- --------------------------------------------------------------------------------
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): November 30, 1999
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
(AS DEPOSITOR UNDER THE TRUST AGREEMENT, DATED AS
OF NOVEMBER 30, 1999, PROVIDING FOR THE
ISSUANCE OF TRUST CERTIFICATES, SERIES 1999-6)
Salomon Brothers Mortgage Securities VII, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-84249 13-3439681
-------- --------- ----------
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification Number)
390 Greenwich Street
New York, New York 10013
- ------------------ -----
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (212) 723-6391
- --------------------------------------------------------------------------------
<PAGE>
-2-
Item 2. Acquisition or Disposition of Assets
------------------------------------
Description of the Certificates
On November 30, 1999, a single series of certificates, entitled Salomon
Brothers Mortgage Securities VII, Inc., Trust Certificates, Series 1999-6 (the
"Trust Certificates") was issued pursuant to the trust agreement attached hereto
as Exhibit 4.1, dated as of November 30, 1999, between Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor") and Bank One, National
Association as trustee. The Trust Certificates consist of four 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 November 30, 1999 of $178,660,299. 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 November 29, 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 $110,500,000 6.50% per annum
A-2 $51,160,299 6.50% per annum
A-3 $17,000,000 6.50% per annum
R 100% Percentage Interest N/A
================================================================================
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
<PAGE>
-3-
Exhibit No. Description
----------- -----------
4.1 Trust Agreement, dated as of
November 30, 1999, between Salomon
Brothers Mortgage Securities VII,
Inc. as Depositor and Bank One,
National Association as Trustee
relating to Salomon Brothers
Mortgage Securities VII, Inc., Trust
Certificates, Series 1999-6.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.
By: /s/ Matthew R. Bollo
------------------------
Matthew R. Bollo
Assistant Vice President
Dated: November 30, 1999
<PAGE>
Index to Exhibits
-----------------
Sequentially
Exhibit No. Description Numbered Page
- ----------- ----------- -------------
4.1 Trust Agreement, dated as of November 30, 6
1999, between Salomon Brothers Mortgage Securities
VII, Inc. as Depositor and Bank One, National
Association as Trustee relating to Salomon Brothers
Mortgage Securities VII, Inc., Trust Certificates,
Series 1999-6.
Exhibit 4.1
<PAGE>
================================================================================
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
Depositor
and
BANK ONE, NATIONAL ASSOCIATION,
Trustee
-----------------------------------------
TRUST AGREEMENT
Dated as of November 30, 1999
-----------------------------------------
$178,660299
Trust Certificates
Series 1999-2
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
- ------- ----
ARTICLE I
<S> <C>
DEFINITIONS.....................................................................................1
1.01. Definitions........................................................................................1
Accretion Termination Date...............................................................................1
Affiliate................................................................................................2
Available Funds..........................................................................................2
Book-Entry Certificate...................................................................................2
Book-Entry Custodian.....................................................................................2
Business Day.............................................................................................2
Certificate..............................................................................................2
Certificate Account......................................................................................2
Certificate Factor.......................................................................................2
Certificate Owner........................................................................................2
Certificate Principal Balance............................................................................2
Certificate Register and Certificate Registrar...........................................................3
Certificateholder or Holder..............................................................................3
Class ................................................................................................3
Class A Certificate......................................................................................3
Class A-1 Certificate....................................................................................3
Class A-2 Certificate....................................................................................3
Class A-3 Certificate....................................................................................3
Class R Certificate......................................................................................4
Closing Date.............................................................................................4
Code ................................................................................................4
Commission...............................................................................................4
Corporate Trust Office...................................................................................4
DCR ................................................................................................4
Definitive Certificates..................................................................................4
Depositor................................................................................................4
Depository...............................................................................................4
Depository Participant...................................................................................4
Disqualified Organization................................................................................4
Distribution Date........................................................................................5
DTC ................................................................................................5
Eligible Account.........................................................................................5
Eligible Investments.....................................................................................5
ERISA ................................................................................................7
Extraordinary Trust Fund Expenses........................................................................7
Final Distribution Date..................................................................................7
FNT Subordinate Certificate..............................................................................7
Freddie Mac..............................................................................................7
Holder ................................................................................................7
Interest Accrual Period..................................................................................7
-i-
<PAGE>
Section Page
- ------- ----
Interest Distribution Amount.............................................................................8
Interest Shortfalls......................................................................................8
Master Servicer..........................................................................................8
Non-United States Person.................................................................................8
Opinion of Counsel.......................................................................................8
Ownership Interest.......................................................................................8
Pass-Through Rate........................................................................................8
Percentage Interest......................................................................................8
Permitted Transferee.....................................................................................9
Person ................................................................................................9
Plan ................................................................................................9
Pooling and Servicing Agreement..........................................................................9
Principal Distribution Amount............................................................................9
Rating Agencies..........................................................................................9
Realized Loss............................................................................................9
Record Date..............................................................................................9
Registrar................................................................................................9
Regular Certificate......................................................................................9
REMIC ................................................................................................9
REMIC Provisions.........................................................................................9
Residual Certificate....................................................................................10
Responsible Officer.....................................................................................10
S&P ...............................................................................................10
Single Certificate......................................................................................10
Startup Day.............................................................................................10
Tax Returns.............................................................................................10
Transfer ...............................................................................................10
Transfer Affidavit and Agreement........................................................................10
Transferee..............................................................................................10
Transferor..............................................................................................11
Trust ...............................................................................................11
Trust Certificate.......................................................................................11
Trustee ...............................................................................................11
Trust Fund..............................................................................................11
Underlying Certificates.................................................................................11
Underlying Certificate Distribution Date................................................................11
Underlying Certificate Distribution Date Statement......................................................11
Underlying Certificate Schedule.........................................................................11
Voting Rights...........................................................................................12
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES
AND THE ORIGINAL ISSUANCE OF CERTIFICATES......................................................13
-ii-
<PAGE>
Section Page
- ------- ----
2.01. Conveyance of the Underlying Certificates......................................................13
2.02. Issuance of Certificates.......................................................................13
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES..................................................14
3.01. Collection of Payments on the Underlying Certificates; Certificate Account.....................14
3.02. Distributions..................................................................................15
3.03. Statements to Certificateholders...............................................................18
3.04. [Reserved].....................................................................................19
3.05. [Reserved].....................................................................................19
3.06. Allocation of Extraordinary Trust Fund Expenses, Interest Shortfalls and Realized
Losses.........................................................................................19
3.07. Notices to Trustee.............................................................................20
3.08. Securities and Exchange Commission; Additional Information.....................................20
ARTICLE IV
THE CERTIFICATES...............................................................................21
4.01. The Certificates...............................................................................21
4.02. Registration of and Limitations on Transfer and Exchange of Certificates.......................23
4.03. Mutilated, Destroyed, Lost or Stolen Certificates..............................................27
4.04. Persons Deemed Owners..........................................................................27
4.05. Certain Available Information..................................................................27
ARTICLE V
THE DEPOSITOR..................................................................................29
5.01. Liability of the Depositor.....................................................................29
5.02. Merger or Consolidation of the Depositor.......................................................29
5.03. Limitation on Liability of the Depositor and Others............................................29
ARTICLE VI
THE TRUSTEE....................................................................................31
6.01. Duties of Trustee..............................................................................31
6.02. Certain Matters Affecting the Trustee..........................................................32
6.03. Trustee Not Liable for Certificates............................................................33
6.04. Trustee May Own Certificates...................................................................33
6.05. Trustee's Fees and Expenses....................................................................33
-iii-
<PAGE>
Section Page
- ------- ----
6.06. Eligibility Requirements for Trustee...........................................................34
6.07. Resignation and Removal of the Trustee.........................................................34
6.08. Successor Trustee..............................................................................35
6.09. Merger or Consolidation of Trustee.............................................................35
6.11. Appointment of Office or Agency................................................................36
6.12. Representations and Warranties of the Trustee..................................................36
6.13. Certificate Account Statements.................................................................37
6.14. Location of Underlying Certificates............................................................37
6.15. Compliance with Withholding Requirements.......................................................38
ARTICLE VII
TERMINATION....................................................................................39
7.01. Termination Upon Distribution to Certificateholders............................................39
7.02. Failure of Certificateholders to Surrender Certificates........................................39
7.03. Additional Termination Requirements............................................................39
ARTICLE VIII
REMIC PROVISIONS...............................................................................41
8.01. REMIC Administration...........................................................................41
8.02. Prohibited Transactions and Activities.........................................................43
8.03. Indemnification................................................................................43
ARTICLE IX
MISCELLANEOUS PROVISIONS.......................................................................44
9.01. Amendment......................................................................................44
9.02. Limitation on Rights of Certificateholders.....................................................45
9.03. Governing Law..................................................................................45
9.04. Notices........................................................................................46
9.05. Severability of Provisions.....................................................................46
9.06. Notice to Rating Agencies......................................................................46
9.07. Article and Section References.................................................................47
9.08. Execution in Counterparts......................................................................47
</TABLE>
-iv-
<PAGE>
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 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
-v-
<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 BANK ONE, NATIONAL ASSOCIATION 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 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 $ 110,500,000 September 2029
Class A-2 6.50% per annum $ 51,160,299 September 2029
Class A-3 6.50% per annum $ 17,000,000 September 2029
</TABLE>
- ------------------------
(1) Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the Distribution Date in the month following the month of
the maturity date for the Mortgage Loan with the latest maturity date
has been designated as the "latest possible maturity date" for each
Class of Certificates.
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:
ACCRETION TERMINATION DATE: The earlier to occur of (i) the
Distribution Date on which the Certificate Principal Balances of the Class A-1
Certificates and the Class A-2 Certificates have been reduced to zero or (ii)
the Distribution Date immediately following the Underlying Distribution Date on
which the principal balances of the FNT Subordinate Certificates have been
reduced to zero.
<PAGE>
-2-
AFFILIATE: With respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
AVAILABLE FUNDS: As to any Distribution Date, the difference
between (a) the aggregate distributions on the Underlying Certificates for the
related Underlying Certificate Distribution Date and (b) the amount of any
Extraordinary Trust Fund Expenses.
BOOK-ENTRY CERTIFICATE: Any Certificate registered in the name
of the Depository or its nominee.
BOOK-ENTRY CUSTODIAN: The custodian appointed pursuant to
Section 4.01.
BUSINESS DAY: Any 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. The Certificate Account shall at
all times be maintained as an Eligible Account.
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 after the initial Distribution Date, 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,
plus, in the case of the Class A-3 Certificates, an amount equal to the Interest
Distribution Amount (or portion thereof) for such Class
<PAGE>
-3-
of Certificates added to the Certificate Principal Balance of such Certificates
on such immediately prior Distribution Date pursuant to Section 3.01(d) if such
immediately prior Distribution Date occurs on or prior to the Accretion
Termination Date. With respect to any Certificate, as 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 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 or a Class A-3 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.
<PAGE>
-4-
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-4 and evidencing a Residual Interest in the REMIC
for purposes of the REMIC Provisions.
CLOSING DATE: November 30, 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 1 Bank One Plaza, Suite IL1-0126, Chicago,
Illinois 60670, Attention: Global Corporate Trust Services, and for purposes of
Section 6.11 is 14 Wall Street, 8th Floor, New York, New York 10005, or at such
other address as the Trustee may designate from time to time by notice to the
Certificateholders and the Depositor.
DCR: Duff & Phelps Credit Rating Co., or its successor in
interest.
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
<PAGE>
-5-
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 Business Day following each Underlying
Certificate Distribution Date or, if such day is not a Business Day, the
Business Day following such day commencing in December 1999.
DTC: The Depository Trust Company, or any successor depository
hereafter named under the Pooling and Servicing Agreement.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a federal or state chartered depository institution or trust company the
short-term deposits of which are rated A-1+ by S&P and D-1 or D-1+ by DCR (if
rated by DCR) 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 be payable on demand or 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 S&P and AAA by DCR (if
rated by DCR) 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 each 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 either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either 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 each 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 either Rating
Agency or
<PAGE>
-6-
result in any of such rated Certificates being placed on credit review
status (other than for possible upgrading) by either 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 each 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
either Rating Agency or result in any of such rated Certificates being
placed on credit review status (other than for possible upgrading) by
either Rating Agency;
(v) repurchase agreements on obligations with respect to
any security described in clauses (i) or (ii) above or any other
security issued or guaranteed by an agency or instrumentality of the
United States of America, in either case entered into with a depository
institution or trust company (acting as principal) described in clause
(iv) above;
(vi) securities (other than stripped bonds or stripped
coupon securities) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America
or any state thereof which, at the time of such investment or
contractual commitment providing for such investment, receive the
highest short-term or one of the two highest long-term ratings by each
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 either Rating Agency or result in any of such rated
Certificates being placed on credit review status (other than for
possible upgrading) by either Rating Agency;
(vii) interests in any money market fund which at the date
of acquisition of the interests in such funds has the highest fund
ratings from each Rating Agency or is otherwise approved in writing by
each Rating Agency; and
(viii) such other investments acceptable to each Rating
Agency as would not result in the downgrading of the rating then
assigned to the Certificates by either Rating Agency or result in any of
such rated Certificates being placed on credit review status (other
than for possible upgrading) by either 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.
<PAGE>
-7-
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.
FNT SUBORDINATE CERTIFICATE: DLJ Mortgage Acceptance Corp.,
First Nationwide Trust Series 1999-4, Mortgage Pass-Through Certificates, Series
1999-4, Class C-B-1, Class C-B-2, Class C-B-3, Class C-B-4, Class C-B-5, Class
C-B-6, Class C-B-7.
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.
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
Interest Shortfalls allocated to the Underlying Certificates pursuant to the
terms of the Pooling and Servicing Agreement, 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.
<PAGE>
-8-
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 pursuant to the terms of the
Pooling and Servicing Agreement.
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, the interest
portion of Realized Losses, and any other amounts allocated in reduction of the
interest distributed on the Underlying Certificates on the related Underlying
Distribution Date.
MASTER SERVICER: First Nationwide Mortgage Corporation, or its
successor as master servicer under the Pooling and Servicing Agreement.
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.
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 are issuable only in Percentage Interests
corresponding to initial Certificate Principal Balances of $25,000 and integral
multiples of $1.00 in excess thereof. The Residual Certificates are issuable in
Percentage Interests of 20% and integral multiples thereof.
<PAGE>
-9-
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 August 1, 1999, among DLJ Mortgage Acceptance Corp. as
depositor, First Nationwide Mortgage Corporation and Headlands Mortgage Company
as sellers, First Nationwide Mortgage Corporation as servicer and Bank One,
National Association (formerly known as The First National Bank of Chicago) 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, plus, in the case of any
Distribution Date on or prior to the Accretion Termination Date, the amount
required to be included in the Principal Distribution Amount pursuant to Section
3.02(d).
RATING AGENCIES: DCR and S&P, 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
<PAGE>
-10-
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.
S&P: Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor in interest.
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.
<PAGE>
-11-
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 or Class R Certificates executed by the Trustee in substantially
the form set forth, respectively, in Exhibit A-1, A-2, A-3 or A-4 hereto.
TRUSTEE: Bank One, National Association, a national banking
association, or its successor in interest, or any successor trustee appointed as
herein provided.
TRUST FUND: The corpus of the Trust consisting of (i) the
Underlying Certificates, (ii) all distributions on the Underlying Certificates
payable after the Closing Date and (iii) amounts held from time to time by the
Trustee in the Certificate Account.
UNDERLYING CERTIFICATES: DLJ Mortgage Acceptance Corp., First
Nationwide Trust Series 1999-4, Mortgage Pass-Through Certificates, Series
1999-4, Class IIIPP-A-1, representing a 22.7848% 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 Underlying Certificates are transferred to the Trust by the Depositor and
identified in the Underlying Certificate Schedule. The Certificate Principal
Balance of the Underlying Certificates as of November 19, 1999 (after taking
into account distributions on the Underlying Certificates on such date) was
178,660,299.
UNDERLYING CERTIFICATE DISTRIBUTION DATE: The 19th day of each
month, or if such 19th day is not a Business Day, the Business Day following
such 19th 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
<PAGE>
-12-
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>
-13-
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 securities entitlements relating to 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 control of the Underlying Certificates through DTC
and securities intermediaries acting on its behalf 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>
-14-
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 1999-2
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
hold such funds uninvested or invest the funds deposited in the Certificate
Account and shall receive as compensation any interest or investment income
earned or other benefit realized 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.
<PAGE>
-15-
(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, (x) if such Distribution Date occurs prior to the
Accretion Termination Date, concurrently, to the
Holders of the Class A-1 Certificates and the Class A-2
Certificates, in respect of interest on such
Certificates, 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 such Certificates for such Distribution
Date,
(y) if such Distribution Date is the Accretion
Termination Date, concurrently, to the Holders of the
Class A-1 Certificates an amount equal to the Interest
Distribution Amount for such Class of Certificates, to
Holders of the Class A-2 Certificates an amount equal
to the Interest Distribution Amount for such Class of
Certificates and to the Holders of the Class A-3
Certificates an amount equal to the portion, if any, of
the Interest Distribution Amount for such Class of
Certificates that exceeds the amount required to be
included in the Principal Distribution Amount pursuant
to Section 3.02(d), in each case in respect of interest
on such Certificates, allocable among such Certificates
PRO
<PAGE>
-16-
RATA in accordance with the respective amounts payable
as to each pursuant to this clause SECOND, or
(z) if such Distribution Date occurs after the
Accretion Termination Date, to the Holders of the Class
A-3 Certificates, an amount equal to the Interest
Distribution Amount for such Class of Certificates; 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.
(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 Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero;
(ii) To the Holders of the Class A-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and
(iii) To the Holders of the Class A-3 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 FNT 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) On each Distribution Date that occurs prior to the
Accretion Termination Date, an amount equal to the Interest Distribution Amount
for the Class A-3 Certificates shall be added to the Certificate Principal
Balance of the Class A-3 Certificates. On the Distribution Date that occurs on
the Accretion Termination Date, the portion, if any, of Interest Distribution
Amount for the Class A-3 Certificates that is not required to reduce the
Certificate Principal Balances of the Class A-1 Certificates and Class A-2
Certificates to zero on such Distribution Date shall be added to the Certificate
Principal Balance of the Class A-3 Certificates; provided, however, that if the
<PAGE>
-17-
Accretion Termination Date is the Distribution Date immediately following the
Underlying Distribution Date on which the principal balances of the FNT
Subordinate Certificates have been reduced to zero, then no portion of Interest
Distribution Amount for the Class A-3 Certificates shall be added to the
Certificate Principal Balance of the Class A-3 Certificates. On each
Distribution Date that occurs after the Accretion Termination Date, no portion
of Interest Distribution Amount for the Class A-3 Certificates shall be added to
the Certificate Principal Balance of the Class A-3 Certificates. On any
Distribution Date on which any Interest Distribution Amount (or portion thereof)
for the Class A-3 Certificates is added to the Certificate Principal Balance of
the Class A-3 Certificates, an amount equal to such Interest Distribution Amount
(or portion thereof) shall be included in the Principal Distribution Amount for
such Distribution Date.
(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. 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.
<PAGE>
-18-
(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
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 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.
<PAGE>
-19-
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.
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. [RESERVED].
Section 3.05. [RESERVED].
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
<PAGE>
-20-
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. SECURITIES AND EXCHANGE COMMISSION; ADDITIONAL
INFORMATION.
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, if required, 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, the Trustee shall deliver a copy of
such form 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.
<PAGE>
-21-
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-4. 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.
<PAGE>
-22-
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. The cost of such issuance, including the
reasonable fees and expenses of the Trustee, shall constitute an Extraordinary
Trust Fund Expense. 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
<PAGE>
-23-
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 instructions. Upon the issuance of Definitive Certificates all references
herein to obligations imposed upon or to be performed by the Depository shall be
deemed to be imposed upon and performed by the Trustee, to the extent applicable
with respect to such Definitive Certificates, and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder.
Section 4.02. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND
EXCHANGE OF CERTIFICATES. (a) The Trustee shall cause to be kept at 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.
<PAGE>
-24-
(c) No Transfer of a Residual Certificate or any interest
therein shall be made to any Plan subject to ERISA or Section 4975 of the Code,
any Person acting, directly or indirectly, on behalf of any such Plan or any
Person acquiring such Certificates with "Plan Assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101 ("Plan Assets") unless the Depositor and the Trustee are provided
with an Opinion of Counsel which establishes to the satisfaction of the
Depositor and the Trustee that the purchase of such Certificates is permissible
under applicable law, will not constitute or result in any prohibited
transaction under ERISA or Section 4975 of the Code and will not subject the
Depositor, the Trustee or the Trust Fund to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in this Agreement, which Opinion of Counsel
shall not be an expense of the Depositor, the Trustee or the Trust. 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.
<PAGE>
-25-
(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 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.
<PAGE>
-26-
The proceeds of such sale, net of the commissions (which may include commissions
payable to the Trustee or its Affiliates), expenses and taxes due, if any, will
be remitted by the Trustee to such purported Transferee. The terms and
conditions of any sale under this clause (iii)(B) shall be determined in the
sole discretion of the Trustee, and the Trustee shall not be liable to any
Person having an Ownership Interest in a Residual Certificate as a result of its
exercise of such discretion.
(iv) The Trustee shall 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
<PAGE>
-27-
surrendered for transfer or exchange shall (if so required by the Trustee) be
duly endorsed by, or be accompanied by a written instrument of transfer in the
form satisfactory to the Trustee 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. 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) this Agreement and any
amendments hereof entered into pursuant to Section 9.01 and (ii) 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.
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.
<PAGE>
-28-
<PAGE>
-29-
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
<PAGE>
-30-
interests of the Certificateholders hereunder. In such event, the legal expenses
and costs of such action and any liability resulting therefrom (except any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder) shall be expenses, costs and
liabilities of the Trust Fund, and the Depositor shall be entitled to be
reimbursed therefor from the Certificate Account, any such right of
reimbursement being prior to the rights of the Certificate holders to receive
any portion of the amounts from which such cost, expense or liability is
reimbursable.
<PAGE>
-31-
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
instru ment 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) Except to the extent provided herein, no provision in
this Agreement shall require the Trustee to expend or risk its
own funds or otherwise incur any
<PAGE>
-32-
personal financial liability in the performance of any of its
duties as Trustee hereunder, or in the exercise of any of its
rights or powers, if the Trustee shall have reasonable grounds
for believing that repayment of funds or adequate indemnity
against such risk or liability is not reasonably assured to it;
and
(v) In exercising any right or power as holder of 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, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or other paper
or document reasonably believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and the written
advice of its counsel or 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 written advice or 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
<PAGE>
-33-
against such expense, or liability from such Certificateholders
as a condition to taking any such action; and
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys.
(b) All rights of action under this Agreement or under any of
the Certificates, enforceable by the Trustee, may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of such Certificates, subject to the provisions of this Agreement.
Section 6.03. TRUSTEE NOT LIABLE FOR CERTIFICATES. The recitals
contained herein and in the Certificates (other than the signature of the
Trustee, the authentication of the Certificate Registrar on the Certificates,
the acknowledgments of the Trustee contained in Article II and the
representations and warranties of the Trustee in Section 6.12) 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 and may transact business with other interested parties 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, the ownership by the Trustee of the Underlying
Certificates for the benefit of the Certificateholders hereunder, 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.
<PAGE>
-34-
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.
<PAGE>
-35-
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 obliga tions.
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 each 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 under Section 6.06
<PAGE>
-36-
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.
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
appoints its Corporate Trust Officer as 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 national banking association duly
organized, validly existing and in good standing under the laws of the
United States.
(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
<PAGE>
-37-
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 Agree ment or, in the Trustee's good
faith reasonable judgment, is likely to materially and adversely affect
the ability of the Trustee to perform its obligations under this
Agreement.
Section 6.13. 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 6.14. 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.
<PAGE>
-38-
Section 6.15. COMPLIANCE WITH WITHHOLDING REQUIREMENTS.
Notwithstanding any other provision of this Agreement, the Trustee shall comply
with all federal withholding requirements with respect to payments to
Certificateholders of interest or original issue discount that the Trustee
reasonably believes are applicable under the Code. The consent of
Certificateholders shall not be required for any such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall indicate the amount withheld to such
Certificateholder.
<PAGE>
-39-
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:
<PAGE>
-40-
(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, which shall be obtained at the expense of the Depositor;
(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 distribute 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.
<PAGE>
-41-
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) Any and all expenses relating to any tax audit of the Trust
Fund (including, but not limited to, any professional fees or any administrative
or judicial proceedings with respect thereto that involve the Internal Revenue
Service or state tax authorities), shall be paid by the Trustee but shall be
reimbursable to the Trustee as expenses of the Trust Fund unless such audit or
proceedings was caused by a breach of the Trustee's obligations hereunder. 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
<PAGE>
-42-
such compliance guidance, the Trustee shall provide (i) to any Transferor of a
Residual Certificate such information as is necessary for the application of any
tax relating to the transfer of a Residual Certificate to any Person who is not
a Permitted Transferee, (ii) to the Certificateholders such information or
reports as are required by the Code or the REMIC Provisions including reports
relating to interest, original issue discount and market discount or premium
(using the Prepayment Assumption as required) and (iii) to the Internal Revenue
Service the name, title, address and telephone number of the person who will
serve as the representative of 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.
<PAGE>
-43-
(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.
(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.
<PAGE>
-44-
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 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.
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.
It shall not be necessary for the consent of Certificateholders
under this Section 9.01 to approve the particular form of any proposed
amendment, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
<PAGE>
-45-
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 THE CERTIFICATEHOLDERS SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
<PAGE>
-46-
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., 390 Greenwich Street, 4th Floor, New York, New York 10013,
Attention: Mortgage Finance Group (telecopy number (212) 723-8604), or such
other address or telecopy number as may hereafter be furnished to the Trustee in
writing by the Depositor; (b) in the case of the Trustee, Bank One, National
Association, 1 Bank One Plaza Suite IL1-0126, Chicago, IL 60670, Attention:
Global Corporate Trust Services, or to such other address as may hereafter be
furnished to the Depositor in writing by the Trustee. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed to a Holder within the time prescribed in this
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 Ratings Services, a division of The
McGraw-Hill Companies, Inc., 26 Broadway, New York, New York 10004, or such
other addresses as the Rating Agencies may designate in writing to the parties
hereto.
<PAGE>
-47-
Section 9.07. ARTICLE AND SECTION REFERENCES. All article and
section references used in this Agreement, unless otherwise provided, are to
articles and sections in this Agreement.
Section 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become a binding agreement when one or more
counterparts have been signed by each party and delivered to the other party.
<PAGE>
IN WITNESS WHEREOF, the Depositor and the Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
SALOMON BROTHERS MORTGAGE
SECURITIES VII, INC.,
as Depositor
By: /s/ Matthew R. Bollo
------------------------------
Name: Matthew R. Bolo
Title: Assistant Vice President
BANK ONE, NATIONAL ASSOCIATION
as Trustee
By: /s/ Mary R. Fonti
----------------------------
Name: Mary R. Fonti
Title: Assistant Vice Presient
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1999 before me, a notary public in and for
said State, personally appeared Matthew R. Bollo, known to me to be an Assistant
Vice President of Salomon Brothers Mortgage Securities VII, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------
Notary Public
[Notarial Seal]
<PAGE>
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On the 30th day of November, 1999 before me, a notary public in and for
said State, personally appeared Mary R. Fonti, known to me to be an Assistant
Vice President of Bank One, National Association, 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]
