Prohibited Transaction Exemption 98-07; Exemption Application No. D-10236, et al.; Grant of Individual Exemptions; Equitable Life Assurance Society

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

Prohibited Transaction Exemption 98-07; Exemption Application No.

D-10236, et al.; Grant of Individual Exemptions; Equitable Life

Assurance Society

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

(c) They are protective of the rights of the participants and

beneficiaries of the plans.

The Equitable Life Assurance Society of the United States (Equitable),

Located in New York, New York

[Prohibited Transaction Exemption 98-07; Exemption Application No. D-

10236]

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: (1) The leasing of 13,086 square feet of office

space and 6,650 square feet of parking space by Equitable Real Estate

Investment Management, Inc. (ERE) until June 30, 2002 (the Tower 1

Lease); and (2) the leasing of 5,821 square feet of office space and

3584 square feet of parking space by ERE's subsidiary, Compass

Management and Leasing, Inc. (Compass) until August 31, 1999 (the Tower

2 Leases), in office buildings located in Orange County, California,

that will be held by the Equitable Separate Account No. 8, also known

as

[[Page 8498]]

the Prime Property Fund (the PPF) and to the 1996 renewal of the

original leases provided that the following conditions are met: (a) the

renewal of the leases and the terms of the leases were reviewed,

negotiated and approved by a qualified independent fiduciary to PPF;

(b) the qualified independent fiduciary determined that the terms of

the transactions reflect fair market value and are at least as

favorable to PPF as the terms would have been in arm's length

transactions between unrelated parties; and (c) the independent

fiduciary will continue to monitor the leases on behalf of the PPF.

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 19, 1997 at 62

FR 66669.

EFFECTIVE DATE OF EXEMPTION: This exemption has an effective date of

March 15, 1996. This exemption will expire for the Tower 2 Leases, on

August 31, 1999 and for the Tower 1 Lease, on June 30, 2002.

FOR FURTHER INFORMATION CONTACT: Ms. Wendy McColough of the Department,

telephone (202) 219-8971. (This is not a toll-free number.)

PNC Capital Markets, Inc. (PNC), Located in Pittsburgh, Pennsylvania

[Prohibited Transaction Exemption 98-08; Exemption Application No. D-

10521]

Exemption

I. Transactions

A. Effective October 21, 1997, 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

(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 21, 1997, 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 21, 1997, 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

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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

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 21, 1997, 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.

[[Page 8499]]

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

from a rating agency (as defined in section III.W.) at the time of such

acquisition that is in one of the three highest generic rating

categories;

(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;

(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;

and

(7) In the event that the obligations used to fund a trust have not

all been transferred to the trust on the closing date, additional

obligations as specified in subsection III.B(1) may be transferred to

the trust during the pre-funding period (as defined in section III.BB.)

in exchange for amounts credited to the pre-funding account (as defined

in section III.Z.), provided that:

(a) The pre-funding limit (as defined in section III.AA.) is not

exceeded;

(b) All such additional obligations meet the same terms and

conditions for eligibility as those of the original obligations used to

create the trust corpus (as described in the prospectus or private

placement memorandum and/or pooling and servicing agreement for such

certificates), 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 of the outstanding

certificateholders or by a rating agency;

(c) The transfer of such additional obligations to the trust during

the pre-funding period does not result in the certificates 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 certificates by the trust;

(d) The weighted average annual percentage interest rate (the

average interest rate) for all of the obligations in the trust 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 trust 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 trustees)

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;

(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, will enforce all the rights created in favor

of certificateholders of such trust, including employee benefit plans

subject to the Act.

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

nor 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 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) or a Financial Asset Securitization

Investment Trust (FASIT) within the meaning of section 860D(a) or

section 860L, respectively, of the Code; 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 PNC

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

[[Page 8500]]

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) (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 business entities

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

leases, as defined in section III.T); 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 commercial real property (including obligations secured

by leasehold interests on 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 (as defined in section III.U); and/or

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

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

(f) fractional undivided interests in any of the obligations

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

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

subsection B.(1);

(3) (a) undistributed cash or temporary investments made therewith

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

made to certificateholders; and/or

(b) cash or investments made therewith which are credited to an

account to provide payments to certificateholders pursuant to any yield

supplement agreement or similar yield maintenance arrangement to

supplement the interest rates otherwise payable on obligations

described in subsection III.B.(1) held in the trust, provided that such

arrangements do not involve swap agreements or other notional principal

contracts; and/or

(c) cash transferred to the trust 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 clauses (a)-(g) of subsection II.A.(7) are met and/or;

(ii) are credited to a capitalized interest account (as defined in

section III.X.); and

(iii) are held in the trust for a period ending no later than the

first distribution date to certificateholders occurring after the end

of the pre-funding period,

For purposes of this clause (c) of subsection III.B.(3), the term

permitted investments means investments which are either: (i) 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 (ii) have been rated

(or the obligor has been rated) in one of the three highest generic

rating categories by a rating agency; are described in the pooling and

servicing agreement; and 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, yield supplement agreements

described in clause (b) of subsection III.B.(3) and other credit

support arrangements with respect to any obligations described in

subsection III.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 described in clauses (a) through (f) of subsection

III.B.(1) 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 a

rating agency 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) PNC;

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

intermediaries, controlling, controlled by or under common control with

PNC; or

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

which PNC 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;

(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

[[Page 8501]]

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 owns or 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. Rating Agency means Standard & Poor's Structured Rating Group,

Moody's Investors Service, Inc., Duff & Phelps Credit Rating Co. or

Fitch Investors Service, L.P.;

X. Capitalized Interest Account means a trust account: (i) which is

established to compensate certificateholders for shortfalls, if any,

between investment earnings on the pre-funding account and the pass-

through rate payable under the certificates; and (ii) which meets the

requirements of clause (c) of subsection III.B.(3).

Y. Closing Date means the date the trust is formed, the

certificates are first issued and the trust'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 trust.

Z. Pre-Funding Account means a trust account: (i) which is

established to purchase additional obligations, which obligations meet

the conditions set forth in clauses (a)-(g) of subsection II.A.(7); and

(ii) which meets the requirements of clause (c) of subsection

III.B.(3).

AA. Pre-Funding Limit means a percentage or ratio of the amount

allocated to the pre-funding account, as compared to the total

principal amount of the certificates being offered which is less than

or equal to 25 percent.

BB. 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 90 days after the closing date.

CC. PNC means PNC Capital Markets, 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 19, 1997 at 62

FR 66672.

FOR FURTHER INFORMATION CONTACT: Gary Lefkowitz of the Department,

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

Jeffrey R. Light, M.D., Inc. Profit Sharing Plan (the Plan), Located in

Garden Grove, CA;

[Prohibited Transaction Exemption No. 98-09; Application No. D-10530]

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 sale (the Sale) by the individual, self-directed

account of Jeffrey R. Light, M.D. within the Plan (the Account) of two

parcels of real property (the Property) to Jeffrey R. Light, M.D. (Dr.

Light), a party in interest with respect to the Plan; provided the

following conditions are satisfied:

(A) The terms and conditions of the transaction are no less

favorable to the Plan than those which the Plan would receive in an

arm's-length transaction with an unrelated party;

(B) The Sale is a one-time transaction for cash;

(C) The Plan does not incur any expenses from the Sale; and

(D) The Plan receives as consideration from the Sale no less than

the fair market value of the Property as determined on the date of the

Sale by a qualified, independent appraiser.

[[Page 8502]]

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 19, 1997, at 62

FR 66684.

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

telephone (202) 219-8881. (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 exemptions 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

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) These exemptions are 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 these exemptions is subject to the express

condition that the material facts and representations contained in each

application accurately describes all material terms of the transaction

which is the subject of the exemption.

Signed at Washington, D.C., this 11th day of February, 1998.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, Department of Labor.

[FR Doc. 98-3986 Filed 2-18-98; 8:45 am]

BILLING CODE 4510-29-P