EXHIBIT 4.4
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.,
as Depositor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
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AMENDED AND RESTATED
TRUST AGREEMENT
Dated as of September 1, 1998
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SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED CERTIFICATES
SERIES 1998-11
Table of Contents
Section Page
ARTICLE I
DEFINITIONS..............................................................................................1
1.01. DEFINITIONS................................................................................1
1.02. OTHER DEFINITIONAL PROVISIONS..............................................................1
ARTICLE II
ORGANIZATION.............................................................................................2
2.01. NAME.......................................................................................2
2.02. OFFICE.....................................................................................2
2.03. PURPOSES AND POWERS........................................................................2
2.04. APPOINTMENT OF OWNER TRUSTEE...............................................................3
2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE...............................................3
2.06. DECLARATION OF TRUST.......................................................................3
2.07. LIABILITY OF THE CERTIFICATEHOLDERS........................................................4
2.08. TITLE TO TRUST PROPERTY....................................................................4
2.09. SITUS OF TRUST.............................................................................4
2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR............................................4
2.11. PAYMENT OF TRUST EXPENSES..................................................................5
2.12. INVESTMENT COMPANY.........................................................................6
2.13. COMMISSION FILINGS.........................................................................6
ARTICLE III
CONVEYANCE OF THE MORTGAGE LOANS; EQUITY CERTIFICATES....................................................6
3.01. CONVEYANCE OF THE MORTGAGE LOANS...........................................................6
3.02. INITIAL OWNERSHIP..........................................................................6
3.03. THE EQUITY CERTIFICATES....................................................................7
3.04. AUTHENTICATION OF EQUITY CERTIFICATES......................................................7
3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF EQUITY
CERTIFICATES...............................................................................7
3.06. MUTILATED, DESTROYED, LOST OR STOLEN EQUITY CERTIFICATES..................................10
3.07. PERSONS DEEMED CERTIFICATEHOLDERS.........................................................11
3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.................................11
3.09. MAINTENANCE OF OFFICE OR AGENCY...........................................................11
3.10. CERTIFICATE PAYING AGENT..................................................................11
ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE...................................................................13
4.01. GENERAL AUTHORITY.........................................................................13
4.02. GENERAL DUTIES............................................................................13
4.03. ACTION UPON INSTRUCTION...................................................................13
4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS OR
IN INSTRUCTIONS...........................................................................14
4.05. RESTRICTIONS..............................................................................15
4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS........................15
4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS..............................16
4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY...................................17
4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER.................................................17
4.10. MAJORITY CONTROL..........................................................................17
4.11. OPTIONAL REDEMPTION.......................................................................17
4.12. RESTRICTIONS..............................................................................17
ARTICLE V
APPLICATION OF TRUST FUNDS..............................................................................18
5.01. DISTRIBUTIONS.............................................................................18
5.02. METHOD OF PAYMENT.........................................................................18
5.03. TAX TREATMENT OF THE ISSUER...............................................................18
ARTICLE VI
CONCERNING THE OWNER TRUSTEE............................................................................19
6.01. ACCEPTANCE OF TRUSTS AND DUTIES...........................................................19
6.02. FURNISHING OF DOCUMENTS...................................................................20
6.03. REPRESENTATIONS AND WARRANTIES............................................................20
6.04. RELIANCE; ADVICE OF COUNSEL...............................................................21
6.05. NOT ACTING IN INDIVIDUAL CAPACITY.........................................................22
6.06. OWNER TRUSTEE NOT LIABLE FOR EQUITY CERTIFICATES OR RELATED DOCUMENTS.....................22
6.07. OWNER TRUSTEE MAY OWN EQUITY CERTIFICATES AND NOTES.......................................22
6.08. PAYMENTS FROM TRUST ESTATE................................................................22
6.09. DOING BUSINESS IN OTHER JURISDICTIONS.....................................................22
6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING AGENT...........................23
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE...........................................................................23
7.01. OWNER TRUSTEE'S FEES AND EXPENSES.........................................................23
7.02. INDEMNIFICATION...........................................................................23
ARTICLE VIII
TERMINATION OF OWNER TRUST AGREEMENT....................................................................24
8.01. TERMINATION OF OWNER TRUST AGREEMENT......................................................24
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..................................................25
9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE................................................26
9.02. REPLACEMENT OF OWNER TRUSTEE..............................................................26
9.03. SUCCESSOR OWNER TRUSTEE...................................................................26
9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE..................................................27
9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.............................................27
ARTICLE X
MISCELLANEOUS...........................................................................................28
10.01. AMENDMENTS................................................................................29
10.02. NO LEGAL TITLE TO TRUST ESTATE............................................................30
10.03. LIMITATIONS ON RIGHTS OF OTHERS...........................................................30
10.04. NOTICES...................................................................................30
10.05. SEVERABILITY..............................................................................31
10.06. SEPARATE COUNTERPARTS.....................................................................31
10.07. SUCCESSORS AND ASSIGNS....................................................................31
10.08. NO PETITION...............................................................................31
10.09. NO RECOURSE...............................................................................32
10.10. HEADINGS..................................................................................32
10.11. GOVERNING LAW.............................................................................32
10.12. INTEGRATION...............................................................................32
EXHIBIT
Exhibit A - Form of Equity Certificate.....................................A-1
Exhibit B - Certificate of Trust of Wilshire REIT Trust Series 1998-1 .....B-1
Exhibit C - Form of Rule 144A Investment Representation....................C-1
Exhibit D - Form of Investor Representation Letter.........................D-1
Exhibit E - Form of Transferor Representation Letter.......................E-1
Exhibit F - Form of Certificate of Non-Foreign Status......................F-1
Exhibit G - Form of ERISA Representation Letter............................G-1
Exhibit H - Form of Representation Letter..................................H-1
Exhibit I - Initial Trust Agreement........................................I-1
This Amended and Restated Trust Agreement (which amends and restates the
Trust Agreement, dated September 1, 1998, between Salomon Brothers Mortgage
Securities VII, Inc. as Depositor and Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity, but solely as, as Owner
Trustee, which is attached hereto as Exhibit I), dated as of September 1, 1998
(as amended from time to time, this "Owner Trust Agreement"), between the
Depositor and the Owner Trustee,
WITNESSETH THAT:
In consideration of the mutual agreements herein contained, the Depositor
and the Owner Trustee agree as follows:
ARTICLE I
Definitions
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Section 1.01. DEFINITIONS. For all purposes of this Owner Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture, dated September 1, 1998,
between Wilshire REIT Trust Series 1998-1 as Issuer and Norwest Bank Minnesota,
National Association as Indenture Trustee, which is incorporated by referenced
herein. All other capitalized terms used herein shall have the meanings
specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Owner Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Owner Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Owner Trust Agreement or in any such certificate or other
document, and accounting terms partly defined in this Owner Trust Agreement or
in any such certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Owner
Trust Agreement or in any such certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting principles,
the definitions contained in this Owner Trust Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in this Owner Trust Agreement shall refer to this Owner Trust
Agreement as a whole and not to any particular provision of this Owner Trust
Agreement; Article, Section and Exhibit references contained in this Owner Trust
Agreement are references to Articles, Sections and Exhibits in or
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to this Owner Trust Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation".
(d) The definitions contained in this Owner Trust Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Organization
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Section 2.01. NAME. The trust created hereby (the "Trust") shall be known
as "Wilshire REIT Trust Series 1998-1", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and ▇▇▇ and be sued.
Section 2.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Depositor.
Section 2.03. PURPOSES AND POWERS. The purpose of the Trust is to engage
in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Equity
Certificates pursuant to this Owner Trust Agreement and to sell the Notes
and the Equity Certificates;
(ii) to pay the organizational, start-up and transactional expenses
of the Trust;
(iii) to hold, assign, grant, transfer, pledge and convey all the
Mortgage Loans pursuant to the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to Section 5.01 any portion
of the Mortgage Loans released from the Lien of, and remitted to the Trust
pursuant to the Indenture;
(iv) to purchase and hold the Mortgage Loans pursuant to this Owner
Trust Agreement;
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(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(vi) if directed by the Majority Certificateholder subsequent to the
discharge of the Indenture, sell the Trust Estate, for the benefit of the
holders of the Equity Certificates;
(vii) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(viii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Trust Estate and the making of distributions to the
Certificateholder and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Owner Trust Agreement
or the Basic Documents.
Section 2.04. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby appoints
the Wilmington Trust Company as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
Section 2.05. INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Trust, as of the
date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt in
trust from the Depositor, as of the date hereof, of the foregoing contribution,
which shall constitute the initial corpus of the Trust and shall be deposited in
the Certificate Distribution Account.
Section 2.06. DECLARATION OF TRUST. The Owner Trustee hereby declares that
it shall hold the Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholders, subject to the
obligations of the Trust under the Basic Documents. It is the intention of the
parties hereto that the Trust constitute a "business trust" under the Business
Trust Statute and that this Owner Trust Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, for federal and state income and state and local franchise tax purposes,
the Trust shall not be treated as (i) an association (other than as a "qualified
REIT subsidiary" under Section 856(i) of the Code) subject separately to
taxation as a corporation or (ii) a "publicly traded partnership" as defined in
Treasury Regulation Section 1.7704-1 and that the Notes shall be characterized
as indebtedness, and the provisions of this Owner Trust Agreement shall be
interpreted to further this intention. Except as otherwise provided in this
Owner Trust Agreement, the rights of the Certificateholders will be those of
equity owners of the Trust. Effective as of the date hereof, the Owner Trustee
shall have all rights, powers and duties set forth herein and in the Business
Trust Statute with respect to accomplishing the purposes of the Trust.
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Section 2.07. LIABILITY OF THE CERTIFICATEHOLDERS. The Certificateholders
(other than any Pledgees as set forth in the definition thereof) shall be
jointly and severally liable directly to and shall indemnify the Trust and the
Owner Trustee for all losses, claims, damages, liabilities and expenses of the
Trust and the Owner Trustee (including Expenses, to the extent not paid by the
Indenture Trustee pursuant to Section 2.11 or out of the Trust Estate);
provided, however, that the Certificateholders shall not be liable for payments
required to be made on the Notes or the Equity Certificates, or for any losses
incurred by a Certificateholder in the capacity of an investor in the Equity
Certificates or a Noteholder in the capacity of an investor in the Notes. The
Certificateholders shall be liable for and shall promptly pay any entity level
taxes imposed on the Trust. In addition, any third party creditors of the Trust
(other than in connection with the obligations described in the second preceding
sentence for which the Certificateholders shall not be liable) shall be deemed
third party beneficiaries of this paragraph. The obligations of the
Certificateholders under this paragraph shall be evidenced by the Equity
Certificates.
Section 2.08. TITLE TO TRUST PROPERTY. Except with respect to the Mortgage
Loans, which will be assigned of record to the Indenture Trustee pursuant to the
Indenture, legal title to the Trust Estate shall be vested at all times in the
Trust as a separate legal entity except where applicable law in any jurisdiction
requires title to any part of the Trust Estate to be vested in a trustee or
trustees, in which case title shall be deemed to be vested in the Owner Trustee,
a co-trustee and/or a separate trustee, as the case may be.
Section 2.09. SITUS OF TRUST. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware or taking actions outside the
State of Delaware in order to comply with Section 2.03. Payments will be
received by the Trust only in Minnesota, Delaware or New York, and payments will
be made by the Trust only from Delaware or New York. The only office of the
Trust will be at the Corporate Trust Office in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby represents and warrants to the Owner Trustee that as of the
Closing Date:
(i) The Depositor is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently
conducted.
(ii) The Depositor is duly qualified to do business as a foreign
corporation in all jurisdictions it is required to be qualified to do
business as a foreign corporation under law and is in good standing and
has obtained all necessary licenses and approvals in all jurisdictions in
which the ownership or lease of its property or the conduct of its
business shall require such qualifications and in which the failure to so
qualify would have a
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material adverse effect on the business, properties, assets or condition
(financial or other) of the Depositor.
(iii) The Depositor has the power and authority to execute and
deliver this Owner Trust Agreement and to carry out its terms; the
Depositor has full power and authority to convey and assign the property
to be conveyed and assigned to and deposited with the Trust as part of the
Trust Estate and the Depositor has duly authorized such conveyance and
assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Owner Trust Agreement have
been duly authorized by the Depositor by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this Owner
Trust Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the Depositor, or any indenture,
agreement or other instrument to which the Depositor is a party or by
which it is bound; nor result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than pursuant to the Basic
Documents); nor violate any law or, to the best of the Depositor's
knowledge, any order, rule or regulation applicable to the Depositor of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Depositor or its properties.
(v) The Trust is not required to register as an investment company
under the Investment Company Act and is not under the control of a Person
required to so register.
(vi) The transfer of the Mortgage Loans to the Trust as contemplated
herein requires no regulatory approval, other than any such approvals as
have been obtained, and is not subject to any bulk transfer or similar law
in effect in any applicable jurisdiction.
(vii) No litigation is pending or, to the best of the Depositor's
knowledge, threatened against the Depositor that, if determined adversely
to the Depositor, would prohibit the Depositor from entering into this
Owner Trust Agreement or, in the Depositor's good faith and reasonable
judgment, is likely to materially and adversely affect either the ability
of the Depositor to perform its obligations under this Owner Trust
Agreement or the financial condition of the Depositor.
(viii) The Depositor is transferring the Mortgage Loans to the Trust
free and clear of any liens, pledges, charges and security interests.
Section 2.11. PAYMENT OF TRUST EXPENSES. The Indenture Trustee shall pay
the Trust's expenses (including expenses of the Owner Trustee and the Indenture
Trustee) incurred with respect to the performance of the Trust's duties under
the Indenture and the Owner Trust
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Agreement pursuant to Section 6.07 of the Indenture, or, if such amounts are
unpaid, the Owner Trustee shall be paid pursuant to Section 5.01 hereof.
Section 2.12. INVESTMENT COMPANY. Neither the Depositor nor any holder of
an Equity Certificate shall take any action which would cause the Trust to
become an "investment company" which would be required to register under the
Investment Company Act.
Section 2.13. COMMISSION FILINGS. The Depositor hereby agrees to furnish
such information and otherwise cooperate with the Indenture Trustee as necessary
for the Indenture Trustee to perform its duties as provided in Section 7.03 of
the Indenture.
ARTICLE III
Conveyance of the Mortgage Loans; Equity Certificates
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Section 3.01. CONVEYANCE OF THE MORTGAGE LOANS. The Depositor,
concurrently with the execution and delivery hereof, does hereby Grant to the
Trust, without recourse, all its right, title and interest in and to the
Mortgage Loans, including all interest and principal received on or with respect
to the Mortgage Loans after the Cut-off Date (other than payments of principal
and interest due on the Mortgage Loans on or before the Cut-off Date) the
proceeds thereof and all rights under the Related Documents (including the
related Mortgage Files). In addition, the Depositor hereby Grants to the Trust
all of its right, title, and interest in, to, and under the Mortgage Loan
Purchase Agreement and the Ownership Transfer Agreement. Notwithstanding the
above, the Trust shall be entitled to all scheduled payments of principal and
interest due on or before the Cutoff Date and collected after the Cut-off Date
with respect to any Mortgage Loan listed on Exhibit 3 to the Indenture.
The conveyance of the Mortgage Loans by the Depositor to the Trust
hereunder is intended to facilitate the simultaneous issuance of the Notes under
the Indenture and issuance of the Equity Certificates hereunder. The parties
hereto intend that the conveyance of the Mortgage Loans by the Depositor to the
Trust hereunder constitute a contribution by the Depositor to the Trust of all
of the Depositor's right, title and interest in and to the Mortgage Loans.
However, if the transactions contemplated by this Owner Trust Agreement are
determined to constitute a financing, the Depositor hereby Grants to the Trust a
security interest in the Trust Estate and all distributions thereon and proceeds
thereof, and this Owner Trust Agreement shall constitute a security agreement
under applicable law, and in such event, the parties hereto acknowledge that the
Indenture Trustee, in addition to holding the Mortgage Loans for the benefit of
the Noteholders, holds the Mortgage Loans as designee of the Trust.
Section 3.02. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the issuance of
the Equity Certificates the Depositor shall be the sole beneficial owner of the
Trust, and thereafter except as otherwise
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permitted hereunder, Wilshire Real Estate Investment Trust Inc. shall be the
sole Certificateholder.
Section 3.03. THE EQUITY CERTIFICATES. The Equity Certificates shall be
issued in the form of one or more Equity Certificates each representing not less
than a 10% Certificate Percentage Interest. The Equity Certificates shall
initially be registered in the name of Wilshire Real Estate Investment Trust
Inc. The Equity Certificates shall be executed on behalf of the Trust by manual
or facsimile signature of an authorized officer of the Owner Trustee and
authenticated in the manner provided in Section 3.04. Equity Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Trust, shall be validly issued and entitled to the benefit of this Owner
Trust Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Equity Certificates or did not hold such offices at the date of authentication
and delivery of such Equity Certificates. Without any further act, a Person
(including a transferee of an Equity Certificate) shall become a
Certificateholder and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such Person's acceptance of a
Equity Certificate duly registered in such Person's name, pursuant to Section
3.05.
Section 3.04. AUTHENTICATION OF EQUITY CERTIFICATES. The Owner Trustee
shall cause all Equity Certificates issued hereunder to be executed and
authenticated on behalf of the Trust, authenticated and delivered upon the
written order of the Depositor, signed by the Depositor's chairman of the board,
its president or any vice president, without further corporate action by the
Depositor, in authorized denominations. No Equity Certificate shall entitle its
holder to any benefit under this Owner Trust Agreement or be valid for any
purpose unless there shall appear on such Equity Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee or the Certificate Registrar by manual signature; such
authentication shall constitute conclusive evidence that such Equity Certificate
shall have been duly authenticated and delivered hereunder. All Equity
Certificates shall be dated the date of their authentication.
Section 3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
EQUITY CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Equity Certificates and of transfers and exchanges of Equity Certificates as
herein provided. Norwest Bank Minnesota, National Association shall be the
initial Certificate Registrar. If the Certificate Registrar resigns or is
removed, the Owner Trustee shall appoint a successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below with respect to
the Equity Certificate, upon surrender for registration of transfer of any
Equity Certificate at the office or agency maintained pursuant to Section 3.09,
the Owner Trustee or the Certificate Registrar shall execute, authenticate and
deliver in the name of the designated transferee or transferees, one or more new
Equity Certificates in authorized denominations of a like aggregate amount dated
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the date of authentication by the Owner Trustee or the Certificate Registrar. At
the option of a Certificateholder, Equity Certificates may be exchanged for
other Equity Certificates of authorized denominations of a like aggregate amount
upon surrender of the Equity Certificates to be exchanged at the office or
agency maintained pursuant to Section 3.09.
Every Equity Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Certificate Registrar duly executed by the
Certificateholder or such Certificateholder's attorney duly authorized in
writing. Each Equity Certificate surrendered for registration of transfer or
exchange shall be canceled and subsequently disposed of by the Certificate
Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Equity Certificates, but the Owner Trustee or the Certificate
Registrar 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 Equity Certificates.
No Person shall become a Certificateholder until it shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign Status set forth in Exhibit F hereto.
No transfer, sale, pledge or other disposition of a Equity Certificate
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act and any applicable
state securities laws or is made in accordance with said Act, the Owner Trust
Agreement and applicable laws. In the event of any such transfer, the
Certificate Registrar or the Depositor shall prior to such transfer require the
transferee to execute (a) either (i) an investment letter in substantially the
form attached hereto as Exhibit C (or in such form and substance reasonably
satisfactory to the Certificate Registrar and the Depositor) which investment
letter shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicers or the Depositor and which investment letter
states that, among other things, such transferee (A) is a "qualified
institutional buyer" as defined under Rule 144A, acting for its own account or
the accounts of other "qualified institutional buyers" as defined under Rule
144A and (B) is aware that the proposed transferor intends to rely on the
exemption from registration requirements under the Securities Act of 1933, as
amended, provided by Rule 144A or (ii) (A) a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Certificate
Registrar and the Depositor that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from said
Act and laws or is being made pursuant to said Act and laws, which Opinion of
Counsel shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicers or the Depositor and (B) the transferee executes
a representation letter, substantially in the form of Exhibit D hereto, and the
transferor executes a representation letter, substantially in the form of
Exhibit E hereto, each acceptable to and in form and substance satisfactory to
the Certificate Registrar and the Depositor certifying the facts surrounding
such transfer, which representation letters shall not be an expense of the
Trust, the Owner Trustee, the Certificate Registrar, the Master Servicers or the
Depositor and (b) the
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Certificate of Non-Foreign Status (in substantially the form attached hereto as
Exhibit F) acceptable to and in form and substance reasonably satisfactory to
the Certificate Registrar and the Depositor, which certificate shall not be an
expense of the Trust, the Owner Trustee, the Certificate Registrar, the Master
Servicers or the Depositor. If the proposed transferee is unable to provide a
Certificate of Non-Foreign Status, such proposed transferee must provide an
Opinion of Counsel as described above in this paragraph. The Certificateholder
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trust, the Owner Trustee, the Certificate Registrar, the Master Servicers 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. Neither an
Opinion of Counsel nor a certification set forth in clause (a) of this paragraph
will be required in connection with (i) the initial transfer of any such Equity
Certificate by the Depositor to the Transferor pursuant to the Ownership
Transfer Agreement, (ii) the transfer of any such Equity Certificate by the
Transferor to the Seller pursuant to the Mortgage Loan Purchase Agreement or
(iii) the pledge of any such Equity Certificate by the Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc. and the certification set forth in clause (b) of this paragraph will
not be required in connection with the pledge of any such Equity Certificate by
the Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
No transfer of a Equity Certificate or any interest therein shall be made
to any employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, ▇▇▇▇▇ 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, or Section 4975 of the Code (collectively, "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Equity 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, the Owner Trustee, the Certificate Registrar and
the Master Servicers are provided with an Opinion of Counsel which establishes
to the satisfaction of the Depositor, the Owner Trustee, the Certificate
Registrar and the Master Servicers that the purchase of Equity 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 Owner Trustee, the Certificate Registrar or the
Master Servicers to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Owner Trust Agreement, which Opinion of Counsel shall not be
an expense of the Depositor, the Owner Trustee, the Certificate Registrar or the
Master Servicers. In lieu of such Opinion of Counsel, a Plan, any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Equity Certificates with Plan Assets of a Plan may provide a certification in
the form of Exhibit G to this Owner Trust Agreement, which the Depositor, the
Owner Trustee, the Certificate Registrar and the Master Servicers may rely upon
without further inquiry or investigation. Neither an Opinion of Counsel nor a
certification will be required in connection with (i) the initial transfer of
any such Equity Certificate by the Depositor to the Transferor pursuant to the
Ownership Transfer Agreement, (ii) the transfer of any such Equity Certificate
by the Transferor to the Seller pursuant to the Mortgage Loan Purchase Agreement
or (iii) the pledge of any such Equity Certificate by the Seller to ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc. (in each case, each such party is deemed to have represented
that it
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is not a Plan or a Person investing Plan Assets of any Plan) and the Owner
Trustee shall be entitled to conclusively rely upon such deemed representation.
In addition, no transfer, sale, assignment, pledge or other disposition of
a Equity Certificate shall be made unless the proposed transferee executes a
representation letter substantially in the form of Exhibit D, or substantially
in the form of Exhibit H hereto, that (1) the transferee is acquiring the Equity
Certificate for its own behalf and is not acting as agent or custodian for any
other person or entity in connection with such acquisition and (2) if the
transferee is a partnership, grantor trust or S corporation for federal income
tax purposes, the Equity Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
No offer, sale, transfer, pledge, hypothecation or other disposition
(including any pledge, sale or transfer under a repurchase transaction or
securities loan) of any Equity Certificate shall be made to any transferee
unless, prior to such disposition, the proposed transferee delivers to the Owner
Trustee an Opinion of Counsel, rendered by a law firm generally recognized to be
qualified to opine concerning the tax aspects of asset securitization, to the
effect that such transfer (including any disposition permitted following any
default under any pledge or repurchase transaction) will not cause the Trust to
be (i) treated as an association taxable as a corporation for federal income tax
purposes, (ii) taxable as a taxable mortgage pool as defined in Section 7701(i)
of the Code or (iii) taxable as a "publicly traded partnership" as defined in
Treasury Regulation section 1.7704-1. Notwithstanding the foregoing, the
provisions of this paragraph shall not apply to (i) the initial transfer of the
Equity Certificates by the Depositor to the Transferor pursuant to the Ownership
Transfer Agreement, (ii) the transfer of the Equity Certificates by the
Transferor to the Seller pursuant to the Mortgage Loan Purchase Agreement, (iii)
the pledge of the Equity Certificates by the Seller to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
and (iv) in the case of any default by the Seller in its obligations to ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., the transfer to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. as registered
owner. In addition, in the event ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. becomes
Certificateholder, the provisions of this paragraph shall no longer apply to any
transfer.
Notwithstanding any other provisions of this Section 3.05 to the contrary,
(i) on the Closing Date, the Depositor may transfer the Equity Certificates to
the Transferor pursuant to the Ownership Transfer Agreement, (ii) the Transferor
may transfer the Equity Certificates to the Seller pursuant to the Ownership
Transfer Agreement, (iii) on or after the Closing Date, the Seller may pledge
the Equity Certificates to secure its obligations to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
and (iv) in the case of any default by the Seller in its obligations to ▇▇▇▇▇▇▇
▇▇▇▇▇ Barney Inc., ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. may become the registered owner of
the Equity Certificates, in each case, without complying with the foregoing
provisions of this Section 3.05.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN EQUITY CERTIFICATES. If
(a) any mutilated Equity Certificate shall be surrendered to the Certificate
Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Equity Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the
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absence of notice to the Certificate Registrar or the Owner Trustee that such
Equity Certificate has been acquired by a bona fide purchaser, the Owner Trustee
shall execute on behalf of the Trust and the Owner Trustee or the Certificate
Registrar, shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Equity Certificate, a new Equity
Certificate of like tenor and denomination. In connection with the issuance of
any new Equity Certificate under this Section 3.06, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
expenses of the Owner Trustee or the Certificate Registrar (including fees and
expenses of counsel) and any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Equity Certificate issued
pursuant to this Section 3.06 shall constitute conclusive evidence of ownership
in the Trust, as if originally issued, whether or not the lost, stolen or
destroyed Equity Certificate shall be found at any time.
Section 3.07. PERSONS DEEMED CERTIFICATEHOLDERS. Prior to due presentation
of a Equity Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Certificate Paying Agent may treat the Person in
whose name any Equity Certificate is registered in the Certificate Register as
the owner of such Equity Certificate for the purpose of receiving distributions
pursuant to Section 5.02 and for all other purposes whatsoever, and none of the
Trust, the Owner Trustee, the Certificate Registrar or any Paying Agent shall be
bound by any notice to the contrary.
Section 3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Certificate Registrar shall furnish or cause to be furnished to the
Depositor or the Owner Trustee, within 15 days after receipt by the Certificate
Registrar of a written request therefor from the Depositor or the Owner Trustee,
a list, in such form as the Depositor or the Owner Trustee, as the case may be,
may reasonably require, of the names and addresses of the Certificateholders as
of the most recent Record Date. Each Certificateholder, by receiving and holding
a Equity Certificate, shall be deemed to have agreed not to hold any of the
Trust, the Depositor, the Certificate Registrar or the Owner Trustee accountable
by reason of the disclosure of its name and address, regardless of the source
from which such information was derived.
Section 3.09. MAINTENANCE OF OFFICE OR AGENCY. The Certificate Registrar
on behalf of the Trust, shall maintain in an office or offices or agency or
agencies where Equity Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Certificate
Registrar in respect of the Equity Certificates and the Basic Documents may be
served. The Certificate Registrar initially designates its Corporate Trust
Office as its office for such purposes. The Certificate Registrar shall give
prompt written notice to the Depositor, the Owner Trustee and the
Certificateholders of any change in the location of the Certificate Register or
any such office or agency.
Section 3.10. CERTIFICATE PAYING AGENT. (a) The Certificate Paying Agent
shall make distributions to Certificateholders from the Certificate Distribution
Account on behalf of the Trust in accordance with the provisions of the Equity
Certificates and Section 5.01 hereof from payments remitted to the Certificate
Paying Agent by the Indenture Trustee pursuant to Section 3.05 of the Indenture.
The Trust hereby appoints Norwest Bank Minnesota, National Association as
Certificate Paying Agent and Norwest Bank Minnesota, National Association hereby
accepts such appointment and further agrees that it will be bound by the
provisions of this Owner Trust Agreement relating to the Certificate Paying
Agent and shall:
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(i) hold all sums held by it for the payment of amounts due with
respect to the Equity Certificates in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the Trust of
which it has actual knowledge in the making of any payment required to be
made with respect to the Equity Certificates;
(iii) at any time during the continuance of any such default, upon
the written request of the Owner Trustee forthwith pay to the Owner
Trustee on behalf of the Trust all sums so held in Trust by such
Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith pay
to the Owner Trustee on behalf of the Trust all sums held by it in trust
for the payment of Equity Certificates if at any time it ceases to meet the
standards under this Section 3.10 required to be met by the Certificate
Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Equity Certificates of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith;
(vi) deliver to the Owner Trustee a copy of the report to
Certificateholders prepared with respect to each Payment Date by the
Indenture Trustee pursuant to Section 7.05 of the Indenture; and
(vii) not institute bankruptcy proceedings against the Issuer in
connection with this Owner Trust Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if it determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Owner Trust Agreement in
any material respect. Norwest Bank Minnesota, National Association shall be
permitted to resign as Certificate Paying Agent upon 30 days written notice to
the Owner Trustee; provided Norwest Bank Minnesota, National Association is also
resigning as Paying Agent under the Indenture at such time. In the event that
Norwest Bank Minnesota, National Association shall no longer be the Certificate
Paying Agent under this Owner Trust Agreement and Paying Agent under the
Indenture, the Owner Trustee shall appoint a successor to act as Certificate
Paying Agent (which shall be a bank or trust company) and which shall also be
the successor Paying Agent under the Indenture. The Owner Trustee shall cause
such successor Certificate Paying Agent or any additional Certificate Paying
Agent appointed by the
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Owner Trustee to execute and deliver to the Owner Trustee an instrument
accepting the terms of this Section 3.10 as it relates to the Certificate Paying
Agent. The Certificate Paying Agent shall return all unclaimed funds to the
Trust and upon removal of a Certificate Paying Agent such Certificate Paying
Agent shall also return all funds in its possession to the Trust. The provisions
of Sections 6.01, 6.03, 6.04 and 7.01 shall apply to the Certificate Paying
Agent to the extent applicable. Any reference in this Owner Trust Agreement to
the Certificate Paying Agent shall include any co-paying agent unless the
context requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain with itself
a trust account (the "Certificate Distribution Account") in which the
Certificate Paying Agent shall deposit, on the same day as it is received from
the Indenture Trustee, each remittance received by the Certificate Paying Agent
with respect to payments made pursuant to the Indenture. The Certificate Paying
Agent shall make all distributions to Equity Certificates, from moneys on
deposit in the Certificate Distribution Account.
(d) The Certificate Paying Agent shall be paid by the Indenture Trustee
from sources other than the Trust Estate.
ARTICLE IV
Authority and Duties of Owner Trustee
-------------------------------------
Section 4.01. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver on behalf of the Trust the Basic Documents to
which the Trust is to be a party and each certificate or other document attached
as an exhibit to or contemplated by the Basic Documents to which the Trust is to
be a party and any amendment or other agreement or instrument described herein,
as evidenced conclusively by the Owner Trustee's execution thereof. In addition
to the foregoing, the Owner Trustee is authorized, but shall not be obligated,
except as otherwise provided in this Owner Trust Agreement, to take all actions
required of the Trust pursuant to the Basic Documents.
Section 4.02. GENERAL DUTIES. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Owner Trust Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Owner Trust Agreement.
Section 4.03. ACTION UPON INSTRUCTION. (a) Subject to this Article IV and
in accordance with the terms of the Basic Documents, the Certificateholders may
by written instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to this Article IV.
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(b) Notwithstanding the foregoing, the Owner Trustee shall not be required
to take any action hereunder or under any Basic Document if the Owner Trustee
shall have reasonably determined, or shall have been advised by counsel, that
such action is likely to result in liability on the part of the Owner Trustee or
is contrary to the terms hereof or of any Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is required to decide between alternative
courses of action permitted or required by the terms of this Owner Trust
Agreement or under any Basic Document, or in the event that the Owner Trustee is
unsure as to the application of any provision of this Owner Trust Agreement or
any Basic Document or any such provision is ambiguous as to its application, or
is, or appears to be, in conflict with any other applicable provision, or in the
event that this Owner Trust Agreement permits any determination by the Owner
Trustee or is silent or is incomplete as to the course of action that the Owner
Trustee is required to take with respect to a particular set of facts, the Owner
Trustee shall promptly give notice (in such form as shall be appropriate under
the circumstances) to the Certificateholders requesting instruction as to the
course of action to be adopted, and to the extent the Owner Trustee acts in good
faith in accordance with any written instruction of the Certificateholders, the
Owner Trustee shall not be liable on account of such action to any Person. If
the Owner Trustee shall not have received appropriate instruction within 10 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Owner Trust Agreement or the Basic Documents, as it shall
deem to be in the best interests of the Certificateholders and the Noteholders,
and the Owner Trustee shall have no liability to any Person for such action or
inaction.
Section 4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS OR
IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided (a) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Owner Trust Agreement, (b) in accordance with the Basic
Documents and (c) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Owner Trust Agreement or any Basic Document against the
Owner Trustee. The Owner Trustee shall have no responsibility (i) to file any
financing or continuation statement in any public office at any time, (ii) to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder, (iii) to record this Owner Trust Agreement or any Basic
Document or (iv) to prepare or file any Securities and Exchange Commission
filing for the Trust. The Owner Trustee nevertheless agrees that it will, at its
own cost and expense, promptly take all action as may be necessary to discharge
any liens on any part of the Trust Estate that result from actions by, or claims
against, the Owner Trustee that are not related to the ownership or the
administration of the Trust Estate.
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Section 4.05. RESTRICTIONS. (a) The Owner Trustee and the Depositor (or an
Affiliate thereof) shall not take any action (i) that is inconsistent with the
purposes of the Trust set forth in Section 2.03 or (ii) that, to the actual
knowledge of the Owner Trustee based on an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization, would result in the Trust becoming taxable as a
corporation for federal income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets (other than as contemplated in the Indenture), including
those included in the Trust Estate, to any person unless (i) it shall have
received an Opinion of Counsel rendered by a law firm generally recognized to be
qualified to opine concerning the tax aspects of asset securitization to the
effect that such transaction will not have any material adverse tax consequence
to the Trust or any Certificateholder and (ii) such conveyance or transfer shall
not violate the provisions of Section 3.16(b) of the Indenture.
(c) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of the Depositor.
Section 4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and the Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims or
lawsuits brought in connection with the collection of cash distributions due and
owing under the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Mortgage Loans);
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment or other change to this Owner Trust Agreement or any
Basic Document in circumstances where the consent of any Noteholder is required;
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(d) the amendment or other change to this Owner Trust Agreement or any
Basic Document in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interest of the
Certificateholders;
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or, pursuant to this Owner Trust
Agreement, of a successor Certificate Registrar or Certificate Paying Agent or
the consent to the assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar or Certificate Paying Agent of its obligations
under the Indenture or this Owner Trust Agreement, as applicable;
(f) the consent to the calling or waiver of any default under any Basic
Document;
(g) the consent to the assignment by the Indenture Trustee or Master
Servicers of their respective obligations under any Basic Document;
(h) except as provided in Article VIII hereof, the dissolution,
termination or liquidation of the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other entity, or
convey or transfer all or substantially all of the Trust's assets to any other
entity;
(j) cause the Trust to incur, assume or guaranty any indebtedness other
than as set forth in this Owner Trust Agreement and the Basic Documents;
(k) perform any act that conflicts with any other Basic Document;
(l) perform any act which would make it impossible to carry on the
purposes and powers of the Trust as described in Section 2.03 hereof;
(m) confess a judgment against the Trust;
(n) possess Trust assets or assign the Trust's right to property for other
than a Trust purpose as described in Section 2.03 hereof;
(o) cause the Trust to lend any funds to any entity; or
(p) change the Trust's purpose and powers from those enumerated in this
Owner Trust Agreement.
Section 4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders to (a) remove or replace the Indenture Trustee under
the Indenture pursuant to Section 6.08 thereof, (b) except as expressly provided
in the Basic Documents, sell the Mortgage Loans after the termination of the
Indenture, (c) institute proceedings to have the Trust declared or adjudicated
to be bankrupt
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or insolvent, (d) consent to the institution of bankruptcy or insolvency
proceedings against the Trust, (e) file a petition or consent to a petition
seeking reorganization or relief on behalf of the Trust under any applicable
federal or state law relating to bankruptcy, (f) consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or any similar official)
of the Trust or a substantial portion of the property of the Trust, (g) make any
assignment for the benefit of the Trust's creditors, (h) cause the Trust to
admit in writing its inability to pay its debts generally as they become due,
(i) take any action or cause the Trust to take any action, in furtherance of any
of the foregoing clauses (c) through (i) (any of such clauses, a "Bankruptcy
Action"). So long as the Indenture remains in effect, no Certificateholder shall
have the power to take, and shall not take, any Bankruptcy Action with respect
to the Trust or the Depositor or direct the Owner Trustee to take any Bankruptcy
Action with respect to the Trust or the Depositor. The Owner Trustee shall take
the actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders.
Section 4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders, the Noteholders and the Owner Trustee and the delivery to
the Owner Trustee by each such Certificateholder of a certificate certifying
that such Certificateholder reasonably believes that the Trust is insolvent.
This paragraph shall survive for one year and one day following termination of
this Owner Trust Agreement.
Section 4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to or
inconsistent with any obligation of the Trust or the Owner Trustee under this
Owner Trust Agreement or any of the Basic Documents or would be contrary to
Section 2.03, nor shall the Owner Trustee be obligated to follow any such
direction, if given.
Section 4.10. MAJORITY CONTROL. Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Owner Trust
Agreement may be taken by the Majority Certificateholder. Except as expressly
provided herein, any written notice of the Certificateholders delivered pursuant
to this Owner Trust Agreement shall be effective if signed by the Majority
Certificateholder at the time of the delivery of such notice.
Section 4.11. OPTIONAL REDEMPTION. The Notes may be redeemed in accordance
with Section 8.07 of the Indenture by the Majority Certificateholder.
Section 4.12. RESTRICTIONS. The Owner Trustee shall take no action if the
Owner Trustee has been notified by the Indenture Trustee that such action would
cause or threaten to cause any Rating Agency to downgrade the ratings on the
Notes.
ARTICLE V
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Application Of Trust Funds
--------------------------
Section 5.01. DISTRIBUTIONS. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Certificateholders, on a pro rata basis
based on the Certificate Percentage Interests thereof, all funds on deposit in
the Certificate Distribution Account and available therefor (as provided in
Section 3.05 of the Indenture) for such Payment Date as reduced first, by any
amount owing to the Owner Trustee hereunder and second, any Expenses of the
Trust remaining unpaid.
(b) In the event that any withholding tax is imposed on the distributions
(or allocations of income) to a Certificateholder, such tax shall reduce the
amount otherwise distributable to such Certificateholder in accordance with this
Section 5.01. The Certificate Paying Agent is hereby authorized and directed to
retain or cause to be retained from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is legally
owed by the Trust (but such authorization shall not prevent the Owner Trustee
from contesting any such tax in appropriate proceedings, and withholding payment
of such tax, if permitted by law, pending the outcome of such proceedings). The
amount of any withholding tax imposed with respect to a Certificateholder shall
be treated as cash distributed to such Certificateholder at the time it is
withheld by the Certificate Paying Agent and remitted to the appropriate taxing
authority. If there is a possibility that withholding tax is payable with
respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
Section 5.02. METHOD OF PAYMENT. Subject to Section 8.01(c), distributions
required to be made to Certificateholders on any Payment Date as provided in
Section 5.01 shall be made to each Certificateholder of record on the preceding
Record Date either by, in the case of any Certificateholder owning Equity
Certificates having a Certificate Percentage Interest of 100%, wire transfer, in
immediately available funds, to the account of such Certificateholder at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Record Date or,
if not, by check mailed to such Certificateholder at the address of such
Certificateholder appearing in the Certificate Register.
Section 5.03. TAX TREATMENT OF THE ISSUER. It is the intention of the
parties hereto that, for federal and state income and state and local franchise
tax purposes, the Trust shall not be treated as (i) an association (other than
as a "qualified REIT subsidiary" as defined in Section 856(i) of the Code)
subject separately to taxation as a corporation or (ii) a publicly traded
partnership as defined in Treasury Regulation Section 1.7704-1, and that the
Notes shall be characterized as indebtedness, and the provisions of this
Agreement shall be interpreted to further this intention. It is also the
intention of the parties hereto that, as of the Closing Date, the Trust will be
disregarded for federal income tax purposes. As an entity disregarded for
federal income
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tax purposes, the Indenture Trustee, in its capacity as Administrator shall not
be required to prepare and file partnership tax returns on behalf of the Trust
unless it receives an Opinion of Counsel (which shall not be at the Indenture
Trustee's expense, but shall be the expense of the Seller or other party
furnishing such opinion) as to the necessity of such filings.
ARTICLE VI
Concerning The Owner Trustee
----------------------------
Section 6.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Owner Trust Agreement.
Each of the Owner Trustee and the Certificate Paying Agent also agrees to
disburse all moneys actually received by it constituting part of the Trust
Estate upon the terms of the Basic Documents and this Owner Trust Agreement. The
Owner Trustee shall not be answerable or accountable hereunder or under any
Basic Document under any circumstances, except (i) for its own willful
misconduct, gross negligence or bad faith or grossly negligent failure to act or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 6.03 expressly made by the Owner Trustee. In particular, but not by
way of limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) The Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the
Certificateholders permitted under this Owner Trust Agreement;
(b) No provision of this Owner Trust Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights, duties or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(c) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(d) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Owner Trust Agreement or for the due execution
hereof by the Depositor or for the form, character, genuineness, sufficiency,
value or validity of any of the Trust Estate, or for or in respect of the
validity or sufficiency of the Basic Documents, the Notes, the Equity
Certificates, other than the certificate of authentication on the Equity
Certificates, if executed by the Owner Trustee and the Owner Trustee shall in no
event assume or incur any liability, duty, or obligation to any Noteholder or to
any Certificateholder, other than as expressly provided for herein or expressly
agreed to in the Basic Documents;
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(e) The Owner Trustee shall not be liable for the default or misconduct of
the Depositor, Indenture Trustee, Certificate Registrar or the Master Servicers
under any of the Basic Documents or otherwise and the Owner Trustee shall have
no obligation or liability to perform the obligations of the Trust under this
Owner Trust Agreement or the Basic Documents that are required to be performed
by the Indenture Trustee under the Indenture or the Seller under the Mortgage
Loan Purchase Agreement; and
(f) The Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it or duties imposed by this Owner Trust Agreement,
or to institute, conduct or defend any litigation under this Owner Trust
Agreement or otherwise or in relation to this Owner Trust Agreement or any Basic
Document, at the request, order or direction of any of the Certificateholders,
unless such Certificateholders have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Owner Trust
Agreement or in any Basic Document shall not be construed as a duty.
Section 6.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish to
the Certificateholders promptly upon receipt of a written reasonable request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Trust under the Basic Documents.
Section 6.03. REPRESENTATIONS AND WARRANTIES. Wilmington Trust Company
hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Owner Trust Agreement or consummation of the transactions
contemplated thereby;
(b) It has taken all corporate action necessary to authorize the execution
and delivery by it of this Owner Trust Agreement, and this Owner Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Owner Trust Agreement on its behalf;
(c) The execution, delivery, authentication and performance by it of this
Owner Trust Agreement will not require the authorization, consent or approval
of, the giving of notice to, the filing or registration with, or the taking of
any other action with respect to, any governmental authority or agency;
(d) Neither the execution nor the delivery by it of this Owner Trust
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or
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order binding on it, or constitute any default under its charter documents or
bylaws or any indenture, mortgage, contract, agreement or instrument to which it
is a party or by which any of its properties may be bound;
(e) This Owner Trust Agreement, assuming due authorization, execution and
delivery by the Depositor, constitutes a valid, legal and binding obligation of
the Owner Trustee, enforceable against it in accordance with the terms hereof
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the enforcement of creditors' rights generally and to
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law;
(f) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and
(g) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Owner Trust Agreement or performing its obligations under
this Owner Trust Agreement.
Section 6.04. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, Note, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Owner Trust Agreement or
the Basic Documents, the Owner Trustee (i) may act directly or through its
agents, attorneys, custodians or nominees (including persons acting under a
power of attorney) pursuant to agreements entered into with any of them, and the
Owner Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care and (ii) may consult with counsel, accountants and other skilled
persons to be selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or omitted in good faith
by it in
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accordance with the written opinion or advice of any such counsel, accountants
or other such Persons and not contrary to this Owner Trust Agreement or any
Basic Document.
Section 6.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Owner Trust Agreement or any Basic Document
shall look only to the Trust Estate for payment or satisfaction thereof; except
nothing contained herein shall protect the Owner Trustee (i) for its own willful
misconduct, gross negligence or bad faith or grossly negligent failure to act or
(ii) in the case of the inaccuracy of any representation or warranty contained
in Section 6.03 expressly made by the Owner Trustee.
Section 6.06. OWNER TRUSTEE NOT LIABLE FOR EQUITY CERTIFICATES OR RELATED
DOCUMENTS. The recitals contained herein and in the Equity Certificates (other
than the signatures of the Owner Trustee on the Equity Certificates) shall be
taken as the statements of the Depositor, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Owner Trust Agreement,
of any Basic Document or of the Equity Certificates (other than the signatures
of the Owner Trustee on the Equity Certificates) or the Notes, or of any Related
Documents. The Owner Trustee shall at no time have any responsibility or
liability with respect to the sufficiency of the Trust Estate or its ability to
generate the payments to be distributed to Certificateholders under this Owner
Trust Agreement or the Noteholders under the Indenture, including compliance by
the Depositor or the Seller with any warranty or representation made under any
Basic Document or in any related document or the accuracy of any such warranty
or representation, or any action of the Certificate Paying Agent, the
Certificate Registrar or the Indenture Trustee taken in the name of the Owner
Trustee.
Section 6.07. OWNER TRUSTEE MAY OWN EQUITY CERTIFICATES AND NOTES. The
Owner Trustee in its individual or any other capacity may, subject to Section
3.05, become the owner or pledgee of Equity Certificates or Notes and may deal
with the Depositor, the Seller, the Certificate Paying Agent, the Certificate
Registrar and the Indenture Trustee in transactions with the same rights as it
would have if it were not Owner Trustee.
Section 6.08. PAYMENTS FROM TRUST ESTATE. All payments to be made by the
Owner Trustee under this Owner Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party shall be made only from the income and
proceeds of the Trust Estate or from other amounts required to be provided by
the Certificateholders and only to the extent that the Owner Trust shall have
received income or proceeds from the Trust Estate or the Certificateholders to
make such payments in accordance with the terms hereof. Wilmington Trust
Company, in its individual capacity, shall not be liable for any amounts payable
under this Owner Trust Agreement or any of the Basic Documents to which the
Owner Trustee is a party.
Section 6.09. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company nor
the Owner Trustee shall be
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required to take any action in any jurisdiction other than in the State of
Delaware if the taking of such action will, even after the appointment of a
co-trustee or separate trustee in accordance with Section 9.05 hereof, (i)
require the consent or approval or authorization or order of or the giving of
notice to, or the registration with or the taking of any other action in respect
of, any state or other governmental authority or agency of any jurisdiction
other than the State of Delaware; (ii) result in any fee, tax or other
governmental charge under the laws of the State of Delaware becoming payable by
Wilmington Trust Company; or (iii) subject Wilmington Trust Company to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
Wilmington Trust Company or the Owner Trustee, as the case may be, contemplated
hereby.
Section 6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING
AGENT. All provisions affording protection to or limiting the liability of the
Owner Trustee shall inure as well to the Certificate Registrar and Certificate
Paying Agent.
ARTICLE VII
Compensation of Owner Trustee
-----------------------------
Section 7.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof and as set forth in Appendix A to
the Indenture, and the Owner Trustee shall be reimbursed by the Indenture
Trustee from the Payment Account for its reasonable expenses hereunder and under
the Basic Documents, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the Owner
Trustee may reasonably employ in connection with the exercise and performance of
its rights and its duties hereunder and under the Basic Documents. The amount of
the Owner Trustee Fee shall be an up- front fee in an amount equal to $15,000
and shall be paid on the Closing Date by the Majority Certificateholder.
Section 7.02. INDEMNIFICATION. The Depositor shall indemnify, defend and
hold harmless the Owner Trustee and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reason able
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against the Owner Trustee or any Indemnified Party in any way relating to or
arising out of this Owner Trust Agreement, the Basic Documents, the Trust
Estate, the administration of the Trust Estate or the action or inaction of the
Owner Trustee hereunder, provided, that:
(i) the Depositor shall not be liable for or required to indemnify
an Indemnified Party from and against Expenses arising or resulting from
the Owner Trustee's willful misconduct, gross negligence or bad faith or
as a result of any inaccuracy
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of a representation or warranty contained in Section 6.03 expressly made
by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified Party shall
have given the Depositor written notice thereof promptly after the
Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the Depositor
shall consult with the Indemnified Party in preparing such defense; and
(iv) notwithstanding anything in this Owner Trust Agreement to the
contrary, the Depositor shall not be liable for settlement of any claim by
an Indemnified Party entered into without the prior consent of the
Depositor which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Owner Trust
Agreement. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 7.02, the Owner Trustee's choice of
legal counsel, if other than the legal counsel retained by the Owner Trustee in
connection with the execution and delivery of this Owner Trust Agreement, shall
be subject to the approval of the Depositor, which approval shall not be
unreasonably withheld. In addition, upon written notice to the Owner Trustee and
with the consent of the Owner Trustee which consent shall not be unreasonably
withheld, the Depositor has the right to assume the defense of any claim, action
or proceeding against the Owner Trustee.
ARTICLE VIII
Termination of Owner Trust Agreement
------------------------------------
Section 8.01. TERMINATION OF OWNER TRUST AGREEMENT. (a) This Owner Trust
Agreement (other than Article VII) and the Trust shall terminate and be of no
further force or effect upon the earliest of (i) the final distribution of all
moneys or other property or proceeds of the Trust Estate in accordance with the
terms of the Indenture and this Owner Trust Agreement, (ii) the Final Maturity
Date, or (iii) the distribution of all of the assets of the Trust Estate, in
accordance with written instructions provided to the Owner Trustee by the
Majority Certificateholder, following the optional redemption of the Notes by
the Issuer pursuant to Section 8.07 of the Indenture; provided in each case that
all amounts owing to the Noteholders to the extent payable from the Trust Estate
or proceeds thereof have been paid in full and that all obligations under the
Indenture have been discharged. The bankruptcy, liquidation, dissolution, death
or incapacity of any Certificateholder shall not (x) operate to terminate this
Owner Trust Agreement or the Trust or (y) 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 all or any part of the
Trust
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or the Trust Estate or (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 8.01(a), neither the Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Equity Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
mailed within five Business Days of receipt of notice of the final payment on
the Notes from the Indenture Trustee, stating (i) the Payment Date upon or with
respect to which final payment of the Equity Certificates shall be made upon
presentation and surrender of the Equity Certificates at the office of the
Certificate Paying Agent therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Payment Date
is not applicable, payments being made only upon presentation and surrender of
the Equity Certificates at the office of the Certificate Payment Agent therein
specified. The Certificate Paying Agent shall give such notice to the Owner
Trustee and the Certificate Registrar at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Equity Certificates,
the Certificate Paying Agent shall cause to be distributed to Certificateholders
amounts distributable on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender their
Equity Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Equity Certificates for cancellation and receive the final distribution with
respect thereto. Subject to applicable laws with respect to escheat of funds, if
within one year following the Payment Date on which final payment of the Equity
Certificates was to have been made pursuant to Section 3.05 of the Indenture,
all the Equity Certificates shall not have been surrendered for cancellation,
the Certificate Paying Agent may take appropriate steps, or may appoint an agent
to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Equity Certificates, and the cost thereof shall be
paid out of the funds and other assets that shall remain subject to this Owner
Trust Agreement. Any funds remaining in the Certificate Distribution Account
after exhaustion of such remedies shall be distributed by the Certificate Paying
Agent to the Certificateholder.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(d) of the Business Trust Statute.
ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
------------------------------------------------------
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Section 9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent that has) a rating of at least BBB or is otherwise
acceptable to DCR and S&P. If such corporation shall publish reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.01, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.02.
Section 9.02. REPLACEMENT OF OWNER TRUSTEE. The Owner Trustee may at any
time resign and be discharged from the trusts hereby created by giving 30 days
prior written notice thereof to the Certificateholders and the Depositor. In the
event of such resignation (or removal as provided below), the Owner Trustee must
reimburse to the Majority Certificateholder the Owner Trustee Fee, less the sum
of $7,000 plus $167 multiplied by the number of months that have elapsed since
the Closing Date. Upon receiving such notice of resignation, the Majority
Certificateholder shall promptly appoint a successor Owner Trustee, by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee and to the successor Owner Trustee. If no successor
Owner Trustee shall have been so appointed and have accepted appointment within
30 days after the giving of such notice of resignation, the resigning Owner
Trustee or the Majority Certificateholder may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee reasonably
acceptable to all Certificateholders.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.01 and shall fail to resign after written
request therefor by the Majority Certificateholder, or if at any time the Owner
Trustee shall be legally unable to act, or shall be adjudged bankrupt or
insolvent, or a receiver of the Owner Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Owner
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Majority Certificateholder may remove the
Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Majority Certificateholder shall provide notice
of such resignation or removal of the Owner Trustee to the Depositor and to each
of the Rating Agencies.
Section 9.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to
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its predecessor Owner Trustee an instrument accepting such appointment under
this Owner Trust Agreement, and thereupon the resignation or removal of the
predecessor Owner Trustee shall become effective, and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Owner Trust Agreement, with like effect as if originally named as Owner
Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Owner Trust Agreement; and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Owner Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies.
Section 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Owner Trust Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Estate may at the time be located, the Owner Trustee shall
have the power and shall execute and deliver all instruments to appoint one or
more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Trust Estate, and to
vest in such Person, in such capacity, such title to the Trust or any part
thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Owner Trustee may consider
necessary or desirable. No co-trustee or separate trustee under this Owner Trust
Agreement shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 9.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.03.
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Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed upon
the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner 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 Trust Estate or any portion
thereof in any such jurisdiction) shall be exercised and performed singly by
such separate trustee or co-trustee, but solely at the direction of the Owner
Trustee;
(b) No trustee under this Owner Trust Agreement shall be personally liable
by reason of any act or omission of any other trustee under this Owner Trust
Agreement; and
(c) The Owner Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner 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 Owner Trust Agreement and the
conditions of this Article IX. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Owner Trust Agreement, specifically including every provision of this
Owner Trust Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Owner Trustee. Each such instrument shall be filed
with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as 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
Owner Trust 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 Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
ARTICLE X
Miscellaneous
-------------
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Section 10.01. AMENDMENTS. (a) This Owner Trust Agreement may be amended
from time to time by the parties hereto (with the prior notice to the Rating
Agencies) as specified in this Section, provided that any amendment, except as
provided in subparagraph (e) below, shall be accompanied by an Opinion of
Counsel addressed to the Owner Trustee and obtained by the Issuer to the effect
that such amendment (i) complies with the provisions of this Section and (ii)
would not cause the Trust (if the Transferor or the Seller was not the
Certificateholder of 100% of the Equity Certificates) to be subject to an entity
level tax for federal income tax purposes.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e. to give effect to the intent of the parties and, if
applicable, to the expectations of the Certificateholders), it shall not be
necessary to obtain the consent of any Certificateholders, but the Owner Trustee
shall be furnished with (i) a letter from each of the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Note or the rating then assigned to any Note or (ii) an Opinion
of Counsel obtained by the Depositor to the effect that such action will not
adversely affect in any material respect the interests of any
Certificateholders.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Equity Certificate is outstanding,
it shall not be necessary to obtain the consent of any Certificateholder, but
the Owner Trustee shall be furnished with an Opinion of Counsel obtained by the
Depositor that such amendment is necessary or helpful to prevent the imposition
of such taxes and is not materially adverse to any Certificateholder.
(d) If the purpose of the amendment is to add or eliminate or change any
provision of the Owner Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (i) an Opinion of Counsel obtained by the
Depositor to the effect that such action will not adversely affect in any
material respect the interests of any Certificateholders and (ii) either (A) a
letter from each of the Rating Agencies that the amendment will not result in
the downgrading or withdrawal of the rating then assigned to any Note or (B) the
consent of the Indenture Trustee and the Majority Certificateholder; provided,
however, that no such amendment shall (1) reduce in any manner the amount of, or
delay the timing of, payments received that are required to be distributed on
any Equity Certificate without the consent of the related Certificateholder, or
(2) reduce the aforesaid percentage of Equity Certificates the
Certificateholders of which are required to consent to any such amendment,
without the consent of the Certificateholders then outstanding.
(e) If the purpose of the amendment is to provide for the holding of any
of the Equity Certificates in book-entry form, it shall require the consent of
Certificateholders of all such Equity Certificates then outstanding; provided,
that the Opinion of Counsel specified in subparagraph (a) above shall not be
required.
(f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent of any Certificateholder, but the Owner Trustee
shall be furnished with (i) an Opinion of Counsel obtained by the Depositor to
the effect that such action will not adversely affect in any material
-30-
respect the interests of any Certificateholders and (ii) a letter from the each
of the Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Notes.
(g) Promptly after the execution of any such amendment or consent, the
Depositor shall furnish written notification of the substance of such amendment
or consent to each Certificateholder, the Indenture Trustee and each of the
Rating Agencies. It shall not be necessary for the consent of Certificateholders
or the Indenture Trustee pursuant to this Section 10.01 to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent shall approve the substance thereof. The manner of obtaining
such consents (and any other consents of Certificateholders provided for in this
Owner Trust Agreement or in any other Basic Document) and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable requirements as the Owner Trustee may prescribe.
(h) In connection with the execution of any amendment to any agreement to
which the Trust is a party, other than this Owner Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
(i) Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.
Section 10.02. NO LEGAL TITLE TO TRUST ESTATE. The Certificateholders
shall not have legal title to any part of the Trust Estate solely by virtue of
their status as Certificateholders. The Certificateholders shall be entitled to
receive distributions with respect to their undivided beneficial interests
therein only in accordance with Articles V and VIII. No transfer, by operation
of law or otherwise, of any right, title or interest of the Certificateholders
to and in their ownership interest in the Trust Estate shall operate to
terminate this Owner Trust Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Trust Estate.
Section 10.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section 2.07, the
provisions of this Owner Trust Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders and, to the extent expressly
provided herein, the Indenture Trustee and the Noteholders, and nothing in this
Owner Trust Agreement (other than Section 2.07), whether express or implied,
shall be construed to give to any other Person any legal or equitable right,
remedy or claim in the Trust Estate or under or in respect of this Owner Trust
Agreement or any covenants, conditions or provisions contained herein.
Section 10.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, to the Owner
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Trustee at: Wilmington Trust Company, ▇▇▇▇▇▇ Square North, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: Corporate Trust Administration;
to the Depositor at: Salomon Brothers Mortgage Securities VII, Inc., Seven ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Finance Group; to
the Indenture Trustee, at ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Services, with a copy to the
Indenture Trustee at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Securities Administration Services; to DCR at: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; to S&P at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in this Owner Trust Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust shall
also be delivered to the Depositor.
Section 10.05. SEVERABILITY. Any provision of this Owner Trust Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.06. SEPARATE COUNTERPARTS. This Owner Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.07. SUCCESSORS AND ASSIGNS. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
Section 10.08. NO PETITION. The Owner Trustee, by entering into this
Owner Trust Agreement and each Certificateholder, by accepting a Equity
Certificate, hereby covenant and agree that they will not at any time institute
against the Transferor, the Depositor or the Trust, or join in any institution
against the Transferor, the Depositor or the Trust of, any bankruptcy
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations to the Equity Certificates, the Notes, this
Owner Trust Agreement or any of the Basic Documents. This Section shall survive
for one year following the termination of this Owner Trust Agreement.
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Section 10.09. NO RECOURSE. Each Certificateholder by accepting a Equity
Certificate acknowledges that such Certificateholder's Equity Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Seller, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Owner Trust Agreement, the Equity Certificates or the Basic Documents.
Section 10.10. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS OWNER TRUST AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 10.12. INTEGRATION. This Owner Trust Agreement constitutes the
entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understanding pertaining thereto.
IN WITNESS WHEREOF, the Depositor and the Owner 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/▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
WILMINGTON TRUST COMPANY, as
Owner Trustee,
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Acknowledged and Agreed:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Certificate Registrar
and Certificate Paying Agent
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A
FORM OF EQUITY CERTIFICATE
WILSHIRE REIT TRUST SERIES 1998-1
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC.
ASSET-BACKED CERTIFICATES, SERIES 1998-11
THIS EQUITY CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE OWNER TRUST AGREEMENT
REFERRED TO HEREIN.
NO TRANSFER OF THIS EQUITY CERTIFICATE SHALL BE MADE (A) TO ANY EMPLOYEE BENEFIT
PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT IS SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR THE INTERNAL
REVENUE CODE OF 1986 AS AMENDED (THE "CODE) OR (B) TO ANY PERSON WHO IS DIRECTLY
OR INDIRECTLY PURCHASING THIS NOTE ON BEHALF OF, AS NAMED FIDUCIARY OF, AS
TRUSTEE OF, OR WITH ASSETS OF ANY SUCH PLAN, UNLESS SUCH PLAN OR PERSON PROVIDES
EITHER THE OPINION OF COUNSEL OR CERTIFICATION DESCRIBED IN SECTION 3.05 OF THE
OWNER TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE REGISTRAR
SHALL HAVE RECEIVED A CERTIFICATE OF NON- FOREIGN STATUS CERTIFYING AS TO THE
TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE MASTER SERVICER, THE SUB-SERVICERS, THE INDENTURE TRUSTEE, OR
THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY
PROVIDED IN THE OWNER TRUST AGREEMENT OR THE BASIC DOCUMENTS.
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Date of Owner Trust Agreement:
September ___, 1998
Cut-off Date: September 1, 1998
First Payment Date: October 26, 1998
Depositor: Salomon Brothers Mortgage
Securities VII, Inc.
Owner Trust Certificate No. ___
Certificate Percentage Interest
of this Certificate: ____%
Closing Date: September ___, 1998
Owner Trustee: Wilmington Trust Company
Evidencing a fractional undivided equity interest in the Trust Estate, the
property of which consists primarily of the Mortgage Loans in Wilshire REIT
Trust Series 1998-1 (the "Trust"), a Delaware business trust formed by
SALOMON BROTHERS MORTGAGE SECURITIES VII, INC. as depositor (the "Depositor"),
pursuant to the Owner Trust Agreement referred to below.
This certifies that ________________ is the registered owner of the
Certificate Percentage Interest represented hereby.
The Trust was created pursuant to a Owner Trust Agreement, dated as of
September ___, 1998, as amended and restated by the Amended and Restated Trust
Agreement, dated as of September 1, 1998 (as amended and supplemented from time
to time, the "Owner Trust Agreement"), between the Depositor and Wilmington
Trust Company as owner trustee (as amended and supplemented from time to time,
the "Owner Trustee", which term includes any successor entity under the Owner
Trust Agreement), a summary of certain of the pertinent provisions of which is
set forth hereinafter. This Equity Certificate is issued under and is subject to
the terms, provisions and conditions of the Owner Trust Agreement, to which
Owner Trust Agreement the Certificateholder by virtue of the acceptance hereof
assents and by which such Certificateholder is bound.
This Equity Certificate is one of a duly authorized issue of Equity
Certificates (herein called the "Equity Certificates") issued under the Owner
Trust Agreement to which reference is
A-3
hereby made for a statement of the respective rights thereunder of the
Depositor, the Owner Trustee and the Certificateholders and the terms upon which
the Equity Certificates are executed and delivered. All terms used in this
Equity Certificate which are defined in the Owner Trust Agreement shall have the
meanings assigned to them in the Owner Trust Agreement. The Trust Estate
consists of the Mortgage Loans in the Trust. The rights of the
Certificateholders are subordinated to the rights of the Holders of the Notes,
as set forth in the Indenture.
There will be distributed on the 25th day of each month or, if such
25th day is not a Business Day, the next Business Day (each, a "Payment Date"),
commencing in October 1998, to the Person in whose name this Certificate is
registered (i) with respect to the first Payment Date, on the Closing Date and
(ii) with respect to every other Payment Date, at the close of business on the
last Business Day of the month preceding the month of such Payment Date (the
"Record Date"), such Certificateholder's Certificate Percentage Interest in the
amount to be distributed to Certificateholders on such Payment Date.
The Certificateholder, by its acceptance of this Equity Certificate,
agrees that it will look solely to the funds on deposit in the Payment Account
that have been released from the Lien of the Indenture for payment hereunder and
that neither the Owner Trustee in its individual capacity nor the Depositor is
personally liable to the Certificateholders for any amount payable under this
Equity Certificate or the Owner Trust Agreement or, except as expressly provided
in the Owner Trust Agreement, subject to any liability under the Owner Trust
Agreement.
The Certificateholder acknowledges and agrees that its rights to
receive distributions in respect of this Equity Certificate are subordinated to
the rights of the Noteholders as described in the Indenture, dated as of
September 1, 1998, between the Trust and Norwest Bank Minnesota,
National Association as Indenture Trustee (the "Indenture").
The Depositor and this Certificateholder, by acceptance of this
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Equity Certificates for federal, state and local income tax
purposes as an equity interest in the Trust.
This Certificateholder, by its acceptance of this Certificate,
covenants and agrees that such Certificateholder will not at any time institute
against the Depositor, or join in any institution against the Depositor or the
Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Equity Certificates, the Notes, the Owner Trust Agreement or any of the Basic
Documents.
Distributions on this Equity Certificate will be made as provided in
the Owner Trust Agreement by the Certificate Paying Agent by wire transfer or
check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of this Equity Certificate or the making
of any notation hereon. Except as otherwise provided in the Owner Trust
Agreement and notwithstanding the above, the final distribution on this Equity
Certificate will be made after due notice by the Certificate Paying Agent of the
pendency of such
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distribution and only upon presentation and surrender of this Equity Certificate
at the office or agency maintained by the Certificate Registrar for that purpose
by the Trust.
Reference is hereby made to the further provisions of this Equity
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, or an authenticating agent by
manual signature, this Equity Certificate shall not entitle the
Certificateholder hereof to any benefit under the Owner Trust Agreement or be
valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Equity Certificate to be duly executed.
WILSHIRE REIT TRUST SERIES 1998-1
By: WILMINGTON TRUST COMPANY, not in its individual capacity
but solely as Owner Trustee
Dated: September ___, 1998 By:____________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Equity Certificates referred to in the within-mentioned
Owner Trust Agreement.
WILMINGTON TRUST COMPANY, not in its individual capacity but
solely as Owner Trustee
By:_________________________________
Authorized Signatory
or__________________________________
As Authenticating Agent of the Owner Trustee
By:_________________________________
Authorized Signatory
[REVERSE OF CERTIFICATE]
The Equity Certificates do not represent an obligation of, or an interest
in, the Depositor, the Seller, the Master Servicer, the Sub-Servicers, the
Indenture Trustee, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as expressly
set forth or contemplated herein or in the Owner Trust Agreement or the Basic
Documents. In addition, this Equity Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections and recoveries with respect to the Mortgage Loans, all as
more specifically set forth herein and in the Owner Trust Agreement. A copy of
the Owner Trust Agreement may be examined by this Certificateholder upon written
request during normal business hours at the principal office of the Depositor
and at such other places, if any, designated by the Depositor.
The Owner Trust Agreement permits the amendment thereof as specified
below, provided that any amendment be accompanied by an Opinion of Counsel to
the Owner Trustee to the effect that such amendment complies with the provisions
of the Owner Trust Agreement and, if either Wilshire REIT 1998-1 Inc. or
Wilshire Real Estate Investment Trust Inc. was not the Holder of 100% of the
Equity Certificates, would not cause the Trust to be subject to an entity level
tax. If the purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it shall
not be necessary to obtain the consent of any Certificateholder, but the Owner
Trustee shall be furnished with (A) a letter from each of the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Note or (B) an Opinion of Counsel to the effect that
such action will not adversely affect in any material respect the interests of
any Certificateholders. If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that any Equity Certificate
is outstanding, it shall not be necessary to obtain the consent of the any
Certificateholder, but the Owner Trustee shall be furnished with an Opinion of
Counsel that such amendment is necessary or helpful to prevent the imposition of
such taxes and is not materially adverse to any Certificateholder. If the
purpose of the amendment is to add or eliminate or change any provision of the
Owner Trust Agreement, other than as specified in the preceding two sentences,
the amendment shall require (A) an Opinion of Counsel to the effect that such
action will not adversely affect in any material respect the interests of any
Certificateholders, and (B) either (i) a letter from each of the Rating Agencies
that the amendment will not result in the downgrading or withdrawal of the
rating then assigned to any Note or (b) the consent of the Indenture Trustee and
the Majority Certificateholder; PROVIDED, HOWEVER, that no such amendment shall
(i) reduce in any manner the amount of, or delay the timing of, payments
received that are required to be distributed on any Equity Certificate without
the consent of the related Certificateholder or (ii) reduce the aforesaid
percentage of Equity Certificates the Holders of which are required to consent
to any such amendment without the consent of the Certificateholders of all such
Equity Certificates then outstanding.
As provided in the Owner Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Equity Certificate is
registerable in the Certificate Register upon surrender of this Equity
Certificate for registration of transfer at the offices or agencies of the
Certificate Registrar maintained by the Trust, accompanied by a written
instrument of transfer in
A-7
form satisfactory to the Certificate Registrar duly executed by the
Certificateholder hereof or such Certificateholder's attorney duly authorized in
writing, and thereupon one or more new Equity Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be issued
to the designated transferee. The initial Certificate Registrar appointed under
the Owner Trust Agreement is Norwest Bank Minnesota, National Association.
Except as provided in the Owner Trust Agreement, the Equity Certificates
are issuable only in a minimum Certificate Percentage Interest of 10%. As
provided in the Owner Trust Agreement and subject to certain limitations therein
set forth, Equity Certificates are exchangeable for new Equity Certificates of
authorized denominations evidencing the same aggregate denomination, as
requested by the Certificateholder surrendering the same. No service charge will
be made for any such registration of transfer or exchange, but the Owner Trustee
or the Certificate Registrar may require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate Registrar
and any agent of the Owner Trustee, the Certificate Paying Agent, or the
Certificate Registrar may treat the Person in whose name this Equity Certificate
is registered as the owner hereof for all purposes, and none of the Owner
Trustee, the Certificate Paying Agent, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Owner Trust Agreement
and the Trust created thereby shall terminate as and when provided in accordance
with the terms of the Owner Trust Agreement.
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
_______________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
_______________________________________________________________________________
the within Equity Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________________________
to transfer said Equity Certificate on the books of the Certificate Registrar,
with full power of substitution in the premises.
Dated:
_______________________________________*/
Signature Guaranteed: -
____________________________*/
-
________________
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Equity Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available funds
to ________________________________________
______________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
__________________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
EXHIBIT B
CERTIFICATE OF TRUST OF
WILSHIRE REIT TRUST SERIES 1998-1
---------------------------------
THIS Certificate of Trust of Wilshire REIT Trust Series 1998-1 (the
"Trust"), dated September ___, 1998, is being duly executed and filed by
______________________, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 DEL. CODE, ss. 3801 ET
SEQ.).
1. NAME. The name of the business trust formed hereby is Wilshire REIT
Trust Series 1998-1.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is ______________________, __________________,
______________, ______________, Attention: ______________________________.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
___________________________________,
not in its individual capacity but solely as owner
trustee under a Owner Trust Agreement dated as of
September ___, 1998.
By:
________________________________
Name:
Title:
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the Owner
Trustee and the Depositor (each as defined in the Amended and Restated Trust
Agreement (the "Agreement"), dated as of September 1, 1998, between Salomon
Brothers Mortgage Securities VII, Inc. as Depositor and Wilmington Trust Company
as Owner Trustee, pursuant to Section 3.05 of the Agreement and Norwest Bank
Minnesota, National Association as indenture trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
C-2
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Indenture
Trustee, the Owner Trustee, the Master Servicer or any Sub-Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would
render the disposition of the Rule 144A Securities a violation of Section 5
of the 1933 Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own account
or the accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
[3. The Buyer warrants and represents to, and covenants with, the
Seller, the Indenture Trustee, Owner Trustee, Master Servicer and the Depositor
that either (1) the Buyer is (A) not an employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), or a plan (within the meaning of Section 4975(e)(1) of
the Internal Revenue Code of 1986 ("Code")), which (in either case) is subject
to ERISA or Section 4975 of the Code (both a "Plan"), and (B) is not directly or
indirectly purchasing the Rule 144A Securities on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with "plan assets" of a
Plan, or (2) the Buyer understands that registration of transfer of any Rule
144A Securities to any Plan, or to any Person acting on behalf of any Plan, will
not be made unless such Plan delivers an opinion of its counsel, addressed and
satisfactory to the Certificate Registrar and the Depositor, to the effect that
the purchase and holding of the Rule 144A Securities by, on behalf of or with
"plan assets" of any Plan would not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and would
not subject the Depositor, the Master Servicer, the Indenture Trustee or the
Trust to any obligation or liability (including liabilities under ERISA or
Section 4975 of the Code) in addition
C-3
to those undertaken in the Agreement or any other liability. In lieu of such
opinion of counsel the Buyer may provide a certification in the form of Exhibit
G to the Agreement.]
4. This document may be executed in one or more counterparts and by
the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, each of the parties has executed this document as
of the date set forth below.
___________________________________ __________________________________
______
Print Name of Seller Print Name of Buyer
By:___________________________ By:________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.___________________________ No.________________________
Date:_________________________ Date:______________________
C-4
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, A COPY OF WHICH IS ATTACHED
HERETO.
________________
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
C-5
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is
a foreign savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a trust fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
C-6
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
________________________________
Print Name of Buyer
By:_____________________________
Name:
Title:
Date:___________________________
C-7
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
C-8
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
______________________________
Print Name of Buyer
By:___________________________
Name:____________________
Title:____________________
IF AN ADVISER:
______________________________
Print Name of Buyer
Date:_________________________
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
, 19
Salomon Brothers Mortgage Securities VII, Inc.
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Norwest Bank Minnesota, National Association
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Attention: Corporate Trust Administration
Re: Wilshire REIT Trust Series 1998-1
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates")
--------------------------------------------------------------
Ladies and Gentlemen:
_____________ (the "Purchaser") intends to purchase from ____________
(the "Seller") $_____________ of the above -captioned Certificates, issued
pursuant to the Amended and Restated Trust Agreement (the "Trust Agreement"),
dated as of September 1, 1998, between Salomon Brothers Mortgage Securities VII,
Inc. as depositor (the "Depositor") and Wilmington Trust Company as owner
trustee (the "Owner Trustee"), as acknowledged and agreed by Norwest Bank
Minnesota, National Association as Certificate Registrar. All terms used herein
and not otherwise defined shall have the meanings set forth in the Trust
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Depositor and the Certificate Registrar that:
1. The Purchaser understands that (a) the Certificates have not
been and will not be registered or qualified under the Securities Act
of 1933, as amended (the "Act") or any state securities law, (b) the
Company is not required to so register or qualify the Certificates,
(c) the Certificates may be resold only if registered and qualified
pursuant to the provisions of the Act or any state securities law, or
if an exemption from such registration and qualification is available,
(d) the Trust Agreement contains restrictions regarding the transfer
of the Certificates and (e) the Certificates will bear a legend to the
foregoing effect.
D-2
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule
501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) a copy of the Trust Agreement and (b) such
other information concerning the Certificates, the Mortgage Loans and
the Depositor as has been requested by the Purchaser from the
Depositor or the Seller and is relevant to the Purchaser's decision to
purchase the Certificates. The Purchaser has had any questions arising
from such review answered by the Depositor or the Seller to the
satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized or
will it authorize any person to (a) offer, pledge, sell, dispose of or
otherwise transfer any Certificate, any interest in any Certificate or
any other similar security to any person in any manner, (b) solicit
any offer to buy or to accept a pledge, disposition of other transfer
of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) otherwise approach
or negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any
manner, (d) make any general solicitation by means of general
advertising or in any other manner or (e) take any other action, that
(as to any of (a) through (e) above) would constitute a distribution
of any Certificate under the Act, that would render the disposition of
any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer
any of the Certificates, except in compliance with the provisions of
the Trust Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not any employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
the Internal Revenue Code of 1986 (the "Code"), a Person acting, directly or
indirectly, on behalf of any such plan or any Person acquiring such Certificates
with "plan assets" of a Plan within
D-3
the meaning of the Department of Labor regulation promulgated at 29 C.F.R.
ss.2510.3- 101; or
____ b. The Purchaser will provide the Depositor, the Owner
Trustee, the Certificate Registrar and the Master Servicer with either: (x) an
opinion of counsel, satisfactory to the Depositor, the Owner Trustee, the
Certificate Registrar and the Master Servicer, to the effect that the purchase
and holding of a Certificate by or on behalf of the Purchaser is permissible
under applicable law, will not constitute or result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code (or comparable provisions
of any subsequent enactments) and will not subject the Depositor, the Owner
Trustee, the Trust, the Certificate Registrar, the Master Servicer or any Sub-
Servicer to any obligation or liability (including liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the Trust
Agreement, which opinion of counsel shall not be an expense of the Depositor,
the Owner Trustee, the Trust, the Certificate Registrar, the Master Servicer or
the Sub-Servicers; or (y) in lieu of such opinion of counsel, a certification in
the form of Exhibit G to the Trust Agreement; and
(ii) the Purchaser is familiar with the prohibited transaction restrictions and
fiduciary responsibility requirements of Sections 406 and 407 of ERISA and
Section 4975 of the Code and understands that each of the parties to which this
certification is made is relying and will continue to rely on the statements
made in this paragraph 6.
7. The Purchaser is not a non-United States person.
Very truly yours,
By:___________________
Name:
Title:
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
, 19
Salomon Brothers Mortgage Securities VII, Inc.
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Norwest Bank Minnesota, National Association
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Attention: Corporate Trust Administration
Re: Wilshire REIT Trust Series 1998-1
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates")
--------------------------------------------------------------
Ladies and Gentlemen:
_______________ (the "Purchaser") intends to purchase from
____________ (the "Seller") $_____________ of the above -captioned Certificates,
issued pursuant to the Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of September 1, 1998, between Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor") and Wilmington Trust Company
as owner trustee (the "Owner Trustee"), as acknowledged and agreed by Norwest
Bank Minnesota, National Association as Certificate Registrar. All terms used
herein and not otherwise defined shall have the meanings set forth in the Trust
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Depositor and the Certificate Registrar that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto. The Seller
will not act, in any manner set forth in the foregoing sentence with respect to
any Certificate. The
E-2
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Trust Agreement.
Very truly yours,
(Seller)
By:_________________________
Name:
Title:
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Amended and Restated Trust Agreement, dated as
of September 1, 1998 (the "Trust Agreement"), between Salomon Brothers Mortgage
Securities VII, Inc. as depositor (the "Depositor") and Wilmington Trust Company
as Owner Trustee (the "Owner Trustee"), in connection with the acquisition of,
transfer to or possession by the undersigned, whether as beneficial owner (the
"Beneficial Owner"), or nominee on behalf of the Beneficial Owner of the Salomon
Brothers Mortgage Securities VII, Inc., Asset-Backed Certificates, Series
1998-11 (the "Certificate"). Capitalized terms used but not defined in this
certificate have the respective meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in
all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS Form W-9
relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident alien for
purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
; and
3. My (The Beneficial Owner's) U.S. taxpayer identification
number (Social Security Number) is .
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a
foreign corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Code and
Treasury Regulations;
F-2
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is
; and
3. The Beneficial Owner's U.S. employer identification number is
.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the undersigned
certifies that this certificate has been made in reliance upon information
contained in:
an IRS Form W-9
a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.
F-3
Under penalties of perjury, I declare that I have examined this certificate
and to the best of my knowledge and belief it is true, correct and complete and
will further declare that I will inform the Trust of any change in the
information provided above, and, if applicable, I further declare that I have
the authority* to sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this certificate.
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 199__
Salomon Brothers Mortgage Securities VII, Inc.
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Wilmington Trust Company, as Owner Trustee
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Norwest Bank Minnesota, National Association
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Attention: Corporate Trust Administration
Re: Wilshire REIT Trust Series 1998-1
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates")
--------------------------------------------------------------
Ladies and Gentlemen:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ____% Certificate
Percentage Interest of Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates"), issued pursuant
to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of
September 1, 1998, between Salomon Brothers Mortgage Securities VII, Inc. as
depositor (the "Depositor") and Wilmington Trust Company as trustee (the "Owner
Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants
with, the Company, the Owner Trustee, the Certificate Registrar, the Master
Servicer and the Sub-Servicers that either:
(1) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other retirement arrangement, including individual retirement
accounts and annuities, ▇▇▇▇▇ plans and bank collective investment funds
and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that is subject to Section 406 of
ERISA
G-2
or Section 4975 of the Internal Revenue Code of 1986 (the "Code") (any of
the foregoing, a "Plan"), (ii) are not being acquired with "plan assets" of
a Plan within the meaning of the Department of Labor ("DOL") regulation, 29
C.F.R. ss. 2510.3-101, and (iii) will not be transferred to any entity that
is deemed to be investing in plan assets within the meaning of the DOL
regulation, 29 C.F.R. ss. 2510.3-101; or
_____ (2) The purchase of Certificates is permissible under applicable law,
will not constitute or result in any prohibited transaction under ERISA or
Section 4975 of the Code, will not subject the Depositor, the Owner Trustee
or the Certificate Registrar to any obligation in addition to those
undertaken in the Trust Agreement and one of the following conditions are
met:
(i) the transferee is an insurance company and (A) the source of
funds used to purchase such Certificate is an "insurance company
general account" (as such term is defined in PTCE 95-60), (B) the
conditions set forth in PTCE 95-60 have been satisfied and (C) there
is no Plan with respect to which the amount of such general account's
reserves and liabilities for contracts held by or on behalf of such
Plan and all other Plans maintained by the same employer (or any
"affiliate" thereof, as defined in PTCE 95-60) or by the same employee
organization, exceeds 10% of the total of all reserves and liabilities
of such general account (as determined under PTCE 95-60) as of the
date of the acquisition of such Certificates;
(ii) the transferee is an insurance company and (A) the source of
funds used to purchase such Certificates is an insurance company
general account, (B) the requirements of Section 401(c) of ERISA and
the regulations to be promulgated thereunder ("401(c) Regulations")
have been satisfied and will continue to be satisfied and (C) the
insurance company represents that it understands that the operation of
the general account after December 31, 1998 may affect its ability to
continue to hold such Certificates after the date which is 18 months
after the 401(c) Regulations become final and that unless a Class
Exemption or an exception under Section 401(c) of ERISA is then
available for the continued holding of such Certificates, it will
dispose of such Certificates prior to the date which is 18 months
after the 401(c) Regulations become final;
(iii) the transferee is an insurance company and (A) the source
of funds used to purchase such Certificates is an "insurance company
pooled separate account" (as such term is defined in PTCE 90-1), (B)
the conditions set forth in PTCE 90-1 have been satisfied and (C)
there is no Plan, together with all other Plans maintained by the same
employer (or any "affiliate" thereof, as defined in PTCE 90-1) or by
the same employee organization, with assets which exceed 10% of the
total of all assets in such pooled separate account (as determined
under PTCE 90-1) as of the date of the acquisition of such
Certificates;
G-3
(iv) the transferee is a bank and (A) the source of funds used to
purchase such Certificates is a "collective investment fund" (as
defined in PTCE 91-38), (B) the conditions set forth in PTCE 91-38
have been satisfied and (C) there is no Plan, the interests of which,
together with the interests of any other Plans maintained by the same
employer or employee organization, in the collective investment fund
exceed 10% of the total of all assets in the collective investment
fund (as determined under PTCE 91-38) as of the date of acquisition of
such Certificates;
(v) the transferee is a "qualified professional asset manager"
described in PTCE 84-14 and the conditions set forth in PTCE 84-14
have been satisfied and will continue to be satisfied; or
(vi) the transferee is an "in-house asset manager" described in
PTCE 96- 23 and the conditions set forth in PTCE 96-23 have been
satisfied and will continue to be satisfied.
(3) The Transferee is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and
407 of ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will continue to
rely on the statements made herein.
Very truly yours,
By:_____________________
Name:
Title:
EXHIBIT H
FORM OF REPRESENTATION LETTER
_____________, 199__
Salomon Brothers Mortgage Securities VII, Inc.
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Wilmington Trust Company, as Owner Trustee
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Administration
Re: Wilshire REIT Trust Series 1998-1
Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates")
--------------------------------------------------------------
Ladies and Gentlemen:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Salomon Brothers Mortgage Securities VII, Inc.
Asset-Backed Certificates, Series 1998-11 (the "Certificates"), issued pursuant
to an Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of
September 1, 1998 between Salomon Brothers Mortgage Securities VII, Inc. as
depositor (the "Depositor") and Wilmington Trust Company, as trustee (the "Owner
Trustee"). Capitalized terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar and
the Master Servicer that:
(1) the Transferee is acquiring the Certificate for its own behalf and
is not acting as agent or custodian for any other person or entity in
connection with such acquisition; and
(2) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee is a
partnership, grantor trust or S corporation for federal income tax
purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
H-2
Very truly yours,
By:______________________
Name:
Title:
EXHIBIT I
INITIAL TRUST AGREEMENT
