- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 30, 1996
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
(AS DEPOSITOR UNDER THE TRUST AGREEMENT, DATED AS OF DECEMBER 30, 1996,
PROVIDING FOR THE ISSUANCE OF TRUST CERTIFICATES, SERIES 1996-6)
Salomon Brothers Mortgage Securities VII, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-14225 13-3439681
-------- --------- ----------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
Seven World Trade Center
New York, New York 10048
- ------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 783-5635
--------------
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<PAGE>
-2-
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Description of the Certificates
On December 30, 1996, a single series of certificates, entitled Salomon
Brothers Mortgage Securities VII, Inc., Trust Certificates, Series 1996-6 (the
"Trust Certificates") was issued pursuant to the trust agreement attached hereto
as Exhibit 4.1, dated as of December 30, 1996, among Salomon Brothers Mortgage
Securities VII, Inc., as depositor (the "Depositor"), and Bankers Trust Company,
as trustee. The Trust Certificates consist of thirty-one classes of
certificates. The Trust Certificates evidence in the aggregate the entire
beneficial ownership interest in a trust fund, consisting primarily of senior
mortgage pass-through certificates (the "Underlying Certificates")(as defined
therein). The Underlying Certificates represent a partial, senior interest in
twelve separate trust funds consisting primarily of twelve separate pools of
residential mortgage loans having original terms to maturity of up to 30 years.
The Underlying Certificates have an aggregate principal balance as of December
30, 1996 of approximately $257,477,667.00. The Trust Certificates were sold by
the Depositor to Salomon Brothers Inc ("Salomon"), an affiliate of the Depositor
pursuant to an underwriting agreement dated December 30, 1996, between the
Depositor and Salomon.
<PAGE>
-3-
Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to them in the Agreements.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable
(b) Not applicable
(c) Exhibits
Exhibit No. Description
----------- -----------
4.1 Trust Agreement, dated as of December 30, 1996,
between Salomon Brothers Mortgage Securities VII,
Inc., as Depositor, and Bankers Trust Company, as
Trustee relating to Salomon Brothers Mortgage
Securities VII, Inc., Trust Certificates, Series
1996- 6.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Gregory P. Petroski
---------------------------------
Gregory P. Petroski
Assistant Vice President
Dated: December 30, 1996
<PAGE>
INDEX TO EXHIBITS
-----------------
Sequentially
Exhibit No. Description Numbered Page
----------- ----------- -------------
4.1 Trust Agreement, dated as of December 30, 6
1996, between Salomon Brothers Mortgage
Securities VII, Inc., as Depositor, and
Bankers Trust Company, as Trustee relating
to Salomon Brothers Mortgage Securities VII,
Inc., Trust Certificates, Series 1996-6.
Exhibit 4.1
<PAGE>
================================================================================
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
and
BANKERS TRUST COMPANY
Trustee
------------------------
TRUST AGREEMENT
Dated December 30, 1996
------------------------
Trust Certificates
Series 1996-6
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS ................................................ -5-
Affiliate .................................................. -5-
Available Funds ............................................ -5-
Book-Entry Certificate ..................................... -5-
Book-Entry Custodian ....................................... -5-
Business Day ............................................... -5-
Certificate ................................................ -5-
Certificate Account ........................................ -5-
Certificate Factor ......................................... -5-
Certificate Owner .......................................... -6-
Certificate Principal Balance .............................. -6-
Certificate Register and Certificate Registrar ............. -6-
Certificateholder or Holder ................................ -6-
Class ...................................................... -6-
Class 6A Certificates ...................................... -6-
Class 6B Certificates ...................................... -6-
Class 6C Certificates ...................................... -6-
Class 6D Certificates ...................................... -7-
Class 6D REMIC ............................................. -7-
Class 6E Certificates ...................................... -7-
Class 6F Certificates ...................................... -7-
Class 6G Certificates ...................................... -7-
Class 6H Certificates ...................................... -7-
Class 6I Certificates ...................................... -7-
Class 6I REMIC ............................................. -7-
Class 6J Certificates ...................................... -7-
Class 6J REMIC ............................................. -7-
Class 6K Certificates ...................................... -7-
Class 6L Certificates ...................................... -7-
Class 6L REMIC I ........................................... -7-
Class 6L REMIC I Regular Interest .......................... -8-
Class 6L REMIC I Remittance Rate ........................... -8-
Class 6L REMIC II .......................................... -8-
Class R-C Certificate ...................................... -8-
Closing Date ............................................... -8-
Code ....................................................... -8-
Commission ................................................. -8-
Common REMIC ............................................... -8-
Corporate Trust Office ..................................... -8-
CPR ........................................................ -8-
<PAGE>
-ii-
Section Page
Depositor .................................................. -9-
Depository ................................................. -9-
Depository Participant ..................................... -9-
Disqualified Organization .................................. -9-
Distribution Date .......................................... -9-
DTC ........................................................ -9-
Eligible Account ........................................... -9-
Eligible Investments ....................................... -10-
ERISA ...................................................... -11-
Extraordinary Trust Fund Expenses .......................... -11-
FHLMC ...................................................... -11-
Final Distribution Date .................................... -11-
Independent ................................................ -11-
Interest Accrual Period .................................... -12-
Interest Determination Date ................................ -12-
Interest Distribution Amount ............................... -12-
Interest Only Certificate .................................. -12-
London Business Day ........................................ -12-
Non-U.S. Person ............................................ -13-
Notional Amount ............................................ -13-
Officer's Certificate ...................................... -13-
One-Month LIBOR ............................................ -13-
Opinion of Counsel ......................................... -13-
Ownership Interest ......................................... -13-
Pass-Through Rate .......................................... -14-
Percentage Interest ........................................ -15-
Permitted Transferee ....................................... -16-
Person ..................................................... -16-
Plan ....................................................... -16-
Pooling and Servicing Agreement ............................ -16-
PPV ........................................................ -16-
Prepayment Assumption ...................................... -17-
Principal Distribution Amount .............................. -17-
Rating Agency .............................................. -17-
Realized Loss .............................................. -17-
Record Date ................................................ -17-
Reference Banks ............................................ -17-
Regular Certificate ........................................ -18-
Related Classes or Related Certificates .................... -18-
Related Underlying Certificates ............................ -18-
REMIC ...................................................... -18-
REMIC Provisions ........................................... -18-
Reserve Interest Rate ...................................... -18-
Residual Certificate ....................................... -18-
Responsible Officer ........................................ -18-
<PAGE>
-iii-
Section Page
Single Certificate ......................................... -19-
SPA ........................................................ -19-
Startup Day ................................................ -19-
Tax Returns ................................................ -19-
Transfer ................................................... -19-
Transfer Affidavit and Agreement ........................... -19-
Transferee ................................................. -19-
Transferor ................................................. -19-
Trust ...................................................... -19-
Trustee .................................................... -19-
Trust Fund ................................................. -19-
Uncertificated Balance ..................................... -20-
Uncertificated Interest .................................... -20-
Underlying Certificates .................................... -20-
Underlying Certificate Distribution Date ................... -20-
Underlying Certificate Distribution Date Statements ........ -21-
Underlying Certificate Schedule ............................ -21-
Underlying Class 6A Certificates ........................... -21-
Underlying Class 6B Certificates ........................... -21-
Underlying Class 6C Certificates ........................... -21-
Underlying Class 6D Certificates ........................... -21-
Underlying Class 6E Certificates ........................... -21-
Underlying Class 6F Certificates ........................... -21-
Underlying Class 6G Certificates ........................... -21-
Underlying Class 6H Certificates ........................... -21-
Underlying Class 6I Certificates ........................... -21-
Underlying Class 6J Certificates ........................... -21-
Underlying Class 6K Certificates ........................... -21-
Underlying Class 6L Certificates ........................... -21-
Underlying Interest Distribution Amount .................... -22-
Underlying Pass-Through Rate ............................... -22-
Voting Rights .............................................. -22-
1.02. INTEREST CALCULATIONS ...................................... -22-
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
AND THE ORIGINAL ISSUANCE OF CERTIFICATES
2.01. CONVEYANCE OF THE UNDERLYING CERTIFICATES .................. -23-
2.02. ISSUANCE OF CERTIFICATES ................................... -23-
2.03. CONVEYANCE OF CLASS 6L REMIC I REGULAR INTERESTS; ACCEPTANCE
OF CLASS 6L REMIC II BY THE TRUSTEE........................ -24-
<PAGE>
-iv-
Section Page
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES
3.01. COLLECTION OF PAYMENTS ON THE UNDERLYING CERTIFICATES;
CERTIFICATE ACCOUNT ....................................... -25-
3.02. DISTRIBUTIONS .............................................. -26-
3.03. STATEMENTS TO CERTIFICATEHOLDERS ........................... -30-
3.04. ALLOCATION OF EXTRAORDINARY TRUST FUND EXPENSES AND REALIZED
LOS ........................................................ -32-
3.05. NOTICES TO TRUSTEE ......................................... -32-
3.06. EXCHANGE COMMISSION; ADDITIONAL INFORMATION ................ -32-
ARTICLE IV
THE CERTIFICATES
4.01. THE CERTIFICATES ........................................... -34-
4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
CERTIFICATE ............................................... -36-
4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES .......... -41-
4.04. PERSONS DEEMED OWNERS ...................................... -41-
4.05. CERTAIN AVAILABLE INFORMATION .............................. -41-
ARTICLE V
THE DEPOSITOR
5.01. LIABILITY OF THE DEPOSITOR ................................. -43-
5.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR ................... -43-
5.03. LIMITATION ON LIABILITY OF THE DEPOSITOR AND OTHERS ........ -43-
ARTICLE VI
THE TRUSTEE
6.01. DUTIES OF TRUSTEE .......................................... -45-
6.02. CERTAIN MATTERS AFFECTING THE TRUSTEE ...................... -46-
6.03. TRUSTEE NOT LIABLE FOR CERTIFICATES ........................ -47-
6.04. TRUSTEE MAY OWN CERTIFICATES ............................... -47-
6.05. TRUSTEE'S FEES AND EXPENSES ................................ -47-
6.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE ....................... -48-
6.07. RESIGNATION AND REMOVAL OF THE TRUSTEE ..................... -48-
6.08. SUCCESSOR TRUSTEE .......................................... -49-
6.09. MERGER OR CONSOLIDATION OF TRUSTEE ......................... -49-
6.10. APPOINTMENT OF OFFICE OR AGENCY ............................ -49-
<PAGE>
-v-
Section Page
6.11. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE .............. -49-
6.12. CERTIFICATE ACCOUNT STATEMENTS ............................. -50-
6.13. LOCATION OF UNDERLYING CERTIFICATES ........................ -51-
6.14. COMPLIANCE WITH WITHHOLDING REQUIREMENTS ................... -51-
ARTICLE VII
TERMINATION
7.01. TERMINATION UPON DISTRIBUTION TO CERTIFICATEHOLDERS ........ -52-
7.02. FAILURE OF CERTIFICATEHOLDERS TO SURRENDER CERTIFICATES .... -52-
7.03. ADDITIONAL TERMINATION REQUIREMENTS ........................ -52-
ARTICLE VIII
REMIC PROVISIONS
8.01. REMIC ADMINISTRATION ....................................... -54-
8.02. PROHIBITED TRANSACTIONS AND ACTIVITIES ..................... -56-
8.03. TRUSTEE INDEMNIFICATION .................................... -56-
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.01. AMENDMENT .................................................. -57-
9.02. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS ................. -58-
9.03. GOVERNING LAW .............................................. -58-
9.04. NOTICES .................................................... -59-
9.05. SEVERABILITY OF PROVISIONS ................................. -59-
9.06. NOTICE TO RATING AGENCIES .................................. -59-
9.07. ARTICLE AND SECTION REFERENCES ............................. -60-
9.08. EXECUTION IN COUNTERPARTS .................................. -60-
EXHIBITS
EXHIBIT A-1 Form of Regular Certificate
EXHIBIT A-2 Form of Residual Certificate
EXHIBIT B-1 Underlying Certificate Schedule
EXHIBIT B-2 Schedule of Pooling and Servicing Agreements
EXHIBIT C-1 Form of Transferor Representation Letter and Form of
Transferee Representation Letter in Connection with
Transfer of Certificates Pursuant to Rule 501 of
Regulation D or Rule 144A Under the 1993 Act
EXHIBIT C-2 Form of Transfer Affidavit and Agreement and Form of
Transferor Affidavit in Connection with Transfer of
Residual Certificates
EXHIBIT D Form of Certification with Respect to ERISA and the
Code
<PAGE>
This Trust Agreement (this "Agreement"), dated December 30, 1996, is
made by and between SALOMON BROTHERS MORTGAGE SECURITIES VII, INC., as Depositor
(the "Depositor"), and BANKERS TRUST COMPANY, as Trustee (the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell trust certificates (collectively, the
"Certificates"), to be issued hereunder, which will evidence the entire
beneficial ownership interest in the Trust Fund created hereunder.
As provided herein, the Trustee will make six separate real estate
mortgage investment conduit ("REMIC") elections with respect to the Trust Fund
for federal income tax purposes. Each Class of Residual Certificates (as defined
herein) will be the sole class of "residual interests" in the related REMIC
under the REMIC Provisions (as defined herein). The Regular Certificates (as
defined herein) will be "regular interests" in the related REMICs.
The following table irrevocably sets forth the designation, the initial
Class 6L REMIC I Remittance Rate, the initial Uncertificated Balance (each as
defined herein) and the "latest possible maturity date" for each of the Class 6L
REMIC I Regular Interests (as defined herein):
<TABLE>
<CAPTION>
Class 6L REMIC I Initial Latest Possible
Designation Remittance Rate Uncertificated Balance Maturity Date(1)
----------- --------------- ---------------------- ----------------
<S> <C> <C> <C> <C>
LT1 Variable(2) $59,368,000.00 November 30, 2026
LTA-1 6.45% $ 5,238.56 November 30, 2026
LTA-2 6.90% $ 14,538.89 November 30, 2026
LTA-3 Adjustable(2) $ 10,222.55 November 30, 2026
</TABLE>
- -----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the related Underlying Certificates with the latest maturity date has
been designated as the "latest possible maturity date" for each Class 6L
REMIC I Regular Interest.
(2) Approximate. Calculated in accordance with the definition of "Class 6L
REMIC I Remittance Rate" herein.
<PAGE>
-2-
The following table irrevocably sets forth the designation, the
Pass-Through Rate, the Certificate Principal Balance (each as defined herein)
and the "latest possible maturity date" for the respective Classes of Residual
Certificates (as defined herein):
<TABLE>
<CAPTION>
Latest Possible
Class Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----- ----------------- ----------------------------- ----------------
<S> <C> <C> <C> <C>
6D-R None None November 30, 2026
6I-R None None November 30, 2011
6J-R None None November 30, 2011
6L-R1 None None November 30, 2026
6L-R2 None None November 30, 2026
R-C None None November 30, 2026
</TABLE>
- -----------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the related Underlying Certificates with the latest maturity date has
been designated as the "latest possible maturity date" for each Residual
Certificate.
<PAGE>
-3-
The following table irrevocably sets forth the initial Pass-Through
Rate (as defined herein), the initial Certificate Principal Balance (as defined
herein) and the "latest possible maturity date" for the respective Classes of
Regular Certificates (as defined herein):
<TABLE>
<CAPTION>
Initial Aggregate Latest Possible
Class Initial Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----- ------------------------- ----------------------------- ----------------
<S> <C> <C> <C> <C>
6A-A1 Adjustable(2) $17,978,000.00 November 30, 2026
6A-A2 Adjustable(2) $17,978,000.00(3) November 30, 2026
6B-A1 Adjustable(2) $21,006,105.00 November 30, 2026
6B-A2 Adjustable(2) $21,006,105.00(3) November 30, 2026
6C-A1 Adjustable(2) $ 9,168,033.00 November 30, 2026
6C-A2 Adjustable(2) $ 9,168,033.00(3) November 30, 2026
6D-A1 Adjustable(2) $22,282,195.00 November 30, 2026
6D-A2 Adjustable(2) $22,282,195.00(3) November 30, 2026
6E-A1 Adjustable(2) $25,549,386.00 November 30, 2026
6E-A2 Adjustable(2) $25,549,386.00(3) November 30, 2026
6F-A1 Adjustable(2) $13,519,704.00 November 30, 2026
6F-A2 Adjustable(2) $13,519,704.00(3) November 30, 2026
6G-A1 Adjustable(2) $18,688,491.00 November 30, 2026
6G-A2 Adjustable(2) $18,688,491.00(3) November 30, 2026
6H-A1 6.00% $ 8,868,378.00 November 30, 2011
6I-A1 6.50% $16,772,687.00 November 30, 2011
6J-A1 6.50% $12,825,696.00 November 30, 2011
6K-A1 7.00% $ 2,458,000.00 November 30, 2026
6K-A2 7.00% $14,056,606.00 November 30, 2026
6K-A3 7.00% $ 401,386.00 November 30, 2026
6K-A4 7.00% $14,505,000.00 November 30, 2026
6L-A1 6.45% $10,372,000.00 November 30, 2026
6L-A2 6.90% $28,786,035.00 November 30, 2026
6L-A3 Adjustable(2) $20,239,965.00 November 30, 2026
6L-A4 Adjustable(2) $59,368,000.00(3) November 30, 2026
</TABLE>
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date immediately following the maturity date
for the Underlying Certificates with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.
(2) Approximate. Calculated in accordance with the definition of "Pass-Through
Rate" herein.
(3) Notional Amount. As provided herein, the Class 6A-A2, Class 6B-A2, Class
6C-A2, Class 6D-A2, Class 6E-A2, Class 6F-A2, Class 6G-A2 and Class 6L-A4
Certificates entitle the respective Holders thereof solely to
distributions of interest accrued on the related Notional Amounts of such
Classes of Certificates.
<PAGE>
-4-
As of the Closing Date, the Underlying Certificates have an aggregate
outstanding principal balance equal to $257,477,667.00.
In consideration of the mutual agreements herein contained, the
Depositor and the Trustee agree as follows:
<PAGE>
-5-
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
AFFILIATE: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AVAILABLE FUNDS: As to any Distribution Date, the difference between
(a) the aggregate distributions on the Underlying Certificates for the related
Underlying Certificate Distribution Date and (b) the amount of any Extraordinary
Trust Fund Expenses.
BOOK-ENTRY CERTIFICATE: Any Certificate registered in the name of the
Depository or its nominee.
BOOK-ENTRY CUSTODIAN: The custodian appointed pursuant to Section 4.01.
BUSINESS DAY: Any "Business Day" under any Pooling and Servicing
Agreement.
CERTIFICATE: Any one of the Regular Certificates or the Residual
Certificates executed by the Trustee, and authenticated and delivered by the
Certificate Registrar, substantially in the form set forth in Exhibit A-1 or, in
the case of the Residual Certificates, Exhibit A-2 hereto. The designations for
the respective Classes of Certificates are set forth in the Preliminary
Statement hereto.
CERTIFICATE ACCOUNT: The trust account, which must be an Eligible
Account, established and maintained pursuant to Section 3.01. Funds deposited in
the Certificate Account shall be held in trust for the benefit of the
Certificateholders for the uses and purposes set forth in Article III hereof.
CERTIFICATE FACTOR: With respect to any Certificate, as of any
Distribution Date, a fraction, expressed as a decimal carried to six places, the
numerator of which is the aggregate Certificate Principal Balance or Notional
Amount of the Certificates of the related Class on such Distribution Date (after
giving effect to any distributions of principal and allocations of Realized
Losses and Extraordinary Trust Fund Expenses in reduction of the Certificate
Principal Balance or Notional Amount of such Class of Certificates to be made on
such Distribution Date) and the denominator of which is the initial aggregate
Certificate Principal Balance or Notional Amount of such Certificates as of the
Closing Date.
<PAGE>
-6-
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate as reflected on the books of the
Depository or on the books of a Depository Participant or on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent.
CERTIFICATE PRINCIPAL BALANCE: With respect to any of the Class 6A-A1,
Class 6B-A1, Class 6C-A1, Class 6D-A1, Class 6E-A1, Class 6F-A1, Class 6G-A1,
Class 6H, Class 6I, Class 6J, Class 6K, Class 6L-A1, Class 6L-A2 and Class 6L-A3
Certificates and as of any date of determination, the Certificate Principal
Balance of such Certificates on the Distribution Date immediately prior to such
date of determination, minus all distributions allocable to principal made
thereon and Realized Losses and Extraordinary Trust Fund Expenses allocated
thereto on such immediately prior Distribution Date (or, in the case of any date
of determination up to and including the first Distribution Date, the initial
Certificate Balance of such Certificates, as stated on the face thereof).
Neither the Residual Certificates nor the Class 6A-A2, Class 6B-A2, Class 6C-A2,
Class 6D-A2, Class 6E-A2, Class 6F-A2, Class 6G-A2 or Class 6L-A4 Certificates
shall have a Certificate Principal Balance or shall be entitled to any
distributions of principal.
CERTIFICATE REGISTER AND CERTIFICATE REGISTRAR: The register maintained
and the registrar appointed pursuant to Section 4.02.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-U.S. Person shall be a Holder of a Residual Certificate
for any purpose hereof and, solely for the purpose of giving any consent
pursuant to this Agreement, any Certificate registered in the name of the
Depositor or any Affiliate thereof shall be deemed not to be outstanding and the
Voting Rights to which it is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 9.01. The Trustee shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein.
CLASS: Collectively, all of the Certificates bearing the same class
designation.
CLASS 6A CERTIFICATES: Collectively, the Class 6A-A1, Class 6A-A2 and
Class R-C Certificates.
CLASS 6B CERTIFICATES: Collectively, the Class 6B-A1, Class 6B-A2 and
Class R-C Certificates.
CLASS 6C CERTIFICATES: Collectively, the Class 6C-A1, Class 6C-A2 and
Class R-C Certificates.
<PAGE>
-7-
CLASS 6D CERTIFICATES: Collectively, the Class 6D-A1, Class 6D-A2 and
Class 6D-R Certificates.
CLASS 6D REMIC: The segregated pool of assets, with respect to which a
REMIC election is to be made, consisting of the Underlying Class 6D
Certificates. Notwithstanding the foregoing, however, the Class 6D REMIC
specifically excludes all payments and other collections of principal and
interest due on such Underlying Certificates on or before the Closing Date.
CLASS 6E CERTIFICATES: Collectively, the Class 6E-A1, Class 6E-A2 and
Class R-C Certificates.
CLASS 6F CERTIFICATES: Collectively, the Class 6F-A1, Class 6F-A2 and
Class R-C Certificates.
CLASS 6G CERTIFICATES: Collectively, the Class 6G-A1, Class 6G-A2 and
Class R-C Certificates.
CLASS 6H CERTIFICATES: The Class 6H-A1 Certificates and the Class R-C
Certificates.
CLASS 6I CERTIFICATES: The Class 6I-A1 Certificates and the Class 6I-R
Certificates.
CLASS 6I REMIC: The segregated pool of assets, with respect to which a
REMIC election is to be made, consisting of the Underlying Class 6I
Certificates. Notwithstanding the foregoing, however, the Class 6D REMIC
specifically excludes all payments and other collections of principal and
interest due on such Underlying Certificates on or before the Closing Date.
CLASS 6J CERTIFICATES: The Class 6J-A1 Certificates and Class 6J-R
Certificates.
CLASS 6J REMIC: The segregated pool of assets, with respect to which a
REMIC election is to be made, consisting of the Underlying Class 6J
Certificates. Notwithstanding the foregoing, however, Class 6J REMIC
specifically excludes all payments and other collections of principal and
interest due on such Underlying Certificates on or before the Closing Date.
CLASS 6K CERTIFICATES: Collectively, the Class 6K-A1, Class 6K-A2,
Class 6K-A3, Class 6K-A4 and Class R-C Certificates.
CLASS 6L CERTIFICATES: Collectively, the Class 6L-A1, Class 6L-A2,
Class 6L-A3, Class 6L-A4, Class 6L-R1 and Class 6L-R2 Certificates.
CLASS 6L REMIC I: The segregated pool of assets, with respect to which
a REMIC election is to be made, consisting of the Underlying Class 6L
Certificates. Notwithstanding the foregoing, however, Class 6L REMIC I
specifically excludes all payments and other collections of principal and
interest due on the Underlying Certificates on or before the Closing Date.
<PAGE>
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CLASS 6L REMIC I REGULAR INTEREST: Any of the four, separate
non-certificated beneficial ownership interests in Class 6L REMIC I designated
as a "regular interest" in Class 6L REMIC I. The designations for the respective
Class 6L REMIC I Regular Interests are set forth in the Preliminary Statement
hereto.
CLASS 6L REMIC I REMITTANCE RATE: With respect to Class 6L REMIC I
Regular Interest LT1 and any Distribution Date, the weighted average of the
Underlying Pass-Through Rates on the Related Underlying Certificates for the
related Underlying Certificate Distribution Date. With respect to the Class 6L
REMIC I Regular Interest LTA-1 and the Class 6L REMIC I Regular Interest LTA-2,
the fixed rates set forth in the Preliminary Statement hereto. With respect to
Class 6L REMIC I Regular Interest LTA-3 and any Distribution Date, One-Month
LIBOR plus 0.54%, subject to a maximum rate of 9.00% per annum and a minimum
rate of 0.54% per annum.
CLASS 6L REMIC II: The segregated pool of assets, with respect to which
a REMIC election is to be made, consisting of the Class 6L REMIC I Regular
Interests.
CLASS R-C CERTIFICATE: The Certificates, collectively, evidencing the
sole class of "residual interests" in the Common REMIC for purposes of the REMIC
provisions.
CLOSING DATE: December 30, 1996.
CODE: The Internal Revenue Code of 1986.
COMMISSION: The Securities and Exchange Commission.
COMMON REMIC: The segregated pool of assets, with respect to which a
REMIC election is to be made, consisting of the Underlying Class 6A
Certificates, the Underlying Class 6B Certificates, the Underlying Class 6C
Certificates, the Underlying Class 6E Certificates, the Underlying Class 6F
Certificates, the Underlying Class 6G Certificates, the Underlying Class 6H
Certificates and the Underlying Class 6K Certificates. Notwithstanding the
foregoing, however, the Common REMIC specifically excludes all payments and
other collections of principal and interest due on the related Underlying
Certificates on or before the Closing Date.
CORPORATE TRUST OFFICE: The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business in
connection with this Agreement shall be administered, which office at the date
of the execution of this instrument is located at Four Albany Street, New York,
New York 10006, Attention: Salomon Brothers Mortgage Securities VII, Inc. Trust
Certificates, Series 1996-6, or at such other address as the Trustee may
designate from time to time by notice to the Certificateholders and the
Depositor.
CPR: A constant prepayment rate, representing an annualized constant
assumed rate of prepayment each month of a pool of mortgage loans relative to
its outstanding principal balance for the life of such pool.
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DEPOSITOR: Salomon Brothers Mortgage Securities VII, Inc., a Delaware
corporation, or its successor in interest.
DEPOSITORY: DTC or any successor Depository hereafter named. The
nominee of the initial Depository for purposes of registering those Certificates
that are to be Book-Entry Certificates, is CEDE & Co. The Depository shall at
all times be a "clearing corporation" as defined in Section 8-102(3) of the
Uniform Commercial Code of the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
DISQUALIFIED ORGANIZATION: Any of the following: (i) the United States,
any State or political subdivision thereof, any possession of the United States,
or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for FHLMC, a majority of its board of directors is not selected
by such governmental unit), (ii) any foreign government, any international
organization, or any agency or instrumentality of any of the foregoing, (iii)
any organization (other than certain farmers' cooperatives described in Section
521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code
(including the tax imposed by Section 511 of the Code on unrelated business
taxable income), (iv) rural electric and telephone cooperatives described in
Section 1381(a)(2)(C) of the Code and (v) any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Residual Certificate by such Person may cause the related REMIC or
any Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in such Residual Certificate to such Person. The terms "United States",
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
DISTRIBUTION DATE: The 30th day of each calendar month (or, in the case
of February, the last calendar day of such month) or, if such day is not a
Business Day, the first Business Day following such day, commencing on January
30, 1997.
DTC: The Depository Trust Company, or any successor depository
hereafter named under this Agreement.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term deposits of which are rated A-1 by the Rating Agency at the time any
amounts are held on deposit therein, (ii) an account or accounts the deposits in
which are fully insured by the FDIC or (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution or trust company acting in its fiduciary capacity. Eligible Accounts
may bear interest.
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ELIGIBLE INVESTMENTS: At any time, any one or more of the following
obligations and securities which shall mature not later than the Business Day
preceding the Distribution Date next succeeding the date of such investment,
provided that such investments continue to qualify as "cash flow investments" as
defined in Code Section 860G(a)(6):
(i) obligations of the United States of America or any agency
thereof, provided such obligations are either (a) backed by the full
faith and credit of the United States of America or (b) issued by an
agency with a long-term debt rating of "AAA" by the Rating Agency and
the ability to borrow directly from the U.S. Treasury as mandated by
Congress;
(ii) general obligations of or obligations guaranteed by any
state of the United States of America or the District of Columbia
receiving the highest short-term or one of the two highest long-term
ratings of the Rating Agency, or such lower rating as would not result
in the downgrading or withdrawal of the rating then assigned to any of
the Certificates by the Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by the Rating Agency;
(iii) commercial or finance company paper which then receives
the highest short-term or one of the two highest long-term commercial
or finance company paper ratings of the Rating Agency, or such lower
ratings as would not result in the downgrading or withdrawal of the
rating then assigned to any of the Certificates by the Rating Agency or
result in any of such rated Certificates being placed on credit review
status (other than for possible upgrading) by the Rating Agency;
(iv) certificates of deposit, demand or time deposits, federal
funds or banker's acceptances issued by any depository institution or
trust company incorporated under the laws of the United States of
America or of any state thereof and subject to supervision and
examination by federal and/or state banking authorities, provided that
the commercial paper and/or debt obligations of such depository
institution or trust company receives the highest short-term or one of
the two highest long-term ratings of the Rating Agency for such
securities, or such lower ratings as would not result in the
downgrading or withdrawal of the rating then assigned to any of the
Certificates by the Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by the Rating Agency;
(v) repurchase agreements on obligations with respect to any
security described in clauses (i) or (ii) above or any other security
issued or guaranteed by an agency or instrumentality of the United
States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(iv) above;
(vi) securities (other than stripped bonds or stripped coupon
securities) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which, at the time of such investment
<PAGE>
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or contractual commitment providing for such investment, receive the
highest short-term or one of the two highest long-term ratings by the
Rating Agency, or such lower ratings as would not result in the
downgrading or withdrawal of the rating then assigned to any of the
Certificates by the Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by the Rating Agency;
(vii) units of any money market fund that has the highest fund
rating from the Rating Agency or is otherwise approved in writing by
the Rating Agency;
(viii) mutual funds organized under the Investment Company Act
of 1940 rated not less than "AAA" by the Rating Agency; and
(ix) such other investments acceptable to the Rating Agency as
would not result in the downgrading of the rating then assigned to the
Certificates by the Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by the Rating Agency.
In no event shall an instrument be an Eligible Investment if such
instrument evidences either (i) a right to receive only interest payments with
respect to the obligations underlying such instrument, or (ii) both principal
and interest payments derived from obligations underlying such instrument and
the interest and principal payments with respect to such instrument provide a
yield to maturity at the date of investment of greater than 120% of the yield to
maturity at par of such underlying obligations.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder.
EXTRAORDINARY TRUST FUND EXPENSES: Unanticipated expenses of the Trust
Fund consisting of amounts reimbursable to the Trustee or the Depositor by the
Trust Fund pursuant to the terms of this Agreement, including any
indemnification payments to the Trustee by the Trust Fund pursuant to Section
6.05, the amount of any taxes payable from amounts on deposit in the Certificate
Account pursuant to Section 8.01(g)(ii) and any other unanticipated costs,
expenses, liabilities and losses borne by the Trust Fund for which the Trust
Fund has not, and in the reasonable good faith judgment of the Trustee shall
not, obtain reimbursement or indemnification from any other Person.
FHLMC: Federal Home Loan Mortgage Corporation or any successor thereto.
FINAL DISTRIBUTION DATE: The Distribution Date set forth in the notice
delivered by the Trustee of the final distribution on the Certificates pursuant
to Section 7.01.
INDEPENDENT: When used with respect to any specified Person, any such
Person who (a) is in fact independent of the Depositor and its Affiliates, (b)
does not have any direct financial interest in or any material indirect
financial interest in the Depositor or any Affiliate thereof, and (c) is not
connected with the Depositor or any Affiliate thereof as an officer, employee,
<PAGE>
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promoter, underwriter, trustee, partner, director or Person performing similar
functions, provided, however, that a Person shall not fail to be Independent of
the Depositor or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any class of securities issued by the
Depositor or any Affiliate thereof, as the case may be.
INTEREST ACCRUAL PERIOD: As to any Distribution Date and the Class 6L
REMIC I Regular Interests or any of the Class 6A, Class 6B, Class 6C, Class 6D,
Class 6E, Class 6F, Class 6G and Class 6L Certificates, the period commencing on
the Distribution Date immediately preceding such Distribution Date (or, in the
case of the first Distribution Date, the period commencing on the Closing Date)
and ending on the calendar day immediately preceding such Distribution Date, and
as to any Distribution Date and any other Class of Certificates, the one-month
period preceding the month with respect to which such Distribution Date occurs.
INTEREST DETERMINATION DATE: With respect to the Class 6L REMIC I
Regular Interest LTA-3 or any of the Class 6A, Class 6B, Class 6C, Class 6D,
Class 6E, Class 6F, Class 6G, Class 6L-A3 and Class 6L-A4 Certificates, and as
to any Interest Accrual Period therefor, the second London Business Day
preceding the commencement of such Interest Accrual Period.
INTEREST DISTRIBUTION AMOUNT: As to any Distribution Date and Class of
Regular Certificates, an amount equal to (a) one month's interest accrued during
the related Interest Accrual Period on the related Certificate Principal Balance
or Notional Amount at the Pass-Through Rate of such Class for such Interest
Accrual Period, less (b) such Class's share (as provided below) of any interest
shortfall allocated to the Related Underlying Certificates on the applicable
Underlying Certificate Distribution Date and the interest portion of any
Realized Losses allocated to the Related Underlying Certificates on the
applicable Underlying Certificate Distribution Date, in each case to the extent
not covered by any form of credit enhancement or, in the case of the Class
6L-A1, Class 6L-A2, Class 6L-A3 and Class 6L-A4 Certificates, by amounts
otherwise distributable to the holders of the related Residual Certificates,
plus (c) the amount of any interest on such Class previously accrued and
remaining unpaid, but only to the extent that previously accrued and unpaid
interest on the Related Underlying Certificates has been included in the
applicable Underlying Certificate Interest Distribution Amount on the applicable
Underlying Certificate Distribution Date. Interest shortfalls and the interest
portions of Realized Losses on the Underlying Certificates shall be allocated
first, with respect to those related to the Class 6L Certificates, to the Class
6L-R1 Certificates to the extent of the cash flows allocable to such Residual
Certificates and, then, to each Related Class PRO RATA based on the Interest
Distribution Amount for such Related Class, before reduction pursuant to clause
(b) of the preceding sentence. The Residual Certificates shall not be entitled
to distributions of interest and, accordingly, shall not have Interest
Distribution Amounts.
INTEREST ONLY CERTIFICATE: Any one of the Class 6A-A2, Class 6B-A2,
Class 6C-A2, Class 6D-A2, Class 6E-A2, Class 6F-A2, Class 6G-A2 or Class 6L-A4
Certificates.
LONDON BUSINESS DAY: Any day on which banks in the City of London are
open and conducting transactions in United States dollars.
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NON-U.S. PERSON: As defined in Section 3.02(e).
NOTIONAL AMOUNT: With respect to the Class 6A-A2, Class 6B-A2, Class
6C-A2, Class 6D-A2, Class 6E-A2, Class 6F-A2 and Class 6G-A2 Certificates and
any date of determination, the aggregate Certificate Principal Balance of the
Class 6A-A1, Class 6B-A1, Class 6C-A1, Class 6D-A1, Class 6E-A1, Class 6F-A1 and
Class 6G-A1 Certificates, respectively, for such date of determination. With
respect to the Class 6L-A4 Certificates and any date of determination, the
aggregate Certificate Principal Balance of the Class 6L-A1, Class 6L-A2 and
Class 6L-A3 Certificates for such date of determination minus the aggregate
Uncertificated Balance of Class 6L REMIC I Regular Interests LTA-1, LTA-2 and
LTA-3 for such date of determination. The Residual Certificates shall not have a
Notional Amount and shall not be entitled to distributions of interest.
OFFICER'S CERTIFICATE: With respect to any Person, a certificate signed
by the Chairman of the Board, the President, or a Vice President, and by the
Treasurer, the Secretary or one of the Assistant Treasurers or Assistant
Secretaries of such Person (or, in the case of a Person which is not a
corporation, signed by the person or persons having like responsibilities).
ONE-MONTH LIBOR: With respect to the Class 6L REMIC I Regular Interest
LTA-3 or any of the Class 6A, Class 6B, Class 6C, Class 6D, Class 6E, Class 6F,
Class 6G, Class 6L-A3 and Class 6L-A4 Certificates, and as to any Interest
Accrual Period therefor, the rate determined by the Trustee on the related
Interest Determination Date on the basis of the offered rates of the Reference
Banks for one-month U.S. dollar deposits, as such rates appear on the Reuters
Screen LIBO Page, as of 11:00 A.M. (London time) on such Interest Determination
Date. On each Interest Determination Date, One-Month LIBOR for the related
Interest Accrual Period will be established by the Trustee as follows:
(i) If on such Interest Determination Date two or more Reference
Banks provide such offered quotations, One-Month LIBOR for the
related Interest Accrual Period shall be the arithmetic mean
of such offered quotations (rounded upwards if necessary to
the nearest whole multiple of 1/16%).
(ii) If on such Interest Determination Date fewer than two
Reference Banks provide such offered quotations, One-Month
LIBOR for the related Interest Accrual Period shall be the
higher of (i) LIBOR as determined on the previous Interest
Determination Date and (ii) the Reserve Interest Rate.
OPINION OF COUNSEL: A written opinion of counsel, who may, without
limitation, be salaried counsel for the Depositor or the Trustee, except that
any opinion of counsel relating to (a) qualification of any REMIC created
hereunder as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.
OWNERSHIP INTEREST: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
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PASS-THROUGH RATE: With respect to any of the Class 6A, Class 6B, Class
6C, Class 6D, Class 6E, Class 6F, Class 6G, Class 6L-A3 and Class 6L-A4
Certificates and the initial Interest Accrual Period, the respective annual
percentage rates equal to the related Pass-Through Rates set forth in the
Preliminary Statement hereto. With respect to any of such Certificates and any
Interest Accrual Period after the initial Interest Accrual Period, the
respective annual percentage rates equal to the following amounts:
(a) in the case of the Class 6A-A1 Certificates,
One-Month LIBOR plus 0.65%, subject to a maximum rate of 9.00%
per annum and a minimum rate of 0.65% per annum;
(b) in the case of the Class 6A-A2 Certificates,
8.35% minus OneMonth LIBOR, subject to a maximum rate of 8.35%
per annum and a minimum rate of 0.00% per annum;
(c) in the case of the Class 6B-A1 Certificates,
One-Month LIBOR plus 0.35%, subject to a maximum rate of 9.00%
per annum and a minimum rate of 0.35% per annum;
(d) in the case of the Class 6B-A2 Certificates,
8.65% minus OneMonth LIBOR, subject to a maximum rate of 8.65%
per annum and a minimum rate of 0.00% per annum;
(e) in the case of the Class 6C-A1 Certificates,
One-Month LIBOR plus 0.35%, subject to a maximum rate of 9.50%
per annum and a minimum rate of 0.35% per annum;
(f) in the case of the Class 6C-A2 Certificates,
9.15% minus OneMonth LIBOR, subject to a maximum rate of 9.15%
per annum and a minimum rate of 0.00% per annum;
(g) in the case of the Class 6D-A1 Certificates,
One-Month LIBOR plus 0.35%, subject to a maximum rate of 9.50%
per annum and a minimum rate of 0.35% per annum;
(h) in the case of the Class 6D-A2 Certificates,
9.15% minus OneMonth LIBOR, subject to a maximum rate of 9.15%
per annum and a minimum rate of 0.00% per annum;
(i) in the case of the Class 6E-A1 Certificates,
One-Month LIBOR plus 0.40%, subject to a maximum rate of 9.50%
per annum and a minimum rate of 0.40% per annum;
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(j) in the case of the Class 6E-A2 Certificates,
9.10% minus OneMonth LIBOR, subject to a maximum rate of 9.10%
per annum and a minimum rate of 0.00% per annum;
(k) in the case of the Class 6F-A1 Certificates,
One-Month LIBOR plus 0.35%, subject to a maximum rate of 9.00%
per annum and a minimum rate of 0.35% per annum;
(l) in the case of the Class 6F-A2 Certificates,
8.65% minus OneMonth LIBOR, subject to a maximum rate of 8.65%
per annum and a minimum rate of 0.00% per annum;
(m) in the case of the Class 6G-A1 Certificates,
One-Month LIBOR plus 0.25%, subject to a maximum rate of
10.50% per annum and a minimum rate of 0.25% per annum;
(n) in the case of the Class 6G-A2 Certificates,
10.25% minus OneMonth LIBOR, subject to a maximum rate of
10.25% per annum and a minimum rate of 0.00% per annum;
(o) in the case of the Class 6L-A3 Certificates,
One-Month LIBOR plus 0.54%, subject to a maximum rate of 9.00%
per annum and a minimum rate of 0.54% per annum; and
(p) in the case of the Class 6L-A4 Certificates, a
rate per annum equal to the excess, if any, of the weighted
average of the Underlying Pass-Through Rates on the Related
Underlying Certificates for the related Underlying Certificate
Distribution Date minus (B) the weighted average of the
Pass-Through Rates on the Class 6L-A1, Class 6L-A2 and Class
6L-A3 Certificates for such Distribution Date.
With respect to any of the Class 6H, Class 6I, Class 6J, Class 6K,
Class 6L-A1 and Class 6L-A2 Certificates and any Distribution Date, the
respective annual percentage rates equal to the related Pass-Through Rates set
forth in the Preliminary Statement hereto.
PERCENTAGE INTEREST: With respect to a Certificate of any Class, the
portion of such Class evidenced by such Certificate, expressed as a percentage,
the numerator of which is the initial Certificate Principal Balance or Notional
Amount represented by such Certificate, and the denominator of which is the
initial aggregate Certificate Principal Balance or Notional Amount of all of the
Certificates of such Class. The Book-Entry Certificates are issuable only in
Percentage Interests corresponding to initial Certificate Principal Balances or
Notional Amounts of $1 and integral multiples thereof. The Regular Certificates
other than the Book-Entry Certificates are issuable only in Percentage Interests
corresponding to initial Certificate Principal Balances or Notional Amounts of
$1,000 and integral multiples of $1 in excess thereof, except that one
Certificate of each Class of Regular Certificates may
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be issued having a Percentage Interest corresponding to the remainder of the
aggregate initial Certificate Principal Balance or Notional Amount of the
Certificates of such Class or to an otherwise authorized denomination for the
Certificates of such Class plus such remainder. The Residual Certificates are
issuable only in Percentage Interests of 20% and integral multiples thereof.
PERMITTED TRANSFEREE: Any Transferee of a Residual Certificate other
than a Disqualified Organization or Non-U.S. Person.
PERSON: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
PLAN: Any employee benefit plan or certain other retirement plans and
arrangements, including individual retirement accounts and annuities, Keogh
plans and bank collective investment funds and insurance company general or
separate accounts in which such plans, accounts or arrangements are invested,
that are subject to ERISA and Section 4975 of the Code.
POOLING AND SERVICING AGREEMENT: With respect to any Underlying
Certificate, the pooling and agreement set forth on the schedule attached hereto
as Exhibit B-2, pursuant to which such Underlying Certificate was issued.
PPV: The prepayment vector, representing an assumed rate of prepayment
each month relative to the outstanding principal balance of a pool of mortgage
loans. For purposes of this Agreement, a "100% PPV" assumes (i) in the case of
the Class 6B Certificates, a CPR percentage of 4% of the then-outstanding
principal balance of such pool in the first month of the life of such pool,
increasing by an additional CPR percentage of 0.666667% in each month thereafter
until the nineteenth month of the life of such pool and thereafter remaining at
a CPR percentage of 16% for the life of such pool, (ii) in the case of the Class
6C Certificates, a CPR percentage of 4% of the then-outstanding principal
balance of such pool in the first month of the life of such pool, increasing by
an additional CPR percentage of 1.090909% in each month thereafter until the
twelfth month of the life of such pool and thereafter remaining at a CPR
percentage of 16% for the life of such pool, (iii) in the case of the Class 6D
Certificates, a CPR percentage of 4% of the then-outstanding principal balance
of such pool in the first month of the life of such pool, increasing by an
additional CPR percentage of 1.090909% in each month thereafter until the
twelfth month of the life of such pool and thereafter remaining at a CPR
percentage of 16% for the life of such pool, (iv) in the case of the Class 6F
Certificates, a CPR percentage of 4% of the then-outstanding principal balance
of such pool in the first month of the life of such pool, increasing by an
additional CPR percentage of 0.666667% in each month thereafter until the
nineteenth month of the life of such pool and thereafter remaining at a CPR
percentage of 16% for the life of such pool, (v) in the case of the Class 6G
Certificates, a CPR Percentage of 4% of the then-outstanding principal balance
of such pool in the first month of the life of such pool, increasing by an
additional CPR percentage of 1.090909% in each month thereafter until the
twelfth month of the life of such pool and thereafter remaining at a CPR
percentage of 16% for the life of such pool and (vi) in the case
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of the Class 6L Certificates, as to the "Group I Loans" related thereto, a CPR
percentage of 4% of the then-outstanding principal balance of such pool in the
first month of the life of such pool, increasing by an additional CPR percentage
of 1.818182% in each month thereafter until the 30th month of the life of such
pool and thereafter remaining at a CPR percentage of 24% for the life of such
pool and, as to the "Group II Loans" related thereto, the Class 6L Certificates,
"24% CPR."
PREPAYMENT ASSUMPTION: A prepayment rate with respect to the Underlying
Certificates equal to (i) in the case of the Class 6A Certificates and the Class
6E Certificates, "22% CPR" and "24% CPR," respectively, (ii) in the case of the
Class 6B, Class 6C, Class 6D, Class 6F, Class 6G and Class 6L Certificates,
"100% PPV," (iii) in the case of the Class 6H, Class 6I and Class 6J
Certificates, "100% SPA" and (iv) in the case of the Class 6K Certificates,
"150% SPA." In each case, the Prepayment Assumption is used solely for purposes
of determining the accrual of original issue discount, market discount and
premium on the Regular Certificates for federal income tax purposes.
PRINCIPAL DISTRIBUTION AMOUNT: As to any Distribution Date, an amount
equal to all principal distributed on the Underlying Certificates on the related
Underlying Certificate Distribution Date.
RATING AGENCY: Standard & Poor's Ratings Services or its successors, if
any. If such agency and its successors are no longer in existence, "Rating
Agency" shall be such nationally recognized statistical rating organization or
other comparable Person designated by the Depositor, notice of which designation
shall be given to the Trustee.
REALIZED LOSS: Any losses allocated to any of the Underlying
Certificates pursuant to the related Pooling and Servicing Agreement. The
principal portion of Realized Losses means any such losses allocated in
reduction of the principal balance of any of the Underlying Certificates. The
interest portion of Realized Losses means any such losses allocated in reduction
of the amount of interest distributable to any of the Underlying Certificates on
an Underlying Certificate Distribution Date.
RECORD DATE: With respect to each Distribution Date, the close of
business on the last Business Day of the month preceding the month with respect
to which such Distribution Date occurs.
REFERENCE BANKS: Bankers Trust Company, Barclay's Bank PLC, The Bank of
Tokyo and National Westminster Bank PLC and their successors in interest,
provided that if any of the foregoing banks are not suitable to serve as a
Reference Bank, then any leading banks selected by the Trustee which are engaged
in transactions in Eurodollar deposits in the international Eurocurrency market
(i) with an established place of business in London, (ii) not controlling, under
the control of or under common control with the Depositor or any Affiliate
thereof, (iii) whose quotations appear on the Reuters Screen LIBO Page on the
relevant Interest Determination Date and (iv) which have been designated as such
by the Trustee.
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REGULAR CERTIFICATE: Any one of the Class 6A, Class 6B, Class 6C, Class
6D, Class 6E, Class 6F, Class 6G, Class 6H, Class 6I, Class 6J, Class 6K or
Class 6L Certificates other than the Residual Certificates.
RELATED CLASSES OR RELATED CERTIFICATES: With respect to any Underlying
Certificate, the Certificates of the related Classes, as indicated on the
Underlying Certificate Schedule, shall be referred to herein as the "Related
Classes" of Certificates or the "Related Certificates."
RELATED UNDERLYING CERTIFICATES: With respect to any Class of
Certificates, the related Underlying Certificates, as indicated on the
Underlying Certificate Schedule, shall be referred to herein as the "Related
Underlying Certificates."
REMIC: A "real estate mortgage investment conduit" as defined in
Section 860D of the Code. Each of the Class 6D REMIC, Class 6I REMIC, Class 6J
REMIC, Class 6L REMIC I, Class 6L REMIC II and Common REMIC shall be a REMIC
hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law relating to
REMICs, which appear at Sections 860A through 860G of the Code, and related
provisions, and proposed temporary, and final regulations and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
RESERVE INTEREST RATE: With respect to any Interest Determination Date,
the rate per annum that the Trustee determines to be either (i) the arithmetic
mean (rounded upwards, if necessary, to the nearest whole multiple of 1/16%) of
the one-month U.S. dollar lending rates which New York City banks selected by
the Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Trustee can determine no such arithmetic mean, the lowest
one-month U.S. dollar lending rate which New York City banks selected by the
Trustee are quoting on such Interest Determination Date to leading European
banks.
RESIDUAL CERTIFICATE: Any one of the Class 6D-R, Class 6I-R, Class
6J-R, Class 6L-R1, Class 6L-R2 or Class R-C Certificates.
RESPONSIBLE OFFICER: When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant
cashier, any trust officer or assistant trust officer, the Controller and any
assistant controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and, with respect to a particular matter, to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
<PAGE>
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SINGLE CERTIFICATE: With respect to any Class of Regular Certificates,
a hypothetical Certificate of such Class evidencing a Percentage Interest in
such Class corresponding to an initial Certificate Principal Balance or an
initial Notional Amount of $1,000. With respect to any Class of Residual
Certificates, a hypothetical Certificate of such Class evidencing a Percentage
Interest in such Class equal to 100%.
SPA: The standard prepayment assumption, representing an assumed rate
of prepayment each month relative to the outstanding principal balance of a pool
of new mortgage loans. A prepayment assumption of "100% SPA" assumes a CPR
percentage of 0.2% of the then-outstanding principal balance of such pool in the
first month of the life of such pool, increasing by an additional CPR percentage
of 0.2% in each month thereafter until the 30th month of the life of such pool
and thereafter remaining at a CPR percentage of 6% for the life of such pool.
STARTUP DAY: As defined in Section 8.01(b).
TAX RETURNS: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of each REMIC due to its classification as such under the REMIC
Provisions, together with any and all other information reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
TRANSFER: Any transfer, sale, pledge, hypothecation or other form of
assignment of any Ownership Interest in a Certificate.
TRANSFER AFFIDAVIT AND AGREEMENT: The Transfer Affidavit and Agreement
attached hereto as Exhibit C-2.
TRANSFEREE: Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
TRANSFEROR: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
TRUST: The trust created by this Agreement.
TRUSTEE: Bankers Trust Company, a New York banking corporation, or its
successor in interest, or any successor trustee appointed as herein provided.
TRUST FUND: The corpus of the Trust consisting of (i) the Underlying
Certificates, (ii) all distributions on the Underlying Certificates payable
after the Closing Date and (iii) all amounts held from time to time by the
Trustee in the Certificate Account.
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UNCERTIFICATED BALANCE: The principal balance of any Class 6L REMIC I
Regular Interest outstanding as of any date of determination. As of the Closing
Date, the Uncertificated Balance of each Class 6L REMIC I Regular Interest shall
equal the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Balance. On each Distribution Date, the Uncertificated Balance of
each Class 6L REMIC I Regular Interest shall be reduced by all distributions of
principal made on such Class 6L REMIC I Regular Interest on such Distribution
Date pursuant to Section 3.02 and, if and to the extent necessary and
appropriate, shall be further reduced on such Distribution Date by Realized
Losses and Extraordinary Trust Fund Expenses as provided in Section 3.04. The
Uncertificated Balance of each Class 6L REMIC I Regular Interest shall never be
less than zero.
UNCERTIFICATED INTEREST: With respect to any Class 6L REMIC I Regular
Interest for any Distribution Date, one month's interest accrued during the
related Interest Accrual Period at the Class 6L REMIC I Remittance Rate
applicable to such Class 6L REMIC I Regular Interest for such Distribution Date
on the Uncertificated Balance of such Class 6L REMIC I Regular Interest
outstanding immediately prior to such Distribution Date. Uncertificated Interest
with respect to each Distribution Date and Class 6L REMIC I Regular Interest (a)
shall be reduced by an amount equal to such Class 6L REMIC I Regular Interest's
share (as provided below) of the sum of the interest shortfalls and the interest
portions of Realized Losses on the Related Underlying Certificates for such
Distribution Date and (b) shall be increased by any amount of interest
previously accrued thereon and not deemed distributed, but only to the extent
that previously accrued and unpaid interest on the Related Underlying
Certificates has been included in the applicable Underlying Certificate Interest
Distribution Amount on the applicable Underlying Certificate Distribution Date.
Interest shortfalls and the interest portions of Realized Losses on the
Underlying Class 6L Certificates shall be allocated, first, to the Class 6L-R1
Certificates to the extent of the cash flows allocable to such Residual
Certificates and, then, to the Class 6L REMIC I Regular Interests PRO RATA based
on their respective amounts of Uncertificated Interest, before reduction
pursuant to clause (a) of the preceding sentence.
UNDERLYING CERTIFICATES: Collectively, the Underlying Class 6A
Certificates, the Underlying Class 6B Certificates, the Underlying Class 6C
Certificates, the Underlying Class 6D Certificates, the Underlying Class 6E
Certificates, the Underlying Class 6F Certificates, the Underlying Class 6G
Certificates, the Underlying Class 6H Certificates, the Underlying Class 6I
Certificates, the Underlying Class 6J Certificates, the Underlying Class 6K
Certificates and the Underlying Class 6L Certificates, which Underlying
Certificates evidence senior interests in the respective trust funds created by
the related Pooling and Servicing Agreements, which are transferred to the Trust
by the Depositor pursuant to this Agreement and which are further identified in
the Underlying Certificate Schedule.
UNDERLYING CERTIFICATE DISTRIBUTION DATE: As to any Distribution Date,
the 25th day of the month with respect to which such Distribution Date occurs,
or if such 25th day is not a Business Day (as defined in the related Pooling and
Servicing Agreement), the first Business Day following such 25th day.
<PAGE>
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UNDERLYING CERTIFICATE DISTRIBUTION DATE STATEMENTS: With respect to
any of the Underlying Certificates, the reports provided to the holder thereof
in connection with the related Underlying Certificate Distribution Dates
pursuant to the Pooling and Servicing Agreements.
UNDERLYING CERTIFICATE SCHEDULE: The schedule attached as Exhibit B-1
hereto, such schedule setting forth as to each Underlying Certificate the
Related Certificates and the designation of such Underlying Certificate, its
percentage interest and its principal balance or the principal balances of its
Components both initially and on the Closing Date.
UNDERLYING CLASS 6A CERTIFICATES: The Underlying Certificates related
to the Class 6A Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6B CERTIFICATES: The Underlying Certificates related
to the Class 6B Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6C CERTIFICATES: The Underlying Certificates related
to the Class 6C Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6D CERTIFICATES: The Underlying Certificates related
to the Class 6D Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6E CERTIFICATES: The Underlying Certificates related
to the Class 6E Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6F CERTIFICATES: The Underlying Certificates related
to the Class 6F Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6G CERTIFICATES: The Underlying Certificates related
to the Class 6G Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6H CERTIFICATES: The Underlying Certificates related
to the Class 6H Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6I CERTIFICATES: The Underlying Certificates related
to the Class 6I Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6J CERTIFICATES: The Underlying Certificates related
to the Class 6J Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6K CERTIFICATES: The Underlying Certificates related
to the Class 6K Certificates, as indicated on the Underlying Certificate
Schedule.
UNDERLYING CLASS 6L CERTIFICATES: The Underlying Certificates related
to the Class 6L Certificates, as indicated on the Underlying Certificate
Schedule.
<PAGE>
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UNDERLYING INTEREST DISTRIBUTION AMOUNT: As to any Distribution Date,
an amount equal to all interest distributions on the Underlying Certificates on
the related Underlying Certificate Distribution Date.
UNDERLYING PASS-THROUGH RATE: As to any Distribution Rate and any
Underlying Certificate, the annual percentage rate at which interest was payable
thereon for the related Underlying Certificate Distribution Date.
VOTING RIGHTS: The portion of the voting rights of the Related
Certificates or all of the Certificates, as the case may be, which is allocated
to any Certificate. At all times during the term of this Agreement, (i) with
respect to matters concerning solely the Related Underlying Certificates for any
Related Classes, (A) 1% of the related Voting Rights shall be allocated among
the Residual Certificates in such Related Classes in proportion to the
respective Percentage Interests of such Residual Certificates, (B) 2% of the
related Voting Rights shall be allocated among the Interest Only Certificates,
if any, in such Related Classes in proportion to the respective Notional Amounts
of such Interest Only Certificates and (C) the remainder of the related Voting
Rights shall be allocated among the other Certificates in such Related Classes
in proportion to the respective Certificate Principal Balances of such other
Certificates and (ii) with respect to all other matters, (A) 1% of all of the
Voting Rights shall be allocated among the Residual Certificates in proportion
to the respective Percentage Interests of such Certificates, (B) 2% of all of
the Voting Rights shall be allocated among the Interest Only Certificates in
proportion to the respective Notional Amounts of such Certificates and (C) the
remainder of all of the Voting Rights shall be allocated among the other Classes
of Certificates in proportion to the respective Certificate Principal Balances
of such Certificates. All Voting Rights allocated to any Class of Certificates
shall be allocated among the Certificates of such Class on a PRO RATA basis in
accordance with the respective Percentage Interests evidenced thereby.
Section 1.02. INTEREST CALCULATIONS.
Interest in respect of the Class 6L REMIC I Regular Interests and the
Regular Certificates for any Distribution Date shall be calculated on the basis
of a 360-day year consisting of twelve 30-day months.
<PAGE>
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ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
AND THE ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. CONVEYANCE OF THE UNDERLYING CERTIFICATES. The Depositor,
concurrently with the execution and delivery hereof, does hereby transfer,
convey, sell and assign to the Trustee, on behalf of the Holders of the
Certificates, without recourse except as set forth in the last sentence of this
Section 2.01, all the right, title and interest of the Depositor in and to the
Underlying Certificates, including all distributions thereon payable after the
Closing Date. In connection with such assignment, the Depositor (i) shall cause
any or all of the Underlying Certificates to be registered in the book-entry
records of DTC in the name of the Trustee and evidence of such registration to
be delivered to the Trustee on the Closing Date and (ii) with respect to each of
the remaining Underlying Certificates, shall cause to be delivered to and
deposited with the Trustee, on the Closing Date, a duly issued and authenticated
certificate endorsed to "Bankers Trust Company, as trustee under the Trust
Agreement dated December 30, 1996 relating to Salomon Brothers Mortgage
Securities VII, Inc. Trust Certificates, Series 1996-6," together with such
documents as shall be necessary to cause registration of transfer of such
certificate to be made and to obtain a duly issued and authenticated certificate
in such name. Promptly after the Closing Date, the Trustee shall submit any
Underlying Certificate subject to clause (ii) above for registration of transfer
in accordance with the related Pooling and Servicing Agreement and shall obtain,
in exchange for the documents and instruments specified in such clause, a duly
issued and authenticated certificate registered in the name specified in such
clause in respect of such Underlying Certificate.
The Depositor represents and warrants to the Trustee that, immediately
prior to such transfer by the Depositor of the Underlying Certificates to the
Trustee, the Depositor was the sole owner of the Underlying Certificates and had
full right and authority to sell, assign and transfer the Underlying
Certificates. Further, if the Depositor receives any distributions in respect of
the Underlying Certificates after the Closing Date, the Depositor shall promptly
remit such distributions to the Trustee.
The transfer of the Underlying Certificates and all other assets
constituting the Trust Fund is absolute and is intended by the parties hereto as
a sale. Except as provided in Section 3.05(b) hereof, the Trustee shall at all
times maintain possession of the Underlying Certificates through DTC and shall
not assign, sell, dispose of or transfer any interest in the Underlying
Certificates or any other asset constituting the Trust Fund or permit the
Underlying Certificates or any other asset constituting the Trust Fund to be
subjected to any lien, claim or encumbrance arising by, through or under the
Trustee or any person claiming by, through or under the Trustee.
Section 2.02. ISSUANCE OF CERTIFICATES. The Trustee acknowledges the
transfer and delivery to it of the Underlying Certificates in the manner
described in Section 2.01 hereof, and concurrently with such delivery, has
caused to be duly executed, authenticated and delivered to or upon the order of
the Depositor, in exchange for the Underlying Certificates and together
<PAGE>
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with all other assets included or to be included in the Trust Fund, receipt of
which is hereby acknowledged, Certificates in authorized denominations which
evidence ownership of the entire Trust Fund. The Trustee declares that it holds
and will hold the Underlying Certificates and any proceeds thereof in trust for
the exclusive use and benefit of all present and future Certificateholders.
Section 2.03. CONVEYANCE OF CLASS 6L REMIC I REGULAR INTERESTS;
ACCEPTANCE OF CLASS 6L REMIC II BY THE TRUSTEE. The Depositor, concurrently with
the execution and delivery hereof, does hereby transfer, assign, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Depositor in and to the Class 6L REMIC I Regular Interests for
the benefit of the Holders of the Class 6L Certificates (other than the Class
6L-R1 Certificates). The Trustee acknowledges receipt of the Class 6L REMIC I
Regular Interests and declares that it holds and will hold the same in trust for
the exclusive use and benefit of all present and future Holders of the Class 6L
Certificates (other than the Class 6L-R1 Certificates). The rights of such
Certificateholders to receive distributions from the proceeds of Class 6L REMIC
II in respect of such Certificates, and all ownership interests of such
Certificateholders in and to such distributions, shall be as set forth in this
Agreement.
<PAGE>
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ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES
Section 3.01. COLLECTION OF PAYMENTS ON THE UNDERLYING CERTIFICATES;
CERTIFICATE ACCOUNT. (a) The Trustee shall establish and maintain with itself a
trust account (the "Certificate Account") entitled "Salomon Brothers Mortgage
Securities VII, Inc. Trust Certificates, Series 1996-6, Certificate Account", in
which the Trustee shall, subject to the terms of this paragraph, deposit each
distribution received by the Trustee with respect to the Underlying Certificates
on the day of receipt. If the Trustee shall not have received a distribution
with respect to an Underlying Certificate on any Underlying Certificate
Distribution Date, the Trustee shall request such payment as promptly as
possible and shall, subject to the second to last sentence of this paragraph,
take such legal action as the Trustee shall deem appropriate under the
circumstances, including the prosecution of any claims in connection therewith.
The reasonable legal fees and expenses incurred by the Trustee in connection
with the prosecution of any such legal action shall be reimbursable to the
Trustee out of the proceeds of any such action and shall be retained by the
Trustee prior to the deposit of any remaining proceeds in the Certificate
Account pending distribution thereof to Certificateholders in accordance with
Section 3.02 hereof. In the event that the Trustee has reason to believe that
the proceeds of any such legal action may be insufficient to reimburse it for
its projected legal fees and expenses, the Trustee shall notify the
Certificateholders that it is not obligated to pursue any such available
remedies unless adequate indemnity for its legal fees and expenses is provided
by Certificateholders. In the event any such adequate indemnity is provided to
the Trustee, the Trustee shall take such action as shall be appropriate under
the circumstances.
(b) In the event that any Distribution Date occurs on a date later than
the related Underlying Certificate Distribution Date, the Trustee may invest the
funds deposited in the Certificate Account and shall receive as compensation any
interest or investment income earned on funds deposited in the Certificate
Account. Notwithstanding the foregoing, during the period from such Underlying
Certificate Distribution Date to such related Distribution Date, any investment
of any amount on deposit in the Certificate Account must be an Eligible
Investment, no such investment of any amount on deposit in the Certificate
Account may mature later than the Business Day preceding such related
Distribution Date and no such investment shall be sold prior to its maturity
date. On each Distribution Date the Trustee shall withdraw any net reinvestment
income on deposit in the Certificate Account and retain such amount as
additional compensation. The amount of any losses incurred in respect of any
such investments shall be deposited in the Certificate Account by the Trustee
out of its own funds immediately as realized.
(c) The Trustee may from time to time withdraw funds from the
Certificate Account for the following purposes:
(i) to make distributions in the amounts and in the
manner provided for in Section 3.02;
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(ii) to pay itself on each Distribution Date any
investment income on amounts in the Certificate Account;
(iii) to pay any Extraordinary Trust Fund Expenses; and
(iv) to pay taxes payable with respect to the Trust
Fund pursuant to Section 8.01(g)(ii) to the extent not covered
by (iii) above; and
(v) to clear and terminate the Certificate Account upon
the termination of this Agreement.
Section 3.02. DISTRIBUTIONS. (a) On each Distribution Date,
the Trustee shall, to the extent of Available Funds on deposit in the
Certificate Account, distribute to the Certificateholders the Available Funds,
subject to 6.14 below, in the following manner:
FIRST, to the extent of the Underlying Interest Distribution
Amount, to distributions of interest in respect of the Certificates, in
an amount equal to the aggregate of the Interest Distribution Amounts
in respect of the Certificates for such Distribution Date, in each case
as provided in Section 3.02(b) below; and
SECOND, to the extent of the Principal Distribution Amount, to
distributions of principal in respect of the Class 6A-A1, Class 6B-A1,
Class 6C-A1, Class 6D-A1, Class 6E-A1, Class 6F-A1, Class 6G-A1, Class
6H, Class 6I, Class 6J, Class 6K, Class 6L-A1, Class 6L-A2 and Class
6L-A3 Certificates (applied to reduce the respective Certificate
Principal Balances of such Certificates) in the manner set forth in
Section 3.02(b).
THIRD, to the extent of the Available Funds remaining, to
distributions in respect of the related Residual Certificates.
In addition, to the extent that the amount of any Realized Losses
previously allocated to any of the Underlying Certificates are at a later date
paid on such Underlying Certificates, such amounts (to the extent not paid on
the Certificates pursuant to clause FIRST, clause SECOND or clause THIRD above)
will be paid to the Related Classes of Certificates in the same manner as
principal is paid such Related Classes pursuant to Section 3.02(b).
(b) On each Distribution Date, the aggregate distributions of interest
and principal made on such date in respect of the Certificates pursuant to
Section 3.02(a) above shall be applied among the various Classes thereof in the
following manner:
1) Amounts received in respect of the Related Underlying
Certificates for any of the Class 6A, Class 6B, Class 6C,
Class 6D, Class 6E, Class 6F and Class 6G Certificates shall
be applied solely to the Related Classes. Interest received in
respect of any such Related Underlying Certificates shall be
applied PRO RATA based on the respective Interest Distribution
Amounts of the Related Classes and
<PAGE>
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principal received in respect of any such Related Underlying
Certificates shall be applied as follows:
(I) All amounts paid in respect of principal on the Underlying
Class 6A Certificates shall be applied as principal payments
on the Class 6A-A1 Certificates;
(II) All amounts paid in respect of principal on the Underlying
Class 6B Certificates shall be applied as principal payments
on the Class 6B-A1 Certificates;
(III) All amounts paid in respect of principal on the Underlying
Class 6C Certificates shall be applied as principal payments
on the Class 6C-A1 Certificates;
(IV) All amounts paid in respect of principal on the Underlying
Class 6D Certificates shall be applied as principal payments
on the Class 6D-A1 Certificates;
(V) All amounts paid in respect of principal on the Underlying
Class 6E Certificates shall be applied as principal payments
on the Class 6E-A1 Certificates;
(VI) All amounts paid in respect of principal on the Underlying
Class 6F Certificates shall be applied as principal payments
on the Class 6F-A1 Certificates; and
(VII) All amounts paid in respect of principal on the Underlying
Class 6G Certificates shall be applied as principal payments
on the Class 6G-A1 Certificates.
2) Amounts received in respect of the Related Underlying
Certificates for any of the Class 6H, Class 6I and Class 6J
Certificates shall be applied solely to the Related Classes.
Interest received in respect of any such Related Underlying
Certificates shall be applied to the Interest Distribution
Amount of the Related Class and principal received in respect
of any such Related Underlying Certificates shall be applied
to principal of the Related Class.
3) Amounts received in respect of the Underlying Class 6K
Certificates shall be applied solely to the Class 6K
Certificates. Interest received in respect of the Underlying
Class 6K Certificates shall be applied PRO RATA based on the
respective Interest Distribution Amounts of the Class 6K
Certificates and principal received in respect of the
Underlying Class 6K Certificates shall be applied as follows:
(I) All amounts paid in respect of principal on the "Class A-7A
Component" of the Underlying Class 6K Certificates shall be
applied as principal payments on the Class 6K-A1 Certificates;
(II) All amounts paid in respect of principal on the "Class A-7B
Component" of the Underlying Class 6K Certificates shall be
applied as principal payments on the Class 6K-A2 Certificates;
<PAGE>
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(III) All amounts paid in respect of principal on the "Class A-7C
Component" of the Underlying Class 6K Certificates shall be
applied as principal payments on the Class 6K-A3 Certificates;
and
(IV) All amounts paid in respect of principal on the "Class A-7D
Component" of the Underlying Class 6K Certificates shall be
applied as principal payments on the Class 6K-A4 Certificates.
4) Amounts received in respect of the Underlying Class 6L
Certificates shall be applied solely to the Class 6L REMIC I
Regular Interests and the Class 6L-R1 Certificates. On each
Distribution Date, the following amounts, in the following
order of priority, shall be distributed by Class 6L REMIC I to
Class 6L REMIC II on account of the Class 6L REMIC I Regular
Interests or shall be applied to the Class 6L-R1 Certificates,
as applicable:
(I) interest received in respect of the Underlying
Class 6L Certificates shall be applied to the Holders of Class
6L REMIC I Regular Interests, in an amount equal to the
aggregate Uncertificated Interest for such Distribution Date;
(II) on each Distribution Date, principal received in
respect of the Underlying Class 6L Certificates shall be
applied between the Holders of Class 6L REMIC I Regular
Interest LT1 and the Holders of Class 6L REMIC I Regular
Interests LTA-1, LTA-2 and LTA-3 on a PRO RATA basis based on
the Uncertificated Balance of Class 6L REMIC I Regular
Interest LT1 and the aggregate Uncertificated Balance of Class
6L REMIC I Regular Interests LTA-1, LTA-2 and LTA-3, with such
principal as is applied to the Holders of Class 6L REMIC I
Regular Interests LTA-1, LTA-2 and LTA-3 allocated in the
following order of priority:
(A) FIRST, 65.92483754% and 34.07516246% of such principal
concurrently to Class 6L REMIC I Regular Interests LTA-1 and
the LTA-3, respectively, until the Uncertificated Balance of
Class 6L REMIC I Regular Interest LTA-1 has been reduced to
zero; and
(B) SECOND, 65.92483754% and 34.07516246% of such principal
concurrently to Class 6L REMIC I Regular Interests LTA-2 and
the LTA-3, respectively, until the Uncertificated Balance of
each such Class 6L REMIC I Regular Interest has been reduced
to zero; and
(III) the balance of the Available Funds received in respect of the
Underlying Class 6L Certificates shall be applied to the Class
6L-R1 Certificates.
5) Amounts received in respect of the Class 6L REMIC I Regular
Interests shall be applied solely to the Class 6L
Certificates. Interest received in respect of the Class 6L
REMIC I Regular Interests shall be applied PRO RATA based on
the
<PAGE>
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respective Interest Distribution Amounts of the Class 6L
Certificates and principal received in respect of the Class 6L
REMIC I Regular Interests shall be applied among the Class 6L
Certificates in the following order of priority, in each case
to the extent of such principal remaining:
(I) FIRST, 65.92483754% and 34.07516246% of such principal
concurrently to the Class 6L-A1 Certificates and the Class
6L-A3 Certificates, respectively, until the Certificate
Principal Balance of the Class 6L-A1 Certificates has been
reduced to zero; and
(II) SECOND, 65.92483754% and 34.07516246% of such principal
concurrently to the Class 6L-A2 Certificates and the Class
6L-A3 Certificates, respectively, until the Certificate
Principal Balance of each such Class of Certificates has been
reduced to zero.
The balance of the Available Funds received in respect of the
Underlying Certificates, shall be applied to the Class 6L-R1 Certificates.
(c) All distributions made with respect to each Class of Certificates
on each Distribution Date shall be allocated PRO RATA among the outstanding
Certificates in such Class based on their respective Percentage Interests.
Payments in respect of each Class of Certificates on each Distribution Date will
be made to the Holders of such Class of record on the related Record Date
(except as otherwise provided in the last sentence of this Section 3.02(c) or in
Section 7.01 respecting the final distribution on such Class), based on the
aggregate Percentage Interest represented by their respective Certificates, and
shall be made by wire transfer of immediately available funds to the account of
any such Holder at a bank or other entity having appropriate facilities
therefor, if such Holder shall have so notified the Trustee in writing at least
five Business Days prior to the Record Date immediately prior to such
Distribution Date and is the registered owner of Certificates having an initial
aggregate Certificate Principal Balance that is in excess of $5,000,000, or
otherwise by check mailed by first class mail to the address of such Holder
appearing in the Certificate Register. The final distribution on each
Certificate will be made in like manner, but only upon presentment and surrender
of such Certificate at the Corporate Trust Office or such other location
specified in the notice to Certificateholders of such final distribution.
Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar or the Depositor shall have any responsibility therefor
except as otherwise provided by this Agreement or applicable law.
<PAGE>
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(d) The rights of the Certificateholders to receive distributions in
respect of the Certificates, and all interests of the Certificateholders in such
distributions, shall be as set forth in this Agreement. Neither the Holders of
the Certificates nor the Trustee shall in any way be responsible or liable to
the Holders of any other Certificates in respect of amounts properly previously
distributed on the Certificates.
(e) The Trustee shall withhold or cause to be withheld such amounts as
may be required by the Code (giving full effect to any exemptions from
withholding and related certifications required to be furnished by
Certificateholders and any reductions to withholding by virtue of any bilateral
tax treaties and any applicable certification required to be furnished by
Certificateholders with respect thereto) from distributions to be made to
Non-U.S. Persons. For the purposes of this paragraph, a "Non-U.S. Person" is an
individual, corporation, partnership or other person other than a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate whose income is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
the trust and one or more United States fiduciaries have the authority to
control all substantial decisions of the trust.
Section 3.03. STATEMENTS TO CERTIFICATEHOLDERS. On the Business Day
prior to each Distribution Date, the Trustee shall prepare, and on each such
Distribution Date forward by mail to each Holder of the Certificates, (A) a copy
of the Underlying Certificate Distribution Date Statements required under each
Pooling and Servicing Agreement to be sent to holders of the Related Underlying
Certificates and (B) a statement as to the distributions on the Certificates
made on such Distribution Date setting forth:
(i) the amount of the distribution made on such
Distribution Date to the Holders of the Certificates of each
such Class allocable to principal;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of the Certificates of each
such Class allocable to interest;
(iii) such customary information as the Trustee deems
necessary or desirable, or which a Certificateholder
reasonably requests, to enable Certificateholders to prepare
their tax returns;
(iv) the aggregate Certificate Principal Balances and
Notional Amounts of the Certificates, after giving effect to
the distributions and allocations of Extraordinary Trust Fund
Expenses and Realized Losses made on such Distribution Date,
separately identifying any reduction thereof due to
allocations of Extraordinary Trust Fund Expenses and Realized
Losses;
(v) the Certificate Factor for each Class of
Certificates applicable to such Distribution Date; and
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(vi) the Pass-Through Rate and Interest Distribution
Amount in respect of each Class of Certificates for such
Distribution Date (separately identifying any reductions
resulting from, the allocation of interest shortfalls and the
allocation of the interest portion of Realized Losses on such
Distribution Date) and the respective portions thereof, if
any, remaining unpaid following the distributions made in
respect of such Certificates on such Distribution Date.
provided that the information furnished pursuant to clauses (A) and (B) above
shall, in addition to being forwarded by mail, be sent by telecopier to any
Holder of any Certificates who has notified the Trustee in writing that it
wishes to receive such information on each Distribution Date by telecopier.
In the case of information furnished pursuant to subclauses (i)-(iii)
above, the amounts shall be expressed as a dollar amount per Single Certificate
of the relevant Class.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each Person who at any time during the calendar
year was a Holder of a Regular Certificate a statement containing the
information set forth in subclauses (i)-(iii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code as from time to
time are in force.
On each Distribution Date the Trustee shall forward to the Depositor
and to each Holder of a Residual Certificate a copy of the reports forwarded to
the Regular Certificateholders on such Distribution Date and a statement setting
forth the amounts, if any, actually distributed with respect to the Residual
Certificates on such Distribution Date.
Within a reasonable period of time after the end of each calendar year,
the Trustee shall furnish to each Person who at any time during the calendar
year was a Holder of a Residual Certificate a statement setting forth the
amount, if any, actually distributed with respect to the Residual Certificates,
as appropriate, aggregated for such calendar year or applicable portion thereof
during which such Person was a Certificateholder. Such obligation of the Trustee
shall be deemed to have been satisfied to the extent that substantially
comparable information shall be provided by the Trustee pursuant to any
requirements of the Code as from time to time are in force.
The Trustee shall, upon request, furnish to each Certificateholder
during the term of this Agreement, such periodic, special, or other reports or
information, whether or not provided for herein, as shall be reasonable with
respect to the Certificateholder, or otherwise with respect to the purposes of
this Agreement, all such reports or information to be provided in accordance
with such reasonable and explicit instructions and directions as the
Certificateholder may provide, including without limitation such information as
may reasonably be requested from time to time by a Certificateholder in order to
prepare its tax returns. For purposes of this Section
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3.03, the Trustee's duties are limited to the extent that the Trustee receives
timely reports as required from the trustee under each of the Pooling and
Servicing Agreements.
Section 3.04. ALLOCATION OF EXTRAORDINARY TRUST FUND EXPENSES AND
REALIZED LOSSES. With respect to each Distribution Date, all Extraordinary Trust
Fund Expenses shall be allocated in reduction of the Certificate Principal
Balances of each Class of Certificates on a PRO RATA basis based on principal
otherwise payable on such Class pursuant to Section 3.02 in relation to the
Principal Distribution Amount.
With respect to each Distribution Date, all Realized Losses incurred on
any Underlying Certificate shall be allocated to the Related Classes of
Certificates. All Realized Losses allocated shall be borne as follows: first, in
the case of those Realized Losses related to the Class 6L Certificates, by the
Class 6L-R1 Certificates on a PRO RATA basis to the extent of the cash flows
allocable to such Residual Certificates on such Distribution Date, and then, by
the Certificateholders of the Related Classes on a PRO RATA basis based on
current interest or current principal entitlements, as applicable.
All Realized Losses and Extraordinary Trust Fund Expenses allocated to
a Class of Certificates hereunder will be allocated among the Certificates of
such Class in proportion to the Percentage Interests evidenced thereby. In
addition, all Extraordinary Trust Fund Expenses allocated among the Class 6L
Certificates shall be deemed to have been allocated to the related Class 6L
REMIC I Regular Interests on a PRO RATA basis based on current principal
allocated thereto, and all Realized Losses allocated to the Class 6L
Certificates (other than the Class 6L-R1 Certificates) shall be deemed to have
been allocated among the related Class 6L REMIC I Regular Interests on a PRO
RATA basis based on current interest or current principal allocated thereto, as
applicable.
Section 3.05. NOTICES TO TRUSTEE. (a) Upon receipt of any notice or
statement with respect to the Underlying Certificates, the Trustee shall not
take any action except in accordance with written instructions from the
Certificateholders pursuant to the third paragraph of Section 9.02.
(b) Upon receipt of notice of the final distribution on any of the
Underlying Certificates, the Trustee shall surrender such Underlying
Certificates to the trustee for such Underlying Certificates for payment of the
final distribution thereon.
Section 3.06. EXCHANGE COMMISSION; ADDITIONAL INFORMATION. The Trustee
shall prepare or cause to be prepared for filing with the Commission (other than
the Current Report on Form 8-K to be filed by the Depositor in connection with
computational materials and the initial Current Report on Form 8-K to be filed
by the Depositor in connection with the issuance of the Certificates) any and
all reports, statements and information respecting the Trust Fund and/or the
Certificates required to be filed, and shall solicit any and all proxies of the
Certificateholders whenever such proxies are required to be solicited, pursuant
to the Securities Exchange Act of 1934, as amended. The Depositor shall promptly
file, and exercise its reasonable best efforts to obtain a favorable response
to, no-action requests with, or other appropriate exemptive relief
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from, the Commission seeking the usual and customary exemption from such
reporting requirements granted to issuers of securities similar to the
Certificates. Fees and expenses incurred by the Trustee in connection with the
foregoing shall be reimbursed pursuant to Section 6.05 and shall not be paid by
the Trust Fund.
The Depositor agrees to promptly furnish to the Trustee, from time to
time upon request, such further information, reports and financial statements
within their control related to this Agreement and the Underlying Certificates
as the Trustee reasonably deems appropriate to prepare and file all necessary
reports with the Commission.
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ARTICLE IV
THE CERTIFICATES
Section 4.01. THE CERTIFICATES. (a) The Certificates in the aggregate
will represent the entire beneficial ownership interest in the Underlying
Certificates and all other assets included in the Trust Fund. At the Closing
Date, the aggregate Certificate Principal Balance of the Certificates will equal
the aggregate principal balance of the Underlying Certificates. The aggregate
Certificate Principal Balance of all Certificates of a Class as of the Closing
Date shall equal such Class's initial Certificate Principal Balance.
The Regular Certificates will be substantially in the form annexed
hereto as Exhibit A-1, and the Residual Certificates will be substantially in
the form annexed hereto as Exhibit A-2. The Certificates of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Certificate will share
ratably in all rights of the Certificates of the related Class.
Upon original issue, the Certificates shall be executed and delivered
by the Trustee and the Trustee shall cause the Certificates to be authenticated
by the Certificate Registrar to or upon the order of the Depositor. The
Certificates shall be executed and attested by manual or facsimile signature on
behalf of the Trustee by an authorized signatory. Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper
officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
herein executed by the Certificate Registrar by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
(b) The Class 6A, Class 6B, Class 6C, Class 6D, Class 6E, Class 6F,
Class 6G, Class 6H, Class 6I, Class 6J and Class 6K Certificates shall initially
be issued as one or more Certificates held by the Book-Entry Custodian or, if
appointed to hold such Certificates as provided below, the Depository and
registered in the name of the Depository or its nominee and, except as provided
below, registration of such Certificates may not be transferred by the Trustee
except to another Depository that agrees to hold such Certificates for the
respective Certificate Owners with Ownership Interests therein. The Certificate
Owners shall hold their respective Ownership Interests in and to such
Certificates through the book-entry facilities of the Depository and, except as
provided below, shall not be entitled to definitive, fully registered
Certificates ("Definitive Certificates") in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall only transfer the Ownership
Interests in the Book-Entry Certificates of Certificate Owners it
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represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures. The Trustee is hereby initially appointed as
the Book-Entry Custodian and hereby agrees to act as such in accordance herewith
and in accordance with the agreement that it has with the Depository authorizing
it to act as such. The Book-Entry Custodian may, and, if it is no longer
qualified to act as such, the Book-Entry Custodian shall, appoint, by a written
instrument delivered to the Depositor, and, if the Trustee is not the Book-Entry
Custodian, the Trustee, any other transfer agent (including the Depository or
any successor Depository) to act as Book-Entry Custodian under such conditions
as the predecessor Book-Entry Custodian and the Depository or any successor
Depository may prescribe, provided that the predecessor BookEntry Custodian
shall not be relieved of any of its duties or responsibilities by reason of any
such appointment of other than the Depository. If the Trustee resigns or is
removed in accordance with the terms hereof, the successor trustee or, if it so
elects, the Depository shall immediately succeed to its predecessor's duties as
Book-Entry Custodian. The Depositor shall have the right to inspect, and to
obtain copies of, any Certificates held as Book-Entry Certificates by the
Book-Entry Custodian.
The Trustee and the Depositor may for all purposes (including the
making of payments due on the respective Classes of Book-Entry Certificates)
deal with the Depository as the authorized representative of the Certificate
Owners with respect to each of the Classes of BookEntry Certificates for the
purposes of exercising the rights of Certificateholders hereunder. The rights of
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates shall be limited to those established by law and agreements between
such Certificate Owners and the Depository Participants and brokerage firms
representing such Certificate Owners. Multiple requests and directions from, and
votes of, the Depository as Holder of any Class of Book-Entry Certificates with
respect to any particular matter shall not be deemed inconsistent if they are
made with respect to different Certificate Owners. The Trustee may establish a
reasonable record date in connection with solicitations of consents from or
voting by Certificateholders and shall give notice to the Depository of such
record date.
If (i)(A) the Depositor advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository, and (B) the Depositor is unable to locate a
qualified successor, (ii) the Depositor at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the Depository
or (iii) Certificate Owners representing in the aggregate not less than 51% of
the Ownership Interests of each of the Classes of the Book-Entry Certificates
advise the Trustee through the Depository, in writing, that the continuation of
a book-entry system through the Depository is no longer in the best interests of
the Certificate Owners, the Trustee shall notify all Certificate Owners, through
the Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Book-Entry
Custodian or the Depository, as applicable, accompanied by registration
instructions from the Depository for registration of transfer, the Trustee shall
issue the Definitive Certificates. Such Definitive Certificates will be issued
in minimum denominations of $1,000 and integral multiples of $1 in excess
thereof, except that any beneficial ownership that was represented by a
Book-Entry Certificate in an amount less than $1,000 immediately prior to the
issuance of a Definitive Certificate shall be issued in a minimum
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denomination equal to the amount represented by such Book-Entry Certificate.
Neither the Depositor nor the Trustee shall be liable for any delay in the
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Certificates all references herein to obligations imposed upon or to be
performed by the Depository shall be deemed to be imposed upon and performed by
the Trustee, to the extent applicable with respect to such Definitive
Certificates, and the Trustee shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF CERTIFICATES. (a) The Trustee shall cause to be kept at one of the offices or
agencies to be appointed by the Trustee in accordance with the provisions of
Section 6.10 a Certificate Register for the Certificates in which, subject to
such reasonable regulations as it may prescribe, the Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Trustee will initially serve as Certificate Registrar
for the purpose of registering Certificates and transfers and exchanges of
Certificates as herein provided. The Certificate Registrar may appoint, by a
written instrument delivered to the Depositor, any other bank or trust company
to act as Certificate Registrar under such conditions as the predecessor
Certificate Registrar may prescribe, provided that the predecessor Certificate
Registrar shall not be relieved of any of its duties or responsibilities
hereunder by reason of such appointment. If the Trustee shall at any time not be
the Certificate Registrar, the Trustee shall have and maintain the right to
inspect the Certificate Register or to obtain a copy thereof at all reasonable
times, and to rely conclusively upon a certificate of the Certificate Registrar
as to the information set forth in the Certificate Register.
No Transfer of any Certificate shall be made absent compliance with the
provisions of Section 4.02(b), (c) and (d) below, to the extent applicable.
(b) No Transfer of a Class 6L Certificate or any Residual Certificate
shall be made unless that transfer is made pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "1933 Act"), and
effective registration or qualification under applicable state securities laws,
or is made in a transaction which does not require such registration or
qualification. In the event that such a transfer of a Class 6L Certificate or
any Residual Certificate is to be made without registration or qualification,
the Trustee and the Certificate Registrar shall each require receipt of (i) if
such transfer is purportedly being made in reliance upon Rule 144A under the
1933 Act, written certifications from the Certificateholder desiring to effect
the transfer, and from such Certificateholder's prospective transferee,
substantially in the forms attached hereto as Exhibit C-1 and (ii) in all other
cases, an Opinion of Counsel satisfactory to the Trustee that such transfer may
be made without such registration or qualification (which Opinion of Counsel
shall not be an expense of the Trust Fund or of the Depositor or the Trustee),
together with copies of the written certification(s) of the Certificateholder
(including that such transfer is purportedly being made in reliance upon Rule
501(a)(1), (2), (3) or (7) of Regulation D under the 1933 Act) desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any, provided that the Residual
Certificates may only be transferred in accordance with Rule 144A under the 1933
Act. None of the Depositor, the Certificate Registrar or the Trustee
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is obligated to register or qualify any Class 6L Certificate or Residual
Certificate under the 1933 Act or any other securities laws or to take any
action not otherwise required under this Agreement to permit the transfer of
such Certificate without registration or qualification. Any Certificateholder
desiring to effect the transfer of a Class 6L Certificate shall, and does hereby
agree to, indemnify the Trustee, the Depositor and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
(c) No transfer of a Residual Certificate or any interest therein shall
be made to any Plan subject to ERISA or Section 4975 of the Code, any Person
acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "plan assets" of a Plan within the meaning of
the Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101 ("Plan
Assets") unless the Depositor and the Trustee are provided with an Opinion of
Counsel which establishes to the satisfaction of the Depositor and the Trustee
that the purchase of such Certificates is permissible under applicable law, will
not constitute or result in any prohibited transaction under ERISA or Section
4975 of the Code and will not subject the Depositor, the Trustee or the Trust
Fund to any obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Depositor,
the Trustee or the Trust Fund. In lieu of such Opinion of Counsel, a Plan, any
Person acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with Plan Assets of a Plan may provide a
certification in the form of Exhibit D to this Agreement, which the Trustee may
rely upon without further inquiry or investigation. Neither an Opinion of
Counsel nor a certification will be required in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor (in which case, the Depositor or any affiliate thereof shall have
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets of any Plan) and the Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Trustee,
shall be a written representation) from the Depositor of the status of such
transferee as an affiliate of the Depositor.
(d) (i) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of Transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Residual Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall be
a Permitted Transferee and shall promptly notify the
Trustee of any change or impending change in its
status as a Permitted Transferee.
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(B) In connection with any proposed Transfer
of any Ownership Interest in a Residual Certificate,
the Trustee shall require delivery to it, and shall
not register the Transfer of any Residual Certificate
until its receipt of, an affidavit and agreement (a
"Transfer Affidavit and Agreement" attached hereto as
Exhibit C-2) from the proposed Transferee, in form
and substance satisfactory to the Trustee,
representing and warranting, among other things, that
such Transferee is a Permitted Transferee, that it is
not acquiring its Ownership Interest in the Residual
Certificates that is the subject of the proposed
Transfer as a nominee, trustee or agent for any
Person that is not a Permitted Transferee, that for
so long as it retains its Ownership Interest in a
Residual Certificate, it will endeavor to remain a
Permitted Transferee, and that it has reviewed the
provisions of this Section 4.02(d) and agrees to be
bound by them.
(C) Notwithstanding the delivery of a
Transfer Affidavit and Agreement by a proposed
Transferee under clause (B) above, if a Responsible
Officer of the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no
Transfer of an Ownership Interest in a Residual
Certificate to such proposed Transferee shall be
effected.
(D) Each Person holding or acquiring any
Ownership Interest in a Residual Certificate shall
agree (x) to require a Transfer Affidavit and
Agreement (in the form attached hereto as Exhibit
C-2) from any other Person to whom such Person
attempts to transfer its Ownership Interest in a
Residual Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate
(in the form attached hereto as Exhibit C-2) to the
Trustee stating that, among other things, it has no
actual knowledge that such other Person is not a
Permitted Transferee.
(E) Each Person holding or acquiring an
Ownership Interest in a Residual Certificate, by
purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is
a "pass-through interest holder" within the meaning
of temporary Treasury regulation Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Residual Certificate, if it
is, or is holding an Ownership Interest in a Residual
Certificate on behalf of, a "pass-through interest
holder".
(ii) The Trustee will register the Transfer of any
Residual Certificate only if it shall have received the
Transfer Affidavit and Agreement and all of such other
documents as shall have been reasonably required by the
Trustee as a condition to such registration. In addition, no
Transfer of a Residual Certificate shall be made unless the
Trustee shall have received a representation letter from the
Transferee of such Certificate to the effect that such
Transferee is a Permitted
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Transferee. Transfers of a Residual Certificate to Non-U.S.
Persons and Disqualified Organizations are prohibited.
(iii) (A) If any purported Transferee shall become a
Holder of a Residual Certificate in violation of the
provisions of this Section 4.02(d), then the last
preceding Permitted Transferee shall be restored, to
the extent permitted by law, to all rights as holder
thereof retroactive to the date of registration of
such Transfer of such Residual Certificate. The
Trustee shall be under no liability to any Person for
any registration of Transfer of a Residual
Certificate that is in fact not permitted by this
Section 4.02(d) or for making any payments due on
such Certificate to the holder thereof or for taking
any other action with respect to such holder under
the provisions of this Agreement.
(B) If any purported Transferee shall become
a holder of a Residual Certificate in violation of
the restrictions in this Section 4.02(d) and to the
extent that the retroactive restoration of the rights
of the holder of such Residual Certificate as
described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have
the right, without notice to the holder or any prior
holder of such Residual Certificate, to sell such
Residual Certificate to a purchaser selected by the
Trustee on such terms as the Trustee may choose. Such
purported Transferee shall promptly endorse and
deliver each Residual Certificate in accordance with
the instructions of the Trustee. Such purchaser may
be the Trustee itself or any Affiliate of the
Trustee. The proceeds of such sale, net of the
commissions (which may include commissions payable to
the Trustee or its Affiliates), expenses and taxes
due, if any, will be remitted by the Trustee to such
purported Transferee. The terms and conditions of any
sale under this clause (iii)(B) shall be determined
in the sole discretion of the Trustee, and the
Trustee shall not be liable to any Person having an
Ownership Interest in a Residual Certificate as a
result of its exercise of such discretion.
(iv) The Trustee shall, upon request, make available to
the Internal Revenue Service and those Persons specified by
the REMIC Provisions all information necessary to compute any
tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Residual Certificate to any Person who is a
Disqualified Organization, including the information described
in Treasury regulations sections 1.860D-1(b)(5) and
1.860E-2(a)(5) with respect to the "excess inclusions" of such
Residual Certificate and (B) as a result of any regulated
investment company, real estate investment trust, common trust
fund, partnership, trust, estate or organization described in
Section 1381 of the Code that holds an Ownership Interest in a
Residual Certificate having as among its record holders at any
time any Person which is a Disqualified Organization.
Reasonable
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compensation for providing such information may be requested
and accepted by the Trustee from any such Person.
(v) The provisions of this Section 4.02(d) set forth
prior to this subsection (v) may be modified, added to or
eliminated, provided that there shall have been delivered to
the Trustee the following:
(A) written notification from the Rating
Agency to the effect that the modification, addition
to or elimination of such provisions will not cause
the Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, at the expense of
the party seeking to modify, add to or eliminate such
provisions, in form and substance satisfactory to the
Trustee, to the effect that such modification of,
addition to or elimination of such provisions will
not cause any REMIC created hereunder to cease to
qualify as a REMIC and will not cause (x) any such
REMIC to be subject to an entity-level tax caused by
the Transfer of any Residual Certificate to a Person
that is not a Permitted Transferee or (y) a Person
other than the prospective transferee to be subject
to a REMICrelated tax caused by the Transfer of a
Residual Certificate to a Person that is not a
Permitted Transferee.
(e) Subject to the preceding subsections, upon surrender for
registration of transfer of any Certificate at any office or agency of the
Trustee maintained for such purpose pursuant to Section 6.10, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated Transferee or Transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
(f) At the option of the Holder thereof, any Certificate may be
exchanged for other Certificates of the same Class with authorized denominations
and a like aggregate Percentage Interest, upon surrender of such Certificate to
be exchanged at any office or agency of the Trustee maintained for such purpose
pursuant to Section 6.10. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute and cause the Certificate Registrar to
authenticate and deliver the Certificates which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee and the Certificate Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing.
(g) No service charge to the Certificateholders shall be made for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
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(h) All Certificates surrendered for transfer and exchange shall be
canceled and destroyed by the Certificate Registrar in accordance with its
customary procedures.
(i) The Trustee will cause the Certificate Registrar (unless the
Trustee is acting as Certificate Registrar) to provide notice to the Trustee of
each transfer of a Certificate and to provide the Trustee with an updated copy
of the Certificate Register on the first Business Day in January and June of
each year, commencing January 1997.
Section 4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated Certificate is surrendered to the Trustee or the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of actual knowledge by the Trustee or the Certificate
Registrar that such Certificate has been acquired by a bona fide purchaser, the
Trustee shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of the same
Class and of like denomination and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Certificate Registrar) connected therewith. Any replacement Certificate issued
pursuant to this Section shall constitute complete and indefeasible evidence of
ownership in the Trust Fund created hereunder, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 4.04. PERSONS DEEMED OWNERS. Subject to Section 4.02, prior to
due presentation of a Certificate for registration of transfer, the Trustee and
any agent of the Trustee may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 3.02 and at any other time for all other
purposes whatsoever, and neither the Trustee, the Certificate Registrar nor any
agent of the Trustee or the Certificate Registrar shall be affected by notice to
the contrary.
Section 4.05. CERTAIN AVAILABLE INFORMATION. On or prior to the date of
the first sale of Certificate to an Independent third party, the Depositor shall
provide to the Trustee 10 copies of any offering circulars or other disclosure
documents used by the Depositor in connection with the offer and sale of the
Certificates. In addition, if any such offering circular or other disclosure
document is revised, amended or supplemented at any time following the delivery
thereof to the Trustee, the Depositor promptly shall inform the Trustee of such
event and shall deliver to the Trustee 10 copies of the offering circular or
other disclosure document, as revised, amended or supplemented. The Trustee
shall maintain at its Corporate Trust Office and shall make available free of
charge during normal business hours for review by any Holder of a Certificate or
any Person identified to the Trustee as a prospective transferee of a
Certificate, originals or copies of the following items: (i) the offering
circulars or other disclosure documents relating to the Certificates, in the
forms most recently provided to the Trustee, (ii) this Agreement and any
amendments hereof entered into pursuant to Section 9.01, (iii) all monthly
statements required to be delivered to Certificateholders of the relevant Class
pursuant
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to Section 3.03 since the Closing Date, and all other notices, reports,
statements and written communications delivered to the Certificateholders of the
relevant Class as a Class pursuant to this Agreement since the Closing Date and
(iv) all certifications delivered by a Responsible Officer of the Trustee since
the Closing Date pursuant to Section 8.01(h). Copies of any and all of the
foregoing items will be available from the Trustee upon request at the expense
of the Person requesting the same.
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ARTICLE V
THE DEPOSITOR
Section 5.01. LIABILITY OF THE DEPOSITOR. The Depositor shall be liable
in accordance herewith only to the extent of the obligations specifically
imposed by this Agreement and undertaken hereunder by the Depositor.
Section 5.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR. Subject to the
following paragraph, the Depositor will keep in full effect its existence,
rights and franchises as a corporation under the laws of the jurisdiction of its
incorporation. The Depositor will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement or the Certificates and to perform its duties
under this Agreement.
The Depositor may be merged or consolidated with or into any Person, or
transfer all or substantially all of its assets to any Person, in which case any
Person resulting from any merger or consolidation to which the Depositor shall
be a party, or any Person succeeding to the business of the Depositor, shall be
the successor of the Depositor hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, provided, however, that the Rating
Agency's ratings of the Certificates of any Class in effect immediately prior to
such merger or consolidation will not be qualified, reduced or withdrawn as a
result thereof (as evidenced by a letter to such effect from the Rating Agency).
Section 5.03. LIMITATION ON LIABILITY OF THE DEPOSITOR AND OTHERS. None
of the Depositor or any of the directors, officers, employees or agents of the
Depositor shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Depositor or any
such person against any breach of warranties, representations or covenants made
herein or against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Depositor and any director, officer, employee or agent of the Depositor may rely
in good faith on any document of any kind which, PRIMA FACIE, is properly
executed and submitted by any Person respecting any matters arising hereunder.
The Depositor and any director, officer, employee or agent of the Depositor
shall be indemnified and held harmless by the Trust Fund against any loss,
liability or expense incurred in connection with any legal action relating to
this Agreement or the Certificates (except as any such loss, liability or
expense shall be otherwise reimbursable pursuant to this Agreement), other than
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder. The Depositor shall not
be under any obligation to appear in, prosecute or defend any legal action
unless such action is related to its respective duties under this Agreement and,
in its opinion, does not involve it in any expense or liability; provided,
however, that the Depositor may in its
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discretion undertake any such action which it may deem necessary or desirable
with respect to this Agreement and the rights and duties of the parties hereto
and the interests of the Certificateholders hereunder. In such event, the legal
expenses and costs of such action and any liability resulting therefrom (except
any loss, liability or expense incurred by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties hereunder or by reason of
reckless disregard of obligations and duties hereunder) shall be expenses, costs
and liabilities of the Trust Fund, and the Depositor shall be entitled to be
reimbursed therefor from the Certificate Account, any such right of
reimbursement being prior to the rights of the Certificateholders to receive any
portion of the amounts from which such cost, expense or liability is
reimbursable.
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ARTICLE VI
THE TRUSTEE
Section 6.01. DUTIES OF TRUSTEE. The Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this Agreement. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. If any such instrument is found
not to conform to the requirements of this Agreement in a material manner, the
Trustee shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to the Trustee's satisfaction,
the Trustee will provide notice thereof to the Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own misconduct; provided, however, that:
(i) The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Agreement,
the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in
this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and, in the
absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee that conform
to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an
error of judgment made in good faith by a Responsible Officer
or Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) The Trustee shall not be personally liable with
respect to any action taken, suffered or omitted to be taken
by it in good faith in accordance with the direction of
Holders of the Related Certificates or the Holders of all of
the Certificates, as applicable, entitled to at least 25% of
the Voting Rights relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement;
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(iv) Except to the extent provided herein, no provision
in this Agreement shall require the Trustee to expend or risk
its own funds or otherwise incur any personal financial
liability in the performance of any of its duties as Trustee
hereunder, or in the exercise of any of its rights or powers,
if the Trustee shall have reasonable grounds for believing
that repayment of funds or adequate indemnity against such
risk or liability is not reasonably assured to it; and
(v) In exercising any right or power as holder of any
Underlying Certificate, the Trustee may request the direction
of the Holders of the Related Certificates and shall be fully
protected in acting in accordance with the written directions
of any such Certificateholders entitled to 51% or more of the
Voting Rights.
Section 6.02. CERTAIN MATTERS AFFECTING THE TRUSTEE. (a) Except as
otherwise provided in Section 6.01:
(i) The Trustee may request and rely upon and shall be
protected in acting or refraining from acting upon any
resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other
paper or document reasonably believed by it to be genuine and
to have been signed or presented by the proper party or
parties;
(ii) The Trustee may consult with counsel and any
Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with
such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to
exercise any of the trusts or powers vested in it by this
Agreement or to institute, conduct or defend any litigation
hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the
provisions of this Agreement, unless such Certificateholders
shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which
may be incurred therein or thereby;
(iv) The Trustee shall not be personally liable for any
action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Agreement;
(v) The Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so
by Holders of the Related Certificates or the Holders of all
of the Certificates, as applicable, entitled to at
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least 25% of the Voting Rights; provided, however, that if the
payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by such
Certificateholders, the Trustee may require reasonable
indemnity against such expense, or liability from such
Certificateholders as a condition to taking any such action;
and
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through agents or attorneys.
(b) All rights of action under this Agreement or under any of the
Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
Section 6.03. TRUSTEE NOT LIABLE FOR CERTIFICATES. The recitals
contained herein and in the Certificates (other than the signature of the
Trustee, the authentication of the Certificate Registrar on the Certificates,
the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 6.11) shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement (other than as specifically set forth
in Section 6.11) or of the Certificates (other than the signature of the Trustee
and authentication of the Certificate Registrar on the Certificates). The
Trustee shall not be accountable for the use or application by the Depositor of
any of the Certificates or of the proceeds of such Certificates, or for the use
or application of any funds, other than any funds held by or on behalf of the
Trustee in accordance with Section 3.01.
Section 6.04. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual capacity or any other capacity may become the owner or pledgee of
Certificates with the same rights it would have if it were not Trustee.
Section 6.05. TRUSTEE'S FEES AND EXPENSES. As provided in Section
3.01(c), the Trustee shall withdraw from the Certificate Account on each
Distribution Date and pay to itself any investment income on amounts in the
Certificate Account. The Trustee and any director, officer, employee or agent of
the Trustee shall be indemnified (to the extent the Trustee has not been
indemnified under any Pooling and Servicing Agreement) by the Trust Fund and
held harmless against any loss, liability or expense incurred in connection with
any claim or legal action or any pending or threatened claim or legal action
relating to this Agreement or the Certificates, or any claim or legal action or
any pending or threatened claim or legal action relating to the performance of
any of the Trustee's duties hereunder, other than any loss, liability or expense
(i) that constitutes a specific liability of the Trustee under this Agreement or
(ii) incurred by reason of willful misfeasance, bad faith or negligence in the
performance of the Trustee's duties under this Agreement or as a result of a
breach of, or by reason of reckless disregard of, the Trustee's obligations and
duties under this Agreement. Such indemnities shall
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survive the termination or discharge of this Agreement and the resignation or
removal of the Trustee. Any payment made hereunder by the Depositor to the
Trustee shall be from the Depositor's own funds, without reimbursement from the
Trust Fund therefor.
Section 6.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a corporation or an association (other than the
Depositor, Salomon Brothers Inc, or any Affiliate of the foregoing) organized
and doing business under the laws of any state or the United States of America,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, or shall be a member of a bank
holding system, the aggregate combined capital and surplus of which is at least
$50,000,000, and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation or association shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
conditions so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 6.07.
Section 6.07. RESIGNATION AND REMOVAL OF THE TRUSTEE. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to the Depositor and to all Certificateholders. Upon
receiving such notice of resignation, the Depositor shall promptly appoint a
successor trustee by written instrument, in duplicate, which instrument shall be
delivered to the resigning Trustee and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders by the Depositor. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee. A copy of such instrument shall be delivered to the
Certificateholders by the Depositor.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed. A copy of such instrument
shall be delivered to the Certificateholders by the Depositor.
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Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 6.08.
Section 6.08. SUCCESSOR TRUSTEE. Any successor trustee appointed as
provided in Section 6.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall transfer and deliver to
the successor trustee evidence of the transfer to such successor Trustee of the
ownership, on behalf of the Certificateholders, of the Underlying Certificates
and related documents and statements, as well as all moneys, held by it
hereunder, and the Depositor and the predecessor trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for more fully and certainly vesting and confirming in the successor trustee all
such rights, powers, duties and obligations.
No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 6.06 and the appointment of such
successor trustee shall not result in a downgrading of any Class of Certificates
by the Rating Agency, as evidenced by a letter from the Rating Agency.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 6.09. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation or
association into which the Trustee may be merged or converted or with which it
may be consolidated or any corporation or association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or association succeeding to the business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation or association
shall be eligible under the provisions of Section 6.06, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.
Section 6.10. APPOINTMENT OF OFFICE OR AGENCY. The Trustee will appoint
an office or agency in the City of New York where the Certificates may be
surrendered for registration of transfer or exchange, and presented for final
distribution, and where notices and demands to or upon the Trustee in respect of
the Certificates and this Agreement may be served.
Section 6.11. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE. The
Trustee hereby represents and warrants to the Depositor, as of the Closing Date,
that:
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(i) The Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of
New York.
(ii) The execution and delivery of this Agreement by the
Trustee, and the performance and compliance with the terms of this
Agreement by the Trustee, will not violate the Trustee's charter or
bylaws or constitute a default (or an event which, with notice or lapse
of time, or both, would constitute a default) under, or result in the
breach of, any material agreement or other instrument to which it is a
party or which is applicable to it or any of its assets.
(iii) The Trustee has the full power and authority to enter
into and consummate all transactions contemplated by this Agreement,
has duly authorized the execution, delivery and performance of this
Agreement, and has duly executed and delivered this Agreement.
(iv) This Agreement, assuming due authorization, execution and
delivery by the Depositor, constitutes a valid, legal and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, receivership, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) The Trustee is not in violation of, and its execution and
delivery of this Agreement and its performance and compliance with the
terms of this Agreement will not constitute a violation of, any law,
any order or decree of any court or arbiter, or any order, regulation
or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Trustee's good faith and reasonable
judgment, is likely to affect materially and adversely either the
ability of the Trustee to perform its obligations under this Agreement
or the financial condition of the Trustee.
(vi) No litigation is pending or, to the best of the Trustee's
knowledge, threatened against the Trustee which would prohibit the
Trustee from entering into this Agreement or, in the Trustee's good
faith reasonable judgment, is likely to materially and adversely affect
either the ability of the Trustee to perform its obligations under this
Agreement or the financial condition of the Trustee.
Section 6.12. CERTIFICATE ACCOUNT STATEMENTS. Not later than 15 days
after each Distribution Date, the Trustee shall prepare a statement setting
forth the status of the Certificate Account as of the close of business on the
last day of the month of related Distribution Date, showing that all
distributions required by this Agreement to be made by the Trustee have been
made (or if any required distribution has not been made by the Trustee,
specifying the nature and status thereof) and showing, for the period covered by
such statement, the aggregate of deposits into and withdrawals from the
Certificate Account as provided in Section 3.01. Copies of such statement shall
be provided by the Trustee to any Certificateholder upon request.
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Section 6.13. LOCATION OF UNDERLYING CERTIFICATES. The Trustee hereby
covenants that so long as the Certificates are outstanding, the Trustee shall
either hold the Underlying Certificates at the Depository or keep possession of
the Underlying Certificates in the State and City of New York.
Section 6.14. COMPLIANCE WITH WITHHOLDING REQUIREMENTS. Notwithstanding
any other provision of this Agreement, the Trustee shall comply with all federal
withholding requirements with respect to payments to Certificateholders of
interest or original issue discount that the Trustee reasonably believes are
applicable under the Code. The consent of Certificateholders shall not be
required for any such withholding. In the event the Trustee withholds any amount
from interest or original issue discount payments or advances thereof to any
Certificateholder pursuant to federal withholding requirements, the Trustee
shall indicate the amount withheld to such Certificateholder.
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ARTICLE VII
TERMINATION
Section 7.01. TERMINATION UPON DISTRIBUTION TO CERTIFICATEHOLDERS. This
Agreement and the respective obligations and responsibilities of the Depositor
and the Trustee created hereby shall terminate upon the final distribution to
Certificateholders of all amounts required to be distributed pursuant to Article
III; provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James's, living on the date hereof.
Notice of any termination, specifying the Final Distribution Date upon
which the Certificateholders may surrender their Certificates to the Trustee for
payment of the final distribution and cancellation, shall be given promptly by
the Trustee by letter to Certificateholders mailed not earlier than the first
day and not later than the 24th day of the month of such final distribution
specifying (A) the Distribution Date upon which the final distribution on the
Certificates will be made upon presentation and surrender of Certificates at the
office of the Trustee therein designated, (B) the amount of any such final
distribution and (C) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office of the Trustee
therein specified; provided, however, that the failure to give such notice will
not entitle any Certificateholder to receive any interest in excess of such
Certificateholder's Percentage Interest of the allocation of such Class's
Interest Distribution Amount for such Final Distribution Date. Upon presentation
and surrender of a Certificate, the Trustee shall cause to be distributed to the
Holder thereof such Holder's final distribution.
On such Final Distribution Date, any amount remaining on deposit in the
Certificate Account (other than amounts required to be distributed pursuant to
Section 3.02(b)) after payment to the Trustee of any amounts to which it is
entitled hereunder will be distributed to the Holders of the Residual
Certificates.
Section 7.02. FAILURE OF CERTIFICATEHOLDERS TO SURRENDER CERTIFICATES.
In the event that any of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the Final Distribution
Date, the Trustee shall give a written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within one year after such
notice all the Certificates shall not have been surrendered for cancellation,
the Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain subject to the Trust Fund.
Section 7.03. ADDITIONAL TERMINATION REQUIREMENTS. (a) In the event
that any right to purchase the Related Underlying Certificates for any Related
Classes is exercised, the REMIC related thereto shall be terminated in
accordance with the following additional requirements:
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(i) The Trustee shall establish a 90-day liquidation
period with respect to such REMIC and shall specify the first day of
such period in a statement attached to such REMIC's final Tax Return
pursuant to Treasury Regulation Section 1.860F-1. The Trustee shall
satisfy all the requirements of a qualified liquidation under Section
860F of the Code and any regulations thereunder, as evidenced by an
Opinion of Counsel obtained at the expense of the Trustee;
(ii) On the Distribution Date on which the Trustee
anticipates that such REMIC will be terminated, after making required
payments under Section 3.05, the Trustee shall distribute or credit, or
cause to be distributed or credited, to the Holders of the related
Residual Certificates all cash on hand (other than cash retained to
meet claims), and such REMIC shall terminate at that time.
(b) By their acceptance of the Residual Certificates, the Holders
thereof hereby agree to authorize the Trustee to specify the 90-day liquidation
period for the related REMICs, which authorization shall be binding upon all
successor Holders of the Residual Certificates.
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ARTICLE VIII
REMIC PROVISIONS
Section 8.01. REMIC ADMINISTRATION. (a) The Trustee shall elect to
treat each REMIC created hereunder as a REMIC under the Code and, if necessary,
under applicable state law. Such election will be made on Form 1066 or other
appropriate federal tax or information return or any appropriate state return
for the taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC election in respect of
each REMIC, the Regular Certificates shall be designated as the "regular
interests" in the related REMICs and each Class of Residual Certificates shall
be designated as the sole class of "residual interests" in the related REMIC.
The Trustee shall not permit the creation of any "interests" in a REMIC created
hereunder (within the meaning of Section 860G of the Code) other than the
related REMIC Regular Interests and the related interests represented by the
Certificates.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC related to the Trust Fund within the meaning of Section 860G(a)(9) of the
Code.
(c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the Trust Fund
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to any REMIC created hereunder that involves
the Internal Revenue Service or state tax authorities), other than the expense
of obtaining any tax related Opinion of Counsel or tax except as specified
herein; provided, however, that if such audit resulted from the negligence of
the Depositor in the performance of its obligations under this Article VIII, the
Depositor shall pay such expenses. The Trustee, as agent for each REMIC's tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving the Trust Fund and (ii) represent the Trust Fund
in any administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority with respect thereto. The holder of the
largest Percentage Interest of each Class of Residual Certificates shall be
designated, in the manner provided under Treasury regulations section
1.860F-4(d) and temporary Treasury regulations section 301.6231(a)(7)-1T, as the
tax matters person of the related REMIC. By their acceptance thereof, the
holders of the largest Percentage Interest of each Class of Residual
Certificates hereby agrees to irrevocably appoint the Trustee as their agent to
perform all of the duties of the tax matters person for the related REMIC.
(d) The Trustee shall prepare, timely file and sign all of the Tax
Returns in respect of each REMIC created hereunder. The expenses of preparing
and filing such returns shall be borne by the Trustee without any right of
reimbursement therefor. Upon filing with the Internal Revenue Service, the
Trustee shall furnish to the Holders of the related Residual Certificates the
Form 1066 and each Form 1066Q, and shall provide from time to time such
information and computations with respect to the entries on such forms as any
Holder of the related Residual Certificates may reasonably request.
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(e) The Trustee shall perform on behalf of the Trust Fund all reporting
and other tax compliance duties that are the responsibility of any REMIC created
hereby under the Code, the REMIC Provisions or other compliance guidance issued
by the Internal Revenue Service or any state or local taxing authority. Among
its other duties, as required by the Code, the REMIC Provisions or other such
compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of such REMIC. In addition, the Depositor shall
provide or cause to be provided to the Trustee, within ten (10) days after the
Closing Date, all information or data that the Trustee reasonably determines to
be relevant for tax purposes as to the valuations and issue prices of the
Certificates, including, without limitation, the price, yield, prepayment
assumption and projected cash flow of the Certificates.
(f) The Trustee shall take such action and shall cause each REMIC
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as a REMIC under the REMIC Provisions. The Trustee
shall not take any action, cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of any
REMIC as a REMIC or (ii) result in the imposition of a tax upon the Trust Fund
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code) (either such event, an "Adverse REMIC Event")
unless the Trustee has received an Opinion of Counsel (at the expense of the
party seeking to take such action but in no event at the expense of the Trustee)
to the effect that the contemplated action will not, with respect to any REMIC
created hereunder, endanger such status or result in the imposition of such a
tax. At all times as may be required by the Code, the Trustee will ensure that
substantially all of the assets of the Trust Fund created hereunder will consist
of "qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
any contributions to any such REMIC after the Startup Day therefor pursuant to
Section 860G(d) of the Code, or any other tax is imposed by the Code or any
applicable provisions of state or local tax laws, such tax shall be charged (i)
to the Trustee pursuant to Section 8.03 hereof, if such tax arises out of or
results from a breach by the Trustee in the performance of any of its
obligations under this Article VIII, or otherwise (ii) against amounts on
deposit in the Certificate Account and shall be paid by withdrawal therefrom.
(h) On or before April 15 of each calendar year, commencing April 15,
1997, the Trustee shall deliver to the Rating Agency a certificate from a
Responsible Officer of the Trustee stating the Trustee's compliance with this
Article VIII.
<PAGE>
-56-
(i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to each REMIC created hereunder on a calendar year and
on an accrual basis.
(j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to any REMIC created hereunder unless it shall have
received an Opinion of Counsel to the effect that the inclusion of such assets
in the Trust Fund will not cause such REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject such REMIC to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(k) The Trustee shall not enter into any arrangement by which any REMIC
created hereunder will receive a fee or other compensation for services nor
permit any such REMIC to receive any income from assets other than "qualified
mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(l) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the "latest possible maturity date" for each of the Class 6L REMIC
I Regular Interests and each of the respective Classes of Certificates
evidencing "regular interests" in the REMICs created hereunder are set forth in
the Preliminary Statement hereto.
Section 8.02. PROHIBITED TRANSACTIONS AND ACTIVITIES. Neither the
Depositor nor the Trustee shall sell, dispose of or substitute for any of the
Underlying Certificates (except in connection with (i) the bankruptcy of any
REMIC created hereunder or (ii) the termination of any such REMIC pursuant to
Article VII of this Agreement), nor acquire any assets for any such REMIC, nor
sell or dispose of any investments in the Certificate Account for gain, nor
accept any contributions to any such REMIC after the Closing Date, unless it has
received an Opinion of Counsel (at the expense of the party seeking to cause
such sale, disposition, substitution, acquisition or contribution but in no
event at the expense of the Trustee) that such sale, disposition, substitution,
acquisition or contribution will not (a) affect adversely the status of any such
REMIC as a REMIC or (b) cause any such REMIC to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Section 8.03. TRUSTEE INDEMNIFICATION. The Trustee agrees to indemnify
the Trust Fund and the Depositor for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund or the Depositor, as a result of a breach of the Trustee's covenants set
forth in this Article VIII. The Depositor agrees to indemnify the Trust Fund and
the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys fees imposed on or incurred by the Trust Fund or the
Trustee, as a result of a breach of the Depositor's covenants set forth in this
Article VIII.
<PAGE>
-57-
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. AMENDMENT. This Agreement may be amended from time to
time by the Depositor and the Trustee without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct, modify or
supplement any provisions herein, or (iii) to make any other provisions with
respect to matters or questions arising under this Agreement which shall not be
inconsistent with the provisions of this Agreement, provided that such action
shall not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect in any material respect the interests of any Certificateholder.
This Agreement may also be amended from time to time by the Depositor
and the Trustee with the consent of the Holders of the Related Certificates or
the Holders of all of the Certificates, as applicable, entitled to at least 66%
of the Voting Rights for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Holders of such Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on the Underlying
Certificates which are required to be distributed on any Certificate without the
consent of the Holder of such Certificate, (ii) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in the immediately preceding clause (i), without the
consent of the Holders of Certificates of such Class evidencing at least 66% of
the Voting Rights allocated to such Class, or (iii) modify the consents required
by the immediately preceding clauses (i) and (ii) without the consent of the
Holders of all such Certificates then outstanding. Notwithstanding any other
provision of this Agreement, for purposes of the giving or withholding of
consents pursuant to this Section 9.01, Certificates registered in the name of
the Depositor or the Trustee or any Affiliate thereof shall be entitled to
Voting Rights with respect to matters affecting such Certificates.
Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, at the expense of the party seeking such
amendment, to the effect that such amendment will not result in the imposition
of any tax on any REMIC created hereunder or cause any such REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding.
Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment to each Certificateholder and to the Rating
Agency.
It shall not be necessary for the consent of Certificateholders under
this Section 9.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
<PAGE>
-58-
The cost of any Opinion of Counsel to be delivered pursuant to this
Section 9.01 shall be borne by the Person seeking the related amendment, but in
no event shall such Opinion of Counsel be an expense of the Trustee.
The Trustee may, but shall not be obligated to enter into any amendment
pursuant to this Section that affects its rights, duties and immunities under
this Agreement or otherwise.
Section 9.02. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as provided above, and unless also the Holders of the
Related Certificates or the Holders of all of the Certificates, as applicable,
entitled to at least 25% of the Voting Rights shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 15 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. It is understood and intended,
and expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatsoever by virtue of any provision of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder, or to enforce any right under this Agreement, except
in the manner herein provided and for the equal, ratable and common benefit of
all Certificateholders. For the protection and enforcement of the provisions of
this Section, each and every Certificateholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Section 9.03. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES
<PAGE>
-59-
HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 9.04. NOTICES. All directions, demands and notices hereunder
shall be in writing and shall be deemed to have been duly given when received if
personally delivered at or mailed by first class mail, postage prepaid, or by
express delivery service or delivered in any other manner specified herein, to
(a) in the case of the Depositor, Salomon Brothers Mortgage Securities VII,
Inc., Seven World Trade Center, New York, New York 10048, Attention: Mortgage
Finance Group (telecopy number (212) 783-3895), or to such other address as may
hereafter be furnished to the Trustee in writing by the Depositor; (b) in the
case of the Trustee, Bankers Trust Company, 4 Albany Street, New York 10006,
Attention: Salomon Brothers Mortgage Securities VII, Inc. Trust Certificates,
Series 1996-6 (telecopier number: (212) 250-1185), or such other address as may
hereafter be furnished to the Depositor in writing by the Trustee. Any notice
required or permitted to be mailed to a Certificateholder shall be given by
first class mail, postage prepaid, at the address of such Holder as shown in the
Certificate Register. Any notice so mailed to a Holder within the time
prescribed in this Agreement shall be conclusively presumed to have been duly
given whether or not the Certificateholder receives such notice. A copy of any
notice telecopied hereunder shall be mailed to the appropriate party in the
manner set forth above.
Section 9.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 9.06. NOTICE TO RATING AGENCIES. Without limiting any other
provision hereunder requiring notice to or a response from the Rating Agency,
the Trustee shall use reasonable efforts promptly to provide notice to the
Rating Agency with respect to each of the following of which it has actual
knowledge:
1. Any material change or amendment to this Agreement;
2. The occurrence of any default that has not been cured or
waived;
3. The resignation or termination of the Trustee;
4. The final payment to the Holders of any Class of Certificates;
and
5. Any change in the location of the Certificate Account.
The Trustee shall promptly furnish to the Rating Agency copies of each
report to Certificateholders described in Section 3.03 and copies of each annual
statement as to compliance described in Section 8.01(h).
<PAGE>
-60-
Any such notice pursuant to this Section 9.06 shall be in writing and
shall be deemed to have been duly given if personally delivered at or mailed by
first class mail, postage prepaid, or by express delivery service to Standard &
Poor's Ratings Services, 26 Broadway, New York, New York 10004, or such other
addresses as the Rating Agency may designate in writing to the parties hereto.
Section 9.07. ARTICLE AND SECTION REFERENCES. All article and section
references used in this Agreement, unless otherwise provided, are to articles
and sections in this Agreement.
Section 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in one or more counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other party.
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
By: /s/ Gregory P. Petroski
---------------------------------------
Name: Gregory P. Petroski
Title: Assistant Vice President
BANKERS TRUST COMPANY,
as Trustee
By: /s/ Mary Bellissimo
---------------------------------------
Name: Mary Bellissimo
Title: Assistant Secretary
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 1996 before me, a notary public in and for
said State, personally appeared Gregory P. Petroski, known to me to be an
Assistant Vice President of Salomon Brothers Mortgage Securities VII, Inc., one
of the corporations that executed the within instrument, and also known to me to
be the person who executed it on behalf of said corporation, and acknowledged to
me that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
______________________________
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30th day of December, 1996 before me, a notary public in and
for said State, personally appeared Mary Bellissimo, known to me to be
a(n) Assistant Secretary of Bankers Trust Company, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_____________________________
Notary Public
[Notarial Seal]
<PAGE>
EXHIBIT A-1
FORM OF REGULAR CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986 (THE "CODE").
THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID")
RULES TO THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS
DECEMBER 30, 1996. BASED ON THE OID REGULATIONS AND ASSUMING THAT THE
UNDERLYING CERTIFICATES PREPAY IN ACCORDANCE WITH THE PREPAYMENT
ASSUMPTION PROVIDED IN THE AGREEMENT REFERRED TO HEREIN (THE
"AGREEMENT"), THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $___
OF OID PER $1,000 OF INITIAL [CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL
AMOUNT], THE YIELD TO MATURITY IS _____% AND THE AMOUNT OF OID
ATTRIBUTABLE TO THE INITIAL INTEREST ACCRUAL PERIOD IS NOT MORE THAN
$____ PER $1,000 OF INITIAL [CERTIFICATE PRINCIPAL BALANCE] [NOTIONAL
AMOUNT], COMPUTED UNDER THE EXACT METHOD. NO REPRESENTATION IS MADE
THAT THE UNDERLYING CERTIFICATES WILL PREPAY AT A RATE THAT IS BASED ON
SUCH PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
[THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION AND MAY NOT BE RESOLD OR TRANSFERRED
UNLESS IT IS REGISTERED OR QUALIFIED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION AND QUALIFICATION UNDER SUCH ACT AND LAWS AND IS
TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE
AGREEMENT.]
[DISTRIBUTIONS IN] REDUCTION OF THE [CERTIFICATE PRINCIPAL BALANCE]
[NOTIONAL AMOUNT] OF THIS CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING [CERTIFICATE PRINCIPAL BALANCE]
[NOTIONAL AMOUNT] HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
HEREIN AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
Series 1996-6, Class ___ Aggregate [Certificate Principal
Balance] [Notional Amount] of Class
[Variable] Pass-Through Rate: ___ Certificates as of the Issue
[_____% per annum] Date: $____________
Date of Trust Agreement: Denomination: $____________
December 30, 1996
Trustee: Bankers Trust Company
First Distribution Date: January 30, 1997
Issue Date: December 30, 1996
No. _____
CUSIP No. ____________
TRUST CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of the Underlying Certificates, such Trust Fund formed and the Underlying
Certificates deposited therein by
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING CERTIFICATES ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
This certifies that __________________________ is the registered
owner of a Percentage Interest (obtained by dividing the denomination of this
Certificate by the aggregate [Certificate Principal Balance] [Notional Amount]
of the Class ___ Certificates as of the Issue Date, both as specified above) in
that certain beneficial ownership interest evidenced by all of the Class ___
Certificates in the Trust Fund created pursuant to a Trust Agreement, dated as
specified above (the "Agreement"), between Salomon Brothers Mortgage Securities
VII, Inc. (hereinafter called the "Depositor", which term includes any successor
entity under the Agreement) and the Trustee specified above, a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
<PAGE>
-3-
Pursuant to the terms of the Agreement, distributions will be
made on the 30th day of each calendar month (or, in the case of February, the
last day of such month) or, if such day is not a business day, the first
Business Day thereafter (a "Distribution Date"), commencing on the First
Distribution Date specified above, to the Person in whose name this Certificate
is registered on the last Business Day of the month immediately preceding the
month with respect to which such Distribution Date occurs (the "Record Date"),
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to the Holders of the
Class ___ Certificates on such Distribution Date pursuant to the Agreement.
Reference is hereby made to the further provisions of this Certificate and the
Agreement, which further provisions shall for all purposes have the same effect
as though fully set forth at this place.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the related Record Date and is the registered
owner of Certificates the aggregate initial Certificate Principal Balance or
Notional Amount of which is in excess of $5,000,000, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as the
name and address of such Person shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Trust Certificates of the Series specified on the
face hereof (herein called the "Trust Certificates"). The Trust Certificates are
limited in right of payment to certain collections and recoveries respecting the
Underlying Certificates, all as more specifically set forth herein and in the
Agreement. As provided in the Agreement, withdrawals from the Certificate
Account may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including compensation to the Trustee and
reimbursement of certain expenses incurred with respect to the Trust Fund.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor and the
Trustee with the consent of the Holders of the Related Certificates or the
Holders of all of the Certificates, as applicable, entitled to at least 66% of
the Voting Rights. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Trust Certificates.
<PAGE>
-4-
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class, and in authorized denominations evidencing the same aggregate
Percentage Interest, will be issued to the designated transferee or transferees.
[No transfer of this Certificate shall be made unless that transfer
is made pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the "1933 Act"), and effective registration or
qualification under applicable state securities laws, or is made in a
transaction which does not require such registration or qualification. In the
event that such a transfer of this Certificate is to be made without
registration or qualification, the Trustee and the Certificate Registrar will
require receipt of (i) if such transfer is purportedly being made in reliance
upon Rule 144A under the 1933 Act, written certifications from the
Certificateholder desiring to effect the transfer, and from such
Certificateholder's prospective transferee, substantially in the forms attached
to the Agreement as Exhibit C-1 and (ii) in all other cases, an Opinion of
Counsel satisfactory to the Trustee that such transfer may be made without such
registration or qualification (which Opinion of Counsel shall not be an expense
of the Trust Fund or of the Depositor or the Trustee), together with copies of
the written certification(s) of the Certificateholder (including that such
transfer is purportedly being made in reliance upon Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the 1933 Act) desiring to effect the transfer and/or
such Certificateholder's prospective transferee upon which such Opinion of
Counsel is based, if any. None of the Depositor, the Certificate Registrar or
the Trustee is obligated to register or qualify this Certificate under the 1933
Act or any other securities laws or to take any action not otherwise required
under the Agreement to permit the transfer of this Certificate without
registration or qualification. Any Certificateholder desiring to effect a
transfer of this Certificate shall be required to indemnify the Trustee, the
Depositor and the Certificate Registrar against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.]
The Trust Certificates are issuable in fully registered form only
without coupons in denominations representing Percentage Interests specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, and in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Trust Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Trust Certificates.
<PAGE>
-5-
The Depositor, the Trustee and the Certificate Registrar and any
agent of the Depositor, the Trustee or the Certificate Registrar may treat the
Person in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the final
payment (or any advance with respect thereto) on the Underlying Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.
Dated:
BANKERS TRUST COMPANY,
as Trustee
By _____________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class ___ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Certificate Registrar
By: ___________________________________
Authorized Signatory
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Trust Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
______________________________________________________________________ for the
account of _________________________________________________ account number
____________________________, or, if mailed by check, to ______________________
_______________________________. Applicable statements should be mailed to
__________________________________________________.
This information is provided by________________________________________
_______________________________________________, the assignee named above, or
___________________________, as its agent.
<PAGE>
EXHIBIT A-2
FORM OF RESIDUAL CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" ("REMIC"), AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF THE AGREEMENT REFERRED TO
HEREIN (THE "AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT
ARRANGEMENT SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED, OR THE CODE WILL BE REGISTERED EXCEPT IN COMPLIANCE WITH THE PROCEDURES
DESCRIBED HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES (I) AN AFFIDAVIT TO THE TRUSTEE THAT (A)
SUCH TRANSFEREE IS NOT (1) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION
THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY
OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (2) ANY ORGANIZATION (OTHER THAN A
COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX
IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX
IMPOSED BY SECTION 511 OF THE CODE, (3) ANY ORGANIZATION DESCRIBED IN SECTION
1381(A)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(1), (2) OR (3) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION")
OR (4) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (B) NO PURPOSE OF SUCH
TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND (II) SUCH
TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL
CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE
CERTIFICATE REGISTER OF ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE
<PAGE>
-2-
BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH AND THE PROVISIONS OF SECTION 4.02 OF THE AGREEMENT. ANY PERSON THAT
IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP
OF THIS CERTIFICATE.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED OR
QUALIFIED PURSUANT TO SUCH ACT AND LAWS OR IS SOLD OR TRANSFERRED IN
TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION AND QUALIFICATION UNDER SUCH ACT
AND LAWS AND IS TRANSFERRED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 4.02 OF
THE AGREEMENT.
Series 1996-6 Percentage Interest: _____%
Class _____ Trustee: Bankers Trust Company
Date of Trust Agreement:
December 30, 1996 Issue Date: December 30, 1996
First Distribution Date: No. ____
January 30, 1997
TRUST CERTIFICATE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of the Underlying Certificates, such Trust Fund formed and the Underlying
Certificates deposited therein by
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR
INTEREST IN SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER
THIS CERTIFICATE NOR THE UNDERLYING CERTIFICATES ARE
GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
STATES.
<PAGE>
-3-
This certifies that __________________________ is the registered owner
of the Percentage Interest specified above in that certain beneficial ownership
interest evidenced by all of the Class _____ Certificates in the Trust Fund
created pursuant to a Trust Agreement, dated as specified above (the
"Agreement"), between Salomon Brothers Mortgage Securities VII, Inc.
(hereinafter called the "Depositor", which term includes any successor entity
under the Agreement) and the Trustee specified above, a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.
Pursuant to the terms of the Agreement, distributions will be made on
the 30th day of each calendar month (or, in the case of February, the last day
of such month) or, if such day is not a business day, the first Business Day
thereafter (a "Distribution Date"), commencing on the First Distribution Date
specified above, to the Person in whose name this Certificate is registered on
the last Business Day of the month immediately preceding the month with respect
to which such Distribution Date occurs (the "Record Date"), in an amount equal
to the product of the Percentage Interest evidenced by this Certificate and the
amount required to be distributed to the Holders of the Class _____ Certificates
on such Distribution Date pursuant to the Agreement. Reference is hereby made to
the further provisions of this Certificate and the Agreement, which further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Trustee by
wire transfer in immediately available funds to the account of the Person
entitled thereto if such Person shall have so notified the Trustee in writing at
least five Business Days prior to the related Record Date and is the registered
owner of Certificates the aggregate initial Certificate Principal Balance or
Notional Amount of which is in excess of $5,000,000, or otherwise by check
mailed by first class mail to the address of the Person entitled thereto, as the
name and address of such Person shall appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
appointed by the Trustee for that purpose as provided in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as Trust Certificates of the Series specified on the face hereof
(herein called the "Trust Certificates"). The Trust Certificates are limited in
right of payment to certain collections and recoveries respecting the Underlying
Certificates, all as more specifically set forth herein and in the Agreement. As
provided in the Agreement, withdrawals from the Certificate Account may be made
from time to time for purposes other than distributions to Certificateholders,
such purposes including compensation to the Trustee and reimbursement of certain
expenses incurred with respect to the Trust Fund.
<PAGE>
-4-
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Certificateholders under the
Agreement at any time by the Depositor and the Trustee with the consent of the
Holders of the Related Certificates or the Holders of all of the Certificates,
as applicable, entitled to at least 66% of the Voting Rights. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Trust Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class, and in authorized denominations evidencing the same aggregate
Percentage Interest, will be issued to the designated transferee or transferees.
No transfer of this Certificate shall be made unless that transfer is
made pursuant to an effective registration statement under the Securities Act of
1933, as amended (the "1933 Act"), and effective registration or qualification
under applicable state securities laws, or is made in a transaction which does
not require such registration or qualification. In the event that such a
transfer of this Certificate is to be made without registration or
qualification, such transfer may only be made in reliance upon Rule 144A under
the 1933 Act and the Trustee and the Certificate Registrar will require receipt
of written certifications from the Certificateholder desiring to effect the
transfer, and from such Certificateholder's prospective transferee,
substantially in the forms attached to the Agreement as Exhibit C-1. None of the
Depositor, the Certificate Registrar or the Trustee is obligated to register or
qualify this Certificate under the 1933 Act or any other securities laws or to
take any action not otherwise required under the Agreement to permit the
transfer of this Certificate without registration or qualification. Any
Certificateholder desiring to effect a transfer of this Certificate shall be
required to indemnify the Trustee, the Depositor and the Certificate Registrar
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.
No transfer of this Certificate or any interest herein shall be made
to any Plan subject to ERISA or Section 4975 of the Code, any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss.2510.3- 101 ("Plan Assets")
unless the Depositor and the Trustee are provided with an Opinion of Counsel
which establishes to the satisfaction of the Depositor and the Trustee that the
purchase of this Certificate is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the
<PAGE>
-5-
Depositor, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which Opinion of Counsel shall
not be an expense of the Depositor, the Trustee or the Trust Fund. In lieu of
such Opinion of Counsel, a Plan, any Person acting, directly or indirectly, on
behalf of any such Plan or any Person acquiring this Certificate with Plan
Assets of a Plan may provide a certification in the form of Exhibit D to the
Agreement, which the Trustee may rely upon without further inquiry or
investigation. Neither an Opinion of Counsel nor a certification will be
required in connection with the initial transfer of this Certificate by the
Depositor to an affiliate of the Depositor (in which case, the Depositor or any
affiliate thereof shall have deemed to have represented that such affiliate is
not a Plan or a Person investing Plan Assets of any Plan) and the Trustee shall
be entitled to conclusively rely upon a representation (which, upon the request
of the Trustee, shall be a written representation) from the Depositor of the
status of such transferee as an affiliate of the Depositor.
Prior to registration of any transfer, sale or other disposition of
this Certificate, the proposed transferee shall provide to the Trustee (i) an
affidavit to the effect that such transferee is any Person other than a
Disqualified Organization or the agent (including a broker, nominee or
middleman) of a Disqualified Organization and (ii) a certificate which
acknowledges that (A) the Class _____ Certificates have been designated as a
residual interest in a real estate mortgage investment conduit (a "REMIC"), (B)
it will include in its income a PRO RATA share of the net income of the Trust
Fund and that such income may be an "excess inclusion", as defined in the Code,
that, with certain exceptions, cannot be offset by other losses or benefits from
any tax exemption, and (C) it expects to have the financial means to satisfy all
of its tax obligations including those relating to holding the Class _____
Certificates. Notwithstanding the registration in the Certificate Register of
any transfer, sale or other disposition of this Certificate to a Disqualified
Organization or an agent (including a broker, nominee or middleman) of a
Disqualified Organization, such registration shall be deemed to be of no legal
force or effect whatsoever and such Person shall not be deemed to be a
Certificateholder for any purpose, including, but not limited to, the receipt of
distributions in respect of this Certificate.
The Holder of this Certificate, by its acceptance hereof, shall be
deemed to have consented to the provisions of Section 4.02 of the Agreement and
to any amendment of the Agreement deemed necessary by counsel of the Depositor
to ensure that the transfer of this Certificate to any Person other than a
Permitted Transferee or any other Person will not cause the related REMIC to
cease to qualify as a REMIC or cause the imposition of a tax upon such REMIC.
The Trust Certificates are issuable in fully registered form only
without coupons in denominations representing Percentage Interests specified in
the Agreement. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class, and in authorized denominations evidencing the same aggregate
Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of transfer
or exchange of Trust Certificates, but the Trustee may require payment of a sum
sufficient to cover
<PAGE>
-6-
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Trust Certificates.
The Depositor, the Trustee and the Certificate Registrar and any agent
of the Depositor, the Trustee or the Certificate Registrar may treat the Person
in whose name this Certificate is registered as the owner hereof for all
purposes, and neither the Depositor, the Trustee, the Certificate Registrar nor
any such agent shall be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund created
thereby shall terminate upon payment (or provision for payment) to the
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the final
payment (or any advance with respect thereto) on the Underlying Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Trustee assumes no responsibility for their correctness.
Unless the certificate of authentication hereon has been executed by
the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
BANKERS TRUST COMPANY,
as Trustee
By______________________________________
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class _____ Certificates referred to in the
within-mentioned Agreement.
BANKERS TRUST COMPANY,
as Certificate Registrar
By:____________________________________
Authorized Signatory
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - CUSTODIAN
-------------
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts
to Minors Act
JT TEN - as joint tenants with right _________________
if survivorship and not as (State)
tenants in common
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee)
the Percentage Interest evidenced by the within Trust Certificate and hereby
authorize(s) the registration of transfer of such interest to assignee on the
Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:__________________________
_______________________________________________________________________________.
Dated:
_______________________________________
Signature by or on behalf of assignor
_______________________________________
Signature Guaranteed
<PAGE>
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to__________________________________________________
______________________________________________________________________ for the
account of _________________________________________________ account number
____________________________, or, if mailed by check, to ______________________
_______________________________. Applicable statements should be mailed to
__________________________________________________.
This information is provided by________________________________________
_______________________________________________, the assignee named above, or
___________________________, as its agent.
<PAGE>
EXHIBIT B-1
<TABLE>
UNDERLYING CERTIFICATE SCHEDULE
<CAPTION>
=============================================================================================================================
Approximate
Related Initial Certificate Factor as of the
Certificates Designation Principal Balance Closing Date
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class 6A Salomon Brothers Mortgage
Securities VII, Inc.
Mortgage Pass-Through Certificates
Series 1995-1
- -----------------------------------------------------------------------------------------------------------------------------
Class A-5 $17,978,000 1.00000000
- -----------------------------------------------------------------------------------------------------------------------------
Class 6B CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1996-F
- -----------------------------------------------------------------------------------------------------------------------------
Class A-3(1) $24,322,447 0.86365101
- -----------------------------------------------------------------------------------------------------------------------------
Class 6C CWMBS, Inc.
Mortgage Pass-Through Certificates
Series 1996-K
- -----------------------------------------------------------------------------------------------------------------------------
Class A-3(1) $10,016,163 0.91532388
- -----------------------------------------------------------------------------------------------------------------------------
Class 6D Residential Accredit Loans, Inc.
Mortgage Pass-Through Certificates
Series 1996-QS5
- -----------------------------------------------------------------------------------------------------------------------------
Class A-I-1 $23,848,000 0.93434233
- -----------------------------------------------------------------------------------------------------------------------------
Class 6E DLJ Mortgage Acceptance Corp.
Mortgage Pass-Through Certificates
Series 1995-Q2
- -----------------------------------------------------------------------------------------------------------------------------
Class A-2 $18,425,057 0.69777628
Class A-3 $12,692,819 1.00000000
- -----------------------------------------------------------------------------------------------------------------------------
Class 6F Bear Stearns Mortgage Securities Inc.
Mortgage Pass-Through Certificates
Series 1996-1
- -----------------------------------------------------------------------------------------------------------------------------
Class A-2 $17,133,947 0.78905953
- -----------------------------------------------------------------------------------------------------------------------------
Class 6G Bear Stearns Mortgage Securities Inc.
Mortgage Pass-Through Certificates
Series 1996-4
- -----------------------------------------------------------------------------------------------------------------------------
Class A-I-2(1) $19,904,000 0.93893144
- -----------------------------------------------------------------------------------------------------------------------------
Class 6H GE Capital Mortgage Services, Inc.
REMIC Mortgage Multi-Class
Pass-Through Certificates
Series 1993-11
- -----------------------------------------------------------------------------------------------------------------------------
Class 11-A5 $7,518.947 0.74492897
Class 11-A6 $1,156,761 0.74492897
Class 11-A7 $3,229,292 0.74492897
<PAGE>
<CAPTION>
-2-
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class 6I Residential Funding Mortgage
Securities I, Inc.
Mortgage Pass-Through Certificates
Series 1993-S23
- -----------------------------------------------------------------------------------------------------------------------------
Class A-13 $15,531,578 0.73888492
Class A-14 $7,168,422 0.73888492
- -----------------------------------------------------------------------------------------------------------------------------
Class 6J Residential Funding Mortgage
Securities I, Inc.
Mortgage Pass-Through Certificates
Series 1993-S25
- -----------------------------------------------------------------------------------------------------------------------------
Class A-4(1) $15,000,000 0.61753353
Class A-5(1) $5,769,230 0.61753353
- -----------------------------------------------------------------------------------------------------------------------------
Class 6K Bear Stearns Mortgage Securities Inc.
Mortgage Pass-Through Certificates
Series 1993-14
- -----------------------------------------------------------------------------------------------------------------------------
Class A-7, PAC Principal Component $2,458,000 1.00000000
Class A-7, SAC Principal Component $14,803,000 0.94957819
Class A-7, TAC Principal Component 1 $3,235,000 0.12407574
Class A-7, TAC Principal Component 2 $14,505,000 1.00000000
- -----------------------------------------------------------------------------------------------------------------------------
Class 6L Residential Funding Securities
Corporation
Mortgage Pass-Through Certificates
Series 1996-KS4
- -----------------------------------------------------------------------------------------------------------------------------
Class A-I-2 $35,203,000 1.00000000
Class A-I-3(1) $5,449,000 1.00000000
Class A-I-4 $11,675,000 1.00000000
Class A-I-5 $7,071,000 1.00000000
=============================================================================================================================
</TABLE>
- ---------------------
(1) Does not represent a percentage interest equal to 100% in the related
class of certificates.
<PAGE>
-3-
n EXHIBIT B-2
SCHEDULE OF POOLING AND SERVICING AGREEMENTS
1. The Pooling and Servicing Agreement, dated as of January 1, 1995, among
Salomon Brothers Mortgage Securities VII, Inc., as depositor, Option
One Mortgage Corporation, as successor to Plaza Home Mortgage Servicing
Corporation, as master servicer, and Bankers Trust Company, as trustee.
2. The Pooling and Servicing Agreement, dated as of April 1, 1996, among
CWMBS, Inc., as depositor, Independent National Mortgage Corporation,
as seller and master servicer and The Bank of New York, as trustee.
3. The Pooling and Servicing Agreement, dated as of September 1, 1996,
among CWMBS, Inc., as depositor, Independent National Mortgage
Corporation, as seller and master servicer, and The Bank of New York,
as trustee.
4. The Pooling and Servicing Agreement, dated as of September 1, 1996,
among Residential Accredit Loans, Inc., as depositor, Residential
Funding Corporation, as seller and master servicer, and The First
National Bank of Chicago, as trustee.
5. The Pooling and Servicing Agreement, dated as of February 1, 1995,
among DLJ Mortgage Acceptance Corp., as depositor, Lomas Mortgage USA,
Inc., as master servicer, and Bankers Trust Company, as trustee.
6. The Pooling and Servicing Agreement, dated as of February 1, 1996,
among Bear Stearns Mortgage Securities Inc., as depositor, ICI Funding
Corporation, as seller and master servicer, and Bankers Trust Company
of California, N.A., as trustee.
7. The Pooling and Servicing Agreement, dated as of September 1, 1996,
among Bear Stearns Mortgage Securities Inc., as depositor, ICI Funding
Corporation, as seller and master servicer, and Bankers Trust Company
of California, N.A., as trustee .
8. The Pooling and Servicing Agreement, dated as of September 1, 1993,
among GE Capital Mortgage Services, Inc., as seller and servicer, and
State Street Bank and Trust Company, as trustee.
9. The Pooling and Servicing Agreement, dated as of June 1, 1993, among
Residential Funding Mortgage Securities I, Inc., as depositor,
Residential Funding Corporation, as seller and master servicer, and
Bankers Trust Company, as trustee.
10. The Pooling and Servicing Agreement, dated as of July 1, 1993, among
Residential Funding Mortgage Securities I, Inc., as depositor,
Residential Funding Corporation, as seller and master servicer, and
Bankers Trust Company of California, N.A., as trustee.
<PAGE>
11. The Pooling and Servicing Agreement, dated as of August 1, 1993, among
Bear Stearns Mortgage Securities Inc., as the company, Countrywide
Mortgage Conduit, Inc., as master servicer, and State Street Bank and
Trust Company, as trustee.
12. The Pooling and Servicing Agreement, dated as of September 1, 1996,
among Residential Asset Securities Corporation, as the Company,
Residential Funding Corporation, as master servicer, and First National
Bank of Chicago, as trustee.
<PAGE>
EXHIBIT C-1
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
Seven World Trade Center
New York, New York 10048
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: Salomon Brothers Mortgage Securities VII, Inc.
Trust Certificates, Series 1996-6, Class 6L-___
Percentage Interest equal to _____%
Ladies and Gentlemen:
In connection with the transfer by ________________ (the
"Transferor") to ________________ (the "Transferee") of the captioned trust
certificates (the "Certificates"), the Transferor hereby certifies that neither
the Transferor nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Certificate, any interest in any
Certificate or any other similar security to any person in any manner, (b) has
solicited any offer to buy or to accept a pledge, disposition or other transfer
of any Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, (e)
has taken any other action, that (in the case of each of subclauses (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933, as amended (the "1933 Act"), or would render the
disposition of any Certificate a violation of Section 5 of the 1933 Act or any
state securities law or would require registration or qualification pursuant
thereto. The Transferor will not act, nor has it authorized or will it authorize
any person to act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Transferor will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of that
certain Trust Agreement, dated December 30, 1996 (the "Trust Agreement"),
between Salomon Brothers Mortgage Securities VII, Inc., as Depositor and Bankers
Trust Company, as Trustee, pursuant to which Trust Agreement the Certificates
were issued.
<PAGE>
-2-
Capitalized terms used but not defined herein shall have the
meanings assigned thereto in the Trust Agreement.
Very truly yours,
________________________________
PRINT NAME OF TRANSFEROR
By:_____________________________
Name:
Title:
<PAGE>
FORM OF TRANSFEREE REPRESENTATION LETTER
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
Seven World Trade Center
New York, New York 10048
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: Salomon Brothers Mortgage Securities VII, Inc.
Trust Certificates, Series 1996-6, Class 6L-___
Percentage Interest equal to _____%
Ladies and Gentlemen:
In connection with the purchase from ______________________ (the
"Transferor") on the date hereof of the captioned trust certificates (the
"Certificates"), _______________ (the "Transferee") hereby certifies as follows:
1. The Transferee is a "qualified institutional buyer" as that
term is defined in Rule 144A ("Rule 144A") under the Securities Act of
1933, as amended (the "1933 Act") and has completed either of the forms
of certification to that effect attached hereto as Annex 1 or Annex 2.
The Transferee is aware that the sale to it is being made in reliance
on Rule 144A. The Transferee is acquiring the Certificates for its own
account or for the account of a qualified institutional buyer and
understands that such Certificate may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that
the resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the 1933
Act.
<PAGE>
-2-
2. The Transferee has been furnished with all information
regarding (a) the Certificates and distributions thereon, (b) the
Underlying Certificates, (c) the Trust Agreement referred to below and
(d) any credit enhancement mechanism associated with the Certificates,
that it has requested.
3. The Transferee certifies either (check one)
____ (a) that it is neither (i) a Plan nor (ii) a Person
who is directly or indirectly purchasing the
Certificate on behalf of, as named fiduciary of, as
trustee of, or with assets of a Plan (including any
insurance company using funds in its general or
separate accounts that may constitute "plan assets")
or
____ (b) that (i) it is an insurance company and (ii) all
of the funds to be used by it to purchase the
Certificates to be purchased by it are held in its
general account and virtually all of the assets in
such general account are from the receipt of premiums
for the purchase of annuity contracts that provide in
part for (A) a benefit that is guaranteed throughout
the term of the contract and (B) a benefit that is
guaranteed for successive periods of at least twelve
months; however, benefits from premiums received
during any twelve month period may be guaranteed only
to the end of such twelve month period, and
thereafter for periods of twelve months or more.
If neither 3(a) nor 3(b) above is checked, the Transferee has delivered
the Trustee and the Certificate Registrar a certification of facts or
an Opinion of Counsel, subject in either case to such item being
satisfactory to the Trustee and the Certificate Registrar, establishing
that the transfer of the Certificates to the Transferee will not result
in a violation of Section 406 of ERISA or Section 4975 of the Code or
cause either the Trustee or the Certificate Registrar to be deemed a
fiduciary of a Plan or result in the imposition of an excise tax under
Section 4975 of the Code.
4. The Transferee was not formed for the purpose of investing
in the captioned Certificates nor did the shareholders, partners or
grantor, as the case may be, of the Transferee contribute additional
capital for the purpose of purchasing the captioned Certificates.
<PAGE>
Capitalized terms used but not defined herein have the respective
meanings assigned thereto in the Trust Agreement, dated December 30, 1996,
between Salomon Brothers Mortgage Securities VII, Inc., as Depositor, and
Bankers Trust Company, as Trustee, pursuant to which the Certificates were
issued.
Very truly yours,
____________________________________
PRINT NAME OF TRANSFEREE
By:_________________________________
Name:
Title:
<PAGE>
ANNEX 1 TO EXHIBIT C-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned hereby certifies as follows to the
"Transferor," the Depositor, Bankers Trust Company, as Trustee and Certificate
Registrar, with respect to the Certificates described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
entity purchasing the Certificates (the "Transferee").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as that term is defined in Rule
144A under the Securities Act of 1933 ("Rule 144A") because (i) the Transferee
owned and/or invested on a discretionary basis $________________1 in securities
(except for the excluded securities referred to below) as of the end of the
Transferee's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Transferee satisfies the criteria in the category
marked below.
___ CORPORATION, ETC. The Transferee is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or any
organization described in Section 501(c)(3) of the Internal
Revenue Code of 1986.
___ BANK. The Transferee (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, A COPY OF WHICH IS
ATTACHED HERETO.
___ SAVINGS AND LOAN. The Transferee (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least
- --------
1 Transferee must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Transferee is a dealer, and, in that case,
Transferee must own and/or invest on a discretionary basis at least $10,000,000
in securities.
<PAGE>
-2-
$25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
___ BROKER-DEALER. The Transferee is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Transferee is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
___ STATE OR LOCAL PLAN. The Transferee is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
___ ERISA PLAN. The Transferee is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
___ INVESTMENT ADVISOR. The Transferee is an investment advisor
registered under the Investment Advisers Act of 1940.
___ SBIC. The Transferee is a Small Business Investment Company
licensed by the U.S. Small Business Administration under
Section 301(c) or (d) of the Small Business Investment Act of
1958.
___ BUSINESS DEVELOPMENT COMPANY. The Transferee is a business
development company as defined in Section 202(a)(22) of
Investment Advisers Act of 1940.
___ TRUST FUND. The Transferee is a trust fund whose trustee is a
bank or trust company and whose participants are exclusively
(a) plans established and maintained by a State, its political
subdivisions or any agency or instrumentality of such State or
its political subdivisions, for the benefit of its employees,
or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is
not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Transferee, (ii) securities
that are part of an unsold allotment to or subscription by the Transferee, if
the Transferee is a dealer, (iii) securities issued or guaranteed by the U.S. or
any instrumentality thereof, (iv) bank deposit notes and certificates of
deposit, (v) loan participations, (vi) repurchase agreements, (vii) securities
owned but subject to a repurchase agreement and (viii) currency, interest rate
and commodity swaps.
<PAGE>
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Transferee, the
Transferee used the cost of such securities to the Transferee and did not
include any of the securities referred to in the preceding paragraph. Further,
in determining such aggregate amount, the Transferee may have included
securities owned by subsidiaries of the Transferee, but only if such
subsidiaries are consolidated with the Transferee in its financial statements
prepared in accordance with generally accepted accounting principles and if the
investments of such subsidiaries are managed under the Transferee's direction.
However, such securities were not included if the Transferee is a
majority-owned, consolidated subsidiary of another enterprise and the Transferee
is not itself a reporting company under the Securities Exchange Act of 1934.
5. The Transferee acknowledges that it is familiar with Rule
144A and understands that the Transferor and other parties related to the
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Transferee may be in reliance on Rule 144A.
___ ___ Will the Transferee be purchasing the Certificates
Yes No only for the Transferee's own account?
6. If the answer to the foregoing question is "no", the
Transferee agrees that, in connection with any purchase of securities sold to
the Transferee for the account of a third party (including any separate account)
in reliance on Rule 144A, the Transferee will only purchase for the account of a
third party that at the time is a "qualified institutional buyer" within the
meaning of Rule 144A. In addition, the Transferee agrees that the Transferee
will not purchase securities for a third party unless the Transferee has
obtained a current representation letter from such third party or taken other
appropriate steps contemplated by Rule 144A to conclude that such third party
independently meets the definition of "qualified institutional buyer" set forth
in Rule 144A.
7. The Transferee will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Unless such notice is given, the Transferee's purchase of the
Certificates will constitute a reaffirmation of this certification as of the
date of such purchase. In addition, if the Transferee is a bank or savings and
loan as provided above, the Transferee agrees that it will furnish to such
parties updated annual financial statements promptly after they become
available.
_________________________________
PRINT NAME OF TRANSFEREE
By:______________________________
Name:
Title:
Date:____________________________
<PAGE>
ANNEX 2 TO EXHIBIT C-1
----------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That Are Registered Investment Companies]
The undersigned hereby certifies as follows to the
"Transferor," the Depositor, Bankers Trust Company, as Trustee and Certificate
Registrar, with respect to the Certificates described in the Transferee
Certificate to which this certification relates and to which this certification
is an Annex:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the entity purchasing the
Certificates (the "Transferee") or, if the Transferee is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because the Transferee is part of a Family of
Investment Companies (as defined below), is such an officer of the investment
adviser (the "Adviser").
2. In connection with purchases by the Transferee, the
Transferee is a "qualified institutional buyer" as defined in Rule 144A because
(i) the Transferee is an investment company registered under the Investment
Company Act of 1940, and (ii) as marked below, the Transferee alone, or the
Transferee's Family of Investment Companies, owned at least $100,000,000 in
securities (other than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year. For purposes of determining the
amount of securities owned by the Transferee or the Transferee's Family of
Investment Companies, the cost of such securities was used.
____ The Transferee owned $___________________ in securities (other
than the excluded securities referred to below) as of the end
of the Transferee's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Transferee is part of a Family of Investment Companies
which owned in the aggregate $______________ in securities
(other than the excluded securities referred to below) as of
the end of the Transferee's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Transferee or are part of the
Transferee's Family of Investment Companies, (ii) securities issued or
guaranteed by the U.S. or any instrumentality thereof, (iii) bank deposit notes
and certificates of deposit, (iv) loan participations, (v) repurchase
agreements, (vi) securities owned but subject to a repurchase agreement and
(vii) currency, interest rate and commodity swaps.
<PAGE>
5. The Transferee is familiar with Rule 144A and understands
that the parties to which this certification is being made are relying and will
continue to rely on the statements made herein because one or more sales to the
Transferee will be in reliance on Rule 144A. In addition, the Transferee will
only purchase for the Transferee's own account.
6. The undersigned will notify the parties to which this
certification is made of any changes in the information and conclusions herein.
Unless such notice is given, the Transferee's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
______________________________________
PRINT NAME OF TRANSFEREE OR ADVISOR
By:___________________________________
Name:
Title:
IF AN ADVISER:
_____________________________________
PRINT NAME OF TRANSFEREE
Date: _______________________________
<PAGE>
EXHIBIT C-2
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
_________________, being first duly sworn, deposes, represents
and warrants:
1. That s/he is a/an ________________ of _____________ (the
"Owner"), a corporation duly organized and existing under the laws of
__________________, the record owner of Salomon Brothers Mortgage Securities
VII, Inc. Trust Certificates, Series 1996-6, Class ________ (the "Residual
Certificates"), on behalf of which s/he makes this affidavit. Capitalized terms
used but not defined herein have the respective meanings assigned thereto in the
Trust Agreement pursuant to which the Residual Certificates were issued.
2. That the Owner (i) is and will be a "Permitted Transferee"
as of _________ and (ii) is acquiring the Residual Certificates for its own
account or for the account of another Owner from which it has received an
affidavit in substantially the same form as this affidavit. A "Permitted
Transferee" is any person other than a "disqualified organization" or a
possession of the United States. For this purpose, a "disqualified organization"
means the United States, any state or political subdivision thereof, any agency
or instrumentality of any of the foregoing (other than an instrumentality all of
the activities of which are subject to tax and, except for the Federal Home Loan
Mortgage Corporation, a majority of whose board of directors is not selected by
any such governmental entity) or any foreign government, international
organization or any agency or instrumentality of such foreign government or
organization, any rural electric or telephone cooperative, or any organization
(other than certain farmers' cooperatives) that is generally exempt from federal
income tax unless such organization is subject to the tax on unrelated business
taxable income.
3. That the Owner is aware (i) of the tax that would be
imposed on transfers of the Residual Certificates to disqualified organizations
under the Internal Revenue Code of 1986 that applies to all transfers of the
Residual Certificates after March 31, 1988; (ii) that such tax would be on the
transferor, or, if such transfer is through an agent (which person includes a
broker, nominee or middleman) for a non-Permitted Transferee, on the agent;
(iii) that the person otherwise liable for the tax shall be relieved of
liability for the tax if the transferee furnishes to such person an affidavit
that the transferee is a Permitted Transferee and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false and; (iv) that
each of the Residual Certificates may be a "noneconomic residual interest"
within the meaning of proposed Treasury regulations promulgated under the Code
and that the transferor of a "noneconomic residual interest" will remain liable
for any taxes due with respect to the income on such residual interest, unless
no significant purpose of the transfer is to impede the assessment or collection
of tax.
<PAGE>
-2-
4. That the Owner is aware of the tax imposed on a
"pass-through entity" holding the Residual Certificates if at any time during
the taxable year of the pass-through entity a non-Permitted Transferee is the
record holder of an interest in such entity. (For this purpose, a "pass through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. That the Owner is aware that the Trustee will not register
the transfer of any Residual Certificate unless the transferee, or the
transferee's agent, delivers to the Trustee, among other things, an affidavit in
substantially the same form as this affidavit. The Owner expressly agrees that
it will not consummate any such transfer if it knows or believes that any of the
representations contained in such affidavit and agreement are false.
6. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificates will only be
owned, directly or indirectly, by an Owner that is a Permitted Transferee.
7. That the Owner's taxpayer identification number is
_______________.
8. That the Owner has reviewed the restrictions set forth on
the face of the Residual Certificates and the provisions of Section 4.02(d) of
the Trust Agreement under which the Residual Certificates were issued (in
particular, clauses (iii)(A) and (iii) (B) of Section 4.02(d) which authorize
the Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event that the Owner holds such Certificate
in violation of Section 4.02(d)); and that the Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. That the Owner is not acquiring and will not transfer the
Residual Certificates in order to impede the assessment or collection of any
tax.
10. That the Owner anticipates that it will, so long as it
holds the Residual Certificates, have sufficient assets to pay any taxes owed by
the holder of such Residual Certificates, and hereby represents to and for the
benefit of the person from whom it acquired the Residual Certificates that the
Owner intends to pay taxes associated with holding such Residual Certificates as
they become due, fully understanding that it may incur tax liabilities in excess
of any cash flows generated by the Residual Certificates.
11. That the Owner has no present knowledge that it may become
insolvent or subject to a bankruptcy proceeding for so long as it holds the
Residual Certificates.
12. That the Owner has no present knowledge or expectation
that it will be unable to pay any United States taxes owed by it so long as any
of the Certificates remain outstanding.
<PAGE>
-3-
13. That the Owner is not acquiring the Residual Certificates
with the intent to transfer the Residual Certificates to any person or entity
that will not have sufficient assets to pay any taxes owed by the holder of such
Residual Certificates, or that may become insolvent or subject to a bankruptcy
proceeding, for so long as the Residual Certificates remain outstanding.
14. That Owner will, in connection with any transfer that it
makes of the Residual Certificates, obtain from its transferee the
representations required by Section 4.02(d) of the Trust Agreement under which
the Residual Certificates were issued and will not consummate any such transfer
if it knows, or knows facts that should lead it to believe, that any such
representations are false.
15. That Owner will, in connection with any transfer that it
makes of the Residual Certificates, deliver to the Trustee an affidavit, which
represents and warrants that it is not transferring the Residual Certificates to
impede the assessment or collection of any tax and that it has no actual
knowledge that the proposed transferee: (i) has insufficient assets to pay any
taxes owed by such transferee as holder of the Residual Certificates; (ii) may
become insolvent or subject to a bankruptcy proceeding, for so long as the
Residual Certificates remains outstanding; and (iii) is not a "Permitted
Transferee".
16. That the Owner is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision thereof, or an
estate whose income is subject to United States federal income tax regardless of
its source, or a trust if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more United
States fiduciaries have the authority to control all substantial decisions of
the trust.
17. That the Owner is neither (a) a Plan nor (b) a Person who
is directly or indirectly purchasing the Residual Certificates on behalf of, as
named fiduciary of, as trustee of, or with assets of a Plan (including any
insurance company using funds in its general or separate accounts that may
constitute "plan assets").
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ________________, attested by its [Assistant] Secretary, this _____ day of
_____________, 199__.
_____________________________________
PRINT NAME OF OWNER
By:__________________________________
Name:________________________________
Title:_______________________________
ATTEST:
_______________________________
[Assistant] Secretary
Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a _____________ of the Owner, and acknowledged to me that
s/he executed the same as his/her free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this _____ day of
_____________, 199__.
_______________________________
NOTARY PUBLIC
<PAGE>
FORM OF TRANSFEROR AFFIDAVIT
STATE OF )
: ss. :
COUNTY OF )
____________________, being first duly sworn, deposes,
represents and warrants:
1. That s/he is a/an ___________________ of
_______________________ (the "Owner"), a __________________ duly organized and
existing under the laws of ____________________, transferor of Salomon Brothers
Mortgage Securities VII, Inc. Trust Certificates, Series 1996-6, Class ______
(the "Residual Certificates"), on behalf of which s/he makes this affidavit and
agreement.
2. That the Owner is not transferring the Residual
Certificates to impede the assessment or collection of any tax.
3. That the Owner has no actual knowledge that the Person
which is the proposed transferee (the "Purchaser") of the Residual Certificates
(i) has insufficient assets to pay any taxes owed by such proposed transferee as
holder of the Residual Certificates, (ii) may become insolvent or subject to a
bankruptcy proceeding, for so long as the Residual Certificates remain
outstanding or (iii) is not a Permitted Transferee.
4. That the Owner understands that the Purchaser has delivered
to the Trustee a transfer affidavit and agreement in the form attached as
Exhibit C-2 to the Trust Agreement pursuant to which the Residual Certificates
were issued (the "Trust Agreement"). The Owner does not know or believe that any
representation contained therein is false.
5. The Owner has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury regulations section 1.860E-1(c)(4)(i) and, as a result
of that investigation, the Owner has determined that the Purchaser has
historically paid its debts as they become due and has found no significant
evidence to indicate that the Purchaser will not continue to pay its debts as
they become due in the future. The Owner understands that the transfer of a
Residual Certificate may not be respected for United States income tax purposes
(and the Owner may continue to be liable for United States income taxes
associated therewith) unless the Owner has conducted such investigation.
6. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Trust Agreement.
<PAGE>
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its ___________________, attested by its [Assistant] Secretary, this _____ day
of _____________, 199__.
_____________________________________
PRINT NAME OF OWNER
By:__________________________________
Name:________________________________
Title:_______________________________
ATTEST:
______________________________
[Assistant] Secretary
Personally appeared before me the above-named _______________,
known or proved to me to be the same person who executed the foregoing
instrument and to be a _____________ of the Owner, and acknowledged to me that
s/he executed the same as his/her free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this _____ day of ___________,
199__.
______________________________
NOTARY PUBLIC
<PAGE>
EXHIBIT D
FORM OF CERTIFICATION WITH RESPECT TO ERISA AND THE CODE
[Date]
Salomon Brothers Mortgage Securities VII, Inc.
Seven World Trade Center
New York, New York 10048
Bankers Trust Company
Four Albany Street
New York, New York 10006
Re: Salomon Brothers Mortgage Securities VII, Inc.
Trust Certificates, Series 1996-6, Class ___
Percentage Interest Equal To ____%
----------------------------------------------
Dear Ladies and Gentlemen:
__________________________________ (the "Transferee") intends
to acquire from _____________________ (the "Transferor") the captioned
certificates (the "Certificates"), issued pursuant to a Trust Agreement (the
"Trust Agreement") dated December 30, 1996 between Salomon Brothers Mortgage
Securities VII, Inc., as depositor (the "Depositor"), and Bankers Trust Company,
as trustee (the "Trustee"). Capitalized terms used herein and not otherwise
defined shall have the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to,
and covenants with, the Depositor and the Trustee that either:
(1) The Certificates (i) are not being acquired by, and will
not be transferred to, any employee benefit plan within the meaning of
section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA") or other retirement arrangement, including individual
retirement accounts and annuities, Keogh plans and bank collective
investment funds and insurance company general or separate accounts in
which such plans, accounts or arrangements are invested, that is
subject to Section 406 of ERISA or Section 4975 of the Internal Revenue
Code of 1986 (the "Code") (any of the foregoing, a "Plan"), (ii) are
not being acquired with "plan assets" of a Plan within the meaning of
the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be
investing in plan assets within the meaning of the DOL regulation, 29
C.F.R. ss. 2510.3-101; or
(2) The purchase of the Certificates is permissible under
applicable law, will not constitute or result in any prohibited
transaction under ERISA or Section 4975 of the Code, will not subject
the Depositor or the Trustee to any obligation in addition to those
<PAGE>
-2-
undertaken in the Trust Agreement and, with respect to each source of
funds being used by the Transferee to acquire the Certificates (each
being referred to as a "Source") and the following statements in at
least one of (a), (b), (c), (d), (e) or (f) are accurate:
(a) the Transferee is an insurance company and (i)
the Source is assets of its "general account," (ii) the
conditions set forth in PTCE 95-60 issued by the DOL have been
satisfied and the purchase and holding of Certificates by or
on behalf of the Transferee are exempt under PTCE 95-60 and
(iii) the amount of reserves and liabilities for such general
account contracts held by or on behalf of any Plan do not
exceed 10% of the total reserves and liabilities of such
general account plus surplus as of the date hereof (for
purposes of this clause, all Plans maintained by the same
employer (or affiliate thereof) or employee organization are
deemed to be a single Plan) in connection with its purchase
and holding of such Certificates; or
(b) the Transferee is an insurance company and (i)
the Source is assets of its "general account," (ii) the
requirements of Section 401(c) of ERISA and the DOL
regulations to be promulgated thereunder ("401(c)
Regulations") have been satisfied and will continue to be
satisfied and (iii) the Transferee represents that it
understands that the operation of the general account after
_____________, ____ [December 31, 1998] may affect its ability
to continue to hold the Certificates after the date which is
18 months after the 401(c) Regulations become final and unless
a class exemption issued by the DOL or an exception under
Section 401(c) of ERISA is then available for the continued
holding of Certificates, if the assets of the general account
constitute Plan Assets, it will dispose of the Certificates
prior to the date which is 18 months after the 401(c)
Regulations become final; or
(c) the Transferee is an insurance company and (i)
the Source is an insurance company "pooled separate account,"
(ii) the conditions set forth in PTCE 90-1 issued by the DOL
have been satisfied and the purchase and holding of
Certificates by or on behalf of the Transferee are exempt
under PTCE 90-1 and (iii) there is no Plan whose assets in
such separate account exceed 10% of the total assets of such
separate account as of the date hereof (for purposes of this
clause, all Plans maintained by the same employer or employee
organization are deemed to be a single Plan); or
(d) the Transferee is a bank and (i) the Source is a
"collective investment fund" as described in Section IV(e) of
PTCE 91-38 with respect to which the bank is trustee, (ii) the
conditions set forth in PTCE 91-38 issued by the DOL have been
satisfied and the purchase and holding of Certificates by or
on behalf of the Transferee are exempt under PTCE 91-38 and
(iii) no Plan has assets invested in such collective
investment fund exceeding 10% of the total assets of such
collective investment fund as of the date hereof (for purposes
of
<PAGE>
-3-
this clause, all Plans maintained by the same employer or
employee organization are deemed to be a single Plan); or
(e) the Transferee is an "investment fund" described
in PTCE 84-14 and (i) the undersigned is a "QPAM" as defined
in PTCE 84-14, (ii) the conditions set forth in PTCE 84-14
issued by the DOL have been satisfied and will continue to be
satisfied and (iii) the purchase and holding of Certificates
by or on behalf of the Transferee are exempt under PTCE 84-14;
or
(f) the Transferee is an "INHAM" defined in PTCE
96-23 and (i) the conditions set forth in PTCE 96-23 issued by
the DOL have been satisfied and will continue to be satisfied
and (ii) the purchase and holding of Certificates by or on
behalf of the Transferee are exempt under PTCE 96-23.
Very truly yours,
___________________________________
PRINT NAME OF TRANSFEREE
By:________________________________
Name:
Title:
