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Employee Benefits Security Administration

EBSA Federal Register Notice

Proposed Extension of the Approval of Information Collection Requirements [12/17/2007]

[PDF Version]

Volume 72, Number 241

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

 
Prohibited Transaction Exemption 2007-17; Grant of Individual 
Exemptions Involving; D-11390, BSC Services Corp. 401(k) Profit Sharing 
Plan (the Plan), PTE 2007-17; D-11402 and D-11403, Owens Corning 
Savings Plan and Owens Corning Savings and Security Plan (Collectively, 
the Plans), PTE 2007-18; D-11405, Middleburg Trust Company 
(Middleburg), PTE 2007-19; D-11420, BlackRock, Inc (BlackRock), and 
Merrill Lynch & Co. (Merrill Lynch) (Collectively, the Applicants), PTE 
2007-20; D-11441, Gastroenterology and Oncology Associates, P.A. (the 
Plan), 2007-21

AGENCY: Employee Benefits Security 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 
(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 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.

[[Page 71438]]

    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.

BSC Services Corp. 401(k) Profit Sharing Plan (the Plan), Located in 
Philadelphia, PA

[Prohibited Transaction Exemption 2007-17; Exemption Application No. D-
11390]

Exemption

Section I--Covered Transactions
    The restrictions of sections 406(a), 406(b)(1) and (b)(2) and 
407(a) of the Act and the sanctions resulting from the application of 
section 4975 of the Code,\1\ by reason of section 4975(c)(1)(A) through 
(E) of the Code, shall not apply, effective April 27, 2006, to (1) the 
acquisition by the Plan of certain stock rights (the Rights) pursuant 
to a stock rights offering (the Offering) from First Bank of Delaware 
(the Bank), a party in interest and the parent company of BSC Services 
Corp., which is the Plan sponsor as well as a party in interest with 
respect to the Plan; (2) the holding of the Rights by the Plan during 
the subscription period of the Offering; and (3) the disposition or 
exercise of the Rights by the Plan.
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    \1\ For purposes of this exemption, references to provisions of 
Title I of the Act, unless otherwise specified, refer also to the 
corresponding provisions of the Code.
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Section II--Conditions
    This exemption is conditioned upon adherence to the material facts 
and representations described herein and upon satisfaction of the 
following conditions:
    (a) The Rights were acquired by the Plan pursuant to Plan 
provisions for the individually-directed investment of participant 
accounts.
    (b) The Plan's receipt of the Rights occurred in connection with 
the Rights Offering made available to all shareholders of the Bank's 
common stock (the Bank Stock).
    (c) All decisions regarding the holding and disposition of the 
Rights by the Plan were made in accordance with Plan provisions for the 
individually-directed investment of participant accounts by the 
individual participants whose accounts in the Plan received Rights in 
the Offering, and if no instructions were received, the Rights expired.
    (d) The Plan's acquisition of the Rights resulted from an 
independent act of the Bank as a corporate entity, and all holders of 
the Rights, including the Plan, were treated in the same manner with 
respect to the acquisition, holding and disposition of such Rights.
    (e) The Plan received the same proportionate number of the Rights 
as other owners of Bank Stock.
    Effective Date: This exemption is effective as of April 27, 2006.
    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 July 2, 2007 at 72 FR 
36059.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department, 
telephone number (202) 693-8556. (This is not a toll-free number.)

Owens Corning Savings Plan and Owens Corning Savings and Security Plan 
(Collectively, the Plans), Located in Toledo, Ohio

[Prohibited Transaction Exemption 2007-18; Exemption Application 
Numbers D-11402 and D-11403, respectively]

Exemption

    The restrictions of sections 406(a), 406(b)(1), 406(b)(2), and 
407(a) 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, effective October 31, 2006, to: (1) 
The acquisition by the Plans of certain warrants (the Warrants) issued 
by Owens Corning (the Applicant), a party in interest with respect to 
the Plans, where such Warrants have been issued in exchange for the 
common stock (the Old Common Stock) of the Applicant incident to a 
bankruptcy reorganization; (2) the holding of the Warrants by each of 
the Plans pending the exercise or other disposition of said Warrants; 
(3) the exercise of the Warrants by participants in the Plans to permit 
acquisition of shares of the Applicant's new common stock (the New 
Common Stock).
    In addition, the restrictions of section 406(a)(1)(A) through (D) 
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 (D) of the 
Code, shall not apply, effective October 31, 2006, to the sale or 
disposition of the Warrants by participants in the Plans through a 
broker-dealer acting as an agent on behalf of such participants.

Conditions

    (a) Other than the right to vote on the Reorganization Plan, the 
Plans had no ability to affect the provisions of the Sixth Amended 
Joint Plan of Reorganization for Owens Corning and Its Affiliated 
Debtors and Debtors-in-Possession (the Reorganization Plan) approved by 
the United States Bankruptcy Court for the District of Delaware (the 
Bankruptcy Court) on September 26, 2006 pursuant to Chapter 11 of Title 
11 of the United States Code (the Bankruptcy Code);
    (b) The acquisition and holding of the Warrants by the Plans 
occurred in connection with the Reorganization Plan, in which all 
holders of the Applicant's stock of the same class have been and will 
be treated similarly;
    (c) The Warrants were acquired automatically and without any action 
on the part of the Plans;
    (d) The Plans did not pay any fees or commissions in connection 
with the acquisition or holding of the Warrants;
    (e) The Plans will not pay any fees or commissions in connection 
with the exercise of the Warrants;
    (f) All decisions regarding the exercise or other disposition of 
the Warrants have been and will be made by the individual participants 
of the Plans in whose accounts the Warrants were allocated, in 
accordance with the respective provisions of the Plans pertaining to 
the individually-directed investment of such accounts, subject to the 
duty of the fiduciaries of the Plans to take action consistent with 
sections 403 and 404 of the Act, in the event the current market price 
for the New Common Stock is below $45.25 per share (the Strike Price) 
at the time of participant exercise or in the event that it becomes 
clear that the Warrants would otherwise expire ``in the money'' 
unexercised by participants; and
    (g) The terms and conditions applicable to the sale of the Warrants 
by participants in the Plans have been and will be at least as 
favorable to the Plans as those that would have been obtained in an 
arm's length transaction with an unrelated party.

[[Page 71439]]

Written Comments

    The Notice of Proposed Exemption (the Notice), published in the 
Federal Register on July 2, 2007, stated that the Applicant would 
distribute the Notice to interested persons within fifteen (15) days of 
its publication in the Federal Register; the Notice also invited all 
interested persons to submit written comments and requests for a 
hearing to the Department concerning the proposed exemption within 
forty-five (45) days of the date of its publication.
    Shortly after the Notice was published in the Federal Register, the 
Applicant requested that the Department extend the foregoing deadlines 
for notification to interested persons. The Department agreed to this 
request, and advised the Applicant that notification to interested 
persons be provided no later than August 16, 2007. The Department 
received a written certification from the Applicant dated August 17, 
2007 confirming that the Notice and the accompanying supplemental 
statement had been distributed to interested persons on August 15, 2007 
via first class mail.
    During the comment period, the Department received two written 
comments concerning the Notice. One comment, submitted by a former 
employee of the Applicant, expressed opposition to the proposed 
exemption, but did not offer any information or rationale in support of 
this viewpoint. The second comment received by the Department was 
submitted by the Applicant. In its comment, the Applicant represented 
that although it had originally requested exemptive relief from the 
Department for the acquisition, holding, exercise, and other 
disposition of the Warrants (including the sale of the Warrants to 
third parties), the Notice did not contain relief for the disposition 
of the Warrants.
    In this regard, the Applicant also expressed its understanding that 
securities traded through the Pink Sheets (such as the Warrants) may be 
sold in the context of either principal transactions (wherein a market 
maker or broker purchases the security for its own account) or agency 
transactions (wherein the broker acts as agent for a non-broker 
purchaser). In either instance, the commenter stated, it was possible 
that the purchaser of the Warrants could be a party in interest with 
respect to the plan. Further, the Applicant commented that neither Part 
II nor Part IV of PTE 75-1 (40 FR 50845, October 31, 1975, as amended 
at 71 FR 5883, February 3, 2006) would provide relief from the 
restriction of section 406(a) of the Act for an agency transaction 
involving the Warrants. In this connection, the Applicant expressed the 
view that it would not be in the interests of the Plans or of the 
Plans' participants to limit the potential purchasers of the Warrants 
to market makers or other brokers who could rely on PTE 75-1. The 
Applicant also commented that the applicability of section 408(b)(17) 
of the Act to the transactions described in the proposed exemption was 
problematic because certain interpretive issues may be raised in 
applying the adequate consideration condition contained therein, 
particularly in the case of participant-directed plans and/or 
securities not traded on an exchange.
    The Applicant also commented that Fidelity Brokerage Services, LLC 
(Fidelity), which is not affiliated with the Applicant, will process 
the Warrant sales ``in accordance with its customary provisions for the 
execution of securities transactions in the over the counter [OTC] 
market and neither [the Applicant] nor any affiliate will have any role 
in that process.'' Based on the foregoing considerations, the Applicant 
requested in its comment that the Department modify the proposed 
exemption by (1) permitting relief from the applicable restrictions of 
the Act and the Code for the sale or disposition of the Warrants and 
(2) limiting such relief to those sales transactions that are ``at 
least as favorable to the Plan as an arms'' length transaction with an 
unrelated party would be.'' \2\
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    \2\ On November 22, 2007, the Department received a written 
communication from the Applicant stating that the New Common Stock 
became an investment option for participants in the Plans as of 
November 6, 2007. The Applicant further represented that this 
development does not affect the rights of participants in the Plans 
with respect to the Warrants held in their respective accounts 
(i.e., the participants will continue to have the ability to sell or 
exercise the Warrants).
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    In response to the Applicant's request, the Department has 
determined to grant exemptive relief to the Applicant for the sale or 
disposition of the Warrants by participants in the Plans provided that 
such sale or disposition was effected through a broker-dealer acting as 
an agent on behalf of such participants. In addition, the Department 
has determined to add a condition (Condition (g)) to the exemption 
which stipulates that such relief is only available where ``the terms 
and conditions applicable to the sale of the Warrants by participants 
in the Plans have been and will be at least as favorable to the Plans 
as those that would have been obtained in an arm's length transaction 
with an unrelated party.''
    Condition (a) of the proposed exemption (located in the first 
column on page 36058 of the July 2, 2007 edition of the Federal 
Register) states that ``[t]he Plans had no ability to affect the 
provisions of the Sixth Amended Joint Plan of Reorganization for Owens 
Corning and its Affiliated Debtors and Debtors-in-Possession (the 
Reorganization Plan) approved by the United States Bankruptcy Court for 
the District of Delaware (the Bankruptcy Court) on September 26, 2006 
pursuant to Chapter 11 of Title 11 of the United States Code (the 
Bankruptcy Code).'' The Applicant suggested that, ``[f]or the purpose 
of clarity,'' Condition (a) of the proposed exemption should be 
modified by the Department by inserting the words ``Other than the 
right to vote on the Reorganization Plan'' at the beginning of the 
condition. The Department has agreed to adopt the Applicant's request 
concerning this matter.
    Condition (f) of the proposed exemption (located in the second 
column on page 36058) states that ``[a]ll decisions regarding the 
exercise or other disposition of the Warrants have been and will be 
made by the individual participants in the Plans in whose accounts the 
Warrants were allocated, in accordance with the respective provisions 
of the Plans pertaining to the individually-directed investment of such 
accounts.'' The Applicant suggested in its comment that Condition (f) 
of the proposed exemption should be modified by the Department to read 
as follows: ``All decisions regarding the exercise or other disposition 
of the Warrants have been and will be made by the individual 
participants of the Plans to whose accounts the Warrants were 
allocated, subject to the duty of the Plan fiduciaries to take action 
with respect to the employer securities held by the Plans pursuant to 
sections 403 and 404 of ERISA, and the right of the Plan sponsor to 
amend the Plans.'' The Applicant commented that such a revision is 
necessary to confirm that the relief provided by the exemption would 
still be available even if the fiduciaries of the Plans were required 
to exercise their fiduciary duty with respect to the Warrants (as noted 
by the Department in footnote 10 of the proposed exemption, located at 
the bottom of page 36059, which states that ``[t]he Applicant 
acknowledges that the appropriate fiduciaries of the Plans shall be 
responsible for monitoring the investment options available to 
participants in the Plans, and taking such action as they deem 
appropriate under the circumstances.'' Such action

[[Page 71440]]

may include preventing participants from exercising the Warrants if the 
current market price for the Common Stock is below the Strike Price, or 
causing the Plans to sell the Warrants in the event that it becomes 
clear that they would otherwise expire unexercised by participants.
    After due consideration of this comment, the Department has decided 
to modify the text of Condition (f) of the exemption to read as 
follows: ``All decisions regarding the exercise or other disposition of 
the Warrants have been and will be made by the individual participants 
of the Plans in whose accounts the Warrants were allocated, in 
accordance with the respective provisions of the Plans pertaining to 
the individually-directed investment of such accounts, subject to the 
duty of the fiduciaries of the Plans to take action consistent with 
sections 403 and 404 of the Act, in the event the current market price 
for the New Common Stock is below $45.25 per share (the Strike Price) 
at the time of participant exercise or in the event that it becomes 
clear that the Warrants would otherwise expire `in the money' 
unexercised by participants.'' In this regard, the Department notes 
that no relief is provided under this final exemption for the plan 
fiduciaries to overrule the direction of participants, unless the 
direction or lack of direction is clearly imprudent under the 
particular circumstances.
    The Applicant also provided a comment concerning the content of 
footnote 8 of the Notice (located at the bottom of the first column on 
page 36059), which states that ``[b]ased on the Applicant's 
representations, to the extent the Warrants are publicly traded on a 
national exchange to unrelated third parties, no exemptive relief is 
being provided by the Department.'' In this regard, the Applicant 
represented in its comment that the Warrants are not traded on a 
national exchange. The Department concurs with the Applicant, and 
hereby deletes footnote 8 in its entirety.
    The Applicant also made two additional suggestions for technical 
revisions to the proposed exemption. In the fifth sentence of the 
second paragraph of the ``Summary of Facts and Representations'' 
section of the proposed exemption (located in the second column of page 
36058), the following language appears: ``The Reorganization Plan 
became effective on October 31, 2006, at which time the Old Common 
Stock was delisted from the New York Stock Exchange and all outstanding 
shares of the Old Common Stock were cancelled.'' The Applicant has now 
advised the Department in its comment that the Old Common Stock was 
delisted some time before October 31, 2006, the date on which it was 
cancelled. In addition, the Applicant suggested modification of the 
content of the seventh sentence of the same paragraph (located in the 
third column of page 36058), which states that ``[t]he Applicant 
represents that the Warrants do not constitute qualifying employer 
securities as defined in section 407(d)(5) of the Act.'' In this 
connection, the Applicant commented that ``it did not concede in its 
[a]pplication [for exemption] that the Warrants `do not constitute' 
qualifying employer securities, but indicated that they may not be.'' 
After due consideration, the Department has adopted these 
clarifications requested by the Applicant.
    Therefore, after giving full consideration to the entire record, 
the Department has determined to grant the exemption subject to the 
modifications described herein.
    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 in the Federal Register on 
July 2, 2007 at 72 FR 36058.

FOR FURTHER INFORMATION CONTACT: Mr. Mark Judge of the Department, 
telephone (202) 693-8339. (This is not a toll-free number).

Middleburg Trust Company (Middleburg), Located in Richmond, VA

[Prohibited Transaction Exemption 2007-19; Application No. D-11405]

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 the past sale, on March 28, 2006, by the William T. Smith 
IRA (the IRA) \3\ of certain bonds (the Bonds) to Middleburg, a 
disqualified person with respect to the IRA, provided that the 
following conditions are satisfied:
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    \3\ Pursuant to 29 CFR 2510.3-2(d), the IRA is not within the 
jurisdiction of Title I of the Employee Retirement Income Security 
Act of 1974 (the Act). However, there is jurisdiction under Title II 
of the Act pursuant to section 4975 of the Code.
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    (a) The sale was a one-time transaction for cash;
    (b) The purchase price for the Bonds was based on the Bonds' face 
value;
    (c) The Bonds' face value was in excess of bids for the Bonds 
solicited from independent brokers and in excess of the price for the 
Bonds quoted by an independent valuation service for the date of the 
sale;
    (d) Neither the IRA nor Mr. William T. Smith, the owner of the IRA, 
paid any fees, commissions, or other costs or expenses associated with 
the sale;
    (e) The IRA received its portion of income and all interest accrued 
on the Bonds through the date of the sale;
    (f) The terms and conditions of the sale were at least as favorable 
to the IRA as those obtainable in an arm's length transaction with an 
unrelated party; and
    (g) Within 30 days of the publication of the grant notice in the 
Federal Register, Middleburg will pay the IRA $196.53 to make up for 
the loss sustained by the IRA as a result of 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 October 26, 2007 at 72 FR 
60904.

FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji of the 
Department, telephone number (202) 693-8567. (This is not a toll-free 
number).

BlackRock, Inc. (BlackRock), and Merrill Lynch & Co. (Merrill Lynch) 
(Collectively, the Applicants), Located in New York, New York

[Prohibited Transaction Exemption 2007-20 Application No. D-11420]

Exemption

Section I--Transactions
    The restrictions of section 406 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 (F) of the Code, shall not apply to 
the purchase of certain securities (the Securities), as defined, below 
in Section III(k), by an Asset Manager, as defined, below, in Section 
III(f), from any person other than a Merrill Lynch/BlackRock Related 
Entity or Merrill Lynch/BlackRock Related Entities, as defined, below, 
in Section III(c), during the existence of an underwriting or selling 
syndicate with respect to such Securities, where a Merrill Lynch/
BlackRock Related Broker-Dealer, as defined, below, in Section III(b), 
is a manager or member of such syndicate and the Asset Manager 
purchases such Securities, as a fiduciary:
    (a) On behalf of an employee benefit plan or employee benefit plans 
(Client Plan(s)), as defined, below, in Section III(h); or
    (b) On behalf of Client Plans, and/or In-House Plans, as defined, 
below, in Section III(o), which are invested in a pooled fund or in 
pooled funds (Pooled

[[Page 71441]]

Fund(s)), as defined, below, in Section III(i); provided that the 
conditions as set forth, below, in Section II, are satisfied 
(Transactions described in Section I(a) and (b) are referred to herein 
as an affiliated underwriter transaction(s) (AUT(s)).\4\
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    \4\ For purposes of this exemption an In-House Plan may engage 
in AUT's only through investment in a Pooled Fund.
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Section II--Conditions
    The exemption is conditioned upon adherence to the material facts 
and representations described herein and upon satisfaction of the 
following requirements:
    (a)(1) The Securities to be purchased are either--
    (i) Part of an issue registered under the Securities Act of 1933 
(the 1933 Act) (15 U.S.C. 77a et seq.). If the Securities to be 
purchased are part of an issue that is exempt from such registration 
requirement, such Securities:
    (A) Are issued or guaranteed by the United States or by any person 
controlled or supervised by and acting as an instrumentality of the 
United States pursuant to authority granted by the Congress of the 
United States,
    (B) Are issued by a bank,
    (C) Are exempt from such registration requirement pursuant to a 
federal statute other than the 1933 Act, or
    (D) Are the subject of a distribution and are of a class which is 
required to be registered under section 12 of the Securities Exchange 
Act of 1934 (the 1934 Act) (15 U.S.C. 781), and are issued by an issuer 
that has been subject to the reporting requirements of section 13 of 
the 1934 Act (15 U.S.C. 78m) for a period of at least ninety (90) days 
immediately preceding the sale of such Securities and that has filed 
all reports required to be filed thereunder with the Securities and 
Exchange Commission (SEC) during the preceding twelve (12) months; or
    (ii) Part of an issue that is an Eligible Rule 144A Offering, as 
defined in SEC Rule 10f-3 (17 CFR 270.10f-3(a)(4)). Where the Eligible 
Rule 144A Offering of the Securities is of equity securities, the 
offering syndicate shall obtain a legal opinion regarding the adequacy 
of the disclosure in the offering memorandum;
    (2) The Securities to be purchased are purchased prior to the end 
of the first day on which any sales are made, pursuant to that 
offering, at a price that is not more than the price paid by each other 
purchaser of the Securities in that offering or in any concurrent 
offering of the Securities, except that--
    (i) If such Securities are offered for subscription upon exercise 
of rights, they may be purchased on or before the fourth day preceding 
the day on which the rights offering terminates; or
    (ii) If such Securities are debt securities, they may be purchased 
at a price that is not more than the price paid by each other purchaser 
of the Securities in that offering or in any concurrent offering of the 
Securities and may be purchased on a day subsequent to the end of the 
first day on which any sales are made, pursuant to that offering, 
provided that the interest rates, as of the date of such purchase, on 
comparable debt securities offered to the public subsequent to the end 
of the first day on which any sales are made and prior to the purchase 
date are less than the interest rate of the debt Securities being 
purchased; and
    (3) The Securities to be purchased are offered pursuant to an 
underwriting or selling agreement under which the members of the 
syndicate are committed to purchase all of the Securities being 
offered, except if--
    (i) Such Securities are purchased by others pursuant to a rights 
offering; or
    (ii) Such Securities are offered pursuant to an over-allotment 
option.
    (b) The issuer of the Securities to be purchased pursuant to this 
exemption must have been in continuous operation for not less than 
three years, including the operation of any predecessors, unless the 
Securities to be purchased--
    (1) Are non-convertible debt securities rated in one of the four 
highest rating categories by Standard & Poor's Rating Services, Moody's 
Investors Service, Inc., Fitch Ratings, Inc., Dominion Bond Rating 
Service Limited, Dominion Bond Rating Service, Inc., or any successors 
thereto (collectively, the Rating Organizations); provided that none of 
the Rating Organizations rates such securities in a category lower than 
the fourth highest rating category; or
    (2) Are debt securities issued or fully guaranteed by the United 
States or by any person controlled or supervised by and acting as an 
instrumentality of the United States pursuant to authority granted by 
the Congress of the United States; or
    (3) Are debt securities which are fully guaranteed by a person (the 
Guarantor) that has been in continuous operation for not less than 
three years, including the operation of any predecessors, provided that 
such Guarantor has issued other securities registered under the 1933 
Act; or if such Guarantor has issued other securities which are exempt 
from such registration requirement, such Guarantor has been in 
continuous operation for not less than three years, including the 
operation of any predecessors, and such Guarantor:
    (a) Is a bank, or
    (b) Is an issuer of securities which are exempt from such 
registration requirement, pursuant to a Federal statute other than the 
1933 Act; or
    (c) Is an issuer of securities that are the subject of a 
distribution and are of a class which is required to be registered 
under section 12 of the Securities Exchange Act of 1934 (the 1934 
Act)(15 U.S.C. 781), and are issued by an issuer that has been subject 
to the reporting requirements of section 13 of the 1934 Act (15 U.S.C. 
78m) for a period of at least ninety (90) days immediately preceding 
the sale of such securities and that has filed all reports required to 
be filed hereunder with the SEC during the preceding twelve (12) 
months.
    (c) The aggregate amount of Securities of an issue purchased, 
pursuant to this exemption, by the Asset Manager with: (i) The assets 
of all Client Plans; and (ii) the assets, calculated on a pro-rata 
basis, of all Client Plans and In-House Plans investing in Pooled Funds 
managed by the Asset Manager; and (iii) the assets of plans to which 
the Asset Manager renders investment advice within the meaning of 29 
CFR 2510.3-21(c) does not exceed:
    (1) 10 percent (10%) of the total amount of the Securities being 
offered in an issue, if such Securities are equity securities;
    (2) 35 percent (35%) of the total amount of the Securities being 
offered in an issue, if such Securities are debt securities rated in 
one of the four highest rating categories by at least one of the Rating 
Organizations; provided that none of the Rating Organizations rates 
such Securities in a category lower than the fourth highest rating 
category; or
    (3) 25 percent (25%) of the total amount of the Securities being 
offered in an issue, if such Securities are debt securities rated in 
the fifth or sixth highest rating categories by at least one of the 
Rating Organizations; provided that none of the Rating Organizations 
rates such Securities in a category lower than the sixth highest rating 
category; and
    (4) The assets of any single Client Plan (and the assets of any 
Client Plans and any In-House Plans investing in Pooled Funds) may not 
be used to purchase any Securities being offered, if such Securities 
are debt securities rated lower than the sixth highest rating category 
by any of the Rating Organizations;
    (5) Notwithstanding the percentage of Securities of an issue 
permitted to be acquired, as set forth in Section II(c)(1),

[[Page 71442]]

(2), and (3), above, of this exemption, the amount of Securities in any 
issue (whether equity or debt securities) purchased, pursuant to this 
exemption, by the Asset Manager on behalf of any single Client Plan, 
either individually or through investment, calculated on a pro-rata 
basis, in a Pooled Fund may not exceed three percent (3%) of the total 
amount of such Securities being offered in such issue, and;
    (6) If purchased in an Eligible Rule 144A Offering, the total 
amount of the Securities being offered for purposes of determining the 
percentages, described, above, in Section II(c)(1)-(3) and (5), is the 
total of:
    (i) The principal amount of the offering of such class of 
Securities sold by underwriters or members of the selling syndicate to 
``qualified institutional buyers'' (QIBs), as defined in SEC Rule 144A 
(17 CFR 230.144A(a)(1)); plus
    (ii) The principal amount of the offering of such class of 
Securities in any concurrent public offering.
    (d) The aggregate amount to be paid by any single Client Plan in 
purchasing any Securities which are the subject of this exemption, 
including any amounts paid by any Client Plan or In-House Plan in 
purchasing such Securities through a Pooled Fund, calculated on a pro-
rata basis, does not exceed three percent (3%) of the fair market value 
of the net assets of such Client Plan or In-House Plan, as of the last 
day of the most recent fiscal quarter of such Client Plan or In-House 
Plan prior to such transaction.
    (e) The covered transactions are not part of an agreement, 
arrangement, or understanding designed to benefit any Merrill Lynch/
BlackRock Related Entity.
    (f) No Merrill Lynch/BlackRock Related Broker-Dealer receives, 
either directly, indirectly, or through designation, any selling 
concession, or other compensation or consideration that is based upon 
the amount of Securities purchased by any single Client Plan, or that 
is based on the amount of Securities purchased by Client Plans or In-
House Plans through Pooled Funds, pursuant to this exemption. In this 
regard, a Merrill Lynch/BlackRock Related Broker-Dealer may not 
receive, either directly or indirectly, any compensation or 
consideration that is attributable to the fixed designations generated 
by purchases of the Securities by the Asset Manager on behalf of any 
single Client Plan or any Client Plan or In-House Plan in Pooled Funds.
    (g)(1) The amount a Merrill Lynch/BlackRock Related Broker-Dealer 
receives in management, underwriting, or other compensation or 
consideration is not increased through an agreement, arrangement, or 
understanding for the purpose of compensating such Merrill Lynch/
BlackRock Related Broker-Dealer for foregoing any selling concessions 
for those Securities sold pursuant to this exemption. Except as 
described above, nothing in this Section II(g)(1) shall be construed as 
precluding a Merrill Lynch/BlackRock Related Broker-Dealer from 
receiving management fees for serving as manager of an underwriting or 
selling syndicate, underwriting fees for assuming the responsibilities 
of an underwriter in the underwriting or selling syndicate, or other 
compensation or consideration that is not based upon the amount of 
Securities purchased by the Asset Manager on behalf of any single 
Client Plan, or on behalf of any Client Plan or In-House Plan 
participating in Pooled Funds, pursuant to this exemption; and
    (2) Each Merrill Lynch/BlackRock Related Broker-Dealer shall 
provide to the Asset Manager a written certification, signed by an 
officer of such Merrill Lynch/BlackRock Related Broker-Dealer, stating 
the amount that each such Merrill Lynch/BlackRock Related Broker-Dealer 
received in compensation or consideration during the past quarter, in 
connection with any offerings covered by this exemption, was not 
adjusted in a manner inconsistent with Section II(e), (f), or (g) of 
this exemption.
    (h) The covered transactions are performed under a written 
authorization executed in advance by an independent fiduciary of each 
single Client Plan (the Independent Fiduciary), as defined, below, in 
Section III(j).
    (i) Prior to the execution by an Independent Fiduciary of a single 
Client Plan of the written authorization described, above, in Section 
II(h), the following information and materials (which may be provided 
electronically) must be provided by the Asset Manager to such 
Independent Fiduciary:
    (1) A copy of the Notice of Proposed Exemption (the Notice) and a 
copy of the final exemption (the Grant) as published in the Federal 
Register, provided that the Notice and the Grant are supplied 
simultaneously; and
    (2) Any other reasonably available information regarding the 
covered transactions that such Independent Fiduciary requests the Asset 
Manager to provide.
    (j) Subsequent to the initial authorization by an Independent 
Fiduciary of a single Client Plan permitting the Asset Manager to 
engage in the covered transactions on behalf of such single Client 
Plan, the Asset Manager will continue to be subject to the requirement 
to provide within a reasonable period of time any reasonably available 
information regarding the covered transactions that the Independent 
Fiduciary requests the Asset Manager to provide.
    (k)(1) In the case of an existing employee benefit plan investor 
(or existing In-House Plan investor, as the case may be) in a Pooled 
Fund, such Pooled Fund may not engage in any covered transactions 
pursuant to this exemption, unless the Asset Manager provides the 
written information, as described, below, and within the time period 
described, below, in this Section II(k)(2), to the Independent 
Fiduciary of each such plan participating in such Pooled Fund (and to 
the fiduciary of each such In-House Plan participating in such Pooled 
Fund).
    (2) The following information and materials, (which may be provided 
electronically) shall be provided by the Asset Manager not less than 45 
days prior to such Asset Manager engaging in the covered transactions 
on behalf of a Pooled Fund, pursuant to this exemption; and provided 
further that the information described, below, in this Section 
II(k)(2)(i) and (iii) is supplied simultaneously:
    (i) A notice of the intent of such Pooled Fund to purchase 
Securities pursuant to this exemption, a copy of this Notice, and a 
copy of the Grant, as published in the Federal Register;
    (ii) Any other reasonably available information regarding the 
covered transactions that the Independent Fiduciary of a plan (or 
fiduciary of an In-House Plan) participating in a Pooled Fund requests 
the Asset Manager to provide; and
    (iii) A termination form expressly providing an election for the 
Independent Fiduciary of a plan (or fiduciary of an In-House Plan) 
participating in a Pooled Fund to terminate such plan's (or In-House 
Plan's) investment in such Pooled Fund without penalty to such plan (or 
In-House Plan). Such form shall include instructions specifying how to 
use the form. Specifically, the instructions will explain that such 
plan (or such In-House Plan) has an opportunity to withdraw its assets 
from a Pooled Fund for a period of no more than 30 days after such 
plan's (or such In-House Plan's) receipt of the initial notice of 
intent, described, above, in Section II(k)(2)(i), and that the failure 
of the Independent Fiduciary of such plan (or fiduciary of such In-
House Plan) to return the termination form to the Asset Manager in the 
case of a plan (or In-House Plan) participating in a Pooled

[[Page 71443]]

Fund by the specified date shall be deemed to be an approval by such 
plan (or such In-House Plan) of its participation in the covered 
transactions as an investor in such Pooled Fund.
    Further, the instructions will identify the Asset Manager and the 
Merrill Lynch/BlackRock Related Broker-Dealer and will provide the 
address of the Asset Manager. The instructions will state that this 
exemption may be unavailable, unless the fiduciary of each plan 
participating in the covered transactions as an investor in a Pooled 
Fund is, in fact, independent of the Merrill Lynch/BlackRock Related 
Entities. The instructions will also state that the fiduciary of each 
such plan must advise the Asset Manager, in writing, if it is not an 
``Independent Fiduciary,'' as that term is defined, below, in Section 
III(j).
    For purposes of this Section II(k), the requirement that the 
fiduciary responsible for the decision to authorize the transactions 
described, above, in Section I of this exemption for each plan be 
independent of the Merrill Lynch/BlackRock Related Entities shall not 
apply in the case of an In-House Plan.
    (l)(1) In the case of each plan (and in the case of each In-House 
Plan) whose assets are proposed to be invested in a Pooled Fund after 
such Pooled Fund has satisfied the conditions set forth in this 
exemption to engage in the covered transactions, the investment by such 
plan (or by such In-House Plan) in the Pooled Fund is subject to the 
prior written authorization of an Independent Fiduciary representing 
such plan (or the prior written authorization by the fiduciary of such 
In-House Plan, as the case may be), following the receipt by such 
Independent Fiduciary of such plan (or by the fiduciary of such In-
House Plan, as the case may be) of the written information described, 
above, in Section II(k)(2)(i) and (ii); provided that the Notice and 
the Grant, described, above, in Section II(k)(2)(i) are provided 
simultaneously.
    (2) For purposes of this Section II(l), the requirement that the 
fiduciary responsible for the decision to authorize the transactions 
described, above, in Section I of this exemption for each plan 
proposing to invest in a Pooled Fund be independent of the Merrill 
Lynch/BlackRock Related Entities shall not apply in the case of an In-
House Plan.
    (m) Subsequent to the initial authorization by an Independent 
Fiduciary of a plan (or by a fiduciary of an In-House Plan) to invest 
in a Pooled Fund that engages in the covered transactions, the Asset 
Manager will continue to be subject to the requirement to provide 
within a reasonable period of time any reasonably available information 
regarding the covered transactions that the Independent Fiduciary of 
such plan (or the fiduciary of such In-House Plan, as the case may be) 
requests the Asset Manager to provide.
    (n) At least once every three months, and not later than 45 days 
following the period to which such information relates, the Asset 
Manager shall furnish:
    (1) In the case of each single Client Plan that engages in the 
covered transactions, the information described, below, in this Section 
II(n)(3)-(7), to the Independent Fiduciary of each such single Client 
Plan.
    (2) In the case of each Pooled Fund in which a Client Plan (or in 
which an In-House Plan) invests, the information described, below, in 
this Section II(n)(3)-(6) and (8), to the Independent Fiduciary of each 
such Client Plan (and to the fiduciary of each such In-House Plan) 
invested in such Pooled Fund.
    (3) A quarterly report (the Quarterly Report) (which may be 
provided electronically) which discloses all the Securities purchased 
pursuant to this exemption during the period to which such report 
relates on behalf of the Client Plan, In-House Plan, or Pooled Fund to 
which such report relates, and which discloses the terms of each of the 
transactions described in such report, including:
    (i) The type of Securities (including the rating of any Securities 
which are debt securities) involved in each transaction;
    (ii) The price at which the Securities were purchased in each 
transaction;
    (iii) The first day on which any sale was made during the offering 
of the Securities;
    (iv) The size of the issue of the Securities involved in each 
transaction;
    (v) The number of Securities purchased by the Asset Manager for the 
Client Plan, In-House Plan, or Pooled Fund to which the transaction 
relates;
    (vi) The identity of the underwriter from whom the Securities were 
purchased for each transaction;
    (vii) The underwriting spread in each transaction (i.e., the 
difference, between the price at which the underwriter purchases the 
securities from the issuer and the price at which the securities are 
sold to the public);
    (viii) The price at which any of the Securities purchased during 
the period to which such report relates were sold; and
    (ix) The market value at the end of the period to which such report 
relates of the Securities purchased during such period and not sold;
    (4) The Quarterly Report contains:
    (i) A representation that the Asset Manager has received a written 
certification signed by an officer of each Merrill Lynch/BlackRock 
Related Broker-Dealer, as described, above, in Section II(g)(2), 
affirming that, as to each AUT covered by this exemption during the 
past quarter, such Merrill Lynch/BlackRock Related Broker-Dealer acted 
in compliance with Section II(e), (f), and (g) of this exemption, and
    (ii) A representation that copies of such certifications will be 
provided upon request;
    (5) A disclosure in the Quarterly Report that states that any other 
reasonably available information regarding a covered transaction that 
an Independent Fiduciary (or fiduciary of an In-House Plan) requests 
will be provided, including, but not limited to:
    (i) The date on which the Securities were purchased on behalf of 
the Client Plan (or the In-House Plan) to which the disclosure relates 
(including Securities purchased by Pooled Funds in which such Client 
Plan (or such In-House Plan) invests;
    (ii) The percentage of the offering purchased on behalf of all 
Client Plans (and the pro-rata percentage purchased on behalf of Client 
Plans and In-House Plans investing in Pooled Funds); and
    (iii) The identity of all members of the underwriting syndicate;
    (6) The Quarterly Report discloses any instance during the past 
quarter where the Asset Manager was precluded for any period of time 
from selling Securities purchased under this exemption in that quarter 
because of its relationship to a Merrill Lynch/BlackRock Related 
Broker-Dealer and the reason for this restriction;
    (7) Explicit notification, prominently displayed in each Quarterly 
Report sent to the Independent Fiduciary of each single Client Plan 
that engages in the covered transactions that the authorization to 
engage in such covered transactions may be terminated, without penalty 
to such single Client Plan, within five (5) days after the date that 
the Independent Fiduciary of such single Client Plan informs the person 
identified in such notification that the authorization to engage in the 
covered transactions is terminated; and
    (8) Explicit notification, prominently displayed in each Quarterly 
Report sent to the Independent Fiduciary of each Client Plan (and to 
the fiduciary of each In-House Plan) that engages in the covered 
transactions through a Pooled Fund that the investment in such Pooled 
Fund may be terminated, without penalty to such Client Plan (or such 
In-House Plan), within such time as may be necessary to effect the

[[Page 71444]]

withdrawal in an orderly manner that is equitable to all withdrawing 
plans and to the non-withdrawing plans, after the date that that the 
Independent Fiduciary of such Client Plan (or the fiduciary of such In-
House Plan, as the case may be) informs the person identified in such 
notification that the investment in such Pooled Fund is terminated.
    (o) For purposes of engaging in covered transactions, each Client 
Plan (and each In-House Plan) shall have total net assets with a value 
of at least $50 million (the $50 Million Net Asset Requirement). For 
purposes of engaging in covered transactions involving an Eligible Rule 
144A Offering,\5\ each Client Plan (and each In-House Plan) shall have 
total net assets of at least $100 million in securities of issuers that 
are not affiliated with such Client Plan (or such In-House Plan, as the 
case may be) (the $100 Million Net Asset Requirement).
---------------------------------------------------------------------------

    \5\ SEC Rule 10f-3(a)(4), 17 CFR 270.10f-3(a)(4), states that 
the term ``Eligible Rule 144A Offering'' means an offering of 
securities that meets the following conditions:
    (i) The securities are offered or sold in transactions exempt 
from registration under section 4(2) of the Securities Act of 1933 
[15 U.S.C. 77d(d)], rule 144A there under [Sec.  230.144A of this 
chapter], or rules 501-508 there under [Sec. Sec.  230.501-230-508 
of this chapter];
    (ii) The securities are sold to persons that the seller and any 
person acting on behalf of the seller reasonably believe to include 
qualified institutional buyers, as defined in Sec.  230.144A(a)(1) 
of this chapter; and
    (iii) The seller and any person acting on behalf of the seller 
reasonably believe that the securities are eligible for resale to 
other qualified institutional buyers pursuant to Sec.  230.144A of 
this chapter.
---------------------------------------------------------------------------

    For purposes of a Pooled Fund engaging in covered transactions, 
each Client Plan (and each In-House Plan) in such Pooled Fund shall 
have total net assets with a value of at least $50 million. 
Notwithstanding the foregoing, if each such Client Plan (and each such 
In-House Plan) in such Pooled Fund does not have total net assets with 
a value of at least $50 million, the $50 Million Net Asset Requirement 
will be met, if 50 percent (50%) or more of the units of beneficial 
interest in such Pooled Fund are held by Client Plans (or by In-House 
Plans) each of which has total net assets with a value of at least $50 
million. For purposes of a Pooled Fund engaging in covered transactions 
involving an Eligible Rule 144A Offering, each Client Plan (and each 
In-House Plan) in such Pooled Fund shall have total net assets of at 
least $100 million in securities of issuers that are not affiliated 
with such Client Plan (or such In-House Plan, as the case may be). 
Notwithstanding the foregoing, if each such Client Plan (and each such 
In-House Plan) in such Pooled Fund does not have total net assets of at 
least $100 million in securities of issuers that are not affiliated 
with such Client Plan (or In-House Plan, as the case may be), the $100 
Million Net Asset Requirement will be met if 50 percent (50%) or more 
of the units of beneficial interest in such Pooled Fund are held by 
Client Plans (or by In-House Plans) each of which have total net assets 
of at least $100 million in securities of issuers that are not 
affiliated with such Client Plan (or such In-House Plan, as the case 
may be), and the Pooled Fund itself qualifies as a QIB, as determined 
pursuant to SEC Rule 144A (17 CFR 230.144A(a)(F)).
    For purposes of the net asset requirements described, above, in 
this Section II(o), where a group of Client Plans is maintained by a 
single employer or controlled group of employers, as defined in section 
407(d)(7) of the Act, the $50 Million Net Asset Requirement (or in the 
case of an Eligible Rule 144A Offering, the $100 Million Net Asset 
Requirement) may be met by aggregating the assets of such Client Plans, 
if the assets of such Client Plans are pooled for investment purposes 
in a single master trust.
    (p) No more than 20 percent of the assets of a Pooled Fund, at the 
time of a covered transaction, are comprised of assets of In-House 
Plans for which the Asset Manager or a Merrill Lynch/BlackRock Related 
Entity exercises investment discretion.
    (q) The Asset Manager and the Merrill Lynch/BlackRock Related 
Broker-Dealer, as applicable, maintain, or cause to be maintained, for 
a period of six (6) years from the date of any covered transaction such 
records as are necessary to enable the persons, described, below, in 
Section II(r), to determine whether the conditions of this exemption 
have been met, except that--
    (1) No party in interest with respect to a plan which engages in 
the covered transactions, other than the Asset Manager, and the Merrill 
Lynch/BlackRock Related Broker-Dealer, as applicable, shall be subject 
to a civil penalty under section 502(i) of the Act or the taxes imposed 
by section 4975(a) and (b) of the Code, if such records are not 
maintained, or not available for examination, as required, below, by 
Section II(r); and
    (2) A prohibited transaction shall not be considered to have 
occurred if, due to circumstances beyond the control of the Asset 
Manager, or the Merrill Lynch/BlackRock Related Broker-Dealer, as 
applicable, such records are lost or destroyed prior to the end of the 
six-year period.
    (r)(1) Except as provided, below, in Section II(r)(2), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to, above, in Section II(q) are 
unconditionally available at their customary location for examination 
during normal business hours by--
    (i) Any duly authorized employee or representative of the 
Department of Labor (the Department), the Internal Revenue Service, or 
the SEC; or
    (ii) Any fiduciary of any plan that engages in the covered 
transactions, or any duly authorized employee or representative of such 
fiduciary; or
    (iii) Any employer of participants and beneficiaries and any 
employee organization whose members are covered by a plan that engages 
in the covered transactions, or any authorized employee or 
representative of these entities; or
    (iv) Any participant or beneficiary of a plan that engages in the 
covered transactions, or duly authorized employee or representative of 
such participant or beneficiary;
    (2) None of the persons described, above, in Section II(r)(1)(ii)-
(iv) shall be authorized to examine trade secrets of the Asset Manager, 
or the Merrill Lynch/BlackRock Related Broker-Dealer, or commercial or 
financial information which is privileged or confidential; and
    (3) Should the Asset Manager, or the Merrill Lynch/BlackRock 
Related Broker-Dealer refuse to disclose information on the basis that 
such information is exempt from disclosure, pursuant to Section 
II(r)(2), above, the Asset Manager shall, by the close of the thirtieth 
(30th) day following the request, provide a written notice advising 
that person of the reasons for the refusal and that the Department may 
request such information.
Section III--Definitions
    (a) The term, ``the Applicants,'' means BlackRock Inc. and Merrill 
Lynch & Co, Inc.
    (b) The term, ``Merrill Lynch/BlackRock Related Broker-Dealer,'' 
means any broker-dealer that is a Merrill Lynch/BlackRock Related 
Entity that meets the requirements of this exemption. Such Merrill 
Lynch/BlackRock Related Broker-Dealer may participate in an 
underwriting or selling syndicate as a manager or member. The term, 
``manager,'' means any member of an underwriting or selling syndicate 
who, either alone or together with other members of the syndicate, is 
authorized to act on behalf of the members of the syndicate in 
connection with the sale and distribution of the Securities, as

[[Page 71445]]

defined, below, in Section III(k), being offered or who receives 
compensation from the members of the syndicate for its services as a 
manager of the syndicate.
    (c) The term, ``Merrill Lynch/BlackRock Related Entity(s)'' 
includes all entities listed in this Section III(c)(i) and (ii): (i) 
Merrill Lynch and any person directly or indirectly, through one or 
more intermediaries, controlling, controlled by, or under common 
control with Merrill Lynch, and (ii) BlackRock and any person directly 
or indirectly, through one or more intermediaries, controlling, 
controlled by, or under common control with, BlackRock. For purposes of 
this exemption, the definition of a Merrill Lynch/BlackRock Related 
Entity shall include any entity that satisfies such definition in the 
future.
    (d) The term, ``BlackRock Related Entity'' or ``BlackRock Related 
Entities,'' means BlackRock and any person directly or indirectly, 
through one or more intermediaries, controlling, controlled by, or 
under common control with BlackRock.
    (e) The term, ``Merrill Lynch Related Entity'' or ``Merrill Lynch 
Related Entities,'' means Merrill Lynch and any person directly or 
indirectly, through one or more intermediaries, controlling, controlled 
by, or under common control with Merrill Lynch.
    (f) The term, ``Asset Manager,'' means a BlackRock Related Entity, 
as defined, above, in Section III(d). For purposes of this exemption, 
the Asset Manager must be registered with the Securities and Exchange 
Commission as an investment advisor, have total client assets under 
management in excess of $5 billion, have shareholders' or partners' 
equity in excess of $1 million, and must satisfy the definition of a 
``qualified professional asset manager'' (QPAM), as that term is 
defined in Part V(a) of PTE 84-14, 49 Fed. Reg. 9494 (Mar. 13, 1984), 
as amended, 70 Fed. Reg. 49305 (Aug. 23, 2005). Accordingly, the Asset 
Manager must have total client asset under its management and control 
in excess of $5 billion, as of the last day of it most recent fiscal 
year, and shareholders' or partners' equity in excess of $1 million in 
addition to satisfying the requirements for a QPAM under Part V(a) of 
PTE 84-14.
    (g) The term, ``control,'' means the power to exercise a 
controlling influence over the management or policies of a person other 
than an individual.
    (h) The term, ``Client Plan(s),'' means an employee benefit plan or 
employee benefit plans that are subject to the Act and/or the Code, and 
for which plan(s) an Asset Manager exercises discretionary authority or 
discretionary control respecting management or disposition of some or 
all of the assets of such plan(s), but excludes In-House Plans, as 
defined, below, in Section III(o).
    (i) The term, ``Pooled Fund(s),'' means a common or collective 
trust fund(s) or a pooled investment fund(s): (i) In which employee 
benefit plan(s) subject to the Act and/or Code invest, (ii) which is 
maintained by an Asset Manager, and (iii) for which such Asset Manager 
exercises discretionary authority or discretionary control respecting 
the management or disposition of the assets of such fund(s).
    (j)(1) The term, ``Independent Fiduciary,'' means a fiduciary of a 
plan who is unrelated to, and independent of any Merrill Lynch/
BlackRock Related Entity. For purposes of this exemption, a fiduciary 
of a plan will be deemed to be unrelated to, and independent of any 
Merrill Lynch/BlackRock Related Entity, if such fiduciary represents 
that neither such fiduciary, nor any individual responsible for the 
decision to authorize or terminate authorization for the transactions 
described, above, in Section I of this exemption, is an officer, 
director, or highly compensated employee (within the meaning of section 
4975(e)(2)(H) of the Code) of any Merrill Lynch/BlackRock Related 
Entity, and represents that such fiduciary shall advise the Asset 
Manager within a reasonable period of time after any change in such 
facts occur.
    (2) Notwithstanding anything to the contrary in this Section 
III(j), a fiduciary of a plan is not independent:
    (i) If such fiduciary, directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common control 
with any Merrill Lynch/BlackRock Related Entity;

    (ii) If such fiduciary directly or indirectly receives any 
compensation or other consideration from any Merrill Lynch/BlackRock 
Related Entity for his or her own personal account in connection with 
any transaction described in this exemption;
    (iii) If any officer, director, or highly compensated employee 
(within the meaning of section 4975(e)(2)(H) of the Code) of the Asset 
Manager responsible for the transactions described, above, in Section I 
of this exemption, is an officer, director, or highly compensated 
employee (within the meaning of section 4975(e)(2)(H) of the Code) of 
the sponsor of a plan or of the fiduciary responsible for the decision 
to authorize or terminate authorization for the transactions described, 
above, in Section I. However, if such individual is a director of the 
sponsor of a plan or of the responsible fiduciary, and if he or she 
abstains from participation in: (A) The choice of such plan's 
investment manager/adviser; and (B) the decision to authorize or 
terminate authorization for transactions described, above, in Section 
I, then Section III(j)(2)(iii) shall not apply.
    (3) The term, ``officer,'' means a president, any vice president in 
charge of a principal business unit, division, or function (such as 
sales, administration, or finance), or any other officer who performs a 
policy-making function for a Merrill Lynch/BlackRock Related Entity.
    (k) The term, ``Securities,'' shall have the same meaning as 
defined in section 2(36) of the Investment Company Act of 1940 (the 
1940 Act), as amended (15 U.S.C. 80a-2(36)(1996)). For purposes of this 
exemption, mortgage-backed or other asset-backed securities rated by 
one of the Rating Organizations, as defined, below, in Section III(n), 
will be treated as debt securities.
    (l) The term, ``Eligible Rule 144A Offering,'' shall have the same 
meaning as defined in SEC Rule 10f-3(a)(4) (17 CFR 270. 10f-3(a)(4)) 
under the 1940 Act.
    (m) The term, ``qualified institutional buyer,'' or the term, 
``QIB,'' shall have the same meaning as defined in SEC Rule 144A (17 
CFR 230.144A(a)(1)) under the 1933 Act.
    (n) The term, ``Rating Organizations,'' means Standard & Poor's 
Rating Services, Moody's Investors Service, Inc., Fitch Ratings Inc., 
Dominion Bond Ratings Service Limited, and Dominion Bond Rating 
Service, Inc., or any successors thereto.
    (o) The term, ``In-House Plan(s),'' means an employee benefit 
plan(s) that is subject to the Act and/or the Code, and that is 
sponsored by: (i) A Merrill Lynch Related Entity, as defined, above, in 
Section III(e), or (ii) a BlackRock Related Entity, as defined, above, 
in Section III(d), for their respective employees.
    The availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
application for exemption are true and complete and accurately describe 
all material terms of the transactions. In the case of continuing 
transactions, if any of the material facts or representations described 
in the applications change, the exemption will cease to apply as of the 
date of such change. In the event of any such change, an application 
for a new exemption must be made to the Department.

[[Page 71446]]

    Effective Date: This exemption will be effective as of the date the 
Grant is published in the Federal Register.

Written Comments

    In the Notice, the Department invited all interested persons to 
submit written comments and requests for a hearing on the proposed 
exemption within forty-five (45) days of the date of the publication of 
the Notice in the Federal Register on September 10, 2007. All comments 
and requests for a hearing were due by October 10, 2007. During the 
comment period, the Department received no comments or requests for a 
hearing. However, in order to clarify the meaning of the term, ``Asset 
Manager,'' the Department has determined to delete the last sentence in 
the definition of the term, ``Asset Manager,'' as set forth in Section 
III(f) of the Notice, at 72 FR 51680, column 1, lines 11-20, and to 
substitute the following sentence, ``Accordingly, the Asset Manager 
must have total client asset under its management and control in excess 
of $5 billion, as of the last day of its most recent fiscal year, and 
shareholders' or partners' equity in excess of $1 million in addition 
to satisfying the requirements for a QPAM under Part V(a) of PTE 84-
14.''

FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the 
Department, telephone (202) 693-8540. (This is not a toll-free number).

Gastroenterology and Oncology Associates, P.A. Profit Sharing Plan and 
Trust (the Plan), Located in St. Petersburg, FL

[Prohibited Transaction Exemption 2007-21; Exemption Application No. D-
11441]

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 proposed sale of certain shares of common stock 
(the Stock) issued by Alden Enterprises, Inc., an unrelated party, by 
the individually directed account in the Plan (the Account) of 
Jayaprakash K. Kamath, M.D. (Dr. Kamath), to Geetha J. Kamath, M.D., 
(Mrs. Kamath), Dr. Kamath's spouse and a party in interest with respect 
to the Plan.
    This exemption is subject to the following conditions:
    (a) The sale of the Stock by the Account to Mrs. Kamath is a one-
time transaction for cash.
    (b) The Stock is sold to Mrs. Kamath for a price that reflects the 
fair market value of the Stock, as determined by a qualified, 
independent appraiser (the Appraiser).
    (c) The closing of the sale (the Closing Date) occurs at a time 
that is mutually agreed upon by Mrs. Kamath and the Plan trustees (the 
Trustees) within 30 days of the Department's approval of the final 
exemption.
    (d) As of the Closing Date, the Appraiser reviews the assumptions 
previously made in determining the appraised value of the Stock to see 
whether there has been a 3% or more increase (Material Increase) in the 
fair market value of the Stock between December 31, 2006 (the Appraisal 
Date) and the Closing Date.
    (e) If the Appraiser determines that there has been no Material 
Increase in the fair market value of the Stock on the Closing Date, the 
Appraiser issues a letter to the parties to the sale to such effect and 
the sale price of the Stock remains at the value determined on the 
Appraisal Date.
    (f) If the Appraiser determines that there has been a Material 
Increase in the fair market value of the Stock, he advises the parties 
to the transaction, in writing, as to the increased value as of the 
Closing Date. Then, the sale price for the Stock is revised to reflect 
the increased value and the amount of such increase is paid to the 
Trustees by Mrs. Kamath following the receipt of the updated appraisal 
report from the Appraiser setting forth the increased value of the 
Stock.
    (g) The sale proceeds from the transaction are credited to Dr. 
Kamath's Account simultaneously with the transfer of the Stock's title 
to Mrs. Kamath.
    (h) The Account is not responsible for paying any fees, 
commissions, or other costs or expenses associated with the sale of the 
Stock.
    (i) The terms and conditions of the Stock sale remain at least as 
favorable to the Account as the terms and conditions obtainable under 
similar circumstances negotiated at arm's length with an unrelated 
party.

Written Comments

    In the notice of proposed exemption, the Department invited all 
interested persons to submit written comments and requests for a 
hearing with respect to the proposed exemption within (30) thirty days 
of the publication of the notice of pendency in the Federal Register on 
October 26, 2007. All comments and requests for a hearing were due by 
November 26, 2007.
    During the comment period, the Department received no comments or 
hearing requests. However, the Department has noted two errors in the 
proposed exemption that require either revision or clarification. In 
this regard, the reference to the Exemption Application Number 
appearing on pages 60889 and 60890 of the proposal has been modified in 
the grant notice to read ``D-11441'' instead of ``D-11141.'' In 
addition, on page 60891 of the proposal, in the paragraph captioned 
``Notice to Interested Persons,'' the Department wishes to clarify that 
the phrase ``whose Account will be affected by the proposed 
transaction,'' should have been inserted after that portion of the 
sentence which states ``Because Dr. Kamath is the only participant in 
the Plan, * * *''
    Accordingly, the Department has considered the entire record and 
has determined to grant the exemption. 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 26, 2007 at 72 FR 60889.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department, 
telephone (202) 693-8556. (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 
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

[[Page 71447]]

contained in the application accurately describes all material terms of 
the transaction which is the subject of the exemption.

    Signed at Washington, DC, this 11th day of December, 2007.
Ivan Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. E7-24313 Filed 12-14-07; 8:45 am]

BILLING CODE 4510-29-P