10-K/A 1 sal02ke2.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A Amendment No. 1 (Mark one) /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 333-83816-04 Salomon Brothers Mortgage Securities VII, Inc. Commercial Mortgage Pass-Through Certificates, Series 2002-KEY2 (Exact name of registrant as specified in its charter) New York 13-4169299 13-4169292 13-4169319 52-7294452 52-7294453 52-2365750 52-2365751 52-2365752 52-2365753 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) c/o Wells Fargo Bank Minnesota, N.A. 9062 Old Annapolis Road Columbia, MD 21045 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (410) 884-2000 Securities registered pursuant to Section 12(b) of the Act: NONE. Securities registered pursuant to Section 12(g) of the Act: NONE. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ( 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Not applicable. State the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of a specified date within 60 days prior to the date of filing. (See definition of affiliate in Rule 405, 17 CFR 230.405.) Not applicable. Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. Not applicable. List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g. Part I, Part II, etc..) into which the document is incorporated: (1)Any annual report to security holders; (2) Any proxy or information statement; and (3)Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g. annual report to security holders for fiscal year ended December 24, 1980). Not applicable. PART I Item 1. Business. Omitted. Item 2. Properties. See Item 15(a), Exhibits 99.1, 99.2, and 99.3, for information provided in lieu of information required by Item 102 of Regulation S-K. Item 3. Legal Proceedings. The registrant knows of no material pending legal proceedings involving the trusts created under the Pooling and Servicing Agreement (the Trusts), the Trustee, the Servicer or the registrant with respect to the Trusts other than routine litigation incidental to the duties of the respective parties. Item 4. Submission of Matters to a Vote of Security Holders. None. PART II Item 5. Market for registrant's Common Equity and Related Stockholder Matters. No established public trading market for the Certificates exists. Records provided to the Trust by the DTC and the Trustee indicate that as of December 31, 2002, the number of holders of record for each class of Certificate were as follows: Class A-1 6 Class A-2 8 Class A-3 8 Class B 3 Class C 1 Class D 1 Class E 1 Class F 1 Class H 1 Class J 1 Class K 1 Class L 3 Class M 1 Class N 1 Class P 1 Class Q 1 Class R-I 1 Class S 1 Class T 1 Class X-1 5 Class X-2 5 Class Y 1 Total: 53 Item 6. Selected Financial Data. Omitted. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation. Omitted. Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Not applicable. Item 8. Financial Statements and Supplementary Data. See Item 15(a), Exhibits 99.1, 99.2, 99.3, for information provided in lieu of information required by Item 302 of Regulation S-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None. PART III Item 10. Directors and Executive Officers of the Registrant. Not applicable. Item 11. Executive Compensation. Not applicable. Item 12. Security Ownership of Certain Beneficial Owners and Management. Not applicable. Item 13. Certain Relationships and Related Transactions. Not applicable. Item 14. Controls and Procedures. Not applicable. PART IV Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K. (a) Exhibits (99.1) Annual Independent Accountants' Servicing Reports concerning servicing activities for the year ended December 31, 2002. ~~a) ARCap Special Servicing, Inc., as Special Servicer b) KeyCorp Real Estate Capital Markets, Inc., as Master Servicer~~

(99.2) Report of Management as to Compliance with Minimum Servicing Standards for the year ended December 31, 2002. ~~a) ARCap Special Servicing, Inc., as Special Servicer b) KeyCorp Real Estate Capital Markets, Inc., as Master Servicer~~

(99.3) Annual Statements of Compliance under the Pooling and Servicing Agreements for the year ended December 31, 2002. ~~a) ARCap Special Servicing, Inc., as Special Servicer b) KeyCorp Real Estate Capital Markets, Inc., as Master Servicer~~

(99.4) Aggregate Statement of Principal and Interest Distributions to Certificate Holders. (99.5) Necessary revisions to Distribution Date Statements filed with Form 8K. (b) On November 04, 2002, November 26, 2002 and December 31, 2002 reports on Form 8-K were filed by the Company in order to provide the statements for the monthly distributions to holders of the Certificates. No other reports on Form 8-K have been filed during the last quarter of the period covered by this report. (c) Not applicable. (d) Omitted. Ex-99.4 Schedule of Year-To-Date Principal and Interest Distributions to Certificateholders EX-99.5 Information in this Form 10K, to the extent inconsistent with information filed previously with the Securities and Exchange Commission, revises and supercedes any such prior information. Filed herewith Previously filed SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized: Salomon Brothers Mortgage Securities VII, Inc. Commercial Mortgage Pass-Through Certificates, Series 2002-KEY2 (Registrant) Signed: Salomon Brothers Mtg Securities VII, Inc. as Depositor By: Paul Vanderslice, Vice President By: /s/ Paul Vanderslice Dated: July 17, 2003 Sarbanes-Oxley Certification I, Paul Vanderslice, certify that: 1. I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by this annual report, of Salomon Brothers Mortgage Securities VII, Inc. Commercial Mortgage Pass-Through Certificates, Series 2002-KEY2; 2. Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report; 3. Based on my knowledge, the distribution or servicing information required to be provided to the trustee by the servicer under the pooling and servicing agreement, for inclusion in these reports is included in these reports; 4. Based on my knowledge and upon the annual compliance statement included in the report and required to be delivered to the trustee in accordance with the terms of the pooling and servicing agreement and except as disclosed in the reports, the servicer has fulfilled its obligations under the servicing agreement; and 5. The reports disclose all significant deficiencies relating to the servicer's compliance with the minimum servicing standards based upon the report provided by an independent public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling and servicing, or similar, agreement, that is included in these reports. In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: ARCap Special Servicing, Inc., as Special Servicer and KeyCorp Real Estate Capital Markets, Inc., as Master Servicer. Date: 7/17/03 /s/ Paul Vanderslice Signature Vice President Title SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT. (a)(i) No annual report is provided to the Certificateholders other than with respect to aggregate principal and interest distributions. (a)(ii) No proxy statement, form of proxy or other proxy soliciting material has been sent to any Certificateholder with respect to any annual or other meeting of Certificateholders. Ex-99.1 (a) ERNST & YOUNG (logo) Ernst & Young LLP Suite 1500 2121 San Jacinto Street Dallas, Texas 65201 Phone: (214) 969-8000 Fax: (214) 969-8587 Telex: 6710375 www.ey.com Report on Management's Assertion on Compliance with Minimum Servicing Standards Set Forth in the Uniform Single Attestation Program for Mortgage Bankers Report of Independent Accountants Board of Directors ARCap Special Servicing, Inc. We have examined management's assertion, included in the accompanying report titled Report of Management, that ARCap Special Servicing, Inc. (the Company) complied with the minimum servicing standards set forth in the Mortgage Bankers (USAP) except, for commercial loan and multifamily loan servicing, minimum servicing standards V.4 and VI.1., which the Mortgage Bankers Association of America has interpreted as inapplicable to such servicing during the nine-month period ended December 31, 2002. Management is responsible for the Company's compliance with those requirements. Our responsibility is to express an opinion on management's assertions about the Company's compliance based on our examination. Our examination was made in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Company's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with specified requirements. In our opinion, mangement's assertion, that the Company complied with the aforementioned requirements during the nine-month period ended December 31, 2002, is fairly stated, in all material respects. This report is intended solely for the information and use of the board of directors, management, any nationally recognized rating agency, including, but not limited to, Standard & Poor's Rating Services, a division of McGraw-Hill Companies, Inc., Moody's Investor Services, Inc. and Fitch, Inc., any party to any Pooling and Servicing Agreement under which the Company acts as the Special Servicer and the Company's private investors and is not intended to be and should not be used by anyone other than these specified parties. /s/ Ernst & Young February 4, 2003 A Member Practice of Ernst & Young Global Ex-99.1 (b) ERNST & YOUNG (logo) Ernst & Young LLP 1300 Huntington Building 925 Euclid Avenue Cleveland, Ohio 44115-1405 Phone: (216) 861-5000 www.ey.com Report on Management's Assertion on Compliance with Minimum Servicing Standards Set Forth in the Uniform Single Attestation Program for Mortgage Bankers Report of Independent Accountants Board of Directors KeyCorp Real Estate Capital Markets, Inc. We have examined management's assertion, included in the accompanying report titled Report of Management, that KeyCorp Real Estate Capital Markets, Inc. (the Company) complied with the minimum servicing standards set forth in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers (USAP) except, for commercial loan and multifamily loan servicing, minimum servicing standards V.4 and VI.1., which the Mortgage Bankers Association of America has interpreted as inapplicable to such servicing during the year ended December 31, 2002. Management is responsible for the Company's compliance with those requirements. Our responsibility is to express an opinion on management's assertions about the Company's compliance based on our examination. Our examination was made in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Company's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Company's compliance with specified requirements. In our opinion, management's assertion that the Company complied with the aforementioned requirements during the year ended December 31, 2002, is fairly stated, in all material respects. This report is intended solely for the information and use of the Board of Directors, management, the U.S. Department of Housing and Urban Development, Federal National Mortgage Association Government National Mortgage Association, and the Company's private investors and is not intended to be and should not be used by anyone other than these specified parties. /s/ Ernst & Young LLP February 14, 2003 Ernst & Young LLP is a member of Ernst & Young International, Ltd. Ex-99.2 (a) ARCap (logo) Management's Assertion on Compliance with Minimum Servicing Standards Set Forth in the Uniform Single Attestation Program for Mortgage Bankers Report of Management We, as members of management of ARCap Special Servicing, Inc. (the Company), are responsible for complying with the minimum servicing standards as set forth in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers (USAP) except, for commercial loan and multifamily loan servicing, minimum servicing standards V.4. and VI.1., which the Mortgage Bankers Association of America has interpreted as inapplicable to such servicing. We are also responsible for establishing and maintaining effective internal control over compliance with these standards. We have performed an evaluation of the Company's compliance with the minimum servicing standards as set forth in the USAP as of December 31, 2002 and for the nine-month period then ended. Based on this evaluation, we assert that during the period ended December 31, 2002, the Company complied, in all material respects, with the minimum servicing standards set forth in the USAP. As of and for this same period, the Company had in effect a fidelity bond (crime) policy in the amount of $1,500,000 and an errors and omissions policy in the amount of $10,000,000. /s/ Chris Crouch Chris Crouch, Servicing Officer of ARCap Special Servicing, Inc. February 4, 2003 Ex-99.2 (b) KeyBank Real Estate Capital (logo) 911 Main Street, Suite 1500 Kansas City, MO 64105 Tel: 816-221-8800 Fax: 816-221-8051 Toll Free: 888-979-1200 February 14, 2003 Report of Management We, as members of management of KeyCorp Real Estate Capital Markets, Inc. (the Company), are responsible for complying with the minimum servicing standards as set forth in the Mortgage Bankers Association of America's Uniform Single Attestation Program for Mortgage Bankers (USAP) except for commercial loan and multifamily loan servicing, minimum servicing standards V.4 and VI.1., which the Mortgage Bankers Association of America has interpreted as inapplicable to such servicing. We are also responsible for establishing and maintaining effective internal control over compliance with these standards. We have performed an evaluation of the Company's compliance with the minimum servicing standards as set forth in the USAP as of December 31, 2002 and for the year then ended. Based on this evaluation, we assert that during the year ended December 31, 2002, the Company complied, in all material respects, with the minimum servicing standards set forth in the USAP. As of and for this same period, the Company was insured as a subsidiary of Key Corp. As of December 31, 2002, the Company had $100,000,000 fidelity bond coverage and $100,000,000 errors and omissions coverage. /s/ Marty O'Connor Marty O'Connor Senior Vice President Loan Servicing & Asset Management /s/ Tony Nemec Tony Nemec Investor Reporting Manager /s/ Bryan Nitcher Bryan Nitcher Portfolio Manager Ex-99.3 (a) OFFICER'S CERTIFICATE ARCap SERVICING, INC. The undersigned, James L. Duggins, the President of ARCap Servicing, Inc., formerly known as ARCap Special Servicing, Inc., the Special Servicer under that certain Pooling and Servicing Agreement (the "Pooling and Servicing Agreement") dated as of September 11, 2002, relating to the Salomon Brothers Mortgage Securities VII, Inc. Commercial Mortgage Pass-Through Certificates Series 2002-KEY2, hereby certifies as follows: 1. a review of the activities of the Special Servicer and of its performance under the Pooling and Servicing Agreement during the calendar year 2002 has been made under the undersigned's supervision; 2. to the best of the undersigned's knowledge, based on such review, the Special Servicer has fulfilled all of its obligations under the Agreement in all material respects throughout such calendar year 2002; and 3. the Special Servicer has received no notice regarding qualification, or challenging the status of, any REMIC Pool as a REMIC or either Grantor Trust Pool as a Grantor Trust from the Internal Revenue Service or any other governmental agency or body Capitalized terms not otherwise defined herein shall have the meanings given them in the Pooling and Servicing Agreement. IN WITNESS WEHEROF, as of the 7 day of March, 2003, I have hereunto signed my name. ARCap SERVICING, INC. formerly known as ARCap Special Servicing, Inc., a Delaware corporation BY: /s/ James L. Duggins James L. Duggins, President Ex-99.3 (b) (logo) KeyBank Real Estate Capital 911 Main Street, Suite 1500 Kansas City, MO 64105 Tel: 816-221-8800 Fax: 816-221-8051 Toll Free: 888-979-1200 KeyCorp Real Estate Capital Markets, Inc. As Master Servicer Annual Officer's Certification For Period of: January 1 through December 31, 2002 Re: SBMS 2002-KEY2 Pooling and Servicing Agreement dated 9/11/2002 With regard to the loans Master Serviced by KeyCorp Real Estate Capital Markets, Inc. d/b/a/ KeyBank Real Estate Capital (KREC) in the above captioned transaction, and pursuant to Section 3.13 and 3.14 of the Pooling and Servicing Agreement, please be advised of the following: * A review of the activities of KREC during the preceding calendar year and of its performance, under the Agreement, has been made under my supervision. * To the best of my knowledge, based on such review, KREC has fulfilled all of its obligations under the Agreement in all material respects. * KCM has received no notice regarding qualification or challenge to the status of Upper-Tier REMIC or Lower-Tier REMIC as a REMIC from the Internal Revenue Service or any governing agency or body. By: /s/ Marty L. O'Connor Marty L. O'Connor, Senior Vice President Loan Servicing and Asset Management Date: /s/ 3/28/03

COMMERCIAL MORTGAGE PASS THROUGH CERT SERIES 2002-KEY2 10-K/A