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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): February 25, 1999
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
(AS DEPOSITOR UNDER THE TRUST AGREEMENT, DATED AS OF FEBRUARY 25, 1999,
PROVIDING FOR THE ISSUANCE OF TRUST CERTIFICATES, SERIES 1999-1)
Salomon Brothers Mortgage Securities VII, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-62737 13-3439681
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(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
390 Greenwich Street
New York, New York 10013
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 723-6391
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS
Description of the Certificates
On February 25, 1999, a single series of certificates, entitled Salomon
Brothers Mortgage Securities VII, Inc., Trust Certificates, Series 1999-1 (the
"Trust Certificates") was issued pursuant to the trust agreement attached hereto
as Exhibit 4.1, dated as of February 25, 1999, among Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor") and The Bank of New York as
trustee. The Trust Certificates consist of thirteen classes of certificates. The
Trust Certificates evidence in the aggregate the entire beneficial ownership
interest in a trust fund, consisting primarily of mortgage pass-through
certificates (the "Underlying Certificates") (as defined therein). The
Underlying Certificates represent a partial, senior interest in a separate trust
fund consisting primarily of a pool of residential mortgage loans having
original terms to maturity of up to 30 years. The Underlying Certificates have
an aggregate principal balance as of February 25, 1999 of $565,156.488. The
Trust Certificates were sold by the Depositor to Salomon Smith Barney Inc.
("Salomon"), an affiliate of the Depositor pursuant to an underwriting agreement
dated February 24, 1999, between the Depositor and Salomon.
The Certificates have the following initial Certificate Balances and
initial Pass-Through Rates:
Initial Certificate
Class Principal Balance Pass-through Rate
----- ----------------- -----------------
A-1 $ 161,500,000.00 6.50% per annum
A-2 $ 1,000,000.00 8.00(1)% per annum
A-3 $ 15,775,000.00 6.00% per annum
A-4 $ 59,300,000.00 6.50% per annum
A-5 $ 260,032,000.00 6.50% per annum
A-6 $ 10,000,000.00 6.50% per annum
A-7 $ 26,999,388.42 6.50% per annum
A-8 $ 9,400,000.00 6.75% per annum
A-9 $ 7,800,000.00 6.75% per annum
A-10 $ 7,373,000.00 6.75% per annum
A-11 $ 4,977,000.00 6.75% per annum
A-12 $ 1,000,000.00 6.50(2)% per annum
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R $100.00 N/A
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(1) The Class A-2 Certificates will accrue interest at a Pass-Through Rate of
8.00% per annum effective for distributions made on the first Distribution
Date up to and including the Distribution Date in February 2000, a
Pass-Through Rate of 6.75% per annum effective for distributions made on
the Distribution Date in March 2000 up to and including the Distribution
Date in February 2001, and thereafter, at a Pass-Through Rate of 6.50% per
annum.
(2) The Class A-12 Certificates will accrue interest at a Pass-Through Rate of
6.50% per annum effective for distributions made on the first Distribution
Date up to and including the Distribution Date in February 2000, a
Pass-Through Rate of 6.75% per annum effective for distributions made on
the Distribution Date in March 2000 up to and including the Distribution
Date in February 2001, and thereafter, at a Pass-Through Rate of 7.00% per
annum.
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
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4.1 Trust Agreement, dated as of
February 25, 1999, between Salomon
Brothers Mortgage Securities VII,
Inc. as Depositor and The Bank of
New York as Trustee relating to
Salomon Brothers Mortgage Securities
VII, Inc., Trust Certificates,
Series 1999-1.
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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/ Vincent J. Varca
----------------------------
Name: Vincent J. Varca
Title: Assistant Vice President
Dated: February 25, 1999
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INDEX TO EXHIBITS
Sequentially
Exhibit No. Description Numbered Page
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4.1 Trust Agreement, dated as of February 25, 6
1999, between Salomon Brothers Mortgage Securities
VII, Inc. as Depositor and The Bank of New York as
Trustee relating to Salomon Brothers Mortgage
Securities VII, Inc., Trust Certificates, Series
1999-1.
Exhibit 4.1
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SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
and
THE BANK OF NEW YORK,
Trustee
-----------------------------------------
TRUST AGREEMENT
Dated as of February 25, 1999
-----------------------------------------
$565,156,488
Trust Certificates
Series 1999-1
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<PAGE>
TABLE OF CONTENTS
Section Page
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ARTICLE I
DEFINITIONS..........................................................2
Affiliate............................................................2
Available Funds......................................................2
Book-Entry Certificate...............................................2
Book-Entry Custodian.................................................3
Business Day.........................................................3
Certificate..........................................................3
Certificate Account..................................................3
Certificate Factor...................................................3
Certificate Owner....................................................3
Certificate Principal Balance........................................3
Certificate Register and Certificate Registrar.......................3
Certificateholder or Holder..........................................3
Class ............................................................4
Class A Certificate..................................................4
Class A-1 Certificate................................................4
Class A-2 Certificate................................................4
Class A-3 Certificate................................................4
Class A-4 Certificate................................................4
Class A-5 Certificate................................................4
Class A-6 Certificate................................................4
Class A-7 Certificate................................................4
Class A-8 Certificate................................................5
Class A-9 Certificate................................................5
Class A-10 Certificate...............................................5
Class A-11 Certificate...............................................5
Class A-12 Certificate...............................................5
Class R Certificate..................................................5
Closing Date.........................................................5
Code ............................................................5
Commission...........................................................5
Corporate Trust Office...............................................5
CWMBS Subordinate Certificate........................................5
Deceased Owner.......................................................5
Definitive Certificates..............................................6
Depositor............................................................6
Depository...........................................................6
Depository Participant...............................................6
Disqualified Organization............................................6
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Section Page
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Distribution Date....................................................6
DTC ............................................................6
Eligible Investments.................................................7
ERISA ............................................................8
Extraordinary Trust Fund Expenses....................................8
Final Distribution Date..............................................9
Freddie Mac..........................................................9
Holder ............................................................9
Interest Accrual Period..............................................9
Interest Distribution Amount.........................................9
Interest Reserve Amount..............................................9
Interest Shortfalls.................................................10
Living Owner........................................................10
Lockout Certificate.................................................10
Lockout Distribution Percentage.....................................10
Master Servicer.....................................................10
Non-United States Person............................................10
Opinion of Counsel..................................................11
Ownership Interest..................................................11
Pass-Through Rate...................................................11
Percentage Interest.................................................11
Permitted Transferee................................................11
Person ...........................................................11
Plan ...........................................................11
Pooling and Servicing Agreement.....................................11
Principal Distribution Amount.......................................12
Random Lot..........................................................12
Rating Agency.......................................................12
Realized Loss.......................................................12
Record Date.........................................................12
Registrar...........................................................12
Regular Certificate.................................................12
REMIC ...........................................................12
REMIC Provisions....................................................12
Residual Certificate................................................12
Responsible Officer.................................................12
Retail Lottery Certificates.........................................13
Rounding Account....................................................13
Rounding Amount.....................................................13
Single Certificate..................................................13
Startup Day.........................................................13
Tax Returns.........................................................13
Transfer ...........................................................13
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<TABLE>
<CAPTION>
Section Page
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<S> <C>
Transfer Affidavit and Agreement........................................................................13
Transferee..............................................................................................13
Transferor..............................................................................................13
Trust ...............................................................................................13
Trust Certificate.......................................................................................14
Trustee ...............................................................................................14
Trustee Expense Account.................................................................................14
Trust Fund..............................................................................................14
Underlying Certificates.................................................................................14
Underlying Certificate Distribution Date................................................................14
Underlying Certificate Distribution Date Statement......................................................14
Underlying Certificate Schedule.........................................................................14
Voting Rights...........................................................................................15
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
AND THE ORIGINAL ISSUANCE OF CERTIFICATES...............................................................16
2.01. CONVEYANCE OF THE UNDERLYING CERTIFICATES...............................................................16
2.02. ISSUANCE OF CERTIFICATES................................................................................16
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES...........................................................17
3.01. COLLECTION OF PAYMENTS ON THE UNDERLYING CERTIFICATES; CERTIFICATE ACCOUNT..............................17
3.02. DISTRIBUTIONS...........................................................................................18
3.03. STATEMENTS TO CERTIFICATEHOLDERS........................................................................22
3.04. ROUNDING ACCOUNT........................................................................................23
3.05. PRINCIPAL DISTRIBUTIONS ON THE RETAIL LOTTERY CERTIFICATES..............................................24
3.06. ALLOCATION OF EXTRAORDINARY TRUST FUND EXPENSES, INTEREST SHORTFALLS
AND REALIZED LOSSES.....................................................................................28
3.07. NOTICES TO TRUSTEE......................................................................................29
3.08. EXCHANGE COMMISSION; ADDITIONAL INFORMATION.............................................................29
ARTICLE IV
THE CERTIFICATES........................................................................................30
4.01. THE CERTIFICATES........................................................................................30
4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF CERTIFICATES................................32
4.03. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.......................................................36
</TABLE>
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Section Page
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4.04. PERSONS DEEMED OWNERS...............................................36
4.05. CERTAIN AVAILABLE INFORMATION.......................................37
ARTICLE V
THE DEPOSITOR.......................................................38
5.01. LIABILITY OF THE DEPOSITOR..........................................38
5.02. MERGER OR CONSOLIDATION OF THE DEPOSITOR............................38
5.03. LIMITATION ON LIABILITY OF THE DEPOSITOR AND OTHERS.................38
ARTICLE VI
THE TRUSTEE.........................................................40
6.01. DUTIES OF TRUSTEE...................................................40
6.02. CERTAIN MATTERS AFFECTING THE TRUSTEE...............................41
6.03. TRUSTEE NOT LIABLE FOR CERTIFICATES.................................42
6.04. TRUSTEE MAY OWN CERTIFICATES........................................42
6.05. TRUSTEE'S FEES AND EXPENSES.........................................42
6.06. ELIGIBILITY REQUIREMENTS FOR TRUSTEE................................43
6.07. RESIGNATION AND REMOVAL OF THE TRUSTEE..............................43
6.08. SUCCESSOR TRUSTEE...................................................44
6.09. MERGER OR CONSOLIDATION OF TRUSTEE..................................44
6.11. APPOINTMENT OF OFFICE OR AGENCY.....................................45
6.12. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.......................46
6.12. CERTIFICATE ACCOUNT STATEMENTS......................................46
6.13. LOCATION OF UNDERLYING CERTIFICATES.................................47
6.14. COMPLIANCE WITH WITHHOLDING REQUIREMENTS............................47
ARTICLE VII
TERMINATION.........................................................48
7.01. TERMINATION UPON DISTRIBUTION TO CERTIFICATEHOLDERS.................48
7.02. FAILURE OF CERTIFICATEHOLDERS TO SURRENDER CERTIFICATES.............48
7.03. ADDITIONAL TERMINATION REQUIREMENTS.................................49
ARTICLE VIII
REMIC PROVISIONS....................................................50
8.01. REMIC ADMINISTRATION................................................50
8.02. PROHIBITED TRANSACTIONS AND ACTIVITIES..............................52
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Section Page
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8.03. INDEMNIFICATION.....................................................52
ARTICLE IX
MISCELLANEOUS PROVISIONS............................................53
9.01. AMENDMENT...........................................................53
9.02. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS..........................54
9.03. GOVERNING LAW.......................................................55
9.04. NOTICES.............................................................55
9.05. SEVERABILITY OF PROVISIONS..........................................55
9.06. NOTICE TO RATING AGENCIES...........................................55
9.07. ARTICLE AND SECTION REFERENCES......................................56
9.08. EXECUTION IN COUNTERPARTS...........................................56
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EXHIBITS
EXHIBIT A-1 Form of Class A-1 Certificate
EXHIBIT A-2 Form of Class A-2 Certificate
EXHIBIT A-3 Form of Class A-3 Certificate
EXHIBIT A-4 Form of Class A-4 Certificate
EXHIBIT A-5 Form of Class A-5 Certificate
EXHIBIT A-6 Form of Class A-6 Certificate
EXHIBIT A-7 Form of Class A-7 Certificate
EXHIBIT A-8 Form of Class A-8 Certificate
EXHIBIT A-9 Form of Class A-9 Certificate
EXHIBIT A-10 Form of Class A-10 Certificate
EXHIBIT A-11 Form of Class A-11 Certificate
EXHIBIT A-12 Form of Class A-12 Certificate
EXHIBIT A-13 Form of Residual Certificate
EXHIBIT B Underlying Certificates
EXHIBIT C-1 Form of Transferor Representation Letter and Form of Transferee
Representation Letter in Connection with Transfers of Residual
Certificates Pursuant to Rule 501 of Regulation D or Rule 144A
Under the 1933 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
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<PAGE>
This Trust Agreement ("Trust Agreement" or "Agreement"), dated
as of February 25, 1999, by and between SALOMON BROTHERS MORTGAGE SECURITIES
VII, INC. as Depositor (the "Depositor") and THE BANK OF NEW YORK as Trustee
(the "Trustee")
PRELIMINARY STATEMENT:
The Depositor intends to sell trust certificates (collectively, the
"Trust 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 a real estate mortgage
investment conduit ("REMIC") election with respect to the Trust Fund for federal
income tax purposes. The Trust Certificates (other than the Class R
Certificates) will be the "regular interests" in the REMIC and the Class R
Certificates will be the sole class of "residual interests" therein.
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
Certificates evidencing "regular interests" in the Trust Fund (as defined
herein) created hereunder.
<TABLE>
<CAPTION>
Initial Aggregate Latest Possible
Designation Pass-Through Rate Certificate Principal Balance Maturity Date(1)
----------- ----------------- ----------------------------- ----------------
<S> <C> <C> <C>
Class A-1 6.50% per annum $161,500,000.00 March 25, 2029
Class A-2 8.00(2)% per annum $1,000,000.00 March 25, 2029
Class A-3 6.00% per annum $15,775,000.00 March 25, 2029
Class A-4 6.50% per annum $59,300,000.00 March 25, 2029
Class A-5 6.50% per annum $260,032,000.00 March 25, 2029
Class A-6 6.50% per annum $10,000,000.00 March 25, 2029
Class A-7 6.50% per annum $26,999,388.42 March 25, 2029
Class A-8 6.75% per annum $9,400,000.00 March 25, 2029
Class A-9 6.75% per annum $7,800,000.00 March 25, 2029
Class A-10 6.75% per annum $7,373,000.00 March 25, 2029
Class A-11 6.75% per annum $4,977,000.00 March 25, 2029
Class A-12 6.50(3)% per annum $1,000,000.00 March 25, 2029
Class R N/A $100.00
</TABLE>
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(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 Mortgage Loans with the latest maturity date has been
designated as the "latest possible maturity date" for each Class of
Certificates.
(2) The Class A-2 Certificates will accrue interest at a Pass-Through Rate
of 8.00% per annum effective for distributions made on the first
Distribution Date up to and including the Distribution Date in February
2000, a Pass-Through Rate of 6.75% per annum effective for distributions
made on the Distribution Date in March 2000 up to and including the
Distribution Date in February 2001, and thereafter, at a Pass-Through
Rate of 6.50% per annum.
(3) The Class A-12 Certificates will accrue interest at a Pass-Through Rate
of 6.50% per annum effective for distributions made on the first
Distribution Date up to and including the Distribution Date in February
2000, a Pass-Through Rate of 6.75% per annum effective for distributions
made on the Distribution Date in March 2000 up to and including the
Distribution Date in February 2001, and thereafter, at a Pass-Through
Rate of 7.00% per annum.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Whenever used in this Trust
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. Notwithstanding the foregoing, on the first
Distribution Date, Available Funds (i) will be increased by the Interest
Shortfall Deposit and (ii) will be decreased by Interest Reserve Amount. On each
of the second through the eleventh Distribution Dates, Available Funds (i) will
be increased by the Interest Reserve Amount from the prior Distribution Date and
(ii) will be decreased by the Interest Reserve Amount for the current
Distribution Date. On the twenty-fourth Distribution Date, Available Funds will
be increased by the Interest Reserve Amount from the prior Distribution Date.
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.
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BUSINESS DAY: Any day other than a Saturday, a Sunday or a day
on which banking or savings and loan institutions in the State of New York or in
the city in which the Corporate Trust Office of the Trustee is located, are
authorized or obligated by law or executive order to be
closed.
CERTIFICATE: Any of the Trust Certificates as defined herein.
CERTIFICATE ACCOUNT: The trust 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 Class of Certificates,
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 of
such Class of Certificates 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 of such
Class of Certificates to be made on such Distribution Date), and the denominator
of which is the initial aggregate Certificate Principal Balance of such Class of
Certificates as of the Closing Date.
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 Certificate,
as of any date of determination, the Certificate Principal Balance of such
Certificate on the Distribution Date immediately prior to such date of
determination, reduced by 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 initial Distribution Date, the initial
Certificate Principal Balance of such Certificate, as stated on the face
thereof). The aggregate Certificate Principal Balance of all of the
Certificates, as of any date of determination, shall equal the certificate
principal balance of the Underlying Certificates minus the aggregate of all
Extraordinary Trust Fund Expenses allocated to the Certificates prior to such
date of determination. The Residual Certificates will not have a Certificate
Principal Balance and will not 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-United States 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 Trust 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
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which it is entitled shall 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 A CERTIFICATE: A Certificate designated as a Class A-l
Certificate, a Class A-2 Certificate, a Class A-3 Certificate, a Class A-4
Certificate, a Class A-5 Certificate, a Class A-6 Certificate, a Class A-7
Certificate, a Class A-8 Certificate, a Class A-9 Certificate, a Class A-10
Certificate, a Class A-11 Certificate or a Class A-12 Certificate.
CLASS A-1 CERTIFICATE: Any one of the Class A-1 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-1 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-2 CERTIFICATE: Any one of the Class A-2 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-2 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-3 CERTIFICATE: Any one of the Class A-3 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-3 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-4 CERTIFICATE: Any one of the Class A-4 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-4 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-5 CERTIFICATE: Any one of the Class A-5 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-5 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-6 CERTIFICATE: Any one of the Class A-6 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-6 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-7 CERTIFICATE: Any one of the Class A-7 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-7 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
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CLASS A-8 CERTIFICATE: Any one of the Class A-8 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-8 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-9 CERTIFICATE: Any one of the Class A-9 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-9 and evidencing a Regular Interest in the REMIC for
purposes of the REMIC Provisions.
CLASS A-10 CERTIFICATE: Any one of the Class A-10 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A- 10 and evidencing a Regular Interest in the REMIC
for purposes of the REMIC Provisions.
CLASS A-11 CERTIFICATE: Any one of the Class A-11 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A- 11 and evidencing a Regular Interest in the REMIC
for purposes of the REMIC Provisions.
CLASS A-12 CERTIFICATE: Any one of the Class A-12 Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A- 12 and evidencing a Regular Interest in the REMIC
for purposes of the REMIC Provisions.
CLASS R CERTIFICATE: Any one of the Class R Certificates
executed, authenticated and delivered by the Trustee, substantially in the form
annexed hereto as Exhibit A-13 and evidencing a Residual Interest in the REMIC
for purposes of the REMIC Provisions.
CLOSING DATE: February 25, 1999.
CODE: The Internal Revenue Code of 1986.
COMMISSION: The Securities and Exchange Commission.
CORPORATE TRUST OFFICE: The principal office of the Trustee and
Certificate Registrar at which at any particular time its corporate trust
business in connection with this Agreement shall be administered, which office
at the Closing Date is located at 101 Barclay Street, 12E, New York 10286,
Attention: MBS Unit, or at such other address as the Trustee may designate from
time to time by notice to the Certificateholders and the Depositor.
CWMBS SUBORDINATE CERTIFICATE: CWMBS, Inc., Mortgage
Pass-Through Certificates, Series 1998-23, Class M, Class B-1, Class B-2, Class
B-3, Class B-4 and Class B-5.
DECEASED OWNER: A Certificate Owner of a Retail Lottery
Certificate who was living at the time such interest was acquired and whose
authorized personal representative, surviving tenant by the entirety, surviving
joint tenant or surviving tenant in common or other person empowered to act on
behalf of a deceased Certificate Owner causes to be furnished to the Depository
evidence of
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death satisfactory to the Depository Participant and any tax waivers requested
by the Depository Participant.
DEFINITIVE CERTIFICATES: As defined in Section 4.01(b).
DEPOSITOR: Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or its successor in interest.
DEPOSITORY: The Depository Trust Company, 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 Freddie Mac, 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, (v) an "electing
large partnership" and (vi) any other Person so designated by the Trustee or the
Trust Administrator based upon an Opinion of Counsel that the holding of an
Ownership Interest in a Residual Certificate by such Person may cause the 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 a 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 26th day of each calendar month or, if
such day is not a Business Day, the first Business Day following such day,
commencing on March 26th 1999.
DTC: The Depository Trust Company, or any successor depository
hereafter named under the Pooling and Servicing Agreement.
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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.
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 Standard & Poor's
Ratings Group (and AAA by Fitch Investors Service, Inc. if it rates such
obligations of such 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 (or in the case of the principal depository
institution in a holding company system, the commercial paper or debt
obligations of such holding 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;
<PAGE>
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(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 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) interests in any money market fund which invests
exclusively in any of the obligations described in clause (i) or clause
(ii) above and which at the date of acquisition of the interests in such
funds has the highest fund ratings from the Rating Agency or is
otherwise approved in writing by the Rating Agency; and
(viii) 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: 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 any amounts reimbursable to the Trustee or the
Depositor by the Trust Fund, including attorney's fees and expenses, pursuant to
the terms of this Trust 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 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.
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.
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FREDDIE MAC: Federal Home Loan Mortgage Corporation or any
successor thereto.
HOLDER: See "Certificateholder".
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, 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.
INDIRECT DEPOSITORY PARTICIPANT: An institution that is not a
Depository Participant but clears through or maintains a custodial relationship
with Participants and has access to the Depository's clearing system.
INDIVIDUAL RETAIL LOTTERY CERTIFICATE: A Retail Lottery
Certificate that evidences $1,000 initial Certificate Principal Balance.
INTEREST ACCRUAL PERIOD: For any Class of Certificates on any
Distribution Date, the one-month period preceding the month in which such
Distribution Date occurs. Notwithstanding the foregoing, distributions of
interest on each Class of Certificates on any Distribution Date will reflect
interest accrued, and receipts with respect thereto, on the Underlying
Certificates for the preceding calendar month, as the same may be reduced by any
shortfalls in collections of interest on the mortgage loans to the extent
described herein, and all distributions of interest on each Class of
Certificates will be based on a 360-day year of twelve equal 30-day Interest
Accrual Periods.
INTEREST DISTRIBUTION AMOUNT: For any Class of Certificates on
any Distribution Date an amount equal to interest accrued during the related
Interest Accrual Period on the Certificate Principal Balance of such Class of
Certificates immediately prior to such Distribution Date at the Pass-Through
Rate thereon plus, in the case of each such class, any such amount remaining
unpaid from previous Distribution Dates, and reduced, in the case of each such
class (to not less than zero), by the PRO RATA share for such class of interest
shortfalls allocated to the Underlying Certificates.
INTEREST RESERVE AMOUNT: An amount equal to the amount by which
interest distributions on the Class A-2 Certificates from the second
Distribution Date through the twelfth Distribution Date are projected to be in
excess of interest on such Certificates at 7.00% per annum.
INTEREST SHORTFALL DEPOSIT: An amount, initially equal to
$10,000 and remitted to the Trustee by Salomon Smith Barney Inc. as underwriter
on or before the first Distribution Date, which represents the aggregate amount
by which interest distributions on the Class A-2 Certificates for the first
twelve Distribution Dates are projected to be in excess of interest on such
Certificates at 7.00% per annum.
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INTEREST SHORTFALLS: As to any Distribution Date and any Class
of Certificates, the amount allocated to the Underlying Certificates as provided
in the Pooling and Servicing Agreement in connection with voluntary principal
prepayments and Solider's and Sailor's Civil Relief Act shortfalls.
LIVING OWNER: A Certificate Owner of a Retail Lottery
Certificate other than a Deceased Owner.
LOCKOUT CERTIFICATE: The Class A-4 Certificates.
LOCKOUT DISTRIBUTION PERCENTAGE: With respect to the Lockout
Certificates and for any Distribution Date occurring prior to the Distribution
Date in March 2004 will be equal to 0%. The Lockout Distribution Percentage for
any Distribution Date occurring after the first five years following the Closing
Date will be as follows: for any Distribution Date during the sixth year after
the Closing Date, 30% of the Lockout Certificate Percentage for such
Distribution Date; for any Distribution Date during the seventh year after the
Closing Date, 40% of the Lockout Certificate Percentage for such Distribution
Date; for any Distribution Date during the eighth year after the Closing Date,
60% of the Lockout Certificate Percentage for such Distribution Date, for any
Distribution Date during the ninth year after the Closing Date, 80% of the
Lockout Certificate percentage for such Distribution Date and for any
Distribution Date during the tenth year after the Closing Date and thereafter,
100% of the Lockout Certificate Percentage for such Distribution Date.
Notwithstanding the foregoing, if the Certificate Principal Balances of the
Certificates (other than the Lockout Certificates) have been reduced to zero,
the Lockout Distribution Percentage will be equal to 100%.
MASTER SERVICER: Countrywide Home Loans. Inc., pursuant to the
Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"), dated
as of December 1, 1998 among CWMBS, Inc. as depositor, the Master Servicer as
seller and master servicer and the Trustee as trustee.
NON-UNITED STATES PERSON: Any person other than a United States
Person.
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).
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 the Trust Fund as a
REMIC or (b) compliance with the REMIC Provisions
must be an opinion of Independent counsel.
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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.
PASS-THROUGH RATE: With respect to all Certificates (other than
the Class R Certificates) the Pass-Through Rate as set forth in the Preliminary
Statement hereto.
PERCENTAGE INTEREST: With respect to any Class of Certificates,
the portion of the respective Class evidenced by such Certificate, expressed as
a percentage, the numerator of which is the initial Certificate Principal
Balance represented by such Certificate, and the denominator of which is the
initial aggregate Certificate Principal Balance of all of the Certificates of
such Class. The Class A Certificates, other than the Retail Certificates, are
issuable only in Percentage Interests corresponding to initial Certificate
Principal Balances of $25,000 and integral multiples of $1,000 in excess
thereof. The Retail Certificates are issuable only in Percentage Interests
corresponding to initial Certificate Principal Balances of $1,000 and integral
multiples of $1,000 in excess thereof. The Residual Certificates are issuable
only in Percentage Interests corresponding to initial Certificate Principal
Balances of $20 and integral multiples thereof.
PERMITTED TRANSFEREE: Any Transferee of a Residual Certificate
other than a Disqualified Organization or Non-United States Person.
PERSON: Any individual, corporation, partnership, 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: The Pooling and Servicing
Agreement, dated as of December 1, 1998, among CWMBS, Inc. as depositor,
Countrywide Home Loans, Inc. as seller and master servicer, and The Bank of New
York as trustee, pursuant to which the Underlying Certificates were issued.
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.
RANDOM LOT: With respect to any Distribution Date, the method
by which the Depository will determine which Retail Lottery Certificates will be
paid, using its established random lot procedures or, if the Retail Lottery
Certificates are no longer represented by a Book-Entry Certificate, using the
Trustee's procedures.
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RATING AGENCY: Either Duff & Phelps Credit Rating Co. or
Standard & Poor's, a division of The McGraw-Hill Companies, Inc., or their
respective successors in interest.
REALIZED LOSS: Any losses allocated to the Underlying
Certificates pursuant to the Pooling and Servicing Agreement. The principal
portion of Realized Losses means any such losses allocated in reduction of the
principal balance of the Underlying Certificates. The interest portion of
Realized Losses means any such losses allocated in reduction of the amount of
interest distributable to the Underlying Certificates on an Underlying
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 in which
such Distribution Date occurs.
REGISTRAR: Initially the Trustee, in its capacity as Registrar,
or any successor to the Trustee in such capacity.
REGULAR CERTIFICATE: Any Class A Certificate.
REMIC: A "real estate mortgage investment conduit" as defined
in Section 860D of the Code.
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.
RESIDUAL CERTIFICATE: Any one of the Class R 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, as the case may be,
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.
RETAIL LOTTERY CERTIFICATES: Any of the Class A-11
Certificates.
ROUNDING ACCOUNT: With respect to the Retail Lottery
Certificates, the account created and maintained pursuant to Section 3.04.
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ROUNDING AMOUNT: With respect to the Rounding Account, the
amount of funds, if any, needed to be withdrawn and used to round the amount of
any distributions in reduction of the Certificate Principal Balance of the
Retail Lottery Certificates upward to the next higher integral multiple of
$1,000.
SINGLE CERTIFICATE: With respect to any Class of Certificates
(other than the Residual Certificates), a hypothetical Certificate of such Class
evidencing a Percentage Interest for such Class corresponding to an initial
Certificate Principal Balance of $1,000. With respect to the Residual
Certificates, a hypothetical Certificate of such Class evidencing a 100%
Percentage Interest in such Class.
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 the Trust Fund due to its classification as a REMIC
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.
TRUST CERTIFICATE: Any one of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class
A-10, Class A-11, Class A-12 or Residual Certificates executed by the Trustee in
substantially the form set forth, respectively, in Exhibit A-1, A-2, A-3, A-4,
A-5, A-6, A-7, A-8, A-9, A-10, A-11, A-12, A-13 or A-14 hereto.
TRUSTEE: The Bank of New York, a New York banking corporation,
or its successor in interest, or any successor trustee appointed as herein
provided.
<PAGE>
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TRUSTEE EXPENSE ACCOUNT: The account established and maintained
pursuant to Section 6.14.
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) amounts held from time to time by the
Trustee in the Certificate Account.
UNDERLYING CERTIFICATES: CWMBS, Inc., Mortgage Pass-Through
Certificates, Series 1998-23, Class A, representing a 91.88% percentage interest
in such class of certificates, which Underlying Certificates evidence a partial
senior interest in the trust fund created by the Pooling and Servicing Agreement
and which are transferred to the Trust by the Depositor and which is identified
in the Underlying Certificate Schedule. The Certificate Principal Balance of the
Underlying Certificates as of January 1, 1999 was $565,156,488.
UNDERLYING CERTIFICATE DISTRIBUTION DATE: The 25th day of each
month, or if such 25th day is not a Business Day, the Business Day following
such 25th day.
UNDERLYING CERTIFICATE DISTRIBUTION DATE STATEMENT: With
respect to the Underlying Certificates, the report provided to holders of such
Underlying Certificates in connection with each Underlying Certificate
Distribution Date pursuant to the Pooling and Servicing Agreement.
UNDERLYING CERTIFICATE SCHEDULE: The schedule attached as
Exhibit B hereto, such schedule setting forth as to each Underlying Certificate
its principal balance on the Closing Date.
UNITED STATES PERSON: 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
(except, in the case of a partnership, to the extent provided in regulations) 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 persons have the authority to control all substantial
decisions of the trust. To the extent prescribed in regulations by the Secretary
of the Treasury, which have not yet been issued, a trust which was in existence
on August 20, 1996 (other than a trust treated as owned by the grantor under
subpart E of part I of subchapter J of chapter 1 of the Code), and which was
treated as a United States person on August 20, 1996 may elect to continue to be
treated as a United States person notwithstanding the previous sentence. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code.
VOTING RIGHTS: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, (i) 99% of all of the Voting Rights shall be allocated to the
Regular Certificates, and (ii) 1% of the Voting Rights shall be allocated to the
Residual Certificates. All Voting Rights allocated to any Class of Certificates
shall be allocated among such Certificates PRO RATA in accordance with the
respective Percentage Interests evidenced thereby.
<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 shall have caused the Underlying
Certificates to be registered in the book-entry records of DTC in the name of
the Trustee or its nominee on the records of the Depository and evidence of such
registration to be delivered to the Trustee on the Closing Date.
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 together
with all other assets 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.
<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 1999-1
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 the Underlying Certificates 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. On each Distribution Date, before making the distributions referred
to in Section 3.02 below, the Trustee shall withdraw the amount of any taxes
payable with respect to the Trust Fund pursuant to Section 8.01(g)(ii) from the
Certificate Account. If the Trustee shall not have received a distribution with
respect to the Underlying Certificates on the Underlying Certificate
Distribution Date, the Trustee shall request such payment as promptly as
possible and legally permitted 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 fees and expenses incurred by the Trustee in
connection with the prosecution of any such legal action (including, but not
limited to, the reasonable fees and expenses of counsel) 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 reasonable 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 reasonable fees and expenses is
provided by Certificateholders. In the event any such 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, any such investment of any amount on deposit in the
Certificate Account must mature no later than the 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.
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(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;
(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;
(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) Upon receipt of the Underlying
Certificate Distribution Date Statements with respect to each Underlying
Certificate Distribution Date, the Trustee shall calculate the amount of
distributions set forth in subsection (b) of this Section 3.02 and make such
distributions on the appropriate Distribution Date.
(b) (i) On each Distribution Date, the Trustee shall, to the
extent of Available Funds on deposit in the Certificate Account, distribute to
the Certificateholders in the manner provided in Section 3.02(d) below the
Available Funds (but only to the extent necessary to make the distributions
described in clauses FIRST through THIRD below) in the following order of
priority, in each case to the extent of remaining Available Funds:
FIRST, to the extent of the Underlying Distribution Amount, to
distributions of interest in respect of the Certificates, in an amount
(allocable among such Certificates PRO RATA in accordance with the
respective amounts payable as to each pursuant to this clause FIRST)
equal to the aggregate of the Interest Distribution Amounts in respect
of the Certificates for such Distribution Date; and
SECOND, to the extent of the Principal Distribution Amount, to
distributions of principal in respect of the Certificates (applied to
reduce the Certificate Principal Balance of such Certificates) in the
priorities and amounts set forth in Section 3.02(c);
(ii) All references above to the Certificate Principal
Balance of any Class of Certificates shall be to the Certificate Principal
Balance of such Class immediately prior to the relevant Distribution Date,
reduced (to not less than zero) by (a) all amounts allocable to principal
previously distributed with respect to such Certificate and (b) any reductions
in the Certificate Principal Balance thereof deemed to have occurred in
connection with allocations thereto of (i) the principal portion of Realized
Losses on the Mortgage Loans allocated to the Underlying Certificates and (ii)
any Extraordinary Trust Fund Expenses.
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(c) On each Distribution Date, the aggregate distributions of
principal made on such date in respect of the Certificates pursuant to Section
3.02(b)(i) SECOND above shall be applied among the various Classes thereof in
the following order of priority:
(i) To the holders of the Lockout Certificates, the
Lockout Distribution Percentage of the amount of principal then payable to the
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero;
(ii) To the holders of the Class R Certificates on
the first Distribution Date, until the Certificate Principal Balance has been
reduced to zero;
(iii) Until the Certificate Principal Balance of the
Class A-1 Certificates and the Class A-6 Certificates has been reduced to zero,
concurrently:
(A) 39.55335194421% of the amount
distributable under this clause (iii)
to the Class A-1 Certificates;
(B) 53.0109102508% of the amount
distributable under this clause (iii)
to the Class A-5 Certificates; and
(C) 7.4355703071% of the amount
distributable under this clause (iii)
first, to the Class A-6 Certificates
until the Certificate Principal
Balance thereof has been reduced to
zero and second, to the Class A-7
Certificates;
(iv) Until the Certificate Principal Balance of
each of the Class A-5 Certificates, the Class A-6 Certificates and the Class A-7
Certificates has been reduced to zero, concurrently:
(A) 87.8921912365% of the amount
distributable under this clause (iv)
to the Class A-5 Certificates; and
(B) 12.1078087635% of the amount
distributable under this clause (iv)
first, to the Class A-6 Certificates
until the Certificate Principal
Balance thereof has been reduced to
zero and second, to the Class A-7
Certificates;
(v) Until the Certificate Principal Balance of the
Class A-8 Certificates has been reduced to zero, concurrently:
(A) 33.3333333333% of the amount
distributable under this clause (v)
to the Class A-3 Certificates; and
(B) 66.6666666667% of the amount
distributable under this clause (v)
to the Class A-8 Certificates;
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(vi) Until the Certificate Principal Balance of the
Class A-9 Certificates has been reduced to zero, concurrently:
(A) 33.3333333333% of the amount
distributable under this clause (vi)
to the Class A-3 Certificates; and
(B) 66.6666666667% of the amount
distributable under this clause (vi)
to the Class A-9 Certificates;
(vii) Concurrently on a pro rata basis based on the
then current Certificate Principal Balance outstanding, to the Class A-2
Certificates, Class A-3 Certificates, the Class A-10 Certificates, the Class
A-11 Certificates and the Class A-12 Certificates, until the Certificate
Principal Balances thereof have been reduced to zero; and
(viii) To the holders of the Lockout Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;
Notwithstanding the foregoing priorities, upon the reduction of the
Certificate Principal Balances of the CWMBS Subordinate Certificates to zero,
the priority of distributions of principal among the Certificates will be
disregarded and distributions allocable to principal will be paid on each
succeeding Distribution Date to holders of the Certificates, on a pro rata
basis, based on the Certificate Principal Balances thereof.
(d) Notwithstanding the priorities relating to distributions of
principal on the Retail Lottery Certificates described above, on any
Distribution Date, distributions in respect of principal on the Retail Lottery
Certificates will be allocated among the Holders of the Retail Lottery
Certificates as set forth in Section 3.05. On each Distribution Date on which
amounts are available for distributions in reduction of the Certificate
Principal Balance of the Retail Lottery Certificates the aggregate amount
allocable to such distributions will be rounded upward by the Rounding Amount.
Such rounding will be accomplished on the first Distribution Date on which
distributions in reduction of the Certificate Principal Balance of the Retail
Lottery Certificates are made by withdrawing from the Rounding Account the
Rounding Amount for deposit into the Certificate Account, and such Rounding
Amount will be added to the amount that is allocable for distributions in
reduction of the Certificate Principal Balance of the Retail Lottery
Certificates. On each succeeding Distribution Date on which distributions in
reduction of the Certificate Principal Balance of the Retail Lottery
Certificates are made, first, the aggregate amount available for distribution in
reduction of the Certificate Principal Balance of the Retail Lottery
Certificates will be applied to repay the Rounding Amount withdrawn from the
Rounding Account on the prior Distribution Date and then, the remainder of such
allocable amount, if any, will be similarly rounded upward through another
withdrawal from the Rounding Account and such determined Rounding Amount will be
added to the amount that is allocable for distributions in reduction of the
Certificate Principal Balance of the Retail Lottery Certificates. Any funds
remaining in the Rounding Account after the Certificate Principal Balance of the
Retail Lottery Certificates is reduced to zero shall be distributed to the
Residual Certificates.
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(e) 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(d) 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 (i) $5,000,000 or (ii) two-thirds of the initial aggregate
Certificate Principal Balance of such Class of Certificates, by wire transfer in
immediately available funds to the account of such Holder specified in the
request. 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. The Trustee and the Depository
shall be responsible for the allocation of the aggregate amount of distributions
in reduction of the Certificate Principal Balance of the Retail Lottery
Certificates as set forth in Section 3.05. None of the Depositor, the Trustee or
the Certificate Registrar shall have any responsibility therefor except as
otherwise provided by this Agreement.
(f) 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 any Class of Certificates nor the Trustee
shall in any way be responsible or liable to the Holders of any other Class of
Certificates in respect of amounts properly previously distributed on the
Certificates.
(g) 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-United States Persons.
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 respective Classes of
Certificates and each Rating Agency, (A) a copy of the monthly statement
required under the Pooling and Servicing Agreement to be sent to holders of the
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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 Certificates of each such
Class allocable to principal;
(ii) the amount of the distribution made on such
Distribution Date to the Holders of 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 Balance of each
such Class of 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 such Class of
Certificates applicable to such Distribution Date; and
(vi) the Pass-Through Rate and Interest Distribution
Amount in respect of each such Class of Certificates for such
Distribution Date (separately identifying any reductions
resulting from, the allocation of Interest Shortfalls to the
Underlying Certificates, 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)-(iv) 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)-(iv) 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.
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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 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 3.03, the Trustee's duties
are limited to the extent that the Trustee receives timely reports as required
from the trustee under the Pooling and Servicing Agreement.
Section 3.04. ROUNDING ACCOUNT.
No later than the Closing Date, the Trustee will establish and maintain
with itself a segregated trust account that is a non-interest bearing Eligible
Account, which shall be titled "Rounding Account, The Bank of New York, as
trustee for the registered holders of Salomon Brothers Mortgage Securities VII,
Inc., Trust Certificates, Class A-11." On the Closing Date, Salomon Smith Barney
Inc. as underwriter, shall deposit with the Trustee, and the Trustee shall
deposit into the Rounding Account, cash in an amount equal to $999.99. The Trust
shall not invest or cause the investment of funds held in the Rounding Account.
The Trustee on each Distribution Date shall, based upon information
provided by the Master Servicer prior to the Underlying Certificate Distribution
Date for the related Distribution Date, withdraw funds from the Rounding Account
to pay to the holders of the Retail Lottery Certificates, pursuant to Section
3.02(d), the Rounding Amount. In addition, the Trustee on each Distribution Date
shall, based upon information provided by Master Servicer prior to the
Underlying Certificate Distribution Date for the related Distribution Date,
withdraw funds from the Certificate Account to repay to the Rounding Account the
Rounding Amount from the prior Distribution Date as contemplated in Section
3.02(d).
Section 3.05. PRINCIPAL DISTRIBUTIONS ON THE RETAIL LOTTERY
CERTIFICATES.
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Distributions in reduction of the Certificate Principal Balance of the
Retail Lottery Certificates will be made in integral multiples of $1,000 at the
request of the appropriate representatives of Deceased Owners of Retail Lottery
Certificates and at the request of Living Owners of Retail Lottery Certificates
or by mandatory distributions by Random Lot, pursuant to clauses (a) and (d)
below, or on a pro rata basis pursuant to clause (e) below.
(a) On each Distribution Date on which distributions in
reduction of the Certificate Principal Balance of the Retail Lottery
Certificates are made, such distributions will be made in the following
priority:
(i) any request by the personal representatives of a Deceased
Owner or by a surviving tenant by the entirety, by a surviving joint tenant or
by a surviving tenant in common, but not exceeding an aggregate amount of
$100,000 per request; and
(ii) any request by a Living Owner, but not exceeding an
aggregate amount of $10,000 per request.
Thereafter, distributions will be made, with respect to the Retail
Lottery Certificates, as provided in clauses (i) and (ii) above up to a second
$100,000 and $10,000, respectively. This sequence of priorities will be repeated
for each request for principal distributions made by the Certificate Owners of
the Retail Lottery Certificates until all such requests have been honored.
Requests for distributions in reduction of the Certificate Principal
Balance of the Retail Lottery Certificates presented on behalf of Deceased
Owners in accordance with the provisions of clause (i) above will be accepted in
order of their receipt by the Depository. Requests for distributions in
reduction of the Certificate Principal Balance of the Retail Lottery
Certificates presented in accordance with the provisions of clause (ii) above
will be accepted in the order of their receipt by the Depository after all
requests presented in accordance with clause (i) have been honored. All requests
for distributions in reduction of the Certificate Principal Balance of the
Retail Lottery Certificates will be accepted in accordance with the provisions
set forth in this Section 3.05(c). All requests for distributions in reduction
of the Certificate Principal Balance of the Retail Lottery Certificates with
respect to any Distribution Date must be received by the Depository and on the
Depository's "participant terminal system" and received by, the Trustee no later
than the close of business on the related Record Date. Requests for
distributions that are on the Depository's participant terminal system and
received by the Trustee after the related Record Date and requests, in either
case, for distributions not accepted with respect to any Distribution Date, will
be treated as requests for distributions in reduction of the Certificate
Principal Balance of Retail Lottery Certificates on the next succeeding
Distribution Date, and each succeeding Distribution Date thereafter, until such
request is accepted or is withdrawn as provided in this Section 3.05(c). Such
requests as are not so withdrawn shall retain their order of priority without
the need for any further action on the part of the appropriate Certificate Owner
of the related Retail Lottery Certificate, all in accordance with the procedures
of the Depository and the Trustee. Upon the transfer of the beneficial ownership
of any Retail Lottery Certificate, any distribution request previously submitted
with respect to such Certificate will be deemed to have been withdrawn only upon
the receipt by the
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Trustee on or before the Record Date for such Distribution Date of notification
of such withdrawal in the manner set forth in this Section 3.05(c) on the
Depository's participant terminal system.
Distributions in reduction of the Certificate Principal Balance of the
Retail Lottery Certificates will be applied in an amount equal to the Principal
Distribution Amount allocable to such Class pursuant to Section 3.02(c), plus
any amounts available for distribution from the Rounding Account established as
provided in Section 3.04, provided that the aggregate distribution in reduction
of the Certificate Principal Balance of the Retail Lottery Certificates on any
Distribution Date shall be made in an integral multiple of $1,000.
To the extent that the portion of the Principal Distribution Amount
allocable to distributions in reduction of the Certificate Principal Balance of
the Retail Lottery Certificates on any Distribution Date exceeds the aggregate
Certificate Principal Balance of Retail Lottery Certificates with respect to
which distribution requests, as set forth above, have been received (plus any
amounts required to be distributed pursuant to the Rounding Account),
distributions in reduction of the Certificate Principal Balance of the Retail
Lottery Certificates will be made by mandatory distribution pursuant to Section
3.05(b).
(b) A Retail Lottery Certificate shall be deemed to be held by
a Deceased Owner for purposes of this Section 3.05 if the death of the
Certificate Owner thereof is deemed to have occurred. Retail Lottery
Certificates beneficially owned by tenants by the entirety, joint tenants or
tenants in common will be considered to be beneficially owned by a single owner.
The death of a tenant by the entirety, joint tenant or tenant in common will be
deemed to be the death of the Certificate Owner, and the Retail Lottery
Certificates so beneficially owned will be eligible for priority with respect to
distributions in reduction of the Certificate Principal Balance thereof, subject
to the limitations stated above. Retail Lottery Certificates beneficially owned
by a trust will be considered to be beneficially owned by each beneficiary of
the trust to the extent of such beneficiary's beneficial interest therein, but
in no event will a trust's beneficiaries collectively be deemed to be
Certificate Owners of a number of Individual Retail Lottery Certificates of
which such trust is the owner. The death of a beneficiary of a trust will be
deemed to be the death of a Certificate Owner of the Retail Lottery
Certificates, as applicable, owned by the trust to the extent of such
beneficiary's beneficial interest in such trust. The death of an individual who
was a tenant by the entirety, joint tenant or tenant in common in a tenancy
which is the beneficiary of a trust will be deemed to be the death of the
beneficiary of such trust. The death of a person who, during his or her
lifetime, was entitled to substantially all of the beneficial ownership
interests in Individual Retail Lottery Certificates will be deemed to be the
death of the Certificate Owner of such Retail Lottery Certificates regardless of
the registration of ownership, if such beneficial interest can be established to
the satisfaction of the Depository Participant. Such beneficial interest will be
deemed to exist in typical cases of street name or nominee ownership, ownership
by a trustee, ownership under the Uniform Gifts to Minors Act and community
property or other joint ownership arrangements between a husband and wife.
Certificate interests shall include the power to sell, transfer or otherwise
dispose of a Retail Lottery Certificate and the right to receive the proceeds
therefrom, as well as interest and distributions in reduction of the Certificate
Principal Balance of the Retail Lottery Certificates, as applicable, payable
with respect thereto. The Trustee shall not be under any duty to determine
independently the occurrence of the death of any deceased Certificate Owner. The
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Trustee may rely entirely upon documentation delivered to it pursuant to Section
3.05(c) in establishing the eligibility of any Certificate Owner to receive the
priority accorded Deceased Owners in Section 3.05(a).
(c) Requests for distributions in reduction of the Certificate
Principal Balance of Retail Lottery Certificates must be made by delivering a
written request therefor to the Depository Participant or Indirect Depository
Participant that maintains the account evidencing such Certificate Owner's
interest in Retail Lottery Certificates. In the case of a request on behalf of a
Deceased Owner, appropriate evidence of death and any tax waivers are required
to be forwarded to the Depository Participant under separate cover. The
Depository Participant shall forward a certification, satisfactory to the
Trustee, certifying the death of the beneficial owner and the receipt of the
appropriate death and tax waivers. The Depository Participant should in turn
make the request of the Depository (or, in the case of an Indirect Depository
Participant, such Indirect Depository Participant must notify the related
Depository Participant of such request, which Depository Participant should make
the request of the Depository) on the Depository's participant terminal system.
The Depository may establish such procedures as it deems fair and equitable to
establish the order of receipt of requests for such distributions received by it
on the same day. None of the Depositor, the Trustee or the Certificate Registrar
shall be liable for any delay in delivery of requests for distributions or
withdrawals of such requests by the Depository, a Depository Participant or any
Indirect Depository Participant.
The Depository shall maintain a list of those Depository Participants
representing the appropriate Certificate Owners of Retail Lottery Certificates
that have submitted requests for distributions in reduction of the Certificate
Principal Balance of Retail Lottery Certificates, together with the order of
receipt and the amounts of such requests on the Depository's participant
terminal system. The Depository will honor requests for distributions in the
order of their receipt (subject to the priorities described in Section 3.05(a)
above). The Trustee shall notify the Depository as to which requests should be
honored on each Distribution Date at least three Business Days prior to such
Distribution Date based on the report received by the Trustee pursuant to
Section 4.04 and shall notify the Depository as to the amount of the Principal
Distribution amount to be distributed to the Retail Lottery Certificates by
Random Lot pursuant to Section 3.05(d). Requests shall be honored by the
Depository in accordance with the procedures, and subject to the priorities and
limitations, described in this Section 3.05. The exact procedures to be followed
by the Trustee and the Depository for purposes of determining such priorities
and limitations will be those established from time to time by the Trustee or
the Depository, as the case may be. The decisions of the Trustee and the
Depository concerning such matters will be final and binding on all affected
persons.
Individual Retail Lottery Certificates that have been accepted for a
distribution shall be due and payable on the applicable Distribution Date. Such
Certificates shall cease to bear interest after the last day of the month
preceding the month in which such Distribution Date occurs.
Any Certificate Owner of a Retail Lottery Certificate that has requested
a distribution may withdraw its request by so notifying in writing the
Depository Participant or Indirect Depository Participant that maintains such
Certificate Owner's account. In the event that such account is maintained by an
Indirect Depository Participant, such Indirect Depository Participant must
notify
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the related Depository Participant which in turn must forward the withdrawal of
such request on the Depository's participant terminal system. If such withdrawal
of a request for distribution has not been received on the Depository's
participant terminal system on or before the Record Date for the next
Distribution Date, the previously made request for distribution will be
irrevocable with respect to the making of distributions in reduction of the
Certificate Principal Balance of the Retail Lottery Certificates on such
Distribution Date.
In the event any requests for distributions in reduction of the
Certificate Principal Balance of the Retail Lottery Certificates are rejected by
the Trustee for failure to comply with the requirements of this Section 3.05,
the Trustee shall return such request to the appropriate Depository Participant
with a copy to the Depository with an explanation as to the reason for such
rejection.
(d) To the extent, if any, that distributions in reduction of
the Certificate Principal Balance of the Retail Lottery Certificates on a
Distribution Date exceed the outstanding Certificate Principal Balance of Retail
Lottery Certificates with respect to which distribution requests have been
received by the related Record Date, as provided in Section 3.05(a) above, the
additional distributions in reduction of the Certificate Principal Balance of
the Retail Lottery Certificates will be made by mandatory distributions in
reduction thereof. Such mandatory distributions on Individual Retail Lottery
Certificates will be made by Random Lot in accordance with the then-applicable
Random Lot procedures of the Depository, the Depository Participants and the
Indirect Depository Participants representing the Certificate Owners; PROVIDED
HOWEVER, that, if after the distribution in reduction of the Certificate
Principal Balance of the Retail Lottery Certificates on the next succeeding
Distribution Date on which mandatory distributions are to be made, the
Certificate Principal Balance of the Retail Lottery Certificates would not be
reduced to zero, the Individual Retail Lottery Certificates to which such
distributions will be applied shall be selected by the Depository from those
Retail Lottery Certificates not otherwise receiving distributions in reduction
of the Certificate Principal Balance on such Distribution Date. The Trustee
shall notify the Depository of the aggregate amount of the mandatory
distribution in reduction of the Certificate Principal Balance of the Retail
Lottery Certificates to be made on the next Distribution Date. The Depository
shall then allocate such aggregate amount among its Depository Participants on a
Random Lot basis. Each Depository Participant and, in turn, each Indirect
Depository Participant will then select, in accordance with its own procedures,
Individual Retail Lottery Certificates from among those held in its accounts to
receive mandatory distributions in reduction of the Certificate Principal
Balance of the Retail Lottery Certificates, such that the total amount so
selected is equal to the aggregate amount of such mandatory distributions
allocated to such Depository Participant by the Depository and to such Indirect
Depository Participant by its related Depository Participant, as the case may
be. Depository Participants and Indirect Depository Participants that hold
Retail Lottery Certificates selected for mandatory distributions in reduction of
the Certificate Principal Balance thereof are required to provide notice of such
mandatory distributions to the affected Certificate Owners. The Trustee will
fulfill its obligations pursuant to the letter of representations dated the
Business Day immediately preceding the Closing Date between the Depositor, the
Trustee and the Depository.
(e) Notwithstanding any provisions herein to the contrary, on
each Distribution Date following the first Distribution Date on which any
Realized Losses are allocated to the Retail
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Lottery Certificates, distributions in reduction of the Certificate Principal
Balance of the Retail Lottery Certificates will be made PRO RATA among the
Certificate Owners of the Retail Lottery Certificates and will not be made in
integral multiples of $1,000 nor pursuant to requests for distribution as
permitted by this Section 3.05 or mandatory distributions by Random Lot.
(f) In the event that Definitive Certificates representing the
Retail Lottery Certificates are issued pursuant to Section 4.01(b), an amendment
to this Agreement, which may be approved without the consent of any
Certificateholders, shall establish procedures relating to the manner in which
distributions in reduction of the Certificate Principal Balance of the Retail
Lottery Certificates are to be made; provided that such procedures shall be
consistent, to the extent practicable and customary for certificates similar to
the Retail Lottery Certificates, with the provisions of this Section 3.05.
Section 3.06. ALLOCATION OF EXTRAORDINARY TRUST FUND
EXPENSES, INTEREST SHORTFALLS AND REALIZED
LOSSES.
With respect to each Distribution Date, Extraordinary Trust Fund
Expenses and Interest Shortfalls will be allocated on a PRO RATA basis. Any
Extraordinary Trust Fund Expenses or Interest Shortfalls so allocated to the
Certificates as of any Distribution Date will reduce the Available Distribution
Amount for such Distribution Date and will result in a reduction in the amount
distributable to the holders of one or more classes of Certificates. An
allocation on a PRO RATA basis among two or more Classes of Certificates means
an allocation to each such Class of Certificates on the basis of its then
outstanding Certificate Principal Balance prior to giving effect to
distributions to be made on such Distribution Date.
In the case of the principal portion of any Realized Loss allocated to
the Underlying Certificates on any Underlying Certificate Distribution Date,
such Realized Loss will be allocated to the Certificates by reducing the
Certificate Principal Balance thereof by the amount allocated thereto, as of the
related Distribution Date. In the case of the interest portion of any Realized
Loss allocated to the Underlying Certificates on any Underlying Certificate
Distribution Date, such Realized Loss will be allocated on a pro rata basis
among each class of Certificates in each case by reducing the Interest
Distribution Amount thereon by the amount allocated thereto for the related
Distribution Date.
Section 3.07. 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 the
Underlying Certificates, the Trustee shall surrender the Underlying Certificates
to the trustee for the Underlying Certificates for payment of the final
distribution thereon.
Section 3.08. EXCHANGE COMMISSION; ADDITIONAL INFORMATION.
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Within 15 days after each Distribution Date, the Trustee shall
file with the Commission via the Electronic Data Gathering and Retrieval System,
a Form 8-K with a copy of the statement to Certificateholders for such
Distribution Date as an exhibit thereto. Prior to January 30, 2000, the Trustee
shall file a Form 15 Suspension Notification with respect to the Trust Fund, if
applicable. Prior to March 30, 2000, the Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust Fund. The
Depositor hereby grants to the Trustee a limited power of attorney to execute
and file each such document on behalf of the Depositor. Such power of attorney
shall continue until the earlier of (i) receipt by the Trustee from the
Depositor of written termination of such power of attorney and (ii) the
termination of the Trust Fund. At least three Business Days prior to filing any
Form 8-K or Form 10-K, as the case may be, to the Depositor. The Depositor
agrees to promptly furnish to the Trustee, from time to time upon request, such
further information, reports and financial statements within its 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 Trust
Certificates will equal the aggregate principal balance of the Underlying
Certificates. The aggregate Certificate Principal Balance of all Certificates of
each Class issued as of the Closing Date shall equal such Class's respective
initial Certificate Principal Balance.
The Certificates will be substantially in the forms annexed
hereto as Exhibits A-1 through A-13. 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, not in its individual capacity but solely as Trustee,
and the Trustee shall cause the Certificates to be authenticated by the
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 Trust
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) Each Class of Class A 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 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 represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
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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 the Trustee (if the Trustee is not the Book-Entry
Custodian) and 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 Book-Entry 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 Book-Entry 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 $1.00 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 denomination
equal to the amount represented by such Book-Entry Certificate. Neither the
Depositor or 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
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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 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 the
Corporate Trust Office 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 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 that does not require such registration or qualification. In
the event that such a transfer of a Residual Certificate is to be made without
registration or qualification (other than in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee shall 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 it 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 desiring to effect the
transfer and/or such Certificateholder's prospective transferee upon which such
Opinion of Counsel is based, if any. Neither the Depositor nor the Trustee is
obligated to register or qualify any such Certificates 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 Certificates without registration or
qualification. Any Certificateholder desiring to effect the transfer of any such
Certificate shall, and does hereby agree to, indemnify the Trustee and the
Depositor 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
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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. In
lieu of such Opinion of Counsel, any prospective Transferee of such Certificates
may provide a certification in the form of Exhibit D to this Agreement (or other
form acceptable to the Depositor and the Trustee), which the Trustee may rely
upon without further inquiry or investigation. Neither an Opinion of Counsel nor
any 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)
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.
(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," in the form 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 Certificate 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
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who is assigned to this transaction 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
transferor affidavit (a "Transferor Affidavit," 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 Transferor Affidavit (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 Transferee.
(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
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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 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 compensation for providing such information may be accepted by the
Trustee.
(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 at the expense of
the party seeking to modify, add to or eliminate any such provision the
following:
(A) written notification from each Rating
Agency to the effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its then-current
ratings of any Class of Certificates; and
(B) an Opinion of Counsel, 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 the REMIC to cease
to qualify as a REMIC and will not cause the 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 a Person other than the prospective
transferee to be subject to a REMIC-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 6.11, the Trustee shall
execute, 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 6.11. Whenever any Certificates are so surrendered for
exchange the Trustee shall execute, 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
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accompanied by a written instrument of transfer in the form satisfactory to the
Trustee 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.
(h) All Certificates surrendered for transfer and exchange
shall be canceled and destroyed by the Trustee in accordance with its customary
procedures.
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 Certificate Registrar and the Trustee 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
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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 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
respective 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 Agencies' ratings of the Certificates 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 Agencies).
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 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
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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 (but need not confirm or
investigate the accuracy of mathematical calculations or other facts stated
therein). 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 reasonable and 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 willful 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
Certificates 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;
(iv) 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
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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 the
Underlying Certificates, the Trustee may request the direction
of all Certificateholders and shall be fully protected in
acting in accordance with the written directions of a majority
of the Certificateholders of each affected Class.
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, Officers' 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, financial
advisors or accountants and the advice of any such counsel,
financial advisor or accountant 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 Certificates entitled to at 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
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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, attorneys or independent contractors and
shall not be liable for the acts or omissions of such agents,
attorneys or independent contractors appointed with due care
and approved
by each of the Rating Agencies.
(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 6.12) 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 6.12) 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 the 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, including the costs and expenses
of defending itself against 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 hereunder or by reason of reckless disregard
of the Trustee's obligations and duties hereunder. Such indemnities shall
survive the termination or discharge of this Agreement and the resignation or
removal of the Trustee.
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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 Smith Barney 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.
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.
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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 deliver to the successor trustee evidence of the transfer to such
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 either 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 CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the REMIC or property securing the same may at the time be located, the
Trustee shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Trustee to act as co-trustee or
co-trustees, jointly with the Trustee or separate trustee or separate trustees,
of all or any part of the REMIC, and to vest in such Person or Persons, in such
capacity, such title to the REMIC, or any part thereof, and, subject to the
other provisions of this Section 6.10, such powers, duties, obligations, rights
and trusts as the Trustee may consider necessary or desirable. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility as
a successor trustee
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under Section 6.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 6.08 hereof.
In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 6.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed by the Trustee, the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
REMIC or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trust conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee, or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Trustee. Every such instrument shall be filed with the
Trustee. No trustee shall be personally liable by reason of any act or omission
of any other trustee hereunder.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee to the extent permitted by law, without the appointment
of a new or successor trustee or co-trustee.
Section 6.11. APPOINTMENT OF OFFICE OR AGENCY. The Trustee will
appoint an office or agency in the City of New York, 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 6.12. REPRESENTATIONS AND WARRANTIES OF THE TRUSTEE.
The Trustee hereby represents and warrants to the Depositor, as of the Closing
Date, that:
(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
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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 (of 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.
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
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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 Trust 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 Underlying Certificates is exercised, the REMIC 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 the REMIC and shall specify the first day of such
period in a statement attached to the 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 the REMIC will be terminated, after making required
payments under Section 3.05, the Trustee shall distibute or credit, or
cause to be distributed or credited, to the Holders of the Residual
Certificates all cash on hand (other than cash retained to meet claims),
and the 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 REMIC, 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 the Trust Fund 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. The Class A Certificates
shall be designated as the "regular interests" in the REMIC and the Residual
Certificates shall be designated as the "residual interests" in the REMIC. The
Trustee shall not permit the creation of any "interests" in the REMIC (within
the meaning of Section 860G of the Code) other than the interests represented by
the Certificates.
(b) The Closing Date is hereby designated as the "Startup
Day" of the Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The Trustee, as agent for the REMICs 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 the Residual Certificates shall be designated, in the
manner provided under Treasury regulations section 1.860F-4(d) and Treasury
regulations section 301.6231(a)(7)-1, as the tax matters person of the REMIC. By
their acceptance thereof, the holders of the largest Percentage Interest of the
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 REMIC.
(d) The Trustee shall prepare, timely file and sign all of the
Tax Returns in respect of the 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 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
Residual Certificates may reasonably request.
(e) The Trustee shall perform on behalf of the Trust Fund all
reporting and other tax compliance duties that are the responsibility of the
REMIC created hereby under the Code, the REMIC Provisions or other compliance
guidance issued by the Internal Revenue Service or any state 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
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telephone number of the person who will serve as the representative of the
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 the
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 the
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) to the effect that the contemplated action
will not, with respect to the 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 the REMIC created hereunder as defined in Section 860F(a)(2) of
the Code, on any contributions to the REMIC after the Startup Day 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 if such tax arises out of or results from the negligence of 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) The Trustee shall, for federal income tax purposes,
maintain books and records with respect to the Trust Fund on a calendar year and
on an accrual basis.
(i) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the 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 the REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject the REMIC to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local
law or ordinances.
(j) The Trustee shall not enter into any arrangement by which
the REMIC created hereunder will receive a fee or other compensation for
services nor permit the 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.
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(k) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury regulations, the "latest possible maturity date" for each of the
respective Classes of Certificates evidencing a "regular interests" in the REMIC
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 the
REMIC created hereunder or (ii) the termination of the REMIC pursuant to Article
VII of this Agreement), nor acquire any assets for the REMIC, nor sell or
dispose of any investments in the Certificate Account for gain, nor accept any
contributions to the 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 the REMIC as a REMIC
or (b) cause the REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.
Section 8.03. INDEMNIFICATION.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.
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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 Certificates
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
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 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 (i) such amendment is permitted by this
Agreement and (ii) such amendment will not result in the imposition of any tax
on the REMIC or cause the REMIC to fail to qualify as a REMIC at any time that
any Certificates are outstanding. In executing any amendment permitted by this
Section 9.01, the Trustee shall be entitled to receive and shall be fully
protected in relying upon such Opinion of Counsel. The Trustee shall not be
obligated to enter into any such amendment which effects the Trustee's own
rights, duties or immunities under this Trust Agreement or otherwise.
Promptly after the execution of any such amendment the Trustee
shall furnish a copy of such amendment to each Certificateholder and to the
Rating Agencies.
<PAGE>
-53-
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.
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.
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 hereinbefore provided, and unless also the
Holders of Certificates 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 such 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 HERETO AND
<PAGE>
-54-
THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 9.04. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered at (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 other parties hereto in
writing by the Depositor; (b) in the case of the Trustee, The Bank of New York,
101 Barclay Street, 12E, New York, New York 10286, Attention: MBS Unit, or to
such other address as may hereafter be furnished to the other parties hereto 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 Trust Agreement shall be
conclusively presumed to have been duly given whether or not the
Certificateholder receives such notice. Any notice mailed to the Trustee shall
be effective only upon receipt.
Section 9.05. SEVERABILITY OF PROVISIONS. If any one or more of
the covenants, agreements, provisions or terms of this Trust 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 Trust Agreement and shall in no way
affect the validity or enforceability of the other provisions of this Trust
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
Agencies, the Trustee shall use its best efforts promptly to provide notice to
the Rating Agencies 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.
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 Duff & Phelps Credit Rating Co., 17 State Street, 12th Floor, New York, New
York 10004 and to Standard & Poor's, a division of McGraw-Hill Companies, Inc.,
26
<PAGE>
-55-
Broadway, New York, New York 10004, or such other addresses as the Rating
Agencies 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>
-56-
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/ Vincent J. Varca
--------------------------------------
Name: Vincent J. Varca
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Rob Mueller
--------------------------------------
Name: Rob Mueller
Title: Assistant Vice President
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the __th day of February, 1999 before me, a notary public in and for
said State, personally appeared ______________, 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 __th day of February, 1999 before me, a notary public in and for
said State, personally appeared ____________________, known to me to be a
_______________ of The Bank of New York, 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 CLASS A-1 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").
Series 1999-1, Class A-1 Aggregate Certificate Principal
Balance of Class A-1 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-1 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-1 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-1 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-1 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-1 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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 CLASS A-2 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").
Series 1999-1, Class A-2 Aggregate Certificate Principal
Balance of Class A-2 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-2 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-2 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-2 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-2 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-2 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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-3
FORM OF CLASS A-3 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 FEBRUARY 25, 1999. BASED
ON THE OID REGULATIONS AND ASSUMING THAT THE MORTGAGE LOANS PREPAY AT 275%
OF THE STANDARD PREPAYMENT ASSUMPTION, USED SOLELY FOR THE PURPOSES OF
APPLYING THE OID RULES TO THE CERTIFICATES (THE "PREPAYMENT ASSUMPTION"),
THIS CERTIFICATE HAS BEEN ISSUED WITH NO MORE THAN $_______ OF OID PER
$1,000 OF CERTIFICATE PRINCIPAL BALANCE, THE YIELD TO MATURITY IS 6.8352%
AND THE AMOUNT OF OID ATTRIBUTABLE TO THE INITIAL ACCRUAL PERIOD IS NO MORE
THAN $_____ PER $1,000 OF CERTIFICATE PRINCIPAL BALANCE, COMPUTED UNDER THE
EXACT METHOD. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY
AT A RATE BASED ON THE PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE.
Series 1999-1, Class A-3 Aggregate Certificate Principal
Balance of Class A-3 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-3 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-3 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-3 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-3 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-3 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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 under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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-4
FORM OF CLASS A-4 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").
Series 1999-1, Class A-4 Aggregate Certificate Principal
Balance of Class A-4 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-4 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-4 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-4 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-4 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-4 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-4 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-5
FORM OF CLASS A-5 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").
Series 1999-1, Class A-5 Aggregate Certificate Principal
Balance of Class A-5 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-5 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-5 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-5 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-5 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-5 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-5 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-6
FORM OF CLASS A-6 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").
Series 1999-1, Class A-6 Aggregate Certificate Principal
Balance of Class A-6 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-6 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-6 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-6 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-6 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-6 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By -----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-6 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-7
FORM OF CLASS A-7 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").
Series 1999-1, Class A-7 Aggregate Certificate Principal
Balance of Class A-7 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-7 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-7 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-7 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-7 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-7 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-7 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-8
FORM OF CLASS A-8 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").
Series 1999-1, Class A-8 Aggregate Certificate Principal
Balance of Class A-8 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum
Date: $__________
Date of Trust Agreement: February 25, 1999
Denomination: $__________
First Distribution Date: March 26, 1999
Trustee: The Bank of New York
No. __
Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-8 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-8 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-8 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-8 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-8 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-8 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-9
FORM OF CLASS A-9 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").
Series 1999-1, Class A-9 Aggregate Certificate Principal
Balance of Class A-9 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-9 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-9 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-9 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-9 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-9 Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-9 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-10
FORM OF CLASS A-10 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").
Series 1999-1, Class A-10 Aggregate Certificate Principal
Balance of Class A-10 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-10 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-10 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-10 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-10 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-10 Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-10 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-11
FORM OF CLASS A-11 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").
Series 1999-1, Class A-11 Aggregate Certificate Principal
Balance of Class A-11 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-11 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-11 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-11 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-11 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-11 Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-11 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-12
FORM OF CLASS A-12 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").
Series 1999-1, Class A-12 Aggregate Certificate Principal
Balance of Class A-12 Certificates
as of the Issue
Pass-Through Rate: 6.50% per annum Date: $__________
Date of Trust Agreement: February 25, 1999 Denomination: $__________
First Distribution Date: March 26, 1999 Trustee: The Bank of New York
No. __ Issue Date: February 25, 1999
CUSIP: 79548K
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL BALANCE OF THIS
CERTIFICATE MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING CERTIFICATE PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS
THAN THE AMOUNT SHOWN ABOVE AS THE DENOMINATION OF THIS CERTIFICATE.
<PAGE>
-2-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class A-12 Certificates as
of the Issue Date) in that certain beneficial ownership interest evidenced by
all the Class A-12 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class A-12 Certificates on
such Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class A-12 Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class A-12 Certificates, or otherwise by check mailed
by first class mail to the address of the Person entitled thereto, as such name
and address 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
<PAGE>
-3-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 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 Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or other
<PAGE>
-4-
governmental charge that may be imposed in connection with any transfer or
exchange of 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 follow ing 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>
-5-
IN WITNESS WHEREOF, the Trustee has caused this Certificate to
be duly executed under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-12 Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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>
-1-
EXHIBIT A-13
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
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").
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN.
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 OR ANY POSSESSION
THEREOF, 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) THAT 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) SHALL HEREINAFTER BE 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
<PAGE>
-2-
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 BY ACCEPTANCE HEREOF SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF SECTION 5.02(D) OF THE
POOLING AND SERVICING AGREEMENT REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP
OF THIS CERTIFICATE.
Series 1999-1, Class R Aggregate Percentage Interest
of the Class R Certificates: 100.00%
Pass-Through Rate: 6.50% per annum Trustee: The Bank of New York
Date of Trust Agreement: February 25, 1999 Issue Date: February 25, 1999
First Distribution Date: March 26, 1999 CUSIP: 79548K
No. __
<PAGE>
-3-
MORTGAGE PASS-THROUGH 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 UNDERLY ING 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 of the Class R Certificates as of
the Issue Date) in that certain beneficial ownership interest evidenced by all
the Class R 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, 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 Agreement 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 26th day of each month or, if such 26th day is not a Business Day, the
Business Day immediately following (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 of such distribution (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 Class R Certificates on such
Distribution Date pursuant to the Agreement.
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 Record Date immediately prior to such
Distribution Date and is the registered owner of Class R Certificates the
aggregate initial Certificate Principal Balance of which is in excess of the
lesser of (i) $5,000,000 or (ii) two-thirds of the aggregate initial Certificate
Principal Balance of the Class R Certificates, or otherwise by check mailed by
first class mail to the address of the Person entitled thereto, as such name and
address 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
<PAGE>
-4-
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 "Certificates") and representing a Percentage Interest in the
Class of Certificates specified on the face hereof equal to the denomination
specified on the face hereof divided by the aggregate Certificate Principal
Balance of the Class of Certificates specified on the face hereof.
The 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 Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Underlying Certificates.
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 Certificates 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 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 in authorized denominations evidencing the same aggregate
Percentage Interest will be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Classes and 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 in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
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
<PAGE>
-5-
transaction that 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 (other than in connection with the initial
transfer of any such Certificate by the Depositor to an affiliate of the
Depositor), the Trustee shall 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 it 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 desiring to
effect the transfer and/or such Certificateholder's prospective transferee upon
which such Opinion of Counsel is based, if any. Neither the Depositor nor 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
this Agreement to permit the transfer of this Certificate without registration
or qualification. Any Certificateholder desiring to effect the transfer of this
Certificate shall, and does hereby agree to, indemnify the Trustee and the
Depositor 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 this Certificate with "Plan Assets" to acquire this Certificate shall
be made except in accordance with Section 4.02(c) of the Agreement.
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 that
acknowledges that (A) the Class R Certificates have been designated as a
residual interest in 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 R 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 Trust Fund to cease
to qualify as a REMIC or cause the imposition of a tax upon the REMIC.
<PAGE>
-6-
No service charge will be made for any such registration of
transfer or exchange of 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 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 under its official seal.
Dated: February 25, 1999
THE BANK OF NEW YORK,
as Trustee
By
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
THE BANK OF NEW YORK,
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 _________________
of 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 Mortgage Pass-Through
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
UNDERLYING CERTIFICATES
CWMBS, Inc., Mortgage Pass-Through Certificates, Series 1998-23, Class A,
representing _____% of such class
Initial principal balance of the Underlying Certificates: $__________
Principal balance of the Underlying Certificates as of the Closing
Date:
$------------
<PAGE>
EXHIBIT C-1
FORM OF TRANSFEROR REPRESENTATION LETTER
[Date]
Salomon Brothers Mortgage
Securities VII, Inc.
390 Greenwich Street
4th Floor
New York, New York 10013
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Re: Salomon Brothers Mortgage Securities VII, Inc., Trust
Certificates, Series 1999-1, Class ___ 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 as follows:
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 February 25, 1999 (the
"Trust Agreement"), between Salomon Brothers Mortgage Securities VII, Inc. as
Depositor and
<PAGE>
-2-
The Bank of New York as Trustee, pursuant to which Trust Agreement the
Certificates were issued.
<PAGE>
-3-
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.
390 Greenwich Street
4th Foor
New York, New York 10013
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Salomon Brothers Mortgage Securities VII, Inc., Trust
Certificates, Series 1999-1, Class ___ 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 (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.
All capitalized terms used but not otherwise defined herein have the
respective meanings assigned thereto in the Trust Agreement, dated February 25,
1999, between Salomon Brothers Mortgage Securities VII, Inc. as Depositor and
The Bank of New York 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 [name of
Transferor] (the "Transferor") and The Bank of New York 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 $25,000,000 as demonstrated in its latest annual
financial statements, A COPY OF WHICH IS ATTACHED HERETO.
- --------
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>
___ 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.
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.
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
<PAGE>
-3-
(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.
Until 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.
Dated:
Very truly yours,
---------------------------------------
PRINT NAME OF TRANSFEREE
By:
-------------------------------------
Name:
Title:
<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 [name of
Transferor] (the "Transferor") and The Bank of New York 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.
Until 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.
Dated:
Very truly yours,
---------------------------------------
PRINT NAME OF TRANSFEREE OR ADVISOR
By:
-------------------------------------
Name:
Title:
IF AN ADVISER:
--------------------------------------
PRINT NAME OF TRANSFEREE
<PAGE>
FORM OF TRANSFEREE REPRESENTATION LETTER
The undersigned hereby certifies on behalf of the purchaser named
below (the "Purchaser") as follows:
1. I am an executive officer of the Purchaser.
2. The Purchaser is a "qualified institutional buyer", as defined
in Rule 144A, ("Rule 144A") under the Securities Act of 1933, as amended.
3. As of the date specified below (which is not earlier than the
last day of the Purchaser's most recent fiscal year), the amount of
"securities", computed for purposes of Rule 144A, owned and invested on a
discretionary basis by the Purchaser was in excess of $100,000,000.
Name of Purchaser
--------------------------------------------------------------
By: (Signature)
--------------------------------------------------------------
Name of Signatory
--------------------------------------------------------------
Title
--------------------------------------------------------------------------
Date of this certificate
-------------------------------------------------------
Date of information provided in paragraph 3
----------------------------------
<PAGE>
EXHIBIT C-2
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
: ss.:
COUNTY OF )
_________________, being duly sworn, deposes, represents and
warrants as follows:
1. I am a ________________ 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 1999-1, 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. 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. 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. 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. 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. 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. The Owner's taxpayer identification number is _______________.
8. 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. The Owner is not acquiring and will not transfer the Residual
Certificates in order to impede the assessment or collection of any tax.
10. 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. 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. 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.
13. 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
<PAGE>
-3-
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. The 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. The 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. 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 or
trust whose income from sources without the United States may be included in
gross income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
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__.
Very truly yours,
---------------------------------------
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 duly sworn, deposes, represents
and warrants as follows:
1. I am a ___________________ of _______________________
(the "Owner"), a corporation duly organized and existing under the laws of
- --------------------,
on behalf of whom I make this affidavit.
2. The Owner is not transferring the Class R Cetificates (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 and (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. The Owner does not know or believe that any
representation contained therein is false.
5. At the time of the transfer, the Owner has 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__.
Very truly yours,
---------------------------------------
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.
390 Greenwich Street
4th Floor
New York, New York 10013
The Bank of New York
101 Barclay Street
New York, New York 10286
Re: Salomon Brothers Mortgage Securities VII, Inc.
Trust Certificates, Series 1999-1, 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 February 25, 1999 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) or (2) are
acurate:
_____ (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 at 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable
law, will not constitute or result in any prohibited transaction under
ERISA or Section 4975 of the Code,
<PAGE>
-2-
will not subject the Depositor, the Trustee or the Master Servicer to
any obligation in addition to those undertaken in the Pooling and
Servicing Agreement and one of the following conditions are met:
(i) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificate is an
"insurance company general account" (as such term is defined
in PTCE 95-60), (B) the conditions set forth in PTCE 95-60
have been satisfied and (C) there is no Plan with respect to
which the amount of such general account's reserves and
liabilities for contracts held by or on behalf of such Plan
and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same
employee organization, exceeds 10% of the total of all
reserves and liabilities of such general account (as
determined under PTCE 95-60) as of the date of the acquisition
of such Certificates;
(ii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
insurance company general account, (B) the requirements of
Section 401(c) of ERISA and the regulations to be promulgated
thereunder ("401(c) Regulations") have been satisfied and will
continue to be satisfied and (C) the insurance company
represents that it understands that the operation of the
general account after December 31, 1998 may affect its ability
to continue to hold such Certificates after the date which is
18 months after the 401(c) Regulations become final and that
unless a Class Exemption or an exception under Section 401(c)
of ERISA is then available for the continued holding of such
Certificates, it will dispose of such Certificates prior to
the date which is 18 months after the 401(c) Regulations
become final;
(iii) the transferee is an insurance company and (A)
the source of funds used to purchase such Certificates is an
"insurance company pooled separate account" (as such term is
defined in PTCE 90-1), (B) the conditions set forth in PTCE
90-1 have been satisfied and (C) there is no Plan, together
with all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 90-1) or by the same
employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as
determined under PTCE 90-1) as of the date of the acquisition
of such Certificates;
(iv) the transferee is a bank and (A) the source of
funds used to purchase such Certificates is a "collective
investment fund" (as defined in PTCE 91-38), (B) the
conditions set forth in PTCE 91-38 have been satisfied and (C)
there is no Plan, the interests of which, together with the
interests of any other Plans maintained by the same employer
or employee organization, in the collective investment fund
exceed 10% of the total of all assets in the collective
investment fund (as determined under PTCE 91-38) as of the
date of acquisition of such Certificates;
<PAGE>
-3-
(v) the transferee is a "qualified professional asset
manager" described in PTCE 84-14 and the conditions set forth
in PTCE 84-14 have been satisfied and will continue to be
satisfied; or
(vi) the transferee is an "in-house asset manager"
described in PTCE 96- 23 and the conditions set forth in PTCE
96-23 have been satisfied and will continue to be satisfied.
Very truly yours,
---------------------------------------
PRINT NAME OF TRANSFEREE
By:
-------------------------------------
Name:
Title:
