Attentus CDO I Offering Circular - Irish Stock Exchange

persons or the fiduciaries of the Benefit Plan. In addition, Title I of ERISA also requires fiduciaries of a
Benefit Plan subject to ERISA to make investments that are prudent, diversified and in accordance with
the governing plan documents.
Certain transactions involving the Issuer or the Co-Issuer might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan that purchased Senior
Notes if assets of the Issuer were deemed to be assets of the Benefit Plan. Under a regulation issued by
the United States Department of Labor (the “Regulation”), the assets of the Issuer or the Co-Issuer would
be treated as plan assets of a Benefit Plan for the purposes of ERISA and the Code only if the Benefit
Plan acquired an “equity interest” in the Issuer or the Co-Issuer and none of the exceptions to plan assets
contained in the Regulation were applicable. An equity interest is defined under the Regulation as an
interest other than an instrument which is treated as indebtedness under applicable local law and which
has no substantial equity features. Although there is little guidance on the subject, assuming the Senior
Notes (other than the Class E Notes and Senior Notes in the form of a Senior Note Component of any
Combination Note) constitute debt for local law purposes, the Issuer and Co-Issuer believe that, at the
time of their initial issuance, the Senior Notes (other than the Class E Notes and Senior Notes in the form
of a Senior Note Component of any Combination Note) should not be treated as an equity interest in the
Issuer or the Co-Issuer for purposes of the Regulation. This determination is based in part upon the
traditional debt features of the Senior Notes (other than the Class E Notes), including the reasonable
expectation of purchasers of such Senior Notes (other than the Class E Notes) that such Senior Notes will
be repaid when due, as well as the absence of conversion rights, warrants and other typical equity
features. The debt treatment of the Senior Notes (other than the Class E Notes) for ERISA purposes
could change if the Issuer or the Co-Issuer incurred losses. This risk of recharacterization is enhanced for
Notes that are subordinated to other classes of Notes. The Combination Notes that contain a
Subordinated Note Component will be treated as an equity interest in the Issuer for purposes of the
Regulation.
However, without regard to whether the Senior Notes (other than the Class E Notes) are treated as
an equity interest for purposes of the Regulation, the acquisition or holding of such Senior Notes by or on
behalf of a Benefit Plan could be considered to give rise to a prohibited transaction if the Issuer, the Co-
Issuer, the Trustee, the Collateral Manager, any Hedge Counterparty or the Initial Purchaser is or becomes
a party in interest or a disqualified person with respect to such Benefit Plan. Certain exemptions from the
prohibited transaction rules could be applicable to the purchase and holding of such Senior Notes by a
Benefit Plan depending on the type and circumstances of the plan fiduciary making the decision to
acquire such Senior Notes. Included among these exemptions are: Prohibited Transaction Class
Exemption (“PTCE”) 96-23, regarding transactions effected by “in-house asset managers”; PTCE 95-60,
regarding investments by insurance company general accounts; PTCE 91-38, regarding investments by
bank collective investment funds; PTCE 90-1, regarding investments by insurance company pooled
separate accounts; and PTCE 84-14, regarding transactions effected by “qualified professional asset
managers.” By acquiring a Senior Note (other than the Class E Notes or a Senior Note in the form of a
Senior Note Component of any Combination Note), each purchaser and transferee will be deemed to
represent and warrant that either (i) it is not acquiring such Senior Note with the assets of a Benefit Plan;
or (ii) the acquisition and holding of such Senior Note will not give rise to a nonexempt prohibited
transaction under Section 406(a) of ERISA or Section 4975 of the Code.
Employee benefit plans that are governmental plans (as defined in Section 3(32) of ERISA) and
certain church plans (as defined in Section 3(33) of ERISA) are not subject to ERISA requirements,
however governmental plans may be subject to comparable state law restrictions.
A Benefit Plan fiduciary considering the purchase of Senior Notes (other than the Class E Notes)
should consult its legal advisors regarding whether the assets of the Issuer or the Co-Issuer would be
170