemental Statement'' describing the modified loan terms was

provided to interested persons, along with a copy of the notice of

proposed exemption as published in the Federal Register. Due to a delay

in providing notice to interested persons, the comment period was

extended until December 26, 1996.

In addition, the applicants wished to note that the last sentence

in the first subparagraph of Paragraph of 1 of the Summary should be

corrected to read as follows:

The trustees of the Wayne Plan are the four owners, above [i.e.,

revised to include Steven Domnitz].

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 October 25, 1996 at 61 FR

55322.

FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

National Baptist Publishing Board Pension Plan (the Plan) Located in

Nashville, TN

[Prohibited Transaction Exemption 97-03; Exemption Application No. D-

10283]

Exemption

The restrictions of sections 406(a) 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 sections 4975(c)(1) (A) through (E) of

the Code shall not apply to the cash sale (the Sale) of common stock of

Citizens Savings Bank and Trust Company (the Stock) located in

Nashville, Tennessee, by the Plan to AmeriStar Investments and Trust, a

division of First American National Bank, Trustee of the Plan and party

in interest with respect to the Plan; provided that (1) the Sale is a

one-time transaction for cash; (2) the Plan experiences no loss nor

incurs any expenses from the Sale; and (3) the Plan receives as

consideration from the Sale the greater of the following amounts: (a)

the fair market value of the Stock as of the date of the Sale plus

interest at 6% for the period March 31, 1993 through the date the Stock

is sold by the Plan; or (b) the total cost of the investment, $100,000,

plus interest at 6% for the period March 31, 1993 through the date the

Stock is sold by the Plan.

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 October 25, 1996 at 61 FR

55324.

FOR FURTHER INFORMATION CONTACT: Mr. Gary H. Lefkowitz of the

Department, telephone (202) 219-8881. (This is not a toll-free number.)

Summit Sheet Metal, Inc. Defined Benefit Pension Plan (the Plan)

Located In Anaheim, California

[Prohibited Transaction Exemption 97-04; Exemption Application No. D-

10330]

Exemption

The restrictions of sections 406(a) 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) through (E) of

the Code, shall not apply to the cash sale (the Sale) by the Plan of

certain real property (the Property) to Messrs. Milton J. Chasin,

Donald E. Hanson, and Gale N. Searing, parties in interest with respect

to the Plan; provided that the following conditions are satisfied: (a)

The Sale is a one-time transaction for a lump sum cash payment; (b) the

purchase price is the fair market value of the Property as determined

on the date of the Sale by a qualified, independent appraiser; and (c)

the Plan will incur no commissions or any other expenses from the Sale.

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 November 25, 1996, at 61

FR 59914.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

SouthTrust Securities, Inc. (ST) Located in Birmingham, Alabama

[Prohibited Transaction Exemption 97-05; Exemption Application No. D-

10376]

Exemption

I. Transactions

A. Effective October 25, 1996, 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 the following transactions involving trusts and

certificates evidencing interests therein:

(1) The direct or indirect sale, exchange or transfer of

certificates in the initial issuance of certificates between the

sponsor or underwriter and an employee benefit plan when the sponsor,

servicer, trustee or insurer of a trust, the underwriter of the

certificates representing an interest in the trust, or an obligor is a

party in interest with respect to such plan;

(2) The direct or indirect acquisition or disposition of

certificates by a plan in the secondary market for such certificates;

and

[[Page 1927]]

(3) The continued holding of certificates 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 for the acquisition or holding

of a certificate 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

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\1\ Section I.A. provides no relief from sections 406(a)(1)(E),

406(a)(2) and 407 for any person rendering investment advice to an

Excluded Plan within the meaning of section 3(21)(A)(ii) and

regulation 29 CFR 2510.3-21(c).

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B. Effective October 25, 1996, the restrictions of sections

406(b)(1) and 406(b)(2) of the Act and the taxes imposed by section

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

certificates in the initial issuance of certificates 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 certificates is (a) an obligor with respect to 5

percent or less of the fair market value of obligations or receivables

contained in the trust, 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 certificates in

connection with the initial issuance of the certificates, at least 50

percent of each class of certificates in which plans have invested is

acquired by persons independent of the members of the Restricted Group

and at least 50 percent of the aggregate interest in the trust is

acquired by persons independent of the Restricted Group;

(iii) a plan's investment in each class of certificates does not

exceed 25 percent of all of the certificates of that class outstanding

at the time of the acquisition; and

(iv) immediately after the acquisition of the certificates, 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 certificates representing an interest in a trust containing

assets sold or serviced by the same entity.2 For purposes of this

paragraph B.(1)(iv) only, an entity will not be considered to service

assets contained in a trust if it is merely a subservicer of that

trust;

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\2\ For purposes of this 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

certificates by a plan in the secondary market for such certificates,

provided that the conditions set forth in paragraphs B.(1) (i), (iii)

and (iv) are met; and

(3) The continued holding of certificates acquired by a plan

pursuant to subsection I.B. (1) or (2).

C. Effective October 25, 1996, 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 a trust, provided:

(1) such transactions are carried out in accordance with the terms

of a binding pooling and servicing arrangement; and

(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

certificates issued by the trust.3

\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

certificates 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.

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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 trust from a person other than

the trustee or sponsor, unless such fee constitutes a ``qualified

administrative fee'' as defined in section III.S.

D. Effective October 25, 1996, 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 sections 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 certificates.

II. General Conditions

A. The relief provided under Part I is available only if the

following conditions are met:

(1) The acquisition of certificates by a plan is on terms

(including the certificate 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 certificates are not

subordinated to the rights and interests evidenced by other

certificates of the same trust;

(3) The certificates acquired by the plan have received a rating at

the time of such acquisition that is in one of the three highest

generic rating categories from either Standard & Poor's Structured

Rating Group (S&P's), Moody's Investors Service, Inc. (Moody's), Duff &

Phelps Credit Rating Co. (D & P) or Fitch Investors Service, L.P.

(Fitch);

(4) The trustee is not an affiliate of any member of the Restricted

Group. However, 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;

(5) The sum of all payments made to and retained by the

underwriters in connection with the distribution or placement of

certificates represents not more than reasonable compensation for

underwriting or placing the certificates; the sum of all payments made

to and retained by the sponsor pursuant to the assignment of

obligations (or interests therein) to the trust 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; and

(6) The plan investing in such certificates 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.

B. Neither any underwriter, sponsor, trustee, servicer, insurer,

nor any obligor, unless it or any of its affiliates has discretionary

authority or renders

[[Page 1928]]

investment advice with respect to the plan assets used by a plan to

acquire certificates, shall be denied the relief provided under Part I,

if the provision of subsection II.A.(6) above is not satisfied with

respect to acquisition or holding by a plan of such certificates,

provided that (1) such condition is disclosed in the prospectus or

private placement memorandum; and (2) in the case of a private

placement of certificates, 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 certificates) 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) above.

III. Definitions

For purposes of this exemption:

A. ``Certificate'' means:

(1) a certificate--

(a) that represents a beneficial ownership interest in the assets

of a trust; and

(b) that entitles the holder to pass-through payments of principal,

interest, and/or other payments made with respect to the assets of such

trust; or

(2) a certificate denominated as a debt instrument--

(a) that represents an interest in a Real Estate Mortgage

Investment Conduit (REMIC) within the meaning of section 860D(a) of the

Internal Revenue Code of 1986; and

(b) that is issued by and is an obligation of a trust;

with respect to certificates defined in (1) and (2) above for which ST

or any of its affiliates is either (i) the sole underwriter or the

manager or co-manager of the underwriting syndicate, or (ii) a selling

or placement agent.

For purposes of this exemption, references to ``certificates

representing an interest in a trust'' include certificates denominated

as debt which are issued by a trust.

B. ``Trust'' means an investment pool, the corpus of which is held

in trust and consists solely of:

(1) either--

(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);

(b) secured credit instruments that bear interest or are purchased

at a discount in transactions by or between business entities

(including, but not limited to, qualified equipment notes secured by

leases, as defined in section III.T);

and which are secured by single-family residential, multi-family

residential and commercial real property (including obligations secured

by leasehold interests on commercial real property);

(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 (as defined in section III.U);

(e) ``guaranteed governmental mortgage pool certificates,'' as

defined in 29 CFR 2510.3-101(i)(2);

(f) fractional undivided interests in any of the obligations

described in clauses (a)-(e) of this section B.(1); 4

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\4\ It is the Department's view that the definition of ``trust''

contained in III.B. includes a two-tier structure under which

certificates issued by the first trust, which contains a pool of

receivables described above, are transferred to a second trust which

issues securities that are sold to plans. However, the Department is

of the further view that, since the exemption provides relief for

the direct or indirect acquisition or disposition of certificates

that are not subordinated, no relief would be available if the

certificates held by the second trust were subordinated to the

rights and interests evidenced by other certificates issued by the

first trust.

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(2) property which had secured any of the obligations described in

subsection B.(1);

(3) undistributed cash or temporary investments made therewith

maturing no later than the next date on which distributions are to made

to certificateholders; and

(4) rights of the trustee under the pooling and servicing

agreement, and rights under any insurance policies, third-party

guarantees, contracts of suretyship and other credit support

arrangements with respect to any obligations described in subsection

B.(1).

Notwithstanding the foregoing, the term ``trust'' does not include any

investment pool unless: (i) The investment pool consists only of assets

of the type which have been included in other investment pools, (ii)

certificates evidencing interests in such other investment pools have

been rated in one of the three highest generic rating categories by

S&P's, Moody's, D & P, or Fitch for at least one year prior to the

plan's acquisition of certificates pursuant to this exemption, and

(iii) certificates 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 certificates pursuant to this

exemption.

C. ``Underwriter'' means:

(1) ST;

(2) any person directly or indirectly, through one or more

intermediaries, controlling, controlled by or under common control with

ST; or

(3) any member of an underwriting syndicate or selling group of

which ST or a person described in (2) is a manager or co-manager with

respect to the certificates.

D. ``Sponsor'' means the entity that organizes a trust by

depositing obligations therein in exchange for certificates.

E. ``Master Servicer'' means the entity that is a party to the

pooling and servicing agreement relating to trust assets and is fully

responsible for servicing, directly or through subservicers, the assets

of the trust.

F. ``Subservicer'' means an entity which, under the supervision of

and on behalf of the master servicer, services loans contained in the

trust, but is not a party to the pooling and servicing agreement.

G. ``Servicer'' means any entity which services loans contained in

the trust, including the master servicer and any subservicer.

H. ``Trustee'' means the trustee of the trust, and in the case of

certificates which are denominated as debt instruments, also means the

trustee of the indenture trust.

I. ``Insurer'' means the insurer or guarantor of, or provider of

other credit support for, a trust. Notwithstanding the foregoing, a

person is not an insurer solely because it holds securities

representing an interest in a trust which are of a class subordinated

to certificates representing an interest in the same trust.

J. ``Obligor'' means any person, other than the insurer, that is

obligated to make payments with respect to any obligation or receivable

included in the trust. Where a trust 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 trust, or subject to any lease securing an obligation included

in the trust.

K. ``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.

L. ``Restricted Group'' with respect to a class of certificates

means:

(1) each underwriter;

[[Page 1929]]

(2) each insurer;

(3) the sponsor;

(4) the trustee;

(5) each servicer;

(6) any obligor with respect to obligations or receivables included

in the trust constituting more than 5 percent of the aggregate

unamortized principal balance of the assets in the trust, determined on

the date of the initial issuance of certificates by the trust; or

(7) any affiliate of a person described in (1)-(6) above.

M. ``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.

N. ``Control'' means the power to exercise a controlling influence

over the management or policies of a person other than an individual.

O. 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.

P. ``Sale'' includes the entrance into a forward delivery

commitment (as defined in section Q below), 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 exemption

applicable to sales are met.

Q. ``Forward delivery commitment'' means a contract for the

purchase or sale of one or more certificates to be delivered at an

agreed future settlement date. The term includes both mandatory

contracts (which contemplate obligatory delivery and acceptance of the

certificates) and optional contracts (which give one party the right

but not the obligation to deliver certificates to, or demand delivery

of certificates from, the other party).

R. ``Reasonable compensation'' has the same meaning as that term is

defined in 29 CFR 2550.408c-2.

S. ``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 (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 trust will not be reduced

by the amount of any such fee waived by the servicer.

T. ``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 trust's security interest in the

equipment is at least as protective of the rights of the trust as would

be the case if the equipment note were secured only by the equipment

and not the lease.

U. ``Qualified Motor Vehicle Lease'' means a lease of a motor

vehicle where:

(1) the trust holds a security interest in the lease;

(2) the trust holds a security interest in the leased motor

vehicle; and

(3) the trust's security interest in the leased motor vehicle is at

least as protective of the trust's rights as would be the case if the

trust consisted of motor vehicle installment loan contracts.

V. ``Pooling and Servicing Agreement'' means the agreement or

agreements among a sponsor, a servicer and the trustee establishing a

trust. In the case of certificates which are denominated as debt

instruments, ``Pooling and Servicing Agreement'' also includes the

indenture entered into by the trustee of the trust issuing such

certificates and the indenture trustee.

W. ``ST'' means SouthTrust Securities, Inc. and its affiliates.

The Department notes that this exemption is included within the

meaning of the term ``Underwriter Exemption'' as it is defined in

section V(h) of Prohibited Transaction Exemption 95-60 (60 FR 35925,

July 12, 1995), the Class Exemption for Certain Transactions Involving

Insurance Company General Accounts at 35932.

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 December 3, 1996 at 61 FR

64164.

FOR FURTHER INFORMATION CONTACT: Gary Lefkowitz of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

Skana Enterprises, Inc. Defined Benefit Pension Plan (the Plan) Located

in Kodiak, Alaska

[Prohibited Transaction Exemption 97-06; Exemption Application No. D-

10342]

Exemption

The sanctions resulting from the application of section 4975 of the

Code, by reason of section 4975(c)(1)(A) through (E) of the Code, shall

not apply to: (1) the loan (the Loan) of $157,500 by the Plan to Skana

Enterprises, Inc. (Skana), the Plan's sponsor and a disqualified person

with respect to the Plan, and (2) the personal guarantee of the Loan by

Mr. Ralph Bolton (Mr. Bolton), a disqualified person with respect to

the Plan, provided the following conditions are satisfied: (a) the

terms of the Loan are at least as favorable to the Plan as those

obtainable in an arm's-length transaction with an unrelated party; (b)

the Loan does not exceed 25% of the assets of the Plan; (c) the Loan is

secured by a first deed of trust on real property (the Property) which

has been appraised by a qualified independent appraiser to have a fair

market value not less than 150% of the amount of the Loan; (d) the fair

market value of the Property remains at least equal to 150% of the

outstanding balance of the Loan throughout the duration of the Loan;

(e) the Plan's independent fiduciary has determined that the Loan is

appropriate for, in the best interest of, and protective of the Plan;

and (f) the Plan's independent fiduciary will monitor compliance with

the terms of the Loan and conditions of the exemption throughout the

duration of the transaction, taking any action necessary to safeguard

the Plan's interest, including foreclosure on the Property in the event

of default.5

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\5\ Since Mr. Bolton is the sole owner of Skana and the only

participant in the Plan, there is no jurisdiction under Title I of

the Act pursuant to 29 CFR 2510.3-3(b). However, there is

jurisdiction under Title II of the Act pursuant to section 4975 of

the Code.

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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 November 25, 1996 at 61

FR 59915.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,

[[Page 1930]]

telephone (202) 219-8881. (This is not a toll-free number.)

Wayne Obstetrical Group, P.A. Money Purchase Retirement Plan (the Wayne

Plan); Pediatric Professional Associates, P.A. Profit Sharing Plan (the

Pediatric Plan); Physicians for Women, P.A. Profit-Sharing Plan and

Trust (the Physicians Plan; collectively, the Plans) Located in Wayne,

New Jersey

[Prohibited Transaction Exemption 97-07; Exemption Application Nos. D-

10262, D-10263, and D-10264]

Exemption

The restrictions of sections 406(a), 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) through (E) of the Code,

shall not apply to the loans totalling $530,000 by the Plans to S & D

Associates (S & D), provided that the following conditions are