<PAGE>
Filed Pursuant to Rule 424B(5)
Registration File No.: 333-65921
THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL WE DELIVER A FINAL PROSPECTUS
SUPPLEMENT AND PROSPECTUS. THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS ARE NOT AN
OFFER TO SELL THESE SECURITIES AND ARE NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 22, 1998.
Prospectus Supplement to Prospectus dated December 22, 1998.
$779,262,000
(Approximate)
GS MORTGAGE SECURITIES CORPORATION II
AS SELLER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
---------------------
The Commercial Mortgage Pass-Through Certificates, Series 1999-C1 will
include seven classes of certificates that we are offering pursuant to this
prospectus supplement. The Series 1999-C1 certificates represent the beneficial
ownership interests in a trust. The trust's main assets will be a pool of 304
fixed rate mortgage loans with original terms to maturity of not more than 360
months, secured by first liens on various types of commercial or multifamily
properties.
<TABLE>
<CAPTION>
Initial Certificate Expected
Principal or Pass-Through Ratings Rated Final
Notional Amount(1) Rate Description (S&P/Moody's) Distribution Date
--------------------- -------------- ------------- --------------- ------------------
<S> <C> <C> <C> <C> <C>
Class A-1 ......... $ 165,650,000 % Fixed AAA/Aaa November 18, 2030
Class A-2 ......... $ 455,533,000 %(2) WAC AAA/Aaa November 18, 2030
Class X ........... $ 890,585,907(3) %(4) WAC/IO AAAr/Aaa November 18, 2030
Class B ........... $ 42,303,000 %(2) WAC AA/Aa2 November 18, 2030
Class C ........... $ 44,529,000 %(2) WAC A/A2 November 18, 2030
Class D ........... $ 57,888,000 %(2) WAC BBB/Baa2 November 18, 2030
Class E ........... $ 13,359,000 %(2) WAC BBB-/Baa3 November 18, 2030
</TABLE>
(Footnotes to table on page S-6)
We will not list the offered certificates on any national securities
exchange or on any automated quotation system of any registered securities
association such as NASDAQ.
The Series 1999-C1 certificates are not obligations of GS Mortgage
Securities Corporation II, the trustee, the master servicer, the special
servicer, any loan originator or loan seller, or any of their respective
affiliates. The offered certificates and the underlying mortgage loans are not
insured or guaranteed by any governmental agency or any of the persons
specified above. THE CLASS B, CLASS C, CLASS D AND CLASS E CERTIFICATES ARE
SUBORDINATED TO THE CLASS A-1, CLASS A-2 AND CLASS X CERTIFICATES, AND EACH
SUCH CLASS IS ALSO SUBORDINATED TO THOSE OTHER CLASSES WITH EARLIER ALPHABETIC
DESIGNATIONS, AS FURTHER DESCRIBED IN THIS PROSPECTUS SUPPLEMENT.
Investing in the offered certificates involves risk. See "Risk Factors"
beginning on page S-18 in this prospectus supplement and page 3 in the
prospectus.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THE OFFERED CERTIFICATES, OR PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------
The underwriters, Goldman, Sachs & Co. and Norwest Investment Services,
Inc., will purchase the offered certificates from GS Mortgage Securities
Corporation II and will offer them to the public at negotiated prices, plus
accrued interest, determined at the time of sale. The underwriters also expect
to deliver the offered certificates to purchasers in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on January 20, 1999. We expect to receive from this offering
approximately $ , plus accrued interest from January 1, 1999, before
deducting expenses payable by us.
GOLDMAN, SACHS & CO. NORWEST INVESTMENT
SERVICES, INC.
---------------------
Prospectus Supplement dated January , 1999.
<PAGE>
$779,262,000 (APPROXIMATE)
GS MORTGAGE SECURITIES CORPORATION II (SELLER)
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-C1
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
Commercial Mortgage Pass-Through Certificates, Series 1999-C1
Geographic Overview of Mortgage Pool
[MAP OF UNITED STATES] [PIE CHART]
MAINE SOUTH CAROLINA CALIFORNIA DISTRIBUTION OF
PROPERTY TYPES
1 property 1 property 32 properties
$3,477,937 $2,694,387 $93,268,451 Healthcare
0.39% of total 0.30% of total 10.47% of total 3.33%
MASSACHUSETTS FLORIDA ALASKA Self Storage
14 properties 21 properties 1 property 0.60%
$36,701,118 $70,095,478 $1,119,948
4.12% of total 7.87% of total 0.13% of total Multifamily
32 47%
CONNECTICUT ALABAMA OREGON
3 properties 1 property 4 properties Retail
$6,291,702 $1,356,840 $6,634,457 24.00%
0.71% of total 0.15% of total 0.74% of total
Of ice
RHODE ISLAND MISSISSIPPI WASHINGTON 16.73%
1 property 4 properties 10 properties
$1,364,770 $8,926,327 $44,268,684 Lodging
0.15% of total 1.00% of total 4.97% of total 14.46%
NEW YORK LOUISIANA IDAHO Industrial
23 properties 2 properties 2 properties 8.42%
$64,964,839 $2,345,985 $6,428,307
7.29% of total 0.26% of total 0.72% of total
[MAP KEY]
NEW JERSEY OKLAHOMA MISSOURI
14 properties 5 properties 6 properties (greater than or
$30,435,474 $15,096,519 $6,662,940 equal to) 1.00%
3.42% of total 1.70% of total 0.75% of total of Initial Pool
Balance
1.01 -- 5.00%
MARYLAND KANSAS ILLINOIS of Initial Pool
Balance
10 properties 1 property 6 properties
$33,607,473 $1,307,700 $34,015,000 5.01 -- 10.00%
3.77% of total 0.15% of total 3.82% of total of Initial Pool
Balance
VIRGINIA TEXAS WISCONSIN (greater
than) 10.00%
4 properties 56 properties 4 properties of Initial Pool
$24,458,888 $115,832,720 $18,014,985 Balance
2.75% of total 13.01% of total 2.02% of total
KENTUCKY COLORADO MICHIGAN
7 properties 7 properties 3 properties
$13,729,821 $19,128,161 $4,993,127
1.54% of total 2.15% of total 0.56% of total
WEST VIRGINIA NEW MEXICO INDIANA
1 property 1 property 4 properties
$1,637,348 $2,193,040 $2,795,597
1.18% of total 0.25% of total 0.31% of total
TENNESSEE ARIZONA OHIO
6 properties 13 properties 7 properties
$30,991,018 $57,330,008 $13,071,839
3.48% of total 6.44% of total 1.47% of total
NORTH CAROLINA UTAH PENNSYLVANIA
4 properties 3 properties 14 properties
$10,921,114 $4,051,863 $31,893,366
1.23% of total 0.45% of total 3.58% of total
GEORGIA NEVADA
12 properties 9 properties
$46,625,164 $21,853,511
5.24% of total 2.45% of total
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
Information about the offered certificates is contained in two separate
documents that progressively provide more detail: (a) the accompanying
prospectus, which provides general information, some of which may not apply to
the offered certificates; and (b) this prospectus supplement, which describes
the specific terms of the offered certificates. IF THE TERMS OF THE OFFERED
CERTIFICATES VARY BETWEEN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS, YOU SHOULD RELY ON THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT.
You should rely only on the information contained in this prospectus
supplement and the accompanying prospectus. We have not authorized anyone to
provide you with information that is different from that contained in this
prospectus supplement and the prospectus. The information in this prospectus
supplement is accurate only as of the date of this prospectus supplement.
This prospectus supplement begins with several introductory sections
describing the Series 1999-C1 certificates and the trust in abbreviated form:
Certificate Summary, commencing on page S-5 of this prospectus
supplement, which sets forth important statistical information relating to
the certificates;
Summary of Prospectus Supplement, commencing on page S-7, which gives a
brief introduction to the key features of the Series 1999-C1 certificates
and a description of the mortgage loans; and
Risk Factors, commencing on page S-18 of this prospectus supplement,
which describes risks that apply to the Series 1999-C1 certificates which
are in addition to those described in the prospectus with respect to the
securities issued by the trust generally.
This prospectus supplement and the accompanying prospectus include cross
references to sections in these materials where you can find further related
discussions. The Tables of Contents in this prospectus supplement and the
prospectus identify the pages where these sections are located.
Certain capitalized terms are defined and used in this prospectus
supplement and the prospectus to assist you in understanding the terms of the
offered certificates and this offering. The capitalized terms used in this
prospectus supplement are defined on the pages indicated under the caption
"Index of Significant Definitions" beginning on page S-100 in this prospectus
supplement.
In this prospectus supplement, the terms "Seller," "we," "us" and "our"
refer to GS Mortgage Securities Corporation II.
FORWARD-LOOKING STATEMENTS
In this prospectus supplement and the accompanying prospectus, we use
certain forward-looking statements. Such forward-looking statements are found
in the material, including each of the tables, set forth under "Risk Factors"
and "Yield, Prepayment and Maturity Considerations." Forward-looking statements
are also found elsewhere in this prospectus supplement and prospectus and
include words like "expects," "intends," "anticipates," "estimates" and other
similar words. Such statements are intended to convey our projections or
expectations as of the date of this prospectus supplement. Such statements are
inherently subject to a variety of risks and uncertainties. Actual results
could differ materially from those we anticipate due to changes in, among other
things:
o economic conditions and industry competition,
o political and/or social conditions, and
o the law and government regulatory initiatives.
We will not update or revise any forward-looking statement to reflect changes
in our expectations or changes in the conditions or circumstances on which such
statements were originally based.
S-2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
SUMMARY OF PROSPECTUS
SUPPLEMENT .................................... S-7
RISK FACTORS ..................................... S-18
Special Prepayment Considerations ............. S-18
Special Yield Considerations .................. S-19
Risks Relating to Enforceability of
Prepayment Premiums ........................ S-19
Risks Associated with Certain of the
Mortgage Loans and Mortgaged
Properties ................................. S-20
Limitations of Appraisals ..................... S-21
Tenant Concentration Entails Risk ............. S-21
Mortgaged Properties Leased to Multiple
Tenants Also Have Risks .................... S-22
Tenant Bankruptcy Entails Risks ............... S-22
Concentration of Mortgage Loans ............... S-22
Risks Relating to Enforceability of
Cross-Collateralization .................... S-23
Risks Particular to Multifamily Rental
Properties ................................. S-24
Risks Particular to Retail Properties ......... S-24
Risks Particular to Office Properties ......... S-25
Risks Particular to Lodging Properties ........ S-25
Risks Particular to Industrial Properties ..... S-26
Nonrecourse Mortgage Loans .................... S-26
Risks of Different Timing of Mortgage Loan
Amortization ............................... S-26
Bankruptcy Proceedings Entail Certain
Risks ...................................... S-27
Geographic Concentration ...................... S-27
Environmental Risks ........................... S-27
Costs of Compliance with Americans with
Disabilities Act ........................... S-28
Litigation and Other Matters Affecting the
Mortgaged Properties or Borrowers .......... S-29
Other Financings .............................. S-29
Effect of Borrower Delinquencies and
Defaults ................................... S-30
Balloon Payments .............................. S-31
Ground Leases and Other Leasehold
Interests .................................. S-31
Attornment Considerations ..................... S-32
</TABLE>
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
State Law Limitations on Remedies ............. S-32
Tax Considerations Relating to Foreclosure S-32
Zoning Compliance and Use Restrictions ........ S-33
Earthquake Insurance, Flood and Other
Insurance .................................. S-33
Special Servicer May Have a Conflict of
Interest ................................... S-33
Limitations with Respect to
Representations and Warranties ............. S-33
Risks of Limited Liquidity and Market Value S-34
Book-Entry Registration ....................... S-34
Risks Associated with Year 2000
Compliance ................................. S-34
Other Risks ................................... S-34
DESCRIPTION OF THE MORTGAGE POOL S-35
General ....................................... S-35
Additional Mortgage Loan Information .......... S-36
Representations and Warranties ................ S-37
Certain Characteristics of the Mortgage
Loans ...................................... S-37
Escrows ....................................... S-39
Underwriting Guidelines ....................... S-39
Additional Information ........................ S-41
DESCRIPTION OF THE OFFERED
CERTIFICATES ..................................... S-42
General ....................................... S-42
Distributions ................................. S-43
Subordination ................................. S-52
Appraisal Reductions .......................... S-53
Delivery, Form and Denomination ............... S-54
Book-Entry Registration ....................... S-55
Definitive Certificates ....................... S-56
Transfer Restrictions ......................... S-57
YIELD, PREPAYMENT AND MATURITY
CONSIDERATIONS ................................... S-58
Yield ......................................... S-58
Weighted Average Life of the Offered
Certificates ............................... S-60
Price/Yield Tables ............................ S-65
Yield Sensitivity of the Class X Certificates S-69
THE POOLING AGREEMENT ............................ S-71
</TABLE>
S-3
<PAGE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
General ......................................... S-71
Assignment of the Mortgage Loans ................ S-71
Servicing of the Mortgage Loans;
Collection of Payments ....................... S-71
Advances ........................................ S-73
Accounts ........................................ S-75
Withdrawals from the Collection Account ......... S-76
Enforcement of "Due-on-Sale" and
"Due-on-Encumbrance" Clauses ................. S-76
Inspections ..................................... S-77
Evidence as to Compliance ....................... S-77
Certain Matters Regarding the Seller, the
Master Servicer and the Special Servicer S-78
Events of Default ............................... S-79
Rights Upon Event of Default .................... S-80
Amendment ....................................... S-81
Realization Upon Mortgage Loans ................. S-81
The Controlling Class Representative ............ S-85
Optional Termination; Optional Mortgage
Loan Purchase ................................ S-86
The Trustee ..................................... S-86
Duties of the Trustee ........................... S-87
The Fiscal Agent ................................ S-88
Duties of the Fiscal Agent ...................... S-88
The Master Servicer ............................. S-89
</TABLE>
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Servicing Compensation and Payment of
Expenses ..................................... S-89
The Special Servicer ............................ S-90
Master Servicer and Special Servicer
Permitted to Buy Certificates ................ S-90
Reports to Certificateholders ................... S-91
USE OF PROCEEDS .................................... S-92
CERTAIN LEGAL ASPECTS OF THE
MORTGAGE LOANS ..................................... S-92
FEDERAL INCOME TAX CONSEQUENCES S-94
STATE TAX CONSIDERATIONS ........................... S-96
ERISA CONSIDERATIONS ............................... S-96
LEGAL INVESTMENT ................................... S-97
UNDERWRITING ....................................... S-98
LEGAL MATTERS ...................................... S-98
RATINGS ............................................ S-99
INDEX OF SIGNIFICANT DEFINITIONS ................... S-100
ANNEX A--CERTAIN CHARACTERISTICS
OF THE MORTGAGE LOANS .............................. A-1
ANNEX B--REPRESENTATIONS AND
WARRANTIES ......................................... B-1
ANNEX C--FORM OF STATEMENT TO
CERTIFICATEHOLDERS ................................. C-1
ANNEX D--STRUCTURAL AND
COLLATERAL TERM SHEET .............................. D-1
</TABLE>
S-4
<PAGE>
CERTIFICATE SUMMARY
<TABLE>
<CAPTION>
INITIAL APPROXIMATE
CERTIFICATE PERCENT OF
APPROXIMATE PRINCIPAL RATINGS TOTAL
CREDIT SUPPORT CLASS AMOUNT (S&P/MOODY'S) CERTIFICATES
<S> <C> <C> <C> <C> <C>
CLASS X CLASS A-1 $165,650,000 AAA/Aaa 18.60%
$890,585,907
30.25%* CLASS A-2 $455,533,000 AAA/Aaa 51.15%
(NOTIONAL AMOUNT)
25.50% CLASS B $ 42,303,000 AA/Aa2 4.75%
(AAAR/AAA)
20.50% CLASS C $ 44,529,000 A/A2 5.00%
14.00% CLASS D $ 57,888,000 BBB/Baa2 6.50%
12.50% CLASS E $ 13,359,000 BBB-/Baa3 1.50%
7.25% CLASS F** $ 46,756,000 N/A 5.25%
4.00% CLASS G** $ 28,944,000 N/A 3.25%
3.13% CLASS H** $ 7,793,000 N/A 0.88%
N/A CLASS J** $ 27,830,907 N/A 3.13%
</TABLE>
* Represents the approximate credit support for the Class A-1 and
Class A-2 Certificates in the aggregate.
** Not offered hereby.
The Class Q, Class R and Class LR Certificates are not offered
hereby or represented in this table.
S-5
<PAGE>
<TABLE>
<CAPTION>
INITIAL PASS-THROUGH
RATINGS CERTIFICATE APPROXIMATE RATE AS OF WEIGHTED
S&P/ PRINCIPAL OR CREDIT CLOSING AVG. LIFE(5) PRINCIPAL
CLASS MOODY'S NOTIONAL AMOUNT(1) SUPPORT DESCRIPTION DATE (YRS.) WINDOW(5)
<S> <C> <C> <C> <C> <C> <C> <C>
Offered Certificates
A-1 AAA/Aaa $ 165,650,000 30.25% Fixed % 5.01 02/99-06/07
A-2 AAA/Aaa $ 455,533,000 30.25% WAC %(2) 9.47 06/07-10/08
X AAAr/Aaa $ 890,585,907(3) N/A WAC/IO %(4) 9.20 02/99-06/28
B AA/Aa2 $ 42,303,000 25.50% WAC %(2) 9.74 10/08-10/08
C A/A2 $ 44,529,000 20.50% WAC %(2) 9.74 10/08-10/08
D BBB/Baa2 $ 57,888,000 14.00% WAC %(2) 9.82 10/08-11/08
E BBB-/Baa3 $ 13,359,000 12.50% WAC %(2) 9.83 11/08-11/08
Certificates Not Offered Hereby
F N/A $ 46,756,000 7.25% Fixed % N/A N/A
G N/A $ 28,944,000 4.00% Fixed % N/A N/A
H N/A $ 7,793,000 3.13% Fixed % N/A N/A
J N/A $ 27,830,907 N/A WAC %(2) N/A N/A
</TABLE>
(1) Approximate, subject to a variance of 5%.
(2) For any distribution date, if the weighted average net mortgage rate
(adjusted if necessary to accrue on the basis of a 360-day year
consisting of twelve 30-day months) as of the first day of the related
Collection Period is less than the rate specified for the Class A-2,
Class B, Class C, Class D, Class E or Class J Certificates with respect
to such distribution date, then the Pass-Through Rate for such classes of
certificates on that distribution date will equal the weighted average
net mortgage rate.
(3) The Class X Certificates will not have a principal amount and will not be
entitled to receive distributions of principal. Interest will accrue on
the Class X Certificates at their Pass-Through Rate based upon their
notional amounts. The notional amount of the Class X Certificates will be
initially $890,585,907, which will be equal to the aggregate initial
principal amounts of the Class A-1, Class A-2, Class B, Class C, Class D,
Class E, Class F, Class G, Class H and Class J Certificates.
(4) The Pass-Through Rate on the Class X Certificates will be equal to the
excess, if any, of (i) the weighted average of the net interest rates on
the mortgage loans (in each case, adjusted if necessary to accrue on the
basis of a 360-day year consisting of twelve 30-day months), over (ii)
the weighted average of the Pass-Through Rates of the certificates (other
than the Class R, Class LR and Class Q Certificates) as described in this
prospectus supplement.
(5) Assuming a 0% prepayment rate, no balloon payment extensions, and
repayment of each hyperamortizing loan on its anticipated repayment date.
S-6
<PAGE>
SUMMARY OF PROSPECTUS SUPPLEMENT
The following is only a summary. Detailed information appears elsewhere in
this prospectus supplement and in the accompanying prospectus. That information
includes, among other things, detailed mortgage loan information and
calculations of cash flows on the offered certificates. To understand all of
the terms of the offered certificates, read carefully this entire document and
the accompanying prospectus. See "Index of Significant Definitions" in this
prospectus supplement and in the prospectus for definitions of capitalized
terms.
TITLE, REGISTRATION AND DENOMINATION OF CERTIFICATES
The certificates to be issued are known as the GS Mortgage Securities
Corporation II, Commercial Mortgage Pass-Through Certificates, Series 1999-C1
and are sometimes referred to in this prospectus supplement as the
"Certificates". The offered certificates will be issued in book-entry form
through The Depository Trust Company ("DTC") and its participants. You may hold
your certificates through: (i) DTC in the United States; or (ii) Cedel Bank,
S.A. ("Cedel") or The Euroclear System ("Euroclear") in Europe. Transfers
within DTC, Cedel or Euroclear will be made in accordance with the usual rules
and operating procedures of those systems. See "Description of the Offered
Certificates--Book-Entry Registration" in this prospectus supplement and
"Description of the Certificates--General" in the prospectus. We will issue the
offered certificates in denominations of $10,000 and integral multiples of $1
above $10,000 and will issue the Class X Certificates in denominations of
$5,000,000 and integral multiples of $1 above $5,000,000.
PARTIES AND DATES
Seller...................... GS Mortgage Securities Corporation II, a
Delaware corporation. The Seller's address is 85
Broad Street, New York, New York 10004 and its
telephone number is (212) 902-1000. See "The
Seller" in the prospectus.
Loan Sellers................ The mortgage loans will be sold to the Seller
by:
o Goldman Sachs Mortgage Company, a New York
limited partnership ("GSMC") or an affiliate
thereof;
o Daiwa Finance Corp., a New York corporation
("DFC");
o Daiwa Real Estate Finance Corp., a Delaware
corporation ("DREFC"); and
o AMRESCO Capital Limited, Inc., a Delaware
corporation.
Originators................. The mortgage loans were originated by:
o AMRESCO Capital, L.P., a Delaware limited
partnership;
o Archon Financial, L.P., a Delaware limited
partnership;
o Central Park Capital, L.P., a Delaware
limited partnership;
o DFC;
o DREFC;
S-7
<PAGE>
o Aries Capital Incorporated, an Illinois
corporation ("Aries");
o Imperial Thrift and Loan Association, a
California thrift & loan association
("ITLA");
o Parman Mortgage Associates, a New York
limited partnership ("Parman");
o Progress Realty Advisors, Inc., a
Pennsylvania corporation ("Progress");
o Secore Financial Corporation, a Pennsylvania
corporation ("Secore");
o Sutter Commercial Capital, a California
corporation ("Sutter"); and
o Wingate Realty Finance Corporation, a
Massachusetts corporation ("Wingate").
Master Servicer............. GMAC Commercial Mortgage Corporation, a
California corporation. The Master Servicer will
initially service all of the mortgage loans. See
"The Pooling Agreement--The Master Servicer" and
"--Servicing of the Mortgage Loans; Collection of
Payments" in this prospectus supplement.
Special Servicer............ Lennar Partners, Inc., a Florida corporation.
See "The Pooling Agreement--The Special Servicer"
in this prospectus supplement.
Trustee..................... LaSalle National Bank, a national banking
association. See "The Pooling Agreement--The
Trustee" in this prospectus supplement.
Fiscal Agent................ ABN AMRO Bank N.V., a Netherlands banking
corporation and the indirect corporate parent of
the Trustee.
Cut-Off Date................ January 10, 1999.
Closing Date................ On or about January 20, 1999.
Distribution Date........... The Trustee will make distributions on the
certificates, to the extent of available funds,
on the 18th day of each month or, if any such
18th day is not a business day, on the next
business day, beginning on February 18, 1999, to
the holders of record at the end of the previous
month.
Determination Date.......... The fifth business day prior to the related
Distribution Date.
THE MORTGAGE LOANS
The Mortgage Pool........... The trust's primary assets will be 304 fixed
rate mortgage loans (the "Mortgage Pool") secured
by 317 commercial and
S-8
<PAGE>
multifamily properties located in 38 states.
See "Risk Factors--Risks Associated with
Certain of the Mortgage Loans and Mortgaged
Properties" in this prospectus supplement.
Monthly payments of principal and/or interest on
each mortgage loan are due on the first day of
each month, or in the case of 17 mortgage
loans, representing approximately 1.8% of the
Initial Pool Balance, the fifth day of each
month, or in the case of 1 mortgage loan,
representing approximately 0.1% of the Initial
Pool Balance, the tenth day of each month.
Some of the mortgage loans provide for monthly
payments of principal based on an amortization
schedule that is significantly longer than the
remaining term of such mortgage loan. These
mortgage loans will have substantial principal
payments due on their maturity dates, unless
prepaid earlier.
General characteristics of the mortgage loans as
of the Cut-Off Date:
<TABLE>
<S> <C>
Initial Pool Balance (1) ..................... $ 890,585,907
Number of Mortgage Loans ..................... 304
Number of Mortgaged Properties ............... 317
Average Mortgage Loan Balance ................ $ 2,929,559
Number of Multifamily Properties ............. 144
Percentage of Multifamily Properties ......... 32.5%
Weighted Average Mortgage Rate ............... 7.202%
Range of Mortgage Rates ...................... 5.750% - 9.250%
Weighted Average Loan-to-Value Ratio ......... 71.46%
Weighted Average Remaining Term to
Maturity (months)(2) ......................... 124.3
Weighted Average DSCR (3) .................... 1.44x
Balloon Mortgage Loans ....................... 270 (92.9%)
Hyperamortizing Mortgage Loans ............... 2 (0.5%)
Fully Amortizing Mortgage Loans .............. 32 (6.6%)
</TABLE>
------------
(1) Subject to a permitted variance of plus or
minus 5%.
(2) In the case of 2 mortgage loans,
representing approximately 0.5% of the
Initial Pool Balance, which are
hyperamortizing mortgage loans, this
calculation assumes that such mortgage loans
pay in full on their anticipated repayment
dates.
(3) See "Description of the Mortgage
Pool--Additional Mortgage Loan Information"
for a description of the calculation of the
Debt Service Coverage Ratio.
Except in certain limited circumstances, each
mortgage loan either prohibits voluntary
prepayments during a certain number of years
following origination or allows the borrower
to prepay the principal balance in whole or in
part during a certain number of years
following origination if the borrower pays a
prepayment premium or a yield maintenance
charge. 294 mortgage loans, representing
approximately 94.6% of the Initial Pool
Balance are freely prepayable by the borrower
during a one-to six-month period prior to
maturity and
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<PAGE>
1 other mortgage loan, representing
approximately 0.1% of the Initial Pool
Balance, is freely prepayable by the borrower
during an 84-month period prior to maturity.
In addition, certain mortgage loans permit the
related borrower to substitute U.S. government
securities as collateral and obtain a release
of the mortgaged property instead of prepaying
the mortgage loan. See "Description of the
Mortgage Pool--Certain Characteristics of the
Mortgage Loans--Defeasance; Collateral
Substitution" and Annex A in this prospectus
supplement.
The descriptions in this prospectus supplement
of the mortgage loans and the mortgaged
properties are based upon the mortgage pool as
it is expected to be constituted as of the
close of business on the closing date,
assuming that (i) all scheduled principal and
interest payments due on or before the Cut-Off
Date will be made, and (ii) there will be no
principal prepayments on or before the Cut-Off
Date.
THE SECURITIES
The Certificates............ We are offering the following seven classes of
Commercial Mortgage Pass-Through Certificates
from the Series 1999-C1:
o Class A-1
o Class A-2
o Class X
o Class B
o Class C
o Class D
o Class E
Series 1999-C1 will consist of a total of 14
classes, the following seven of which are not
being offered through this prospectus
supplement and the accompanying prospectus:
Class F, Class G, Class H, Class J, Class Q,
Class R and Class LR.
Certificate Principal Amounts
and Notional Amount....... Your certificates will have the approximate
aggregate initial principal amount or notional
amount set forth below, subject to a variance of
plus or minus 5%:
<TABLE>
<S> <C>
o Class A-1 ......... $165,650,000 principal amount
o Class A-2 ......... $455,533,000 principal amount
o Class X ........... $890,585,907 notional amount
o Class B ........... $ 42,303,000 principal amount
o Class C ........... $ 44,529,000 principal amount
o Class D ........... $ 57,888,000 principal amount
o Class E ........... $ 13,359,000 principal amount
</TABLE>
The notional amount of the Class X Certificates
will generally be equal to the aggregate
principal amounts of the other certificates
that have principal amounts (the Class Q,
Class R and Class LR Certificates do not have
principal amounts),
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<PAGE>
determined as of the preceding distribution
date (after giving effect to the distribution
of principal on such distribution date) or, in
the case of the first distribution date, the
Closing Date.
See "Description of the Offered
Certificates--General" in this prospectus
supplement.
Pass-Through Rates
A. Offered Certificates
(Other Than Class X)... Your certificates will accrue interest at an
annual rate called a "Pass-Through Rate" which is
set forth below (other than for the Class X
Certificates) for each class.
<TABLE>
<S> <C>
o Class A-1 ......... %
o Class A-2 ......... %*
o Class B ........... %*
o Class C ........... %*
o Class D ........... %*
o Class E ........... %*
</TABLE>
------------
* The lesser of such rate or the weighted
average of the net interest rates (adjusted if
necessary to accrue on the basis of 360-day
year consisting of twelve 30-day months, as
described below) on the mortgage loans.
Interest on such classes of certificates will be
calculated based on a 360-day year consisting
of twelve 30-day months, or a "30/360 basis".
B. Class X Certificates... If you invest in the Class X Certificates, your
Pass-Through Rate will be equal to the difference
between the weighted average interest rate of the
mortgage loans (after giving effect to the Master
Servicer's and the Trustee's fees) and the
weighted average of the Pass-Through Rates of the
other certificates (other than the Class Q, Class
R and Class LR Certificates), as described in
this prospectus supplement. The weighting will be
based upon the respective principal amounts of
those classes.
For purposes of calculating the Class X
Pass-Through Rate, the mortgage loan interest
rates will not reflect any default interest
rate or any rate increase occurring after an
Anticipated Repayment Date. The mortgage loan
interest rates will also be determined without
regard to any loan term modifications agreed
to by the Special Servicer or resulting from
the borrower's bankruptcy or insolvency. In
addition, if a mortgage loan does not accrue
interest on a 30/360 basis, its interest rate
for any month that is not a 30-day month will
be recalculated so that the amount of interest
that would accrue at that rate in such month,
calculated on a 30/360 basis, will equal the
amount of interest that actually accrues on
that loan in that month, adjusted for any
withheld amounts as described under "The
Pooling Agreement--Accounts" in this
prospectus supplement.
See "Description of the Offered
Certificates--Distributions--
Payment Priorities" in this prospectus
supplement.
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<PAGE>
Distributions
A. Amount and Order
of Distributions........... On each distribution date, funds available for
distribution from the mortgage loans, net of
specified trust expenses, will be distributed
in the following amounts and order of priority:
Step 1/Class A and Class X: To interest on Class
A (which includes Classes A-1 and A-2) and
Class X, in accordance with their interest
entitlements.
Step 2/Class A: Concurrently:
To the extent of funds allocated to principal,
to principal on Class A-1 and Class A-2, in
that order, until reduced to zero. If all
classes of certificates with principal amounts
other than Class A have been reduced to zero,
funds available for principal will be
distributed to Classes A-1 and A-2 on a pro
rata basis, rather than sequentially.
Step 3/Class A: After each class of certificates
other than Class A has been reduced to zero,
to reimburse Classes A-1 and A-2, pro rata,
for any previously unreimbursed losses on the
mortgage loans allocable to principal that
were previously borne by those classes,
together with interest on such amount.
Step 4/Class B: To Class B as follows: (a) to
interest on Class B in the amount of its
interest entitlement; (b) to the extent of
funds allocated to principal that are
remaining after distributions in respect of
principal to each class with a higher
priority, to principal on Class B until
reduced to zero; and (c) to reimburse Class B
for any previously unreimbursed losses on the
mortgage loans allocable to principal that
were previously borne by that class, together
with interest on such amount.
Step 5/Class C: To Class C in a manner analogous
to the Class B allocations of Step 4.
Step 6/Class D: To Class D in a manner analogous
to the Class B allocations of Step 4.
Step 7/Class E: To Class E in a manner analogous
to the Class B allocations of Step 4.
See "Description of the Offered
Certificates--Distributions--
Payment Priorities" in this prospectus
supplement.
B. Interest and Principal
Entitlements.......... A description of each class's interest
entitlement can be found in "Description of the
Offered Certificates--Distributions--Method,
Timing and Amount" and
"--Distributions--Payment Priorities" in this
prospectus supplement. As described in such
section, there are circumstances in which your
interest entitlement for a distribution date
could be less than one full month's interest
at the Pass-Through Rate on your certificate's
principal amount or notional amount.
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<PAGE>
A description of the amount of principal
required to be distributed to the classes
entitled to principal on a particular
distribution date also can be found in
"Description of the Offered
Certificates--Distributions--Method, Timing
and Amount" and "--Distributions--Payment
Priorities" in this prospectus supplement.
C. Prepayment Premiums..... The manner in which any prepayment premiums and
yield maintenance charges received during a
particular collection period will be allocated to
the Class X Certificates, on the one hand, and
certain of the classes of certificates entitled
to principal, on the other hand, is described in
"Description of the Offered
Certificates--Distributions--Prepayment Premiums"
in this prospectus supplement.
Advances
A. Principal and Interest
Advances.............. The Master Servicer is required to advance
(each, a "P&I Advance") delinquent monthly
mortgage loan payments, if it determines that the
advance will be recoverable. The Master Servicer
will not be required to advance balloon payments
due at maturity or interest in excess of a
mortgage loan's regular interest rate (without
considering any default rate or any rate increase
after an Anticipated Repayment Date). The Master
Servicer also is not required to advance amounts
deemed non-recoverable, prepayment premiums or
yield maintenance charges. In the event that the
Master Servicer fails to make any required P&I
Advance, the Trustee or Fiscal Agent will be
required to make such P&I Advance. See "The
Pooling Agreement--Advances" in this prospectus
supplement. If an advance is made, the Master
Servicer will not advance its servicing fee, but
will advance the Trustee's fee.
B. Property Protection
Advances.............. Master Servicer is also required to make
advances to pay delinquent real estate taxes,
assessments and hazard insurance premiums and
similar expenses necessary to protect and
maintain the mortgaged property, to maintain the
lien on the mortgaged property or enforce the
related mortgage loan documents ("Property
Advances," and collectively with P&I Advances,
"Advances"). The Master Servicer is not required
to advance amounts deemed non-recoverable. In the
event that the Master Servicer fails to make any
required Property Advance, the Trustee or the
Fiscal Agent will be required to make such
Property Advance. See "The Pooling
Agreement--Advances" in this prospectus
supplement.
C. Interest on Advances... The Master Servicer, the Trustee and the Fiscal
Agent, as applicable, will be entitled to
interest as described in this prospectus
supplement on any Advances made. Interest accrued
on outstanding Advances may result in reductions
in amounts otherwise payable on the certificates.
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<PAGE>
See "Description of the Offered
Certificates--Realized Losses" and "The
Pooling Agreement--Advances" in this
prospectus supplement.
Subordination............... The amount available for distribution will be
applied in the order described in
"Distributions--Amount and Order of
Distributions" above.
The chart below describes the manner in which
the payment rights of certain classes will be
senior or subordinate, as the case may be, to
the payment rights of other classes. The chart
shows entitlement to receive principal and
interest on any Distribution Date in
descending order (beginning with the Class A
and Class X Certificates). It also shows the
manner in which mortgage loan losses are
allocated in ascending order (beginning with
the Class J Certificates). (However, no
principal payments or loan losses will be
allocated to the Class X Certificates,
although loan losses will reduce the notional
amount of the Class X Certificates and,
therefore, the amount of interest they
accrue.)
Class A-1 and Class A-2,
Class X*
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class J
------------
* Interest only
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<PAGE>
NO OTHER FORM OF CREDIT ENHANCEMENT WILL BE
AVAILABLE FOR THE BENEFIT OF THE HOLDERS OF
THE OFFERED CERTIFICATES.
See "Description of the Offered
Certificates--Subordination" in this
prospectus supplement.
Any allocation of a loss to a class of
certificates will reduce the related principal
amount of such class.
In addition to losses caused by mortgage loan
defaults, shortfalls in payments to holders of
certificates may occur as a result of the
Master Servicer's, Trustee's and Fiscal
Agent's right to receive payments of interest
on unreimbursed advances, the Special
Servicer's right to compensation with respect
to mortgage loans which are or have been
serviced by the Special Servicer or as a
result of other unanticipated trust expenses.
Such shortfalls will reduce distributions to
the classes of certificates with the lowest
payment priorities. To the extent funds are
available on a subsequent distribution date
for distribution on your certificates, you
will be reimbursed for any shortfall allocated
to your certificates with interest at the
Pass-Through Rate on your certificates.
Information Available to
Certificateholders........ Please see "The Pooling Agreement--Reports to
Certificateholders" in this prospectus
supplement for a description of the periodic
reports that you will receive.
Optional Termination........ On any distribution date on which the aggregate
unpaid principal balance of the mortgage loans
remaining in the trust is less than 1% of the
Initial Pool Balance, certain specified persons
will have the option to purchase all of the
remaining mortgage loans at the price specified
in this prospectus supplement (and all property
acquired through exercise of remedies in
respect of any mortgage loan). Exercise of this
option will terminate the trust and retire the
then-outstanding certificates.
OTHER INVESTMENT CONSIDERATIONS
Federal Income
Tax Consequences........... REMIC elections will be made for parts of the
trust. The certificates will represent
ownership of "regular interests" in a REMIC.
Pertinent federal income tax consequences of
an investment in the offered certificates
include:
o Each class of offered certificates will
constitute REMIC "regular interests."
o The regular interests will be treated as
newly originated debt instruments for
federal income tax purposes.
o You will be required to report income on
your certificates in accordance with the
accrual method of accounting.
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<PAGE>
o The Class X Certificates will, and one or
more other classes of offered certificates
may, be issued with original issue
discount.
For information regarding the federal income
tax consequences of investing in the offered
certificates, see "Federal Income Tax
Consequences" in this prospectus supplement
and in the prospectus.
Yield Considerations........ You should carefully consider the matters
described under "Risk Factors--Special
Prepayment Considerations" and "--Special Yield
Considerations" in this prospectus supplement,
which may affect significantly the yields on
your investment.
ERISA Considerations........ Subject to important considerations described
under "ERISA Considerations" in this prospectus
supplement, if you are subject to ERISA,
generally you can buy the Class A-1, Class A-2
and Class X Certificates, but not any other
offered certificate. A fiduciary of any
retirement plan or other employment benefit
plan or arrangement should review carefully
with its legal advisors whether the purchase or
holding of any class of offered certificates
could give rise to a transaction that is not
permitted under applicable law or whether there
exists any statutory or administrative
exemption applicable to an investment. This
prospectus supplement describes several
exemptions that may be available. If you use
insurance company general account funds to
purchase certificates, you should consider the
availability of Section III of Prohibited
Transaction Class Exemption 95-60 (60 Fed.
Reg. 35925, July 12, 1995) issued by the
U.S. Department of Labor. See "ERISA
Considerations" in this prospectus supplement
and in the prospectus.
Ratings..................... On the Closing Date, the offered certificates
must have the minimum ratings from Standard &
Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. ("S&P"), and
Moody's Investors Service, Inc. ("Moody's")
set forth below:
<TABLE>
<CAPTION>
S&P MOODY'S
------ --------
<S> <C> <C>
Class A-1 .......... AAA Aaa
Class A-2 .......... AAA Aaa
Class X ............ AAAr Aaa
Class B ............ AA Aa2
Class C ............ A A2
Class D ............ BBB Baa2
Class E ............ BBB- Baa3
</TABLE>
A rating agency may downgrade, qualify or
withdraw a rating at any time. A rating agency
not requested to rate the offered certificates
may nonetheless issue a rating and, if one
does, it may be lower than those stated above.
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<PAGE>
The security ratings do not address the
frequency of prepayments (whether voluntary or
involuntary) of mortgage loans, or the degree
to which such prepayments might differ from
those originally anticipated, or the
likelihood of collection of excess interest,
default interest, prepayment premiums or yield
maintenance charges, or the tax treatment of
the certificates. The ratings on the Class X
Certificates do not address the possibility
that you may suffer a lower yield than you
anticipate and that you may fail to recover
your full initial investment due to a rapid
rate of prepayments, defaults or liquidations.
S&P assigns the additional rating of "r" to
highlight classes of securities that S&P
believes may experience high volatility or
high variability in expected returns due to
non-credit risks.
The ratings do not address the fact that the
Pass-Through Rates of the Class A-2, Class X,
Class B, Class C, Class D and Class E
Certificates, to the extent that they are
based on the weighted average interest rate of
the mortgage loans, will be affected by
changes in such weighted average interest
rate. See "Yield, Prepayment and Maturity
Considerations" in this prospectus supplement,
"Risk Factors" and "Ratings" in this
prospectus supplement and in the prospectus,
and "Yield Considerations" in the prospectus.
Legal Investment............ The offered certificates will not constitute
"mortgage related securities" within the
meaning of SMMEA. As a result, the appropriate
characterization of the offered certificates
under various legal investment restrictions,
and thus your ability, if you are subject to
these restrictions, to purchase the offered
certificates, may be subject to significant
interpretative uncertainties.
You should consult your own legal advisors to
determine whether and to what extent the
offered certificates constitute legal
investments for you. See "Legal Investment" in
this prospectus supplement and the prospectus.
S-17
<PAGE>
RISK FACTORS
You should carefully consider the following risks before making an
investment decision. In particular, distributions on your certificates will
depend on payments received on and other recoveries with respect to the
mortgage loans. Therefore, you should carefully consider the risk factors
relating to the mortgage loans and the mortgaged properties.
The risks and uncertainties described below are not the only ones relating
to your certificates. Additional risks and uncertainties not presently known to
us or that we currently deem immaterial may also impair your investment.
If any of the following risks are realized, your investment could be
materially and adversely affected.
This prospectus supplement also contains forward-looking statements that
involve risks and uncertainties. Actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors, including the risks described below and elsewhere in this prospectus
supplement.
SPECIAL PREPAYMENT CONSIDERATIONS
The yield to maturity on your certificates will depend significantly on
the rate and timing of principal payments on the certificates. The rate and
timing of principal payments on the mortgage loans will affect the rate and
timing of principal payments on the offered certificates.
In addition to scheduled payments of principal, principal payments on the
offered certificates could result from prepayments, defaults, liquidations or
purchases of mortgage loans due to a breach of a representation and warranty.
The rate of principal payments and prepayments on the mortgage loans, in turn,
will depend on a variety of factors, such as:
o the terms of the mortgage loans, including amortization schedules,
interest rates and prepayment restrictions and penalties;
o the level of market interest rates;
o the availability of mortgage credit;
o the existence and extent of periods in which prepayments are prohibited
(known as "lock-out periods") and defeasance, prepayment premium and
yield maintenance provisions of the mortgage loans, and the
enforceability of those provisions; and
o economic, demographic, geographic, tax, legal and other factors.
In general, if market interest rates fall significantly below the interest
rates on the mortgage loans, the borrowers are likely to increase the number
and amount of principal prepayments. At the same time, there should be smaller
and less frequent principal prepayments on mortgage loans with prepayment
restrictions and prepayment premiums and/or yield maintenance charges than on
similar mortgage loans without such provisions, or with shorter restrictions or
lower prepayment premiums and/or yield maintenance charges.
In addition, certain mortgage loans permit the borrower to defease the
borrower's mortgage loan by substituting U.S. government securities for the
mortgaged property as collateral. This substitution will not result in a
prepayment on your certificates, even though the borrower effectively gets a
release of the mortgaged property.
Nevertheless, we cannot assure you that the related borrowers will refrain
from prepaying their mortgage loans due to the existence of prepayment premiums
or yield maintenance charges. Also, we cannot assure you that involuntary
prepayments will not occur. Generally, no prepayment premiums or yield
maintenance charges will be required if the prepayment results from a casualty
or condemnation. See "Description of the Mortgage Pool" and "Yield, Prepayment
and Maturity Considerations" in this prospectus supplement and "Yield
Considerations" in the prospectus.
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<PAGE>
SPECIAL YIELD CONSIDERATIONS
The yield to maturity on each class of the offered certificates will
depend in part on the following:
o the purchase price for the certificates;
o the rate and timing of principal payments on the mortgage loans;
o the receipt and allocation of prepayment premiums and/or yield
maintenance charges;
o the allocation of principal payments to pay down classes of
certificates; and
o interest shortfalls on the mortgage loans, such as interest shortfalls
resulting from prepayments.
The yield on the Class A-2, Class X, Class B, Class C, Class D and Class E
Certificates could also be adversely affected if mortgage loans with higher
interest rates pay faster than the mortgage loans with lower interest rates,
since those classes bear interest at a rate limited by the weighted average
mortgage rate of the mortgage loans. The Pass-Through Rates on the Class A-2,
Class B, Class C, Class D and Class E Certificates may be limited by the
weighted average of the net interest rates on the mortgage loans even if
principal prepayments do not occur.
In general, if you buy a Class X Certificate, or if you buy a certificate
at a premium, and principal distributions (or, for the Class X Certificates,
reductions in their notional amount) occur faster than expected, your actual
yield to maturity will be lower than expected. If principal distributions are
very high, holders of Class X Certificates (and other certificates purchased at
a premium) might not fully recover their initial investment. Conversely, if you
buy a certificate (other than a Class X Certificate) at a discount and
principal distributions occur more slowly than expected, your actual yield to
maturity will be lower than expected. Because losses on the mortgage loans will
be allocated to reduce the certificate principal amounts of certain classes of
certificates as described in this prospectus supplement, the allocation of any
such losses will also reduce the notional amount of the Class X Certificates,
and notwithstanding their parity with the Class A-1 and Class A-2 Certificates
in the right to receive interest distributions, the amount and timing of such
losses could have a significant adverse effect on the yield of the Class X
Certificates. See "Yield, Prepayment and Maturity Considerations" in this
prospectus supplement and "Yield Considerations" in the prospectus.
Any changes in the weighted average lives of your certificates may
adversely affect your yield. Prepayments resulting in a shortening of weighted
average lives of your certificates may be made at a time of low interest rates
when you may be unable to reinvest the resulting payments of principal on your
certificates at a rate comparable to the effective yield anticipated by you in
making your investment in such certificates, while delays and extensions
resulting in a lengthening of such weighted average lives may occur at a time
of high interest rates when you may have been able to reinvest principal
payments that would otherwise have been received by you at higher rates.
In addition, the rate and timing of delinquencies, defaults, losses and
other shortfalls on mortgage loans will affect distributions on the
certificates and their timing. See "--Effect of Borrower Delinquencies and
Defaults" below.
Yields on the Class X Certificates will be extremely sensitive to the
prepayment and loss experience on the mortgage loans. If you are an investor in
the Class X Certificates, you should fully consider the associated risks,
including the risk that you, in circumstances of higher than anticipated rates
of principal prepayments or losses, could fail to fully recoup your initial
investment. We make no representation as to the anticipated rate of prepayments
or losses on the mortgage loans or as to the anticipated yield to maturity of
any class of certificates. See "Yield, Prepayment and Maturity Considerations"
in this prospectus supplement.
RISKS RELATING TO ENFORCEABILITY OF PREPAYMENT PREMIUMS
Provisions requiring yield maintenance charges or prepayment premiums may
not be enforceable in some states and under federal bankruptcy law. Those
provisions also may constitute interest for usury purposes. Accordingly, we
cannot assure you that the obligation to pay a yield maintenance charge or
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<PAGE>
prepayment premium will be enforceable. Also, we cannot assure you that
foreclosure proceeds will be sufficient to pay an enforceable yield maintenance
charge or prepayment premium. Additionally, although the collateral
substitution provisions related to defeasance do not have the same effect on
the certificateholders as prepayment, we cannot assure you that a court would
not interpret those provisions as the equivalent of a yield maintenance charge
or prepayment premium. In certain jurisdictions those collateral substitution
provisions might therefore be deemed unenforceable or usurious under applicable
law.
RISKS ASSOCIATED WITH CERTAIN OF THE MORTGAGE LOANS AND MORTGAGED PROPERTIES
Security for the mortgage loans consists of fee simple and/or leasehold
interests in multifamily, retail, office, lodging, industrial,
healthcare-related and self-storage properties. Commercial and multifamily
lending is generally riskier for the lender than one-to four-family residential
lending because:
o loans to a given borrower or groups of related borrowers are larger
than residential one-to four-family mortgage loans;
o the repayment of loans secured by income-producing properties typically
depends upon the successful operation of the property;
o if the property's cash flow declines (for example, if leases are not
obtained or renewed), the borrower may have trouble repaying the loan;
o commercial and multifamily real estate is sensitive to increases in
market supply and decreases in market demand for the type of property
securing the loan; and
o market values may vary because of economic events or governmental
regulations outside the control of the borrower or lender, such as rent
control laws in the case of multifamily mortgage loans, which impact the
future cash flow of the property. See "--Nonrecourse Mortgage Loans"
below.
The successful operation of a real estate project also depends on the
performance and viability of the property manager. The property manager must,
among other things:
o respond to changes in the local market;
o plan and implement appropriate rental rates; and
o advise the borrower about maintenance and capital improvements.
Property managers may change when leases or management agreements expire or
following a default or foreclosure of a mortgage loan. The poor performance or
financial condition of current or future property managers could have a
negative impact on payments on the mortgage loans.
Commercial and multifamily property values and net operating income are
volatile. The net operating income and value of the mortgaged properties may
decline for a number of reasons related to the general business environment or
to a specific property. Reasons related to the general business environment
include:
o economic conditions such as plant closings, industry slowdowns and other
factors;
o local real estate conditions (such as an oversupply of multifamily
housing, retail space, office space, lodging rooms, industrial space,
healthcare facilities or self-storage space);
o weakness in specific industry segments; and
o demographic factors.
S-20
<PAGE>
The following are some of the property-specific reasons:
o the construction quality, age and design of the property;
o perceptions regarding the safety, convenience, services and
attractiveness of the property;
o the ability of the property manager and the extent to which the property
is adequately maintained;
o retroactive changes to building or similar codes; and
o increases in operating expenses (such as energy costs).
LIMITATIONS OF APPRAISALS
Appraisals were obtained with respect to each of the mortgaged properties
prior to the origination of the applicable mortgage loan, and in some cases
updates were performed in anticipation of this transaction. See Annex A to this
prospectus supplement for dates of the latest appraisals for the mortgaged
properties.
In general, appraisals represent the analysis and opinion of qualified
appraisers and are not guarantees of present or future value. One appraiser may
reach a different conclusion than that of a different appraiser with respect to
the same property. Moreover, appraisals seek to establish the amount a
typically motivated buyer would pay a typically motivated seller and, in
certain cases, may have taken into consideration the purchase price paid by the
borrower. Such amount could be significantly higher than the amount obtained
from the sale of a mortgaged property in a distress or liquidation sale.
Information regarding the appraised values of the mortgaged properties
(including loan-to-value ratios) presented in this prospectus supplement is not
intended to be a representation as to the past, present or future market values
of the mortgaged properties. Historical operating results of the mortgaged
properties used in these appraisals may not be comparable to future operating
results. In addition, other factors may impair the mortgaged properties' value
without affecting their current net operating income, including:
o changes in governmental regulations, zoning or tax laws;
o potential environmental or other legal liabilities;
o the availability of refinancing; and
o changes in interest rate levels.
TENANT CONCENTRATION ENTAILS RISK
A deterioration in the financial condition of a tenant can be particularly
significant if a mortgaged property is leased to a single tenant, or a small
number of tenants. In the event of a default by the tenant, there would likely
be an interruption of rental payments under the lease and, accordingly,
insufficient funds available to the borrower to pay the debt service on the
loan. Mortgaged properties leased to a single tenant, or a small number of
tenants, also are more susceptible to interruptions of cash flow if a tenant
fails to renew its lease. This is so because:
o the financial effect of the absence of rental income may be severe;
o more time may be required to re-lease the space; and
o substantial capital costs may be incurred to make the space appropriate
for replacement tenants.
49 mortgage loans, representing approximately 12.4% of the Initial Pool
Balance, are secured by mortgaged properties leased to single tenants. With
respect to 30 of such mortgaged properties, securing mortgage loans
representing approximately 6.8% of the Initial Pool Balance, the term of the
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related lease expires prior to the maturity date of the related mortgage loan.
If the current tenant does not renew its lease on comparable economic terms to
the expired lease, or if a suitable replacement tenant does not enter into a
new lease on similar economic terms, there could be a negative impact on the
payments on the related mortgage loans.
30 groups of 60 mortgaged properties, securing mortgage loans representing
approximately 20.3% of the Initial Pool Balance, are leased in whole or in part
to affiliated tenants. 16 mortgage loans, representing approximately 1.6% of
the Initial Pool Balance, are made to related borrowers and are secured by
mortgaged properties leased only to Blockbuster Video, Inc. Each Blockbuster
Video, Inc., lease expires prior to the maturity date of the related mortgage
loan. In addition, 1 mortgage loan, representing approximately 0.3% of the
Initial Pool Balance, is secured by a mortgaged property leased only to KMART
Corporation and 4 mortgage loans, representing approximately 3.1% of the
Initial Pool Balance, are secured by mortgaged properties which are partially
leased to the KMART Corporation. Concentrations of particular tenants among the
mortgaged properties or of tenants in a particular business or industry could
increase the possibility of financial problems with such tenants or such
business or industry sectors affecting the mortgaged properties. See "Tenant
Bankruptcy Entails Risk" below.
MORTGAGED PROPERTIES LEASED TO MULTIPLE TENANTS ALSO HAVE RISKS
If a mortgaged property has multiple tenants, re-leasing expenditures may
be more frequent than in the case of mortgaged properties with fewer tenants,
thereby reducing the cash flow available for payments on the related mortgage
loan. Multi-tenanted mortgaged properties also may experience higher continuing
vacancy rates and greater volatility in rental income and expenses. In certain
cases, the lease of a major or anchor tenant at a multi-tenanted mortgaged
property expires prior to the maturity date of the related mortgage loan.
In addition, 3 of the mortgage loans, representing approximately 1.4% of
the Initial Pool Balance, grant the borrowers under certain of the leases the
right to purchase a portion of the related mortgaged property at amounts which
may be less than the portion of the principal balance of the applicable loan
that one might allocate to such mortgaged property. This could make such
mortgaged properties more difficult to sell after foreclosure and could result
in a larger loss than would otherwise be incurred.
TENANT BANKRUPTCY ENTAILS RISKS
The bankruptcy or insolvency of a major tenant (such as an anchor tenant
or a credit lease tenant), or a number of smaller tenants, may adversely affect
the income produced by a mortgaged property. Under the federal bankruptcy code
(11 U.S.C.) (the "Bankruptcy Code"), a tenant has the option of assuming or
rejecting any unexpired lease. If the tenant rejects the lease, the landlord's
claim for breach of the lease would be a general unsecured claim against the
tenant (absent collateral securing the claim). The claim would be limited to
the unpaid rent reserved under the lease for the periods prior to the
bankruptcy petition (or earlier surrender of the leased premises) which are
unrelated to the rejection, plus the greater of one year's rent or 15% of the
remaining reserved rent (but not more than three years' rent). Notwithstanding
provisions in the lease prohibiting assignment, if the tenant assigns the
lease, it may assign such lease to another entity which could be less
creditworthy than such tenant may have been at the time of origination of the
related loan.
CONCENTRATION OF MORTGAGE LOANS
The impact of losses on individual mortgage loans will be more severe in
mortgage pools consisting of relatively few mortgage loans with large
outstanding principal balance.
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<PAGE>
<TABLE>
<CAPTION>
AGGREGATE % OF
CUT-OFF DATE INITIAL POOL
BALANCE BALANCE
-------------- -------------
<S> <C> <C>
Largest Single Mortgage Loan ........................... $ 20,007,359 2.2%
Largest 5 Mortgage Loans ............................... $ 86,794,240 9.7%
Largest 10 Mortgage Loans .............................. $142,696,249 16.0%
Largest Related-Borrower Concentration(1) .............. $ 16,849,268 1.9%
Next Largest Related-Borrower Concentration(1) ......... $ 16,142,221 1.8%
</TABLE>
- ----------
(1) Excluding single mortgage loans.
A concentration of mortgaged property types or of mortgage loans with the
same borrower or related borrowers also can pose increased risks. For example,
if a borrower that owns or controls several mortgaged properties (whether or
not all of them secure mortgage loans in the mortgage pool) experiences
financial difficulty at one mortgaged property, it could defer maintenance at
another mortgaged property in order to satisfy current expenses with respect to
the first mortgaged property. The borrower could also attempt to avert
foreclosure by filing a bankruptcy petition that might have the effect of
interrupting debt service payments on the mortgage loans in the mortgage pool
(subject to the Master Servicer's obligation to make P&I Advances) for an
indefinite period. In addition, mortgaged properties owned by the same borrower
or related borrowers are likely to have common management, increasing the risk
that financial or other difficulties experienced by the property manager could
have a greater impact on the pool of mortgage loans.
With respect to concentrations of borrowers of the total mortgage pool:
o 32 groups of mortgage loans have borrowers related to each other and
such mortgage loans represent, in the aggregate, approximately 25.3% of
the Initial Pool Balance.
o 6 mortgage loans, representing, in the aggregate, approximately 3.0% of
the Initial Pool Balance, are secured by more than one mortgaged
property.
o 6 groups of 14 mortgage loans, representing, in the aggregate,
approximately 3.4% of the Initial Pool Balance, are cross-collateralized
and cross-defaulted with each other.
The terms of many of the mortgage loans require that the borrowers be
single-purpose entities and, in most cases, such borrowers' organizational
documents or the terms of the mortgage loans limit their activities to the
ownership of only the related mortgaged property or properties and limit the
borrowers' ability to incur additional indebtedness. Such provisions are
designed to mitigate the possibility that the borrower's financial condition
would be adversely impacted by factors unrelated to the mortgaged property and
the mortgage loan in the pool. However, we cannot assure you that such
borrowers will comply with such requirements. Furthermore, in many cases such
borrowers are not required to observe all covenants and conditions which
typically are required in order for such borrowers to be viewed under standard
rating agency criteria as "special purpose entities." See "Certain Legal
Aspects of the Mortgage Loans--Anti-Deficiency Legislation; Bankruptcy Laws" in
the prospectus.
RISKS RELATING TO ENFORCEABILITY OF CROSS-COLLATERALIZATION
As described above, 6 groups of mortgage loans, representing approximately
3.4% of the Initial Pool Balance, are cross-collateralized with other mortgage
loans in the mortgage pool. Cross-collateralization arrangements involving more
than one borrower could be challenged as fraudulent conveyances by creditors of
the related borrower in an action brought outside a bankruptcy case or, if such
borrower were to become a debtor in a bankruptcy case, by the borrower's
representative.
A lien granted by such a borrower entity could be avoided if a court were
to determine that:
(i) such borrower was insolvent when it granted the lien, was rendered
insolvent by the granting of the lien, or was left with inadequate capital
after the lien was granted; and
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(ii) such borrower did not receive fair consideration or reasonably
equivalent value when it allowed its mortgaged property or properties to be
encumbered by a lien securing the entire indebtedness.
Among other things, a legal challenge to the granting of the liens may
focus on the benefits realized by such borrower from the respective mortgage
loan proceeds, as well as the overall cross-collateralization. If a court were
to conclude that the granting of the liens was an avoidable fraudulent
conveyance, that court could:
(i) subordinate all or part of the pertinent mortgage loan to existing or
future indebtedness of that borrower;
(ii) recover payments made under that mortgage loan; or
(iii) take other actions detrimental to the holders of the certificates,
including, under certain circumstances, invalidating the mortgage loan or
the mortgages securing such cross-collateralization.
RISKS PARTICULAR TO MULTIFAMILY RENTAL PROPERTIES
144 mortgaged properties, representing approximately 32.5% of the Initial
Pool Balance, are multifamily rental properties. The following conditions and
events may reduce rent payments and occupancy levels:
o adverse economic conditions, such as unemployment;
o construction of additional housing units;
o local military base closings;
o national and local politics, including current or future rent
stabilization and rent control laws and agreements; and
o changes in the characteristics of a neighborhood over time or in
relation to newer developments.
Other circumstances also may increase the possibility that a borrower will
be unable to meet its obligations under its mortgage loan, such as:
o the level of mortgage interest rates may encourage tenants in
multifamily rental properties to move out and purchase single-family
housing; and
o the cost of operating a multifamily property may increase, including the
cost of utilities and the costs of required capital expenditures.
RISKS PARTICULAR TO RETAIL PROPERTIES
67 mortgaged properties, representing approximately 24.0% of the Initial
Pool Balance, are retail properties. In addition to risks generally associated
with commercial real estate, retail properties face the following risks:
o adverse changes in consumer spending patterns;
o local competitive conditions (such as an increased supply of retail
space or the construction of other shopping centers);
o other forms of retailing (such as direct mail, video shopping networks
and Internet-based selling efforts, which reduce merchants' need for
store space);
o the quality and philosophy of management;
o the attractiveness of the properties and the surrounding neighborhood to
tenants and their customers;
o the public perception of the safety of the neighborhood; and
o the need to make major repairs or improvements to satisfy major tenants.
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The presence or absence of an "anchor tenant" in a shopping center also
can be important because anchors play a key role in generating customer traffic
and making a center desirable for other tenants. While there is no strict
definition of an "anchor tenant," it is generally understood that a retail
anchor tenant is larger in size and is vital in attracting customers to a
retail property, whether or not it is located on the related mortgaged
property. An anchor tenant may cease operations at a retail property because it
decides not to renew a lease, becomes insolvent or simply goes out of business.
Other tenants at retail properties may be entitled to terminate their leases if
an anchor tenant ceases operations.
If anchor stores in a mortgaged property were to close, the related
borrower may be unable to replace those anchors in a timely manner or without
suffering adverse economic consequences. It is impossible to predict whether
any particular anchor tenants will continue to occupy their current space.
All of these circumstances and events may increase the possibility that a
borrower will be unable to meet its obligations under its mortgage loan.
RISKS PARTICULAR TO OFFICE PROPERTIES
38 mortgaged properties, representing approximately 16.7% of the Initial
Pool Balance, are office properties. In addition to risks generally associated
with commercial real estate, the following factors may affect operations of
office buildings:
o adverse changes in population, patterns of telecommuting and sharing of
office space, and employment growth (all of which affect demand for
office space);
o local competitive conditions (such as increased supply of office space
or the construction of new, competitive office buildings);
o the quality of the building's tenants and the philosophy of management;
o the attractiveness of the properties and the surrounding area to tenants
and their customers or clients;
o the public perception of safety in the neighborhood; and
o the need to make major repairs or improvements to satisfy major tenants.
In addition, an economic decline in the business operated by tenants can
affect a building and cause one or more significant tenants to cease
operations. A tenant may decide not to renew a lease, may become insolvent and
unable to meet its lease obligations or may simply go out of business. The risk
of an economic decline is particularly severe for office properties with a
single tenant or several tenants in the same industry.
All of these conditions and events may increase the possibility that a
borrower will be unable to meet its obligations under its mortgage loan.
RISKS PARTICULAR TO LODGING PROPERTIES
31 of the mortgaged properties, representing approximately 14.5% of the
Initial Pool Balance, are lodging properties. In addition to risks generally
associated with commercial real estate, the following specific risks are
relevant to lodging properties:
o income from a lodging property may decline relatively quickly if
economic or competitive conditions worsen, because such income is
primarily generated by room occupancy, and room occupancy is usually for
a short period of time;
o daily exposure to market conditions increases the sensitivity of a
hotel/motel's performance to economic cycles;
o relatively small decreases in revenue can cause significant declines in
net cash flow because of the relatively high operating costs associated
with lodging properties;
o sensitivity to competition may require more frequent improvements and
renovations than are required for other properties;
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<PAGE>
o if a lodging property is affiliated with a regional, national or
international chain, changes in the public perception of the chain and/or
a deterioration in the financial health of the franchisor may affect the
income generated by the property; and
o operation of certain lodging properties is seasonal and, accordingly,
the property's income will fluctuate during the year.
The liquor licenses for some of these properties may be held by the
property manager rather than by the related borrower. The laws and regulations
relating to liquor licenses generally prohibit the transfer of such licenses to
any person. In the event of a foreclosure of a lodging property, the Trustee,
the Special Servicer or a purchaser in a foreclosure sale would likely have to
apply for a new license, which might not be granted.
All of these conditions and events may increase the possibility that a
borrower will be unable to meet its obligations under its mortgage loan.
RISKS PARTICULAR TO INDUSTRIAL PROPERTIES
28 mortgaged properties, representing approximately 8.4% of the Initial
Pool Balance, are industrial properties. In addition to risks generally
associated with commercial real estate, the following specific risks are
relevant to industrial properties:
o reduced demand for industrial space because of a decline in a particular
industry segment may hurt operations of such properties;
o an industrial property that suited the needs of its original tenant may
be difficult to relet to another tenant or may become functionally
obsolete compared to newer properties;
o the availability of labor sources or a change in the proximity of supply
sources may impair such properties' operations; and
o industrial properties may be more likely to suffer damage from
environmental hazards.
All of these conditions and events may increase the possibility that a
borrower will be unable to meet its obligations under its mortgage loan.
NONRECOURSE MORTGAGE LOANS
Subject to certain exceptions for liability in connection with breaches of
mortgage loan terms, substantially all of the mortgage loans are nonrecourse
loans. In the event of a default, only the mortgaged property, and not other
assets of the borrower, would be available to satisfy the debt. Consequently,
payment of each mortgage loan prior to maturity depends primarily on the net
operating income of the mortgaged property. For mortgage loans that do not
fully amortize by their maturity dates, payment on the mortgage loan at
maturity (whether as scheduled or upon the acceleration of maturity after
default) depends on the market value of the mortgaged property at that time, or
the ability of the borrower to refinance the mortgage loan. No mortgage loan is
insured or guaranteed by any governmental agency or by the Seller, the Trustee,
the Master Servicer, the Special Servicer or any loan originator or loan
seller, or any of their respective affiliates.
RISKS OF DIFFERENT TIMING OF MORTGAGE LOAN AMORTIZATION
As mortgage loans pay down or properties are released, the remaining
mortgage loans may face a higher risk with respect to the diversity of property
types and property characteristics and with respect to the number of borrowers.
See the tables entitled "Distribution of Years of Maturity" in Annex A to this
prospectus supplement for a description of the maturity dates of the mortgage
loans. Because principal on the offered certificates is payable in sequential
order, and a class receives principal only after the preceding class or classes
have been paid in full, classes that have a lower sequential priority are more
likely to face the risk of concentration discussed under "--Concentration of
Mortgage Loans" above than classes with a higher sequential priority.
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<PAGE>
BANKRUPTCY PROCEEDINGS ENTAIL CERTAIN RISKS
Under the Bankruptcy Code, the filing of a petition in bankruptcy by or
against a borrower will stay the sale of the real property owned by that
borrower, as well as the commencement or continuation of a foreclosure action.
In addition, if a court determines that the value of the mortgaged property is
less than the principal balance of the mortgage loan it secures, the court may
reduce the amount of secured indebtedness to the then-value of the mortgaged
property. Such an action would make the lender a general unsecured creditor for
the difference between the then-value and the amount of its outstanding
mortgage indebtedness. A bankruptcy court also may: (i) grant a debtor a
reasonable time to cure a payment default on a mortgage loan; (ii) reduce
monthly payments due under a mortgage loan; (iii) change the rate of interest
due on a mortgage loan; or (iv) otherwise alter the mortgage loan's repayment
schedule.
Moreover, the filing of a petition in bankruptcy by, or on behalf of, a
junior lienholder may stay the senior lienholder from taking action to
foreclose out the junior lien. Certain of the borrowers or their affiliates
have subordinate debt secured by the related mortgaged properties. See "--Other
Financings" below. Additionally, the borrower's trustee or the borrower, as
debtor-in-possession, has certain special powers to avoid, subordinate or
disallow debts. In certain circumstances, the claims of the trustee may be
subordinated to financing obtained by a debtor-in-possession subsequent to its
bankruptcy.
Under the Bankruptcy Code, a lender will be stayed from enforcing a
borrower's assignment of rents and leases. The Bankruptcy Code also may
interfere with the Trustee's ability to enforce lockbox requirements. The legal
proceedings necessary to resolve these issues can be time consuming and may
significantly delay the receipt of rents. Rents also may escape an assignment
to the extent they are used by the borrower to maintain the mortgaged property
or for other court authorized expenses.
As a result of the foregoing, the Trustee's recovery with respect to
borrowers in bankruptcy proceedings may be significantly delayed, and the
aggregate amount ultimately collected may be substantially less than the amount
owed.
GEOGRAPHIC CONCENTRATION
This table shows the states with the largest concentrations of mortgaged
properties:
<TABLE>
<CAPTION>
AGGREGATE
CUT-OFF DATE % OF INITIAL
STATE BALANCE POOL BALANCE
- ----------------------- -------------- -------------
<S> <C> <C>
Texas .............. $115,832,720 13.0%
California ......... $ 93,268,451 10.5%
Florida ............ $ 70,095,478 7.9%
New York ........... $ 64,964,839 7.3%
Arizona ............ $ 57,330,008 6.4%
Georgia ............ $ 46,625,164 5.2%
</TABLE>
Concentrations of mortgaged properties in geographic areas may increase
the risk that adverse economic or other developments or natural disasters
affecting a particular region of the country could increase the frequency and
severity of losses on mortgage loans secured by those properties. The following
geographic factors could impair the borrowers' ability to repay the mortgage
loans:
o economic conditions in regions where the borrowers and the mortgaged
properties are located;
o conditions in the real estate market where the mortgaged properties are
located;
o changes in local governmental rules and fiscal policies; and
o acts of nature (including earthquakes and floods, which may result in
uninsured losses).
ENVIRONMENTAL RISKS
Under federal and state environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal and
remediation of hazardous substances affecting its property.
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<PAGE>
These laws often impose liability whether or not the owner or operator knew of,
or was responsible for, the presence of such hazardous substances. The cost of
any required remediation and the owner's liability are generally unlimited and
could exceed the value of the property and/or the aggregate assets of the
owner. In addition, the presence of unremediated hazardous substances may
impair the value of a property. Certain laws impose liability specifically for
release of asbestos into the air. Third parties may seek recovery from property
owners or operators for injuries associated with exposure to asbestos, radon
gas, lead in paint, and lead in drinking water.
Under some environmental laws, such as the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA"), as well as some state laws, a secured lender (such as the trust)
may be liable as an "owner" or "operator" for the costs of dealing with
hazardous substances affecting a borrower's property, if agents or employees of
the lender have participated in the management of the borrower's property. This
liability could exist even if a previous owner caused the environmental damage.
The trust's potential exposure to liability for cleanup costs may increase if
the trust actually takes possession of a borrower's property, or control of its
day-to-day operations, as for example through the appointment of a receiver.
An environmental report ("Environmental Report") was prepared for each
mortgaged property securing a mortgage loan no more than 17 months prior to the
Cut-Off Date. The Environmental Reports were prepared pursuant to two
alternative procedures developed by the American Society for Testing and
Materials ("ASTM"). With respect to 91 of the mortgage loans, representing
approximately 11.7% of the Initial Pool Balance, the Environmental Reports were
prepared pursuant to the ASTM standard for an environmental transaction screen
("ETS"). With respect to 213 of the mortgage loans, representing approximately
88.3% of the Initial Pool Balance, the Environmental Reports were prepared
pursuant to the ASTM standard for a Phase I environmental assessment ("Phase
I"). An ETS is similar to a Phase I, but is not necessarily as comprehensive in
its analysis and generally examines less information. In addition to following
the ASTM standards, many of the Environmental Reports included additional
research, such as limited sampling for asbestos-containing material ("ACM"),
lead-based paint ("LBP"), and radon, depending upon the property use and/or
age. Additionally, as needed pursuant to ASTM standards, supplemental Phase II
site investigations ("Phase II") were completed for some mortgaged properties
to resolve certain environmental issues. Phase II investigation consists of
sampling and/or testing.
With respect to a number of the mortgaged properties, the Environmental
Reports revealed the existence of ACM, LBP, possible radon gas, and other
environmental matters. Some mortgaged properties contain or previously
contained underground storage tanks ("USTs") for gasoline, oil, or other
products. See "Certain Legal Aspects of the Mortgage Loans--Environmental
Risks" in the prospectus. With respect to some mortgaged properties,
Environmental Reports recommended upgrading or other management actions for
USTs or other environmental matters, but such recommendations in some cases
have not yet been implemented. For certain of the properties for which
estimates have been provided for the cost of implementing recommendations,
funds have been escrowed. Moreover, with respect to each mortgage loan that was
the subject of an ETS, the Originator will purchase an insurance policy
described under "Description of the Mortgage Pool--Underwriting
Guidelines--Environmental Reports." However, we cannot assure you that escrowed
funds or insurance will in every case cover the entire costs eventually
incurred.
It is possible that the Environmental Reports and/or Phase II sampling did
not reveal all environmental liabilities, or that there are material
environmental liabilities of which we are not aware. Also, the environmental
condition of the mortgaged properties in the future could be affected by the
activities of tenants and occupants or by third parties unrelated to the
borrowers. For a more detailed description of environmental matters that may
affect the mortgaged properties, see "Certain Legal Aspects of the Mortgage
Loans--Environmental Risks" in the prospectus.
COSTS OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT
Under the Americans with Disabilities Act of 1990 (the "ADA"), all public
accommodations are required to meet certain federal requirements related to
access and use by disabled persons. To the
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extent the mortgaged properties do not comply with the ADA, the borrowers are
likely to incur costs of complying with the ADA. In addition, noncompliance
could result in the imposition of fines by the federal government or an award
of damages to private litigants. In connection with the origination of the
related mortgage loan, property inspection reports were generally obtained
which included limited information regarding compliance with the ADA. A portion
of funds in the capital reserve escrow accounts established by certain
borrowers are required to be used for costs associated with complying with the
ADA. However, escrows were not required with respect to all mortgage loans and
we cannot assure you that the related mortgaged properties will comply with the
ADA in all respects once the related conditions are remedied, that such
property-inspection reports identified all risks or conditions relating to the
ADA or that amounts reserved (if any) are sufficient to pay such costs.
LITIGATION AND OTHER MATTERS AFFECTING THE MORTGAGED PROPERTIES OR BORROWERS
There may be legal proceedings pending or threatened from time to time
against the borrowers and the managers of the mortgaged properties and their
affiliates arising out of their ordinary business. Any such litigation may
materially impair distributions to certificateholders if borrowers must use
property income to pay judgments or litigation costs.
In addition, in the event the owner of a borrower experiences financial
problems, we cannot assure you that such owner would not attempt to take
actions with respect to the mortgaged property that may adversely affect the
borrower's ability to fulfill its obligations under the related mortgage loan.
OTHER FINANCINGS
The mortgage loans generally prohibit incurring any additional debt
secured by the mortgaged property without the consent of the lender. With
respect to 4 mortgage loans, representing approximately 4.0% of the Initial
Pool Balance, each borrower has debt secured by the related mortgaged property
or affiliates of the borrowers have obtained a loan secured by the equity
interests in such borrowers (in each case, "Subordinate Debt"), in addition to
the debt owed under the mortgage loan. The borrower under the largest mortgage
loan in the mortgage pool (identified on Annex A to this prospectus supplement
as "The Torpedo Factory"), representing approximately 2.2% of the Initial Pool
Balance, has Subordinate Debt with an original principal balance of $2,853,950.
Generally, each holder of Subordinate Debt has executed an agreement pursuant
to which such holder of Subordinate Debt has agreed to subordinate such
Subordinate Debt to the applicable mortgage loan. In addition, under certain
circumstances, the terms of certain of the mortgage loans would allow the
related borrowers to incur additional Subordinate Debt or debt that is not
secured by the related mortgaged property or the equity interests in the
borrower.
When a mortgage loan borrower (or its constituting members) also has one
or more other outstanding loans (even if subordinated loans), the trust is
subjected to additional risk. The borrower may have difficulty servicing and
repaying multiple loans. The existence of another loan generally also will make
it more difficult for the borrower to obtain refinancing of the mortgage loan
and may thereby jeopardize repayment of the mortgage loan. Moreover, the need
to service additional debt may reduce the cash flow available to the borrower
to operate and maintain the mortgaged property.
Additionally, if the borrower (or its constituent members) defaults on the
mortgage loan and/or any other loan, actions taken by other lenders could
impair the security available to the trust. If a junior lender files an
involuntary petition for bankruptcy against the borrower (or the borrower files
a voluntary petition to stay enforcement by a junior lender), the trust's
ability to foreclose would be automatically stayed, and principal and interest
payments might not be made during the course of the bankruptcy case. The
bankruptcy of another lender also may operate to stay foreclosure by the trust.
Further, if another loan secured by the mortgaged property is in default,
the other lender may foreclose on the mortgaged property, absent an agreement
to the contrary, thereby causing a delay in payments and/or an involuntary
repayment of the mortgage loan prior to maturity. The trust may also be subject
to the costs and administrative burdens of involvement in foreclosure
proceedings or related litigation.
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<PAGE>
EFFECT OF BORROWER DELINQUENCIES AND DEFAULTS
The rate and timing of mortgage loan delinquencies and defaults will
affect:
o the aggregate amount of distributions on the offered certificates;
o the yield to maturity of the offered certificates;
o the rate of principal payments on the offered certificates; and
o the weighted average lives of the offered certificates.
When defaults occur, a borrower bankruptcy filing, lengthy foreclosure
proceedings or adverse local market conditions may reduce or delay recoveries.
Defaults can also have the effect of accelerating repayment of principal, if a
servicer declares the mortgage loan payable in full after the default (assuming
the amounts owed are actually collected).
Generally, the mortgage loans were originated within twelve months of the
Cut-Off Date. Therefore, the mortgage loans do not have a long standing payment
history.
If you assume a rate of default and an amount of losses on the mortgage
loans to calculate your expected yield to maturity and the actual default rate
or amount of losses allocable to your class of certificates is higher, your
actual yield to maturity will be lower than expected. Under certain extreme
scenarios, the yield could be negative. The timing of any loss on a liquidated
mortgage loan will also affect the actual yield to maturity of any class of
offered certificates to which such loss is allocable, even if the overall rate
of defaults and severity of losses are consistent with your expectations. In
general, the earlier you bear a loss, the greater is the effect on your yield
to maturity. Losses will also reduce the notional amount of the Class X
Certificates, and notwithstanding their senior priority in interest
distributions with the Class A Certificates, the amount and timing of losses
could have a significant adverse effect on the yield of the Class X
Certificates.
Also, if:
o a servicer agrees to extend the maturity of a mortgage loan due to the
borrower's inability to pay in full when due, or
o the related borrower does not repay a mortgage loan with a
hyperamortization feature by its Anticipated Repayment Date,
the extension of maturity will increase the weighted average life of your
certificates and reduce your yield to maturity.
As described in more detail under "The Pooling Agreement--Advances," the
Master Servicer (or the Trustee or Fiscal Agent, as the case may be) will
receive interest on unreimbursed advances of principal, interest and servicing
expenses. It must recover advances either from amounts received on the mortgage
loan for which it made such advances (in the form of late payments, liquidation
proceeds, insurance proceeds, condemnation proceeds or amounts paid in
connection with the purchase of such mortgage loan) or, if the advance is
nonrecoverable, from the trust. Interest on the advance accrues until the
Master Servicer (or the Trustee or Fiscal Agent, as the case may be) recovers
the advance. The right to receive interest on advances is prior to the rights
of certificateholders to receive distributions on the certificates. Therefore,
because of the accrual of such interest, losses may be allocated to the offered
certificates.
Also, with respect to each mortgage loan serviced by the Special Servicer,
the Special Servicer will receive certain compensation to which the Special
Servicer is entitled prior to the right of certificateholders to receive
distributions on the certificates. Consequently, it is possible that shortfalls
resulting from such compensation will be allocated to the offered certificates
with respect to any mortgage loan which is a specially serviced mortgage loan.
See "The Pooling Agreement--The Special Servicer" in this prospectus
supplement.
Even if losses do not occur, delinquencies and defaults on the mortgage
loans may significantly delay the receipt of payments by an investor, if
advances of principal and interest or the subordination
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of another class of certificates does not fully offset the delinquency or
default. The Special Servicer can extend and modify mortgage loans that are in
default or nearly in default, including extending the date on which a Balloon
Payment is due. The Special Servicer must comply with the Pooling Agreement's
requirements for those modifications. The obligation to make advances of
principal and interest on a mortgage loan with a delinquent Balloon Payment is
limited as described under "The Pooling Agreement--Advances" in this prospectus
supplement. Until liquidation of a mortgage loan with a delinquent Balloon
Payment, investors entitled to principal will receive, in connection with that
mortgage loan, only payments made by the borrower, if any, and any advance of
principal and interest made by the Master Servicer (or the Trustee or Fiscal
Agent, as the case may be). Consequently, any delay in the receipt of a Balloon
Payment will extend the weighted average life of the offered Certificates.
In addition, 2 mortgage loans, representing approximately 0.5% of the
Initial Pool Balance, require the borrower to pay interest (which may be
capitalized) at an increased rate after a date (each, an "Anticipated Repayment
Date") specified in the mortgage loan documents, and to use excess property
cash flow to pay mortgage loan principal after that date. Though the borrower
can avoid these additional payments by prepaying the mortgage loan, if it fails
to do so it may be unable to pay the Balloon Payment at maturity resulting from
the increased interest.
BALLOON PAYMENTS
272 of the mortgage loans, representing approximately 93.4% of the Initial
Pool Balance, are expected to have substantial remaining principal balances as
of their respective Anticipated Repayment Dates or stated maturity dates. 270
of such mortgage loans, representing approximately 92.9% of the Initial Pool
Balance, require that all outstanding amounts of principal are due and payable
on their maturity dates (each such amount, after application of monthly
payments due on or prior to their maturity dates, a "Balloon Payment"). 2 of
such mortgage loans, representing approximately 0.5% of the Initial Pool
Balance, have Anticipated Repayment Dates, on which dates the interest rate on
the mortgage loan increases by at least 2% per annum, but the borrower is
permitted to prepay the loan on or after such date without payment of a
prepayment premium or yield maintenance charge. Mortgage loans with substantial
remaining principal balances at their stated maturity dates or Anticipated
Repayment Dates (i.e., "balloon loans") involve greater risk than fully
amortizing loans.
A borrower's ability to repay a loan on its stated maturity date or
Anticipated Repayment Date typically will depend upon its ability either to
refinance the loan or to sell the mortgaged property at a price sufficient to
permit repayment. A borrower's ability to achieve either of these goals will be
affected by a number of factors, including:
o the availability of, and competition for, credit for commercial or
multifamily real estate projects, which fluctuate over time;
o the prevailing interest rates;
o the fair market value of the related properties;
o the borrower's equity in the related properties;
o the borrower's financial condition;
o the operating history and occupancy level of the property;
o the tax laws; and
o prevailing general and regional economic conditions.
We cannot assure you that each borrower will have the ability to repay the
remaining principal balances on the pertinent date.
GROUND LEASES AND OTHER LEASEHOLD INTERESTS
3 mortgage loans, representing approximately 2.5% of the Initial Pool
Balance, are secured in whole or in part by leasehold interests. Under Section
365(h) of the Bankruptcy Code, ground lessees may
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remain in possession of their leased premises upon the bankruptcy of their
ground lessor and the rejection of the ground lease by the ground lessor or its
bankruptcy trustee. The leasehold mortgages generally provide that the borrower
needs the prior approval of the lender in order to elect to treat the ground
lease as terminated after any such bankruptcy of, and rejection by, the ground
lessor. In the event of a bankruptcy of a ground lessee/borrower, the
Bankruptcy Code permits the ground lessee/borrower to assume (continue) or
reject (terminate) any or all of its ground leases. In the event of concurrent
bankruptcy proceedings involving the ground lessor and the ground
lessee/borrower, the Trustee may be unable to keep the bankrupt ground
lessee/borrower from choosing to terminate a ground lease rejected by a
bankrupt ground lessor. In such circumstances, a ground lease could be
terminated notwithstanding lender protection provisions contained in the lease
or in the mortgage.
ATTORNMENT CONSIDERATIONS
Some of the tenant leases, including the anchor tenant leases, contain
attornment provisions that require the tenant to recognize as landlord under
the lease a successor owner of the property following foreclosure. Some of the
leases, including the anchor tenant leases, may be either subordinate to the
liens created by the mortgage loans or else contain a provision that requires
the tenant to subordinate the lease if the mortgagee agrees to enter into a
non-disturbance agreement. In some states, if tenant leases are subordinate to
the liens created by the mortgage loans and such leases do not contain the
attornment provisions described above, such leases may terminate upon the
transfer of the property in a foreclosure. Accordingly, after foreclosure of a
mortgaged property located in such a state, the termination of leases without
attornment provisions could cause a further decline in value of the mortgaged
property, particularly if the tenants were paying above-market rents. If a
mortgage is subordinate to a lease, the lender will not be able to evict a
tenant after foreclosure, unless the lender and the tenant agree otherwise, and
if the lease contains provisions inconsistent with the mortgage (e.g.,
provisions relating to application of insurance proceeds or condemnation
awards), the provisions of the lease will control.
STATE LAW LIMITATIONS ON REMEDIES
Certain jurisdictions (including California) have laws that prohibit more
than one "judicial action" to enforce a mortgage, and some courts have viewed
the term "judicial action" broadly. The Pooling Agreement will require the
Master Servicer or Special Servicer to obtain legal advice prior to enforcing
any rights under the mortgage loans that relate to properties where the rule
could be applicable. In addition, the Master Servicer or Special Servicer may
be required to foreclose on properties in states where the "one action" rules
apply before foreclosing on properties located in states where judicial
foreclosure is the only permitted method of foreclosure. See "Certain Legal
Aspects of Mortgage Loans--Foreclosure" in the prospectus.
Because of these considerations, the ability of the Master Servicer and
Special Servicer to foreclose on the mortgage loans may be limited by the
application of state laws. Such actions could also subject the Trust Fund to
liability as a "mortgagee-in-possession" or result in equitable subordination
of the claims of the Trustee to the claims of other creditors of the borrower.
The servicers will be required to consider these factors in deciding what
alternative to pursue after a default.
TAX CONSIDERATIONS RELATING TO FORECLOSURE
If the trust acquires a mortgaged property pursuant to a foreclosure or
deed in lieu of foreclosure, the Special Servicer must retain an independent
contractor to operate the property. Any net income from such operation (other
than qualifying "rents from real property"), or any rental income based on the
net profits of a tenant or sub-tenant or allocable to a non-customary service,
will subject the Lower-Tier REMIC to federal tax (and possibly state or local
tax) on such income at the highest marginal corporate tax rate (currently 35%).
In such event, the net proceeds available for distribution to
certificateholders will be reduced. The Special Servicer may permit the
Lower-Tier REMIC to earn "net income from foreclosure property" that is subject
to tax if it determines that the net after-tax benefit to holders of
certificates is greater than under another method of operating or leasing the
mortgaged property.
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ZONING COMPLIANCE AND USE RESTRICTIONS
Due to changes in zoning requirements after certain of the mortgaged
properties were constructed, some mortgaged properties may not comply with
current zoning laws, including density, use, parking and set-back requirements.
The operation of each such property is considered to be a "permitted
non-conforming use." This means that the borrower is not required to alter its
structure to comply with the new law; however, the borrower may not be able to
rebuild the premises "as is" in the event of a substantial casualty loss. This
may adversely affect the cash flow of the property following such a loss. If a
substantial casualty were to occur, it is expected that insurance proceeds
would be available to pay the mortgage loan in full. Such proceeds, however,
may not be sufficient to pay the mortgage loan in full. In addition, if the
mortgaged property were repaired or restored in conformity with the current
law, the value of the property or the revenue-producing potential of the
property may not be equal to that of the property before the casualty.
In addition, certain of the mortgaged properties are subject to certain
use restrictions imposed pursuant to reciprocal easement agreements or
operating agreements. Such use restrictions include, for example, limitations
on the character of the improvements thereon, limitations affecting noise and
parking requirements, among other things, and limitations on the borrowers'
right to operate certain types of facilities within a prescribed radius. These
limitations could adversely affect the ability of the related borrower to lease
the mortgaged property on favorable terms, thus adversely affecting the
borrower's ability to fulfill its obligations under the related mortgage loan.
EARTHQUAKE INSURANCE, FLOOD AND OTHER INSURANCE
The mortgaged properties may suffer casualty losses due to risks which are
not covered by insurance or for which insurance coverage is inadequate. In
addition, approximately 31.4% of the mortgaged properties (by Initial Pool
Balance) are located in California, Florida and Texas, states that have
historically been at greater risk regarding acts of nature (such as hurricanes,
floods and earthquakes) than other states. We cannot assure you that borrowers
will be able to maintain adequate insurance covering such risks. Moreover, if
construction or any major repairs are required, changes in laws may materially
affect the borrower's ability to effect such reconstruction or major repairs or
may materially increase the cost thereof.
Recently, certain areas of the United States experienced hurricanes and/or
floods. We have been informed that the properties securing 2 mortgage loans
(representing approximately 0.6% of the Initial Pool Balance) have recently
sustained damage and the related borrowers have contacted their insurance
companies. An installment on one claim has been escrowed and the other claim
was below the applicable deductible. However, we cannot assure you that the
borrower will be able to completely restore the property. In addition, we
cannot assure you that other properties securing the mortgage loans have not
sustained similar damage.
As a result of any of the foregoing, the amount available to make
distributions on your certificates could be reduced.
SPECIAL SERVICER MAY HAVE A CONFLICT OF INTEREST
We anticipate that Special Servicer or one of its affiliates will purchase
all or a portion of certain classes of the certificates. This could cause a
conflict between the Special Servicer's duties as Special Servicer and its
interest as an investor. However, the Special Servicer is required to
administer the mortgage loans in accordance with the servicing standard
included in the Pooling Agreement, without regard to ownership of any
certificate by the Special Servicer or any of its affiliates.
LIMITATIONS WITH RESPECT TO REPRESENTATIONS AND WARRANTIES
Certain persons will make certain limited representations and warranties
regarding the mortgage loans for which it is acting as a responsible party in
the Pooling Agreement. See "Description of the Mortgage Pool--Representations
and Warranties" in this prospectus supplement and Annex B to this
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prospectus supplement for a summary of such representations and warranties. A
material breach of such representations and warranties could obligate such
person to repurchase the mortgage loan, in which case, the proceeds of such
repurchase would be passed through to certificateholders in the same manner as
a principal prepayment, except that no prepayment premium or yield maintenance
charge will be payable in connection with such repurchase.
If a responsible party is required to but does not cure or remedy a breach
of a representation or warranty, payments on the offered certificates may be
substantially less than such payments would have been if such person had cured
or remedied the breach.
The obligation of a responsible party to cure a breach or repurchase a
mortgage loan will constitute the only remedy available to holders of
certificates for a breach of a representation or warranty. We cannot assure you
that a responsible party will have the resources to repurchase any mortgage
loan. No other party will be obligated to cure or repurchase a mortgage loan in
the event of a breach if the related responsible party does not fulfill its
obligations.
RISKS OF LIMITED LIQUIDITY AND MARKET VALUE
Your certificates will not be listed on any national securities exchange
or on any automated quotation system of any registered securities association
such as NASDAQ and there is currently no secondary market for your
certificates. While the underwriters currently intend to make a secondary
market in the offered certificates, they are not obligated to do so.
Accordingly, you may not have an active or liquid secondary market for your
certificates. Lack of liquidity could result in a substantial decrease in the
market value of your certificates. The market value of your certificates also
may be affected by many other factors, including the then-prevailing level of
interest rates.
BOOK-ENTRY REGISTRATION
Your certificates will be initially represented by one or more
certificates registered in the name of Cede & Co., as the nominee for DTC, and
will not be registered in your name. As a result, you will not be recognized as
a "certificateholder" or holder of record of your certificates.
RISKS ASSOCIATED WITH YEAR 2000 COMPLIANCE
We are aware of the issues associated with the programming code in
existing computer systems as the year 2000 approaches. The "year 2000 problem"
is pervasive and complex; virtually every computer operation will be affected
in some way by the rollover of the two digit year value to 00. The issue is
whether computer systems will properly recognize date-sensitive information
when the year changes to 2000. Systems that do not properly recognize such
information could generate erroneous data or cause a system to fail.
We have been advised by each of the Master Servicer, the Special Servicer
and the Trustee that they are committed either to (i) implement modifications
to their respective existing systems to the extent required to cause them to be
year 2000 ready or (ii) acquire computer systems that are year 2000 ready in
each case prior to January 1, 2000. However, we have not made any independent
investigation of the computer systems of the Master Servicer, the Special
Servicer or the Trustee. In the event that computer problems arise out of a
failure of such efforts to be completed on time, or in the event that the
computer systems of the Master Servicer, the Special Servicer or the Trustee
are not fully year 2000 ready, the resulting disruptions in the collection or
distribution of receipts on the mortgage loans could materially and adversely
affect your investment.
OTHER RISKS
See "Risk Factors" in the accompanying prospectus for a description of
certain other risks and special considerations that may be applicable to your
certificates.
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DESCRIPTION OF THE MORTGAGE POOL
GENERAL
The assets of the trust created pursuant to the Pooling Agreement (the
"Trust Fund") will consist of a pool of fixed rate mortgage loans (the
"Mortgage Loans") with an aggregate principal balance as of the Cut-Off Date,
after deducting payments of principal due on such date, of approximately
$890,585,907 (with respect to each Mortgage Loan, the "Cut-Off Date Balance",
and in the aggregate, the "Initial Pool Balance"). Each Mortgage Loan is
evidenced by a promissory note (a "Mortgage Note") and secured by a mortgage,
deed of trust or other similar security instrument (a "Mortgage") creating a
first lien on a fee simple or leasehold interest in a multifamily, retail,
office, lodging, industrial, healthcare-related or self-storage property (each,
a "Mortgaged Property"). Except with respect to 2 Mortgage Loans, representing
approximately 1.4% of the Initial Pool Balance, the Mortgage Loans are
non-recourse loans. In the event of a borrower default on a non-recourse
mortgage loan, recourse may be had only against the specific mortgaged property
and such other limited assets securing the mortgage loan, and not against the
borrower's other assets. Except as otherwise indicated, all percentages of the
Mortgage Loans described herein are approximate percentages of the Initial Pool
Balance. Furthermore, the descriptions in this Prospectus Supplement of the
Mortgage Loans and the Mortgaged Properties are based upon the Mortgage Pool as
it is expected to be constituted as of the close of business on the Closing
Date, assuming that (i) all scheduled principal and interest payments due on or
before the Cut-Off Date are made, and (ii) there are no principal prepayments
on or before the Cut-Off Date.
Of the Mortgage Loans to be included in the Trust Fund:
o 97 Mortgage Loans, representing approximately 40.8% of the Initial
Pool Balance, were originated by AMRESCO Capital, L.P. ("ACLP") or a
predecessor entity (the "AMRESCO Loans");
o 55 Mortgage Loans, representing approximately 18.8% of the Initial
Pool Balance, were originated by Archon Financial, L.P. (the "Archon Loans");
o 77 Mortgage Loans, representing approximately 15.7% of the Initial
Pool Balance, were originated by DREFC;
o 17 Mortgage Loans, representing approximately 9.3% of the Initial Pool
Balance, were originated by Aries (the "Aries Loans");
o 19 Mortgage Loans, representing approximately 6.3% of the Initial Pool
Balance, were originated by Central Park Capital, L.P. (the "CPC Loans");
o 4 Mortgage Loans, representing approximately 2.8% of the Initial Pool
Balance, were originated by Secore (the "Secore Loans");
o 12 Mortgage Loans, representing approximately 2.7% of the Initial Pool
Balance, were originated by Sutter (the "Sutter Loans");
o 2 Mortgage Loans, representing approximately 1.4% of the Initial Pool
Balance, were originated by DFC;
o 12 Mortgage Loans, representing approximately 1.2% of the Initial Pool
Balance, were originated by ITLA (the "ITLA Loans");
o 6 Mortgage Loans, representing approximately 0.7% of the Initial Pool
Balance, were originated by Wingate (the "Wingate Loans");
o 2 Mortgage Loans, representing approximately 0.2% of the Initial Pool
Balance, were originated by Parmann (the "Parmann Loans"); and
o 1 Mortgage Loan, representing approximately 0.1% of the Initial Pool
Balance, was originated by Progress (the "Progress Loans").
The originators of the Mortgage Loans are referred to herein as the
"Originators". The CPC Loans and Archon Loans were originated for sale to GSMC.
All the AMRESCO Loans were originated for sale
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to AMRESCO Capital Limited, Inc. ("ACLI"). GSMC acquired the AMRESCO Loans
(other than 5 AMRESCO Loans, representing approximately 2.3% of the Initial
Pool Balance), the CPC Loans and the Archon Loans. DFC and DREFC, as the case
may be, acquired the Aries Loans, the ITLA Loans, the Parmann Loans, the
Progress Loans, the Secore Loans, the Sutter Loans and the Wingate Loans. The
Seller will acquire the Mortgage Loans from GSMC (or an affiliate thereof),
DFC, DREFC and ACLI (collectively, the "Loan Sellers") on or before the Closing
Date. The Seller will cause the Mortgage Loans in the Mortgage Pool to be
assigned to the Trustee pursuant to the Pooling Agreement.
ADDITIONAL MORTGAGE LOAN INFORMATION
GENERAL MORTGAGE LOAN CHARACTERISTICS
(AS OF THE CUT-OFF DATE, UNLESS OTHERWISE INDICATED)
<TABLE>
<S> <C>
Initial Cut-Off Date Balance(1) ................................. $890,585,907
Number of Mortgage Loans ........................................ 304
Number of Mortgaged Properties .................................. 317
Average Mortgage Loan Balance ................................... $ 2,929,559
Weighted Average Mortgage Rate .................................. 7.202%
Range of Mortgage Rates ......................................... 5.750% -- 9.250%
Weighted Average Remaining Term to Maturity (months)(2) ......... 124.3
Range of Remaining Terms to Maturity (months)(2) ................ 49 -- 353
Weighted Average Original Amortization Term (months)(3) ......... 324
Range of Original Amortization Terms (months) ................... 172 - 360
Weighted Average DSCR(4) ........................................ 1.44x
Range of DSCRs(4) ............................................... 1.01x -- 5.41x
Weighted Average LTV(5) ......................................... 71.46%
Range of LTVs(5) ................................................ 17.62% -- 96.32%
Weighted Average LTV at Maturity(6) ............................. 56.04%
Percentage of Initial Pool Balance made up of:
Fully Amortizing Loans ......................................... 6.6%
Balloon Mortgage Loans ......................................... 92.9%
ARD Loans ...................................................... 0.5%
Defeasance Loans ............................................... 56.3%
</TABLE>
- ----------
(1) Subject to a permitted variance of plus or minus 5%.
(2) In the case of the ARD Loans, this calculation assumes that the Mortgage
Loans pay off on their Anticipated Repayment Dates.
(3) "Weighted Average Original Amortization Term" reflects the fact that
certain Mortgage Loans provide for Monthly Payments based on amortization
schedules longer than the original stated terms to maturity of such
Mortgage Loans.
(4) "DSCR" for any Mortgage Loan is equal to the Net Cash Flow from the
related Mortgaged Property divided by the annual debt service for such
Mortgage Loan.
(5) "LTV" or "Loan-to-Value Ratio" means, with respect to any Mortgage Loan,
the principal balance of such Mortgage Loan as of the Cut-Off Date
divided by the appraised value of the Mortgaged Property or Properties
securing such Mortgage Loan as of the date of the original appraisal (or,
in certain cases, as updated in contemplation of this transaction).
(6) "LTV at Maturity" for any Mortgage Loan is calculated in the same manner
as LTV as of the Cut-Off Date, except that the Cut-Off Date Balance used
to calculate the LTV as of the Cut-Off Date has been adjusted to give
effect to the amortization of the applicable Mortgage Loan up to its
maturity date or, with respect to ARD Loans, its Anticipated Repayment
Date. Such calculation thus assumes that the appraised value of the
Mortgaged Property or Properties securing a Mortgage Loan on the maturity
date or, with respect to ARD Loans, Anticipated Repayment Date, is the
same as the appraised value as of the date of the original appraisal.
There can be no assurance that the value of any particular Mortgaged
Property is now, will be at maturity or, if applicable, on the
Anticipated Repayment Date, equal to or greater than its original
appraised value.
Where a Mortgage Loan is secured by multiple properties, statistical
information in this Prospectus Supplement relating to geographical locations
and property types of the Mortgaged Properties is based
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on the principal balance allocated to such property (each, an "Allocated Loan
Amount"). The Allocated Loan Amount, where not stated in the Mortgage Loan
documents, is generally based on the relative appraised values of such
properties; provided, however, with respect to 2 Mortgage Loans, representing
approximately 0.6% of the Initial Pool Balance, the related Allocated Loan
Amounts were calculated by dividing the aggregate Cut-Off Date Balance of the
related Mortgage Loan by the number of Mortgaged Properties. In addition,
wherever information is presented in this Prospectus Supplement with respect to
LTVs or DSCRs, the LTV or DSCR of each Mortgaged Property securing a Mortgage
Loan secured by multiple Mortgaged Properties is assumed to be the LTV or DSCR
of such Mortgage Loan in the aggregate.
REPRESENTATIONS AND WARRANTIES
Pursuant to the Pooling Agreement, the Loan Sellers will make certain
representations and warranties concerning the Mortgage Loans sold by them to
the Seller, except that ACLI will make such representations and warranties with
respect to all of the AMRESCO Loans, including those to be sold to the Seller
by GSMC. Each of ACLI, GSMC, DFC and DREFC are referred to herein as a
"Responsible Party". Each Responsible Party will be obligated to cure any
breach of such representations and warranties or to repurchase any Mortgage
Loan as to which there exists a breach of any such representation or warranty
or a document defect that in either case materially and adversely affects the
value of the Mortgage Loan or the interests of the Certificateholders in such
Mortgage Loan. Each Responsible Party will be required to repurchase any
Mortgage Loan or cure any such breach or defect in all material respects within
90 days of receiving notice thereof, subject to extension for an additional 90
days if the Responsible Party is diligently pursuing a cure. The sole remedy
available to the Trustee or the Certificateholders is the obligation of the
Responsible Party to cure or repurchase any Mortgage Loan in the event of such
a breach. The Responsible Parties will make the representations and warranties
set forth in Annex B to this prospectus supplement.
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
286 of the Mortgage Loans, representing approximately 98.1% of the Initial
Pool Balance, have payment dates upon which interest and principal payments are
due under the related Mortgage Note (each such date, a "Due Date") that occur
on the first day of each month. 17 of the Mortgage Loans, representing
approximately 1.8% of the Initial Pool Balance, have Due Dates that occur on
the fifth day of each month. 1 of the Mortgage Loans, representing
approximately 0.1% of the Initial Pool Balance, has a Due Date that occurs on
the tenth day of each month. All of the Mortgage Loans are secured by first
liens on fee simple and/or leasehold interests in the related Mortgaged
Properties, subject to the permitted exceptions reflected in the related title
insurance policy. All of the Mortgage Loans bear fixed interest rates. 1 of the
Mortgage Loans, representing approximately 0.9% of the Initial Pool Balance,
provides for monthly payments of interest only over a fixed period of time
after origination. Approximately 93.4% of the Mortgage Loans (by Initial Pool
Balance) provide for monthly payments of principal based on amortization
schedules significantly longer than the remaining terms of such Mortgage Loans
(each, a "Balloon Mortgage Loan"). Thus, such Mortgage Loans will have Balloon
Payments due at their stated maturity dates, unless prepaid prior thereto.
"DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" PROVISIONS. The Mortgage Loans
generally contain "due-on-sale" and "due-on-encumbrance" clauses, which in each
case permit the holder of the Mortgage Loan to accelerate the maturity of the
Mortgage Loan if the borrower sells or otherwise transfers or encumbers
(subject to certain limited exceptions) the related Mortgaged Property without
the consent of the mortgagee; provided that certain of the Mortgage Loans
provide that such consent may not be unreasonably withheld so long as (i) no
event of default has occurred, (ii) the proposed transferee is creditworthy and
has sufficient experience in the ownership and management of properties similar
to the Mortgaged Property, (iii) the Rating Agencies have confirmed in writing
that such transfer will not result in a qualification, downgrade or withdrawal
of the then current rating of the Certificates, (iv) the transferee has
executed and delivered an assumption agreement evidencing its agreement to
abide by the terms of the Mortgage Loan together with legal opinions and title
insurance endorsements and (v) the
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assumption fee has been received (which assumption fee will be paid to the
Special Servicer, as described herein and as provided in the Pooling Agreement,
and will not be paid to the Certificateholders). Certain of the Mortgage Loans
allow the borrower to sell or otherwise transfer the related Mortgaged Property
a limited number of times without paying an assumption fee. Certain of the
Mortgage Loans also permit transfers for estate planning purposes and transfers
of interests in the borrower, so long as no change of control results. The
Special Servicer, or the Master Servicer at the direction of or with the prior
written consent of the Special Servicer, will determine, in a manner consistent
with the Servicing Standard, whether to exercise any right the mortgagee may
have under any such clause to accelerate payment of the related Mortgage Loan
upon, or to withhold its consent to, any transfer or further encumbrance of the
related Mortgaged Property. See "Certain Legal Aspects of Mortgage
Loans--Due-on-Sale and Due-on-Encumbrance" in the Prospectus. The Seller makes
no representation as to the enforceability of any due-on-sale or
due-on-encumbrance provision in any Mortgage Loan.
ARD LOANS. 2 of the Mortgage Loans (the "ARD Loans"), representing
approximately 0.5% of the Initial Pool Balance, contain a hyper-amortization
feature, which provides that if after an Anticipated Repayment Date the related
borrower has not prepaid the ARD Loan in full, any principal outstanding on
such date will accrue at an increased rate (the "Revised Rate") rather than the
stated Mortgage Rate (the "Initial Rate"). The Anticipated Repayment Date is
not more than 120 months after the first Due Date for the related ARD Loan. The
Revised Rate for 1 of the ARD Loans is equal to the sum of (x) the Initial Rate
plus (y) 2% per annum, and in the case of the other ARD Loan, the Revised Rate
will be equal to the greater of (x) the sum of (i) the Initial Rate plus (ii)
2% per annum and (y) 2% above the yield (the "Treasury Rate"), calculated by
linear interpolation of the yields, of non-callable U.S. Treasury obligations
with terms (one longer and one shorter) and maturities most nearly
approximating that of the applicable Mortgage Loan.
Following the Anticipated Repayment Date, each ARD Loan generally requires
that all cash flow available from the related Mortgaged Property after payment
of the constant monthly payment required under the terms of the related loan
documents and all escrows, reserves and expenses required under the related
loan documents will be used to accelerate amortization of principal on such ARD
Loan (such available cashflow, "Excess Cashflow"). With respect to each ARD
Loan interest will generally continue to accrue at the Initial Rate and be
payable on a current basis after the Anticipated Repayment Date, and the
payment of interest at the excess of the Revised Rate over the Initial Rate for
such ARD Loan will be deferred and will be paid, together with any interest
thereon, only after the outstanding principal balance of the ARD Loan has been
paid in full. The foregoing features, to the extent applicable, are designed to
increase the likelihood that the ARD Loan will be prepaid by the borrower on
the applicable Anticipated Repayment Date.
DEFEASANCE; COLLATERAL SUBSTITUTION. The terms of 131 of the Mortgage
Loans (the "Defeasance Loans"), representing approximately 56.3% of the Initial
Pool Balance, permit the applicable borrower at any time (provided no event of
default exists) after a specified period (the "Defeasance Lock-Out Period") to
obtain a release of a Mortgaged Property from the lien of the related Mortgage
(a "Defeasance Option"). In each case, the Defeasance Lock-Out Period ends at
least two years after the Closing Date.
The Defeasance Option is also generally conditioned on, among other
things, (a) the borrower providing the mortgagee with at least 30 days prior
written notice of the date of such defeasance and (b) the borrower (A) paying
on any Due Date (the "Release Date") (i) all interest accrued and unpaid on the
principal balance of the Mortgage Note to the Release Date, (ii) all other
sums, excluding scheduled interest or principal payments, due under the
Mortgage Loan and all other loan documents executed in connection therewith,
(iii) an amount (the "Defeasance Deposit") that will be sufficient to (x)
purchase direct non-callable obligations of the United States of America
providing payments (1) on or prior to, but as close as possible to, all
successive scheduled payment dates from the Release Date to the related
maturity date, or in the case of an ARD Loan, the related Anticipated Repayment
Date, and (2) in amounts equal to the scheduled payments due (or assumed
balloon payment on ARD Loans) on such dates under the Mortgage Loan or the
defeased amount thereof in the case of a partial defeasance, and (y) pay any
costs and expenses incurred in connection with the purchase of such U.S.
government
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obligations and (B) delivering a security agreement granting the Trust Fund a
first priority lien on the Defeasance Deposit and, in certain cases, the U.S.
government obligations purchased with the Defeasance Deposit and an opinion of
counsel to such effect.
Some of the Defeasance Loans secured by more than one Mortgaged Property
require that prior to the release of a related Mortgaged Property (i) a
specified percentage (generally 125%, with a minimum of 110% and a maximum of
125%) of the Allocated Loan Amount for such Mortgaged Property be defeased,
provided that in no event will the specified percentage be greater than the
outstanding principal balance of the Mortgage Loan or (ii) a minimum debt
service coverage ratio test (not less than the underwritten debt service
coverage ratio) be satisfied for the remaining Mortgaged Properties.
Pursuant to the terms of the Pooling Agreement, the Master Servicer will
be responsible for purchasing the U.S. government obligations on behalf of the
borrower at the borrower's expense to the extent consistent with the related
loan documents. Any amount in excess of the amount necessary to purchase such
U.S. government obligations will be returned to the borrower. Simultaneously
with such actions, the related Mortgaged Property will be released from the
lien of the Mortgage Loan and the pledged U.S. government obligations (together
with any Mortgaged Property not released, in the case of a partial defeasance)
will be substituted as the collateral securing the Mortgage Loan.
In general, a successor borrower established or designated by the Master
Servicer will assume all of the defeased obligations of a borrower exercising a
Defeasance Option under a Mortgage Loan and the borrower will be relieved of
all of the defeased obligations thereunder. If a Mortgage Loan is partially
defeased, the related promissory note will be split and only the defeased
portion of the borrower's obligations will be transferred to the successor
borrower.
See "Risk Factors--Risks Relating to Enforceability of Prepayment
Premiums" in this Prospectus Supplement.
ESCROWS
278 of the Mortgage Loans, representing approximately 90.6% of the Initial
Pool Balance, provide for monthly escrows to cover property taxes on the
Mortgaged Properties.
256 of the Mortgage Loans, representing approximately 85.3% of the Initial
Pool Balance, provide for monthly escrows to cover insurance premiums on the
Mortgaged Properties.
249 of the Mortgage Loans, representing approximately 74.0% of the Initial
Pool Balance, provide for monthly escrows to cover ongoing replacements and
capital repairs.
69 of the Mortgage Loans, representing approximately 22.9% of the Initial
Pool Balance, that are secured by office, retail and industrial properties,
provide for up-front or monthly escrows for the full term or a portion of the
term of the related Mortgage Loan to cover anticipated re-leasing costs,
including tenant improvements and leasing commissions. Such escrows are
typically considered for office, retail and industrial properties only.
UNDERWRITING GUIDELINES
The Originators have implemented guidelines establishing certain
procedures with respect to underwriting mortgage loans originated by the
Originators, as described more fully below. The Mortgage Loans were generally
originated in accordance with such guidelines. In some instances, one or more
provisions of the guidelines were waived or modified where it was determined
not to adversely affect the Mortgage Loans.
PROPERTY ANALYSIS. The Originators perform, or cause to be performed, site
inspections to evaluate the location and quality of each mortgaged property.
Such inspections generally include an evaluation of functionality, design,
attractiveness, visibility, and accessibility, as well as convenience to major
thoroughfares, transportation centers, employment sources, retail areas and
educational or
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recreational facilities. The Originators also assess the submarket in which the
property is located, which includes evaluating competitive or comparable
properties as well as market trends. In addition, the Originators evaluate the
property's age, physical condition, operating history, leases and tenant mix,
and management.
CASH FLOW ANALYSIS. The Originators review operating statements provided
by the borrower and make adjustments in order to determine the Debt Service
Coverage Ratio. See "Description of the Mortgage Pool--Certain Characteristics
of the Mortgage Loans" above.
APPRAISAL AND LOAN-TO-VALUE RATIO. For each mortgaged property, the
Originators obtain a current narrative appraisal conforming to the requirements
of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as
amended ("FIRREA"). The appraisal must be based on the highest and best use of
the Mortgaged Property and must include an estimate of the current market value
of the property in its current condition. The Originators determine the
loan-to-value ratio of the mortgage loan at the date of origination based on
the value set forth in the appraisal. With respect to certain of the Mortgage
Loans, an updated appraisal was obtained in connection with this transaction.
EVALUATION OF BORROWER. The Originators evaluate the borrower and its
principals with respect to credit history and prior experience as an owner and
operator of commercial real estate properties. The evaluation generally
includes obtaining and reviewing a credit report or other reliable indication
of the borrower's financial capacity; obtaining and verifying credit references
and/or business and trade references; and obtaining and reviewing
certifications provided by the borrower as to prior real estate experience and
current contingent liabilities. In addition, in general, each borrower for
loans above a minimum loan amount is required to be organized as a
single-purpose, bankruptcy-remote entity, and the Originators review the
organizational documents of the borrower to verify compliance with this
requirement. Finally, although the mortgage loans generally are non-recourse in
nature, in the case of certain mortgage loans, the borrower and certain
principals thereof may be required to assume legal responsibility for
liabilities relating to fraud, misrepresentation, misappropriation of funds,
breach of environmental or hazardous waste requirements and unauthorized
transfer of title to the property. The Originators evaluate the financial
capacity of the borrower and such principals to meet any obligations that may
arise with respect to such liabilities.
ENVIRONMENTAL REPORT. The Originators obtain a current or updated ESA or
ETS for each mortgaged property prepared by a qualified environmental firm
approved by the Originators. The Originators or their designated agents review
the ESA or ETS, as the case may be, to verify the absence of reported
violations of applicable laws and regulations relating to environmental
protection and hazardous waste. In cases in which the ESA or ETS identifies
such violations, the Originator requires the borrower to carry out satisfactory
remediation activities prior to the origination of the mortgage loan, or to
establish an operations and maintenance plan and to place sufficient funds in
escrow at the time of origination of the mortgage loan to complete such
remediation generally within twelve months (except with respect to de minimis
amounts).
The mortgaged properties that were reviewed using an ETS will be covered
by a Secured Creditor Impaired Property Environmental Policy with limits of $10
million per claim and $30 million total for all losses, and were issued by an
insurer rated "AAA" by S&P, "Aaa" by Moody's and "A++" by A.M. Best. If a
mortgaged property is impaired by an environmental condition, the policy either
covers the outstanding balance if a borrower defaults or indemnifies the lender
for monetary awards or settlements for bodily injury, property damage, or
cleanup costs that the lender becomes legally obligated to pay as a result of
claims first made, and reported to the insurer, during the policy period. The
coverages have certain important limitations, exclusions, qualifications, and
conditions including, without limitation, excluding coverage with respect to
any known environmental conditions that the insured failed to disclose to the
insurer.
PHYSICAL ASSESSMENT REPORT. The Originators obtain a current physical
assessment report ("PAR") for each mortgaged property prepared by a qualified
structural engineering firm approved by the Originators. The Originators review
the PAR to verify that the mortgaged property is reported to be in satisfactory
physical condition, and to determine the anticipated costs of necessary repair,
replacement
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and major maintenance or capital expenditure needs over the term of the
mortgage loan. In cases in which the PAR identifies material repairs or
replacements needed immediately, the Originators require the borrower to carry
out such repairs or replacements prior to the origination of the mortgage loan,
or to place sufficient funds in escrow at the time of origination of the
mortgage loan to complete such repairs or replacements within not more than
twelve months.
TITLE INSURANCE POLICY. The borrower is required to provide, and the
Originators or its counsel review, a title insurance policy for each mortgaged
property. The title insurance policy must meet the following requirements: (a)
the policy must be written by a title insurer licensed to do business in the
jurisdiction where the mortgaged property is located, (b) the policy must be in
an amount equal to the original principal balance of the mortgage loan, (c) the
protection and benefits must run to the mortgagee and its successors and
assigns, (d) the policy should be written on the most current standard policy
form of the American Land Title Association ("ALTA") or equivalent policy
promulgated in the jurisdiction where the mortgaged property is located and (e)
the legal description of the mortgaged property in the title policy must
conform to that shown on the survey of the mortgaged property, where a survey
has been required.
PROPERTY INSURANCE. The borrower is required to provide, and the
Originators review, certificates of required insurance with respect to the
mortgaged property. Such insurance generally may include: (1) commercial
general liability insurance for bodily injury or death and property damage; (2)
an "All Risk of Physical Loss" policy; (3) if applicable, boiler and machinery
coverage; (4) if the Mortgaged Property is located in a special flood hazard
area where mandatory flood insurance purchase requirements apply, flood
insurance; and (5) such other coverage as the Originators may require based on
the specific characteristics of the mortgaged property.
ESCROW REQUIREMENTS. The Originators require substantially all borrowers
to fund various escrows for taxes and insurance, replacement reserves,
environmental remediation and capital expenditures in excess of available cash
flow.
UNDERWRITING OF THE MORTGAGE LOANS. In underwriting each Mortgage Loan in
connection with the origination or acquisition thereof, income information
provided by the borrower was examined by the Responsible Party. In addition,
the operating history of the Mortgaged Property, industry data regarding the
local real estate market and the appraiser's analysis were reviewed and, if
conditions warranted, net operating income with respect to the related
Mortgaged Property was adjusted for purposes of determining whether the
Mortgaged Property satisfied the debt service coverage ratio required by the
Responsible Party's underwriting guidelines. In accordance with the
underwriting guidelines, net operating income of any Mortgaged Property may
have been adjusted by, among other things, adjustments in the calculation of
the components of "Net Cash Flow". In connection with the underwriting, net
operating income was based upon information provided by the borrower. In
certain cases, the applicable Responsible Party or the borrower engaged
independent accountants to review or perform certain procedures to verify such
information, however, neither the Responsible Parties nor the Seller makes any
representation as to the accuracy of such information.
ADDITIONAL INFORMATION
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the offered Certificates and will be filed, together with the
Pooling Agreement, with the Securities and Exchange Commission within fifteen
days after the initial issuance of the Offered Certificates.
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DESCRIPTION OF THE OFFERED CERTIFICATES
GENERAL
The Certificates will be issued pursuant to the Pooling Agreement and will
consist of 14 classes (each, a "Class") to be designated as the Class A-1
Certificates and the Class A-2 Certificates (collectively, the "Class A
Certificates"), the Class X Certificates, the Class B Certificates, the Class C
Certificates, the Class D Certificates, the Class E Certificates, the Class F
Certificates, the Class G Certificates, the Class H Certificates, the Class J
Certificates, the Class Q Certificates, the Class R Certificates and the Class
LR Certificates. Only the Class A-1, Class A-2, Class X, Class B, Class C,
Class D and Class E Certificates (collectively, the "Offered Certificates") are
offered hereby. The Class F, Class G, Class H, Class J, Class Q, Class R and
Class LR Certificates are not offered hereby.
The Certificates represent in the aggregate the entire beneficial
ownership interest in the Trust Fund consisting of: (i) the Mortgage Loans and
all payments under and proceeds of the Mortgage Loans due after the Cut-Off
Date; (ii) any Mortgaged Property acquired on behalf of the Trust Fund through
foreclosure or deed in lieu of foreclosure (upon acquisition, an "REO
Property"); (iii) such funds or assets as from time to time are deposited in
the Collection Account, the Lower-Tier Distribution Account, the Upper-Tier
Distribution Account, the Interest Reserve Account, the Excess Interest
Distribution Account, the Class Q Distribution Account, and any account
established in connection with REO Properties (an "REO Account"); and (iv) the
rights of the mortgagee under all insurance policies with respect to the
Mortgage Loans. The Class Q Certificates are not entitled to any distributions
on or with respect to any other assets in the Trust Fund other than
distributions of Net Default Interest. The Certificates do not represent an
interest in or obligation of the Seller, the Loan Sellers, the Originators, the
Master Servicer, the Trustee, the Fiscal Agent, the Underwriters, the
borrowers, the property managers or any of their respective affiliates.
Upon initial issuance, the Class A-1, Class A-2, Class B, Class C, Class
D, Class E, Class F, Class G, Class H and Class J Certificates (collectively,
the "Sequential Pay Certificates") will have the following Certificate
Principal Amounts and the Class X Certificates will have the Notional Amount
shown below (in each case, subject to a variance of plus or minus 5%):
<TABLE>
<CAPTION>
INITIAL CERTIFICATE PRINCIPAL
CLASS AMOUNT OR NOTIONAL AMOUNT
- -------------------------- ------------------------------
<S> <C>
Class A-1 .............. $165,650,000
Class A-2 .............. $455,533,000
Class X ................ $890,585,907
Class B ................ $ 42,303,000
Class C ................ $ 44,529,000
Class D ................ $ 57,888,000
Class E ................ $ 13,359,000
Class F ................ $ 46,756,000
Class G ................ $ 28,944,000
Class H ................ $ 7,793,000
Class J ................ $ 27,830,907
</TABLE>
The "Certificate Principal Amount" of any Class of Sequential Pay
Certificates outstanding at any time represents the maximum amount which the
Holders thereof are entitled to receive as distributions allocable to principal
from the cash flow on the Mortgage Loans and the other assets in the Trust
Fund, all as described herein; provided, however, that in the event that
Realized Losses previously allocated to a Class of Certificates in reduction of
their Certificate Principal Amounts are recovered subsequent to the reduction
of the Certificate Principal Amount of such Class to zero, such Class may
receive distributions in respect of such recoveries in accordance with the
priorities set forth under "--Distributions--Payment Priorities" herein. The
respective Certificate Principal Amount of each Class of Certificates entitled
to distributions of principal will in each case be reduced by amounts actually
distributed thereon that are allocable to principal and by any Realized Losses
allocated to such Class of Certificates.
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The Class X Certificates will not have a Certificate Principal Amount.
Such Class will represent the right to receive distributions of interest
accrued as described herein on a notional principal amount (a "Notional
Amount"). The Notional Amount of the Class X Certificates will be reduced to
the extent of all reductions in the aggregate of the Certificate Principal
Amounts of the Sequential Pay Certificates. The Notional Amount of the Class X
Certificates will for purposes of distributions on each Distribution Date equal
the aggregate of the Certificate Principal Amounts of the Sequential Pay
Certificates as of the first day of the related Interest Accrual Period.
DISTRIBUTIONS
METHOD, TIMING AND AMOUNT. Distributions on the Certificates are required
to be made on the 18th day of each month, or if such day is not a day other
than a Saturday, a Sunday or any day on which banking institutions in the City
of New York, New York, the cities in which the principal servicing offices of
the Master Servicer or the Special Servicer are located, or city in which the
corporate trust office of the Trustee is located, are authorized or obligated
by law, executive order or governmental decree to be closed (each such day a
"Business Day"), on the next succeeding Business Day, commencing on February
18, 1999 (each, a "Distribution Date"). All distributions (other than the final
distribution on any Certificate) are required to be made by the Trustee to the
persons in whose names the Certificates are registered at the close of business
on the last day of the month immediately preceding the month in which the
related Distribution Date occurs or, if such day is not a Business Day, the
immediately preceding Business Day (such date, the "Record Date"). Such
distributions are required to be made (a) by wire transfer in immediately
available funds to the account specified by the Certificateholder at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
provides the Trustee with wiring instructions no less than five Business Days
prior to the related Record Date, or otherwise (b) by check mailed to such
Certificateholder. The final distribution on any Offered Certificates is
required to be made in like manner, but only upon presentment or surrender of
such Certificate at the location specified in the notice to the
Certificateholder thereof of such final distribution. All distributions made
with respect to a Class of Certificates on each Distribution Date will be
allocated pro rata among the outstanding Certificates of such Class based on
their respective Percentage Interests. The "Percentage Interest" evidenced by
any Offered Certificate is equal to the initial denomination thereof as of the
Closing Date divided by the initial Certificate Principal Amount of the related
Class.
The aggregate distribution to be made on the Certificates (other than the
Class Q Certificates) on any Distribution Date will equal the Available Funds.
The "Available Funds" for a Distribution Date will be the sum of (i) all
Monthly Payments or other receipts on account of principal and interest on or
in respect of the Mortgage Loans (including Unscheduled Payments and Net REO
Proceeds, if any) received by the Master Servicer in the related Prepayment
Period, (ii) all other amounts deposited in the Collection Account by the
Master Servicer pursuant to the Pooling Agreement in respect of such
Distribution Date that are allocable to the Mortgage Loans, including all P&I
Advances made by the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, in respect of such Distribution Date, and any interest or other
income earned on funds in the Interest Reserve Account, (iii) for the
Distribution Date occurring in each March, the related Withheld Amounts as
described herein under "The Pooling Agreement--Accounts", and required to be
deposited in the Lower-Tier Distribution Account pursuant to the Pooling
Agreement, and (iv) any late payments of Monthly Payments received after the
end of the Collection Period relating to such Distribution Date but prior to
the related Determination Date, but excluding the following:
(a) amounts permitted to be used to reimburse the Master Servicer, the
Trustee or the Fiscal Agent, as applicable, for previously unreimbursed
Advances and interest on such Advances as described herein under "The
Pooling Agreement--Advances";
(b) the aggregate amount of the Servicing Fee (which includes the fees
for both the Trustee and the Master Servicer) payable to the Master
Servicer (net of any amounts used to offset Prepayment Interest Shortfalls
as described herein) and the amounts payable to the Special Servicer
described herein under "The Pooling Agreement--Certain Matters Regarding
the Seller, the Master Servicer and the Special Servicer" in each case in
respect of such Distribution Date, and all amounts in the nature of late
fees, loan modification fees, extension fees, loan service transaction
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fees, demand fees, beneficiary statement charges, assumption fees,
modification fees and similar fees, and reinvestment earnings on payments
received with respect to the Mortgage Loans which the Master Servicer or
Special Servicer is entitled to receive as additional servicing
compensation pursuant to the terms of the Pooling Agreement (together with
the Servicing Fee, "Servicing Compensation");
(c) all amounts representing scheduled Monthly Payments due after the
related Due Date;
(d) to the extent permitted by the Pooling Agreement, that portion of
liquidation proceeds, insurance proceeds and condemnation proceeds or the
Repurchase Price received with respect to a Mortgage Loan which represents
any unpaid Servicing Compensation as described herein, to which the Master
Servicer, the Special Servicer or the Trustee is entitled;
(e) all amounts representing certain unanticipated or default related
expenses reimbursable or payable to the Master Servicer, the Special
Servicer, the Trustee or Fiscal Agent and other amounts permitted to be
retained by the Master Servicer or withdrawn pursuant to the Pooling
Agreement in respect of various items, including indemnities and the excess
of Prepayment Interest Excesses over Prepayment Interest Shortfalls;
(f) prepayment premiums and yield maintenance charges;
(g) Default Interest;
(h) Excess Interest;
(i) with respect to all Mortgage Loans which accrue interest on the basis
of a 360-day year and the actual number of days in the related month and
any Distribution Date occurring in each February, and in any January
occurring in a year that is not a leap year, the related Withheld Amount as
described under "The Pooling Agreement--Accounts" herein;
(j) all amounts received with respect to each Mortgage Loan previously
purchased or repurchased pursuant to the Pooling Agreement during the
related Prepayment Period and subsequent to the date as of which the amount
required to effect such purchase or repurchase was determined; and
(k) the amount reasonably determined by the Trustee to be necessary to
pay any applicable federal, state or local taxes imposed on the Upper-Tier
REMIC or the Lower-Tier REMIC under the circumstances and to the extent
described in the Pooling Agreement.
"Monthly Payment" with respect to any Mortgage Loan (other than any REO
Mortgage Loan) and any Due Date is the scheduled monthly payment of principal
(if any) and interest at the related Mortgage Rate which is payable by the
related borrower on such Due Date. The Monthly Payment with respect to any
Distribution Date and (i) an REO Mortgage Loan, or (ii) any Mortgage Loan which
is delinquent at its maturity date and with respect to which the Special
Servicer has not entered into an extension, is the monthly payment that would
otherwise have been payable on the related Due Date had the related Mortgage
Note not been discharged or the related maturity date had not been reached, as
the case may be, determined as set forth in the Pooling Agreement.
"Unscheduled Payments" are all net liquidation proceeds, net insurance
proceeds and net condemnation proceeds payable under the Mortgage Loans,
Principal Prepayments, the purchase price received with respect to all
purchases or repurchases of any Mortgage Loan and any other payments under or
with respect to the Mortgage Loans not scheduled to be made, but excluding
prepayment premiums, yield maintenance charges, Excess Interest and Default
Interest and excluding any amount paid in connection with the release of the
related Mortgaged Property through defeasance.
"Net REO Proceeds" with respect to any REO Property and any related REO
Mortgage Loan are all revenues received by the Special Servicer with respect to
such REO Property or REO Mortgage Loan (other than the proceeds of a
liquidation thereof) net of any insurance premiums, taxes, assessments and
other costs and expenses permitted to be paid therefrom pursuant to the Pooling
Agreement.
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"Principal Prepayments" are unscheduled payments of principal permitted to
be made by a borrower under the terms of a Mortgage Loan and received from the
borrower.
"Collection Period" with respect to a Distribution Date and each Mortgage
Loan is the period beginning on the day after the Due Date in the month
preceding the month in which such Distribution Date occurs (or, in the case of
the Distribution Date occurring on February 18, 1999, beginning on the day
after the Cut-Off Date) and ending on the Due Date in the month in which such
Distribution Date occurs.
"Repurchase Price" with respect to a Mortgage Loan shall be equal to the
sum of (i) the outstanding principal balance of such Mortgage Loan (or relevant
portion thereof) as of the date of purchase, (ii) all accrued and unpaid
interest on such Mortgage Loan (or relevant portion thereof) at the related
Mortgage Rate, in effect from time to time, to but not including the Due Date
in the Collection Period of purchase, (iii) all related unreimbursed Property
Advances plus accrued and unpaid interest on related Advances at the Advance
Rate, and unpaid Special Servicing Fees allocable to such Mortgage Loan (or
relevant portion thereof) and (iv) all reasonable out-of-pocket expenses
reasonably incurred by the Master Servicer, the Special Servicer, the Seller
and the Trustee in respect of the breach giving rise to the repurchase
obligation, including any expenses arising out of the enforcement of the
repurchase obligation, which are reimbursable to such parties under the terms
of the Pooling Agreement.
"Prepayment Period" with respect to any Distribution Date is the period
beginning the day after the Determination Date in the month immediately
preceding the month in which such Distribution Date occurs (or on the Cut-Off
Date, in the case of the first Distribution Date) through and including the
Determination Date immediately preceding such Distribution Date.
"Net Default Interest" with respect to any Mortgage Loan is any Default
Interest accrued on such Mortgage Loan less amounts required to pay the Master
Servicer, the Trustee or Fiscal Agent, as applicable, interest on Advances at
the Advance Rate.
"Determination Date" with respect to any Distribution Date is the fifth
Business Day prior to such Distribution Date.
"Default Interest" with respect to any Mortgage Loan is interest accrued
on such Mortgage Loan at the excess of (i) the related Default Rate over (ii)
the sum of the related Mortgage Rate plus, if applicable, the related Excess
Rate.
"Default Rate" with respect to any Mortgage Loan is the per annum rate at
which interest accrues on such Mortgage Loan following any event of default on
such Mortgage Loan including a default in the payment of a Monthly Payment.
"Excess Rate" with respect to each of the ARD Loans is the excess of the
related Revised Rate over the related Initial Rate.
"Excess Interest" with respect to each of the ARD Loans is the interest
accrued at the related Excess Rate in respect of such Mortgage Loan, plus
interest thereon, to the extent permitted by applicable law, at the related
Revised Rate.
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PAYMENT PRIORITIES. As used below in describing the priorities of
distribution of Available Funds for each Distribution Date, the terms set forth
below will have the following meanings.
The "Interest Accrual Amount," with respect to any Distribution Date and
any Class of Sequential Pay Certificates, is equal to interest for the related
Interest Accrual Period at the Pass-Through Rate for such Class on the related
Certificate Principal Amount (provided, that for interest accrual purposes any
distributions of principal or reductions in Certificate Principal Amount as a
result of allocations of Realized Losses on the Distribution Date occurring in
an Interest Accrual Period will be deemed to have been made on the first day of
such Interest Accrual Period); and "Interest Accrual Amount" with respect to
any Distribution Date and the Class X Certificates is equal to interest for the
related Interest Accrual Period at the Pass-Through Rate for such Class for
such Interest Accrual Period on the applicable Notional Amount of such Class
(provided, that for interest accrual purposes any reductions in Notional Amount
as a result of reductions in the corresponding Certificate Principal Amounts
used to determine the Notional Amount due to principal distributions or
allocations of Realized Losses on the Distribution Date occurring in an
Interest Accrual Period will be deemed to have been made on the first day of
such Interest Accrual Period). Calculations of interest on the Certificates
will be made on the basis of a 360-day year consisting of twelve 30-day months.
The "Interest Distribution Amount" with respect to any Distribution Date
and each Class of Regular Certificates will equal (A) the sum of (i) the
Interest Accrual Amount for such Distribution Date and (ii) the Interest
Shortfall, if any, for such Distribution Date, less (B) any Excess Prepayment
Interest Shortfall allocated to such Class on such Distribution Date.
The "Interest Accrual Period" with respect to any Distribution Date is the
calendar month preceding the month in which such Distribution Date occurs. Each
Interest Accrual Period with respect to each Class of Certificates is assumed
to consist of 30 days.
An "Interest Shortfall" with respect to any Distribution Date for any
Class of Regular Certificates is the sum of (a) the excess, if any, of (i) the
Interest Distribution Amount for such Class for the immediately preceding
Distribution Date, over (ii) all distributions of interest (other than Excess
Interest) made with respect to such Class of Certificates on the immediately
preceding Distribution Date, and (b) to the extent permitted by applicable law,
(i) other than in the case of the Class X Certificates, one month's interest on
any such excess at the Pass-Through Rate applicable to such Class of
Certificates for the current Distribution Date and (ii) in the case of the
Class X Certificates, one month's interest on any such excess at the WAC Rate
for such Distribution Date.
The "Pass-Through Rate" for any Class of Regular Certificates for any
Interest Accrual Period is the per annum rate at which interest accrues on the
Certificates of such Class during such Interest Accrual Period, as follows:
The Pass-Through Rate on the Class A-1 Certificates is a per annum rate
equal to %.
The Pass-Through Rate on the Class A-2 Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class B Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class C Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class D Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class E Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class F Certificates is a per annum rate
equal to %.
The Pass-Through Rate on the Class G Certificates is a per annum rate
equal to %.
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The Pass-Through Rate on the Class H Certificates is a per annum rate
equal to %.
The Pass-Through Rate on the Class J Certificates is a per annum rate
equal to %, subject to a cap equal to the WAC Rate.
The Pass-Through Rate on the Class X Certificates is a per annum rate
equal to the excess of (i) the WAC Rate over (ii) the weighted average of
the Pass-Through Rates on the Sequential Pay Certificates, weighted on the
basis of their respective Certificate Principal Amounts.
The "WAC Rate" with respect to any Distribution Date is a per annum rate
equal to the product of the weighted average of the Net Mortgage Rates in
effect for the Mortgage Loans as of their respective Due Dates in the month
preceding the month in which such Distribution Date occurs weighted on the
basis of the respective Stated Principal Balances of the Mortgage Loans on such
Due Dates.
The "Regular Certificates" are the Class A-1, Class A-2, Class B, Class C,
Class D, Class E, Class F, Class G, Class H, Class J and Class X Certificates.
The "Net Mortgage Rate" with respect to any Mortgage Loan is a per annum
rate equal to the related Mortgage Rate in effect from time to time minus the
related Servicing Fee Rate. However, for purposes of calculating Pass-Through
Rates, the Net Mortgage Rate of such Mortgage Loan will be determined without
regard to any modification, waiver or amendment of the terms, whether agreed to
by the Special Servicer or resulting from a bankruptcy, insolvency or similar
proceeding involving the related borrower.
The "Mortgage Rate" with respect to any Mortgage Loan is the per annum
rate at which interest accrues on such Mortgage Loan as stated in the related
Mortgage Note in each case without giving effect to the Excess Rate or the
Default Rate. Notwithstanding the foregoing, if any Mortgage Loan does not
accrue interest on the basis of a 360-day year consisting of twelve 30-day
months, then, for purposes of calculating Pass-Through Rates, the Mortgage Rate
of such Mortgage Loan for any one-month period preceding a related Due Date
will be the annualized rate at which interest would have to accrue in respect
of such Mortgage Loan on the basis of a 360-day year consisting of twelve
30-day months in order to produce the aggregate amount of interest actually
accrued in respect of such Mortgage Loan during such one-month period at the
related Mortgage Rate; provided, however, that with respect to all such
Mortgage Loans which accrue on the basis of a 360-day year and the actual
number of days, (i) the Mortgage Rate for the one month period preceding the
Due Dates in January and February in any year which is not a leap year or in
February in any year which is a leap year will be determined net of the
Withheld Amount, and (ii) the Mortgage Rate for the one-month period preceding
the Due Date in March will be determined taking into account the addition of
any such Withheld Amounts.
The "Stated Principal Balance" of any Mortgage Loan at any date of
determination will equal (a) the principal balance as of the Cut-Off Date of
such Mortgage Loan, minus (b) the sum of (i) the principal portion of each
Monthly Payment due on such Mortgage Loan after the Cut-Off Date and prior to
such date of determination, if received from the borrower or advanced by the
Master Servicer, Trustee or Fiscal Agent, (ii) all voluntary and involuntary
principal prepayments and other unscheduled collections of principal received
with respect to such Mortgage Loan, to the extent distributed to holders of the
Certificates or applied to other payments required under the Pooling Agreement
before such date of determination and (iii) any adjustment to such balance as a
result of a reduction of principal by a bankruptcy court or as a result of a
modification reducing the principal amount due on such Mortgage Loan. The
Stated Principal Balance of a Mortgage Loan with respect to which title to the
related Mortgaged Property has been acquired by the Trust Fund is equal to the
principal balance of such Mortgage Loan outstanding on the date on which such
title is acquired less any Net REO Proceeds allocated to principal on such
Mortgage Loan. The Stated Principal Balance of a defaulted Mortgage Loan with
respect to which the Master Servicer or the Special Servicer has determined
that it has received all payments and recoveries which it expects to be finally
recoverable on such Mortgage Loan is zero.
The "Principal Distribution Amount" for any Distribution Date will be
equal to the sum, without duplication, of:
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(i) the principal component of all scheduled Monthly Payments due on the
Due Date immediately preceding such Distribution Date (if received, or
advanced by the Master Servicer, Trustee or Fiscal Agent, in respect of
such Distribution Date);
(ii) the principal component of any payment on any Mortgage Loan received
or applied on or after the date on which such payment was due in the
related Prepayment Period, net of the principal portion of any unreimbursed
P&I Advances related to such Mortgage Loan;
(iii) the portion of Unscheduled Payments allocable to principal of any
Mortgage Loan received or applied during the related Prepayment Period, net
of the principal portion of any unreimbursed P&I Advances related to such
Mortgage Loan; and
(iv) the Principal Shortfall, if any, for such Distribution Date.
For purposes of the foregoing definition of Principal Distribution Amount,
the term "Principal Shortfall" for any Distribution Date means the amount, if
any, by which (i) the Principal Distribution Amount for the preceding
Distribution Date, exceeds (ii) the aggregate amount actually distributed with
respect to principal on such preceding Distribution Date in respect of such
Principal Distribution Amount.
An "REO Mortgage Loan" is any Mortgage Loan as to which the related
Mortgaged Property has become an REO Property.
On each Distribution Date prior to the Cross-over Date, the Available
Funds for such Distribution Date are required to be distributed in the
following amounts and order of priority:
(i) First, pro rata, in respect of interest, to the Class A-1, Class A-2
and Class X Certificates, up to an amount equal to, and pro rata as among
such Classes in accordance with, the Interest Distribution Amounts of such
Classes;
(ii) Second, to the Class A Certificates, in reduction of their
respective Certificate Principal Amounts: first, to the Class A-1
Certificates and second, to the Class A-2 Certificates, in each case up to
an amount equal to the lesser of (i) the Certificate Principal Amount of
such Certificates and (ii) the Principal Distribution Amount for such
Distribution Date (less, in the case of the Class A-2 Certificates, the
portion of such Principal Distribution Amount distributed on the Class A-1
Certificates);
(iii) Third, to the Class B Certificates, in respect of interest, up to
an amount equal to the Interest Distribution Amount of such Class;
(iv) Fourth, to the Class B Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal
Distribution Amount for such Distribution Date, less the portion of such
Principal Distribution Amount distributed pursuant to all prior clauses,
until the Certificate Principal Amount thereof is reduced to zero;
(v) Fifth, to the Class B Certificates, an amount equal to the aggregate
of unreimbursed Realized Losses previously allocated to such Class, plus
interest thereon at the Pass-Through Rate for such Class compounded monthly
from the date the related Realized Loss was allocated to such Class;
(vi) Sixth, to the Class C Certificates, in respect of interest, up to an
amount equal to the Interest Distribution Amount of such Class;
(vii) Seventh, to the Class C Certificates, in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
(viii) Eighth, to the Class C Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the related Realized Loss was allocated to
such Class;
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(ix) Ninth, to the Class D Certificates in respect of interest, up to an
amount equal to the Interest Distribution Amount of such Class;
(x) Tenth, to the Class D Certificates, in reduction of the Certificate
Principal Amount thereof, up to an amount equal to the Principal
Distribution Amount for such Distribution Date, less the portion of such
Principal Distribution Amount distributed pursuant to all prior clauses,
until the Certificate Principal Amount thereof is reduced to zero;
(xi) Eleventh, to the Class D Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the related Realized Loss was allocated to
such Class;
(xii) Twelfth, to the Class E Certificates in respect of interest, up to
an amount equal to the Interest Distribution Amount of such Class;
(xiii) Thirteenth, to the Class E Certificates in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
(xiv) Fourteenth, to the Class E Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the related Realized Loss was allocated to
such Class;
(xv) Fifteenth, to the Class F Certificates in respect of interest, up to
an amount equal to the Interest Distribution Amount of such Class;
(xvi) Sixteenth, to the Class F Certificates in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
(xvii) Seventeenth, to the Class F Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the related Realized Loss was allocated to
such Class;
(xviii) Eighteenth, to the Class G Certificates in respect of interest,
up to an amount equal to the Interest Distribution Amount of such Class;
(xix) Nineteenth, to the Class G Certificates in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
(xx) Twentieth, to the Class G Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the related Realized Loss was allocated to
such Class;
(xxi) Twenty-first, to the Class H Certificates in respect of interest,
up to an amount equal to the Interest Distribution Amount of such Class;
(xxii) Twenty-second, to the Class H Certificates in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
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(xxiii) Twenty-third, to the Class H Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the Realized Loss was allocated to such
Class;
(xxiv) Twenty-fourth, to the Class J Certificates in respect of interest,
up to an amount equal to the Interest Distribution Amount of such Class;
(xxv) Twenty-fifth, to the Class J Certificates in reduction of the
Certificate Principal Amount thereof, up to an amount equal to the
Principal Distribution Amount for such Distribution Date, less the portion
of such Principal Distribution Amount distributed pursuant to all prior
clauses, until the Certificate Principal Amount thereof is reduced to zero;
(xxvi) Twenty-sixth, to the Class J Certificates, an amount equal to the
aggregate of unreimbursed Realized Losses previously allocated to such
Class, plus interest thereon at the Pass-Through Rate for such Class
compounded monthly from the date the Realized Loss was allocated to such
Class; and
(xxvii) Twenty-seventh, to the Class R Certificates, any amounts
remaining in the Upper-Tier Distribution Account; and to the Class LR
Certificates, any amounts remaining in the Lower-Tier Distribution Account.
On each Distribution Date occurring on and after the Cross-over Date,
regardless of the allocation of principal payments described in priority Second
above, an amount equal to the Principal Distribution Amount for such
Distribution Date is required to be distributed, first, to the Class A-1 and
Class A-2 Certificates, pro rata, based on their respective Certificate
Principal Amounts, in reduction of their respective Certificate Principal
Amounts, until the Certificate Principal Amount of each such Class is reduced
to zero, and, second, to the Class A-1 and Class A-2 Certificates for
unreimbursed amounts of Realized Losses previously allocated to such Classes,
pro rata, in accordance with the amount of such unreimbursed Realized Losses so
allocated, plus interest thereon at their respective Pass-Through Rates
compounded monthly from the date the related Realized Loss was allocated to
such Classes. The "Cross-over Date" is the Distribution Date on which the
Certificate Principal Amount of each Class of Certificates entitled to
distributions of principal (other than the Class A-1 and Class A-2
Certificates) has been reduced to zero due to the application of Realized
Losses.
All references to "pro rata" in the preceding clauses, unless otherwise
specified, mean pro rata based upon the amounts distributable pursuant to such
clause.
PREPAYMENT PREMIUMS. On any Distribution Date, prepayment premiums and
yield maintenance charges collected during the related Collection Period are
required to be distributed to the holders of the Classes of Offered
Certificates as described below.
On each Distribution Date, yield maintenance charges collected on the
Mortgage Loans during the related Prepayment Period will be distributed by the
Trustee to the following Classes of Offered Certificates: to the Class A-1,
Class A-2, Class B, Class C, Class D and Class E Certificates, in an amount
equal to the product of (a) a fraction whose numerator is the amount
distributed as principal to such Class on such Distribution Date, and whose
denominator is the total amount distributed as principal to the Class A-1,
Class A-2, Class B, Class C, Class D, Class E, Class F, Class G, Class H and
Class J Certificates on such Distribution Date, (b) the Base Interest Fraction
for the related principal prepayment and such Class of Certificates, and (c)
the aggregate amount of yield maintenance charges relating to the Mortgage
Loans collected on such principal prepayments during the related Prepayment
Period. Any yield maintenance charges relating to the Mortgage Loans collected
during the related Prepayment Period remaining after such distributions will be
distributed to the holders of the Class X Certificates.
The "Base Interest Fraction" with respect to any principal prepayment on
any Mortgage Loan and with respect to any Class of Offered Certificates is a
fraction (a) whose numerator is the amount, if any, by which (i) the
Pass-Through Rate on such Class of Certificates exceeds (ii) the discount rate
used in accordance with the related Mortgage Loan documents in calculating the
yield maintenance charge with
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respect to such principal prepayment and (b) whose denominator is the amount,
if any, by which the (i) Mortgage Rate on such Mortgage Loan exceeds (ii) the
discount rate used in accordance with the related Mortgage Loan documents in
calculating the yield maintenance charge with respect to such principal
prepayment; provided, however, that under no circumstances shall the Base
Interest Fraction be greater than one. If such discount rate is greater than or
equal to the lesser of (x) the Mortgage Rate on such Mortgage Loan and (y) the
Pass-Through Rate described in the preceding sentence, then the Base Interest
Fraction shall equal zero.
A substantial number of the Mortgage Loans require the payment of a
prepayment premium equal to a fixed percentage of the principal balance of the
related Mortgage Loan or have a yield maintenance charge and also have a fixed
prepayment premium for a specified period of time. If a prepayment premium is
imposed in connection with a prepayment rather than a yield maintenance charge,
then the prepayment premium so collected will be allocated as described above.
For this purpose, the discount rate used to calculate the Base Interest
Fraction will be the discount rate used to determine the yield maintenance
charge for Mortgage Loans that require payment at the greater of a yield
maintenance charge or a minimum amount equal to a fixed percentage of the
principal balance of the Mortgage Loan and the latter is the greater amount,
or, for Mortgage Loans that only have a prepayment premium based on a fixed
percentage of the principal balance of the Mortgage Loan, such other discount
rate as may be specified in the related Mortgage Loan documents.
No prepayment premiums or yield maintenance charges will be distributed to
holders of the Class F, Class G, Class H, Class J, Class Q or Residual
Certificates. Instead, after the Certificate Principal Amount of the Class A-1,
Class A-2, Class B, Class C, Class D and Class E Certificates have been reduced
to zero, all prepayment premiums and yield maintenance charges with respect to
Mortgage Loans will be distributed to holders of the Class X Certificates. For
a description of prepayment premiums and yield maintenance charges, see Annex A
to this Prospectus Supplement. See also "Certain Legal Aspects of the Mortgage
Loans--Enforceability of Certain Provisions--Prepayment Provisions" in the
Prospectus.
Notwithstanding the foregoing, prepayment premiums and yield maintenance
charges will be distributed on any Distribution Date only to the extent they
are received in respect of the Mortgage Loans in the related Prepayment Period.
EXCESS INTEREST. On each Distribution Date, the Trustee is required to
distribute any Excess Interest received during the related Collection Period,
to the holders of the Class A-2, Class B, Class C, Class D, Class E, Class F
and Class G Certificates, pro rata, based on their initial Certificate
Principal Amounts.
CLASS Q DISTRIBUTIONS. On each Distribution Date, Net Default Interest
received in the related Collection Period with respect to a default on a
Mortgage Loan, to the extent set forth in the Pooling Agreement, will be
available for distribution solely to the Class Q Certificates, as set forth in
the Pooling Agreement. The Class Q Certificates are not entitled to any other
distributions.
REALIZED LOSSES. The Certificate Principal Amount of each Class of
Sequential Pay Certificates will be reduced without distribution on any
Distribution Date as a write-off to the extent of any Realized Loss allocated
to such Class on such Distribution Date. As referred to herein, the "Realized
Loss" with respect to any Distribution Date shall mean the amount, if any, by
which the aggregate Certificate Principal Amount of all such Classes of
Certificates after giving effect to distributions made on such Distribution
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to any payments of principal received or advanced with respect to
the Due Date occurring immediately prior to such Distribution Date. Any such
write-offs will be applied to such Classes of Certificates in the following
order, until each is reduced to zero: first, to the Class J Certificates;
second, to the Class H Certificates; third, to the Class G Certificates;
fourth, to the Class F Certificates; fifth, to the Class E Certificates; sixth,
to the Class D Certificates; seventh, to the Class C Certificates; eighth, to
the Class B Certificates and, finally, pro rata, to the Class A-1 and Class A-2
Certificates, based on their respective Certificate Principal Amounts. The
Notional Amount of the Class X Certificates will be reduced to reflect
reductions in the Certificate Principal Amounts of the Sequential Pay
Certificates
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resulting from allocations of Realized Losses. Any amounts recovered in respect
of any amounts previously written off as Realized Losses will be distributed to
the Classes of Certificates described above in reverse order of allocation of
Realized Losses thereto.
Shortfalls in Available Funds resulting from additional servicing
compensation other than the Servicing Fee, interest on Advances to the extent
not covered by Default Interest, extraordinary expenses of the Trust Fund, a
reduction of the interest rate of a Mortgage Loan by a bankruptcy court
pursuant to a plan of reorganization or pursuant to any of its equitable powers
or other unanticipated or default-related expenses (not constituting Realized
Losses) will reduce the amounts distributable on the Classes of Regular
Certificates in the same order as Realized Losses are applied to reduce the
Certificate Principal Amounts of such Classes.
PREPAYMENT INTEREST SHORTFALLS. To the extent any Mortgage Loan is prepaid
in full or in part between a Determination Date and the related Due Date
immediately following such Determination Date, an interest shortfall may result
on the second Distribution Date following such Determination Date because
interest on prepayments in full or in part will only accrue to the date of
payment (such shortfall, a "Prepayment Interest Shortfall"). To the extent any
Mortgage Loan is prepaid in full or in part between the related Due Date and
the Determination Date immediately following such Due Date, the interest on
such prepayment will be included in the Available Funds for the immediately
succeeding Distribution Date (the "Prepayment Interest Excess"), but only to
the extent necessary to offset Prepayment Interest Shortfalls for such
Prepayment Period. If a Mortgage Loan is prepaid in full or in part during any
Prepayment Period, any related Prepayment Interest Shortfall shall be offset to
the extent of any Prepayment Interest Excess collected during such Prepayment
Period. If the Prepayment Interest Shortfall for any Prepayment Period exceeds
any Prepayment Interest Excess collected during such period, the remaining
shortfall shall be offset only by an amount up to the product of (x) 1/12th of
0.04%, and (y) the aggregate Stated Principal Balance of the Mortgage Loans for
the related Interest Accrual Period, which amount represents a reduction in the
Servicing Fee (net of the Trustee Fee) payable to the Master Servicer on the
related Distribution Date. Any remaining Prepayment Interest Shortfall not so
offset (an "Excess Prepayment Interest Shortfall") will be allocated to each
Class of Regular Certificates, pro rata, based upon the amount of interest
which would otherwise have been distributable to each Class. The Master
Servicer shall be entitled to any excess of the Prepayment Interest Excess over
the Prepayment Interest Shortfall.
APPRAISAL REDUCTION AMOUNTS. In the event that an Appraisal Reduction
Event occurs with respect to a Mortgage Loan, (i) the amount advanced by the
Master Servicer with respect to delinquent payments of interest with respect to
the related Mortgage Loan will be reduced as described under "The Pooling
Agreement--Advances" herein, and (ii) the Voting Rights of certain Classes will
be reduced as described under "The Pooling Agreement--Amendment" herein. The
reduction of interest advanced by the Master Servicer will have the effect of
reducing the amount available to be distributed as interest on the then most
subordinate Class or Classes of Certificates.
The Certificate Principal Amount of each of the Class J, Class H, Class G,
Class F, Class E, Class D, Class C and Class B Certificates will be notionally
reduced (solely for purposes of determining the Voting Rights of the related
Classes) on any Distribution Date to the extent of any Appraisal Reduction
Amounts allocated to such Class on such Distribution Date. To the extent that
the aggregate of the Appraisal Reduction Amounts for any Distribution Date
exceeds such Certificate Principal Amount, such excess will be applied, subject
to any reversal described below, to notionally reduce the Certificate Principal
Amount of the next most subordinate Class of Certificates on the next
Distribution Date. Any such reductions will be applied in the following order
of priority: first, to the Class J Certificates; second, to the Class H
Certificates; third, to the Class G Certificates; fourth, to the Class F
Certificates; fifth, to the Class E Certificates; sixth, to the Class D
Certificates; seventh, to the Class C Certificates and finally, to the Class B
Certificates (provided in each case that no Certificate Principal Amount in
respect of any such Class may be notionally reduced below zero). See "--Payment
Priorities" above and "--Appraisal Reductions" below.
SUBORDINATION
As a means of providing a certain amount of protection to the holders of
the Class A-1, Class A-2 and Class X Certificates against losses associated
with delinquent and defaulted Mortgage Loans, the
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rights of the holders of the Class B, Class C, Class D, Class E, Class F, Class
G, Class H and Class J Certificates to receive distributions of interest (other
than Excess Interest) and principal, as applicable, will be subordinated to
such rights of the holders of the Class A-1, Class A-2 and Class X
Certificates. The Class B Certificates will likewise be protected by the
subordination of the Class C, Class D, Class E, Class F, Class G, Class H and
Class J Certificates. The Class C Certificates will likewise be protected by
the subordination of the Class D, Class E, Class F, Class G, Class H and Class
J Certificates. The Class D Certificates will likewise be protected by the
subordination of the Class E, Class F, Class G, Class H and Class J
Certificates. The Class E Certificates will likewise be protected by the
subordination of the Class F, Class G, Class H and Class J Certificates. This
subordination will be effected in two ways: (i) by the preferential right of
the holders of a Class of Certificates to receive on any Distribution Date the
amounts of interest and principal distributable in respect of such Certificates
on such date prior to any distribution being made on such Distribution Date in
respect of any Classes of Certificates subordinate thereto and (ii) by the
allocation of Realized Losses: first, to the Class J Certificates; second, to
the Class H Certificates; third, to the Class G Certificates; fourth, to the
Class F Certificates; fifth, to the Class E Certificates; sixth, to the Class D
Certificates; seventh, to the Class C Certificates; eighth, to the Class B
Certificates; and, finally, to the Class A-1 and Class A-2 Certificates, pro
rata, based on their respective Certificate Principal Amounts. No other form of
credit enhancement will be available with respect to any Class of Offered
Certificates.
APPRAISAL REDUCTIONS
With respect to the first Distribution Date following the earliest of (i)
the third anniversary of the date on which an extension of the maturity date of
a Mortgage Loan becomes effective as a result of a modification of such
Mortgage Loan by the Special Servicer, which extension does not change the
amount of Monthly Payments on the Mortgage Loan, (ii) 120 days after an uncured
delinquency occurs in respect of a Mortgage Loan, (iii) 90 days after the date
on which a reduction in the amount of Monthly Payments on a Mortgage Loan, or a
change in any other material economic term of the Mortgage Loan, becomes
effective as a result of a modification of such Mortgage Loan by the Special
Servicer, (iv) 60 days after a receiver has been appointed, (v) immediately
after a borrower declares bankruptcy, (vi) 60 days after an involuntary
petition of bankruptcy is filed with respect to the borrower, if such petition
is not dismissed prior to the expiration of such period; and (vii) immediately
after a Mortgage Loan becomes an REO Mortgage Loan (each, an "Appraisal
Reduction Event"), an Appraisal Reduction Amount is required to be calculated
by the Special Servicer. The "Appraisal Reduction Amount" for any Distribution
Date and for any Mortgage Loan as to which any Appraisal Reduction Event has
occurred will be an amount equal to the excess of (a) the outstanding Stated
Principal Balance of such Mortgage Loan as of the last day of the related
Collection Period over (b) the excess of (i) 90% of the sum of the appraised
values of the related Mortgaged Properties as determined (A) by one or more
appraisals by independent members of the Appraisal Institute ("MAI") with
respect to any Mortgage Loan with an outstanding principal balance equal to or
in excess of $1,000,000 (the cost of which is required to be paid by the Master
Servicer as an Advance), or (B) by an internal valuation performed by the
Special Servicer with respect to any Mortgage Loan with an outstanding
principal balance of less than $1,000,000, over (ii) the sum of (A) to the
extent not previously advanced by the Master Servicer, the Trustee or the
Fiscal Agent, all unpaid interest on such Mortgage Loan at a per annum rate
equal to the Mortgage Rate, (B) all unreimbursed Advances and interest thereon
at the Advance Rate in respect of such Mortgage Loan and (C) all currently due
and unpaid real estate taxes and assessments and insurance premiums and all
other amounts, including, if applicable, ground rents, due and unpaid under the
Mortgage Loan (which taxes, premiums and other amounts have not been the
subject of an Advance and/or for which funds have not been escrowed). If an
independent MAI appraisal or an internal valuation, as applicable, has not been
obtained within twelve months prior to the first Distribution Date on or after
which an Appraisal Reduction Event has occurred, the Special Servicer will be
required to estimate the value of the related Mortgaged Properties (the
"Special Servicer's Appraisal Reduction Estimate") and such estimate will be
used for purposes of determining the Appraisal Reduction Amount. Within 60 days
after the Special Servicer receives notice or is otherwise aware of an
Appraisal Reduction Event the Special Servicer will be required to either (i)
with respect to any Mortgage Loan with an outstanding principal balance equal
to or in excess of $1,000,000,obtain an independent MAI appraisal, the cost of
which will be paid by the
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Master Servicer as a Property Advance or (ii) with respect to any Mortgage Loan
with an outstanding principal balance of less than $1,000,000, perform an
internal valuation. On the first Distribution Date occurring on or after the
delivery of such independent MAI appraisal or internal valuation, as the case
may be, the Special Servicer will be required to adjust the Appraisal Reduction
Amount to take into account such appraisal or valuation (regardless of whether
the independent MAI appraisal or internal valuation is higher or lower than the
Special Servicer's Appraisal Reduction Estimate). Annual updates of any such
independent MAI appraisal or internal valuation, as the case may be, will be
required during the continuance of an Appraisal Reduction Event and the
Appraisal Reduction Amount will be adjusted accordingly.
Upon payment in full or liquidation of any Mortgage Loan for which an
Appraisal Reduction Amount has been determined, such Appraisal Reduction Amount
will be eliminated.
DELIVERY, FORM AND DENOMINATION
The Offered Certificates (other than the Class X Certificates) will be
issued, maintained and transferred in the book-entry form only in denominations
of $10,000 initial Certificate Principal Amount, and in multiples of $1 in
excess thereof, and the Class X Certificates will be issued, maintained and
transferred in the book-entry form only in denominations of $5,000,000 initial
Notional Amount, and in multiples of $1 in excess thereof.
The Offered Certificates will initially be represented by one or more
global Certificates for each such Class registered in the name of the nominee
of DTC. The Seller has been informed by DTC that DTC's nominee will be Cede &
Co. No holder of an Offered Certificate will be entitled to receive a
certificate issued in fully registered, certificated form (each, a "Definitive
Certificate") representing its interest in such Class, except under the limited
circumstances described below under "--Definitive Certificates." Unless and
until Definitive Certificates are issued, all references to actions by holders
of the Offered Certificates will refer to actions taken by DTC upon
instructions received from holders of Offered Certificates through its
participating organizations (together with Cedel and Euroclear participating
organizations, the "Participants"), and all references herein to payments,
notices, reports, statements and other information to holders of Offered
Certificates will refer to payments, notices, reports and statements to DTC or
Cede & Co., as the registered holder of the Offered Certificates, for
distribution to holders of Offered Certificates through its Participants in
accordance with DTC procedures; provided, however, that to the extent that the
party to the Pooling Agreement responsible for distributing any report,
statement or other information has been provided with the name of the
beneficial owner of a Certificate (or the prospective transferee of such
beneficial owner), such report, statement or other information will be provided
to such beneficial owner (or prospective transferee).
Until Definitive Certificates are issued in respect of the Offered
Certificates, interests in the Offered Certificates will be transferred on the
book-entry records of DTC and its Participants. The Trustee will initially
serve as certificate registrar (in such capacity, the "Certificate Registrar")
for purposes of recording and otherwise providing for the registration of the
Offered Certificates.
A "Certificateholder" or "holder" under the Pooling Agreement will be the
person in whose name a Certificate is registered in the certificate register
maintained pursuant to the Pooling Agreement, except that solely for the
purpose of giving any consent or taking any action pursuant to the Pooling
Agreement, any Certificate registered in the name of the Seller, the Trustee,
the Master Servicer, the Special Servicer, a manager of a Mortgaged Property, a
borrower or any person affiliated with the Seller, the Trustee, the Master
Servicer, or the Special Servicer, will be deemed not to be outstanding and the
Voting Rights to which it is entitled will not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent or take any such action has been obtained; provided,
however, that for purposes of obtaining the consent of Certificateholders to an
amendment to the Pooling Agreement, any Certificates beneficially owned by the
Master Servicer, the Special Servicer or an affiliate of the Master Servicer or
the Special Servicer will be deemed to be outstanding so long as such amendment
does not relate to compensation of the Master Servicer or the Special Servicer,
or otherwise benefit the Master Servicer or the Special Servicer in any
material respect; and, provided, further, that for purposes of obtaining the
consent of Certificateholders to any action proposed to be
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<PAGE>
taken by the Special Servicer with respect to a Specially Serviced Mortgage
Loan, any Certificates beneficially owned by the Master Servicer or an
affiliate thereof will be deemed to be outstanding, provided that the Special
Servicer is not the Master Servicer. The Percentage Interest of any Offered
Certificate of any Class will be equal to the percentage obtained by dividing
the denomination of such Certificate by the aggregate initial Certificate
Principal Amount of such Class of Certificates. See "Description of the
Certificates--General" in the Prospectus.
BOOK-ENTRY REGISTRATION
Holders of Offered Certificates may hold their Certificates through DTC
(in the United States) or Cedel or Euroclear (in Europe) if they are
Participants of such system, or indirectly through organizations that are
participants in such systems. Cedel and Euroclear will hold omnibus positions
on behalf of the Cedel Participants and the Euroclear Participants,
respectively, through customers' securities accounts in Cedel's and Euroclear's
names on the books of their respective depositories (collectively, the
"Depositories") which in turn will hold such positions in customers' securities
accounts in the Depositories' names on the books of DTC. DTC is a limited
purpose trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code and a "clearing agency" registered pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended. DTC was created
to hold securities for its Participants and to facilitate the clearance and
settlement of securities transactions between Participants through electronic
computerized book-entries, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly ("Indirect Participants").
Transfers between DTC Participants will occur in accordance with DTC
rules. Transfers between Cedel Participants and Euroclear Participants will
occur in accordance with their applicable rules and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly through Cedel Participants or
Euroclear Participants, on the other, will be effected in DTC in accordance
with DTC rules on behalf of the relevant European international clearing system
by its Depository; however, such cross-market transactions will require
delivery of instructions to the relevant European international clearing system
by the counterparty in such system in accordance with its rules and procedures.
If the transaction complies with all relevant requirements, Euroclear or Cedel,
as the case may be, will then deliver instructions to the Depository to take
action to effect final settlement on its behalf.
Because of time-zone differences, credits of securities in Cedel or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date, and such credits or any transactions in such
securities settled during such processing will be reported to the relevant
Cedel Participant or Euroclear Participant on such business day. Cash received
in Cedel or Euroclear as a result of sales of securities by or through a Cedel
Participant or a Euroclear Participant to a DTC Participant will be received
with value on the DTC settlement date but will be available in the relevant
Cedel or Euroclear cash account only as of the business day following
settlement in DTC.
The holders of Offered Certificates that are not Participants or Indirect
Participants but desire to purchase, sell or otherwise transfer ownership of,
or other interests in, Offered Certificates may do so only through Participants
and Indirect Participants. In addition, holders of Offered Certificates will
receive all distributions of principal and interest from the Trustee through
the Participants who in turn will receive them from DTC. Under a book-entry
format, holders of Offered Certificates may experience some delay in their
receipt of payments, since such payments will be forwarded by the Trustee to
Cede & Co., as nominee for DTC. DTC will forward such payments to its
Participants, which thereafter will forward them to Indirect Participants or
beneficial owners of Offered Certificates.
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<PAGE>
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Offered Certificates among Participants on whose behalf it acts with respect to
the Offered Certificates and to receive and transmit distributions of principal
of, and interest on, the Offered Certificates. Participants and Indirect
Participants with which the holders of Offered Certificates have accounts with
respect to the Offered Certificates similarly are required to make book-entry
transfers and receive and transmit such payments on behalf of their respective
holders of Offered Certificates. Accordingly, although the holders of Offered
Certificates will not possess the Offered Certificates, the Rules provide a
mechanism by which Participants will receive payments on Offered Certificates
and will be able to transfer their interest.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a holder of
Offered Certificates to pledge such Certificates to persons or entities that do
not participate in the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the lack of a physical certificate for such
Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a holder of an Offered Certificate under the Pooling Agreement only at
the direction of one or more Participants to whose accounts with DTC the
Offered Certificates are credited. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of Participants whose holdings include such undivided interests.
Cedel is incorporated under the laws of Luxembourg as a professional
depository. Cedel holds securities for its participating organizations ("Cedel
Participants") and facilitates the clearance and settlement of securities
transactions between Cedel Participants through electronic book-entry changes
in accounts of Cedel Participants, thereby eliminating the need for physical
movement of certificates.
Euroclear was created in 1968 to hold securities for participants of the
Euroclear system ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within the Euroclear system,
withdrawal of securities and cash from the Euroclear system, and receipts of
payments with respect to securities in the Euroclear system.
Although DTC, Euroclear and Cedel have implemented the foregoing
procedures in order to facilitate transfers of interests in book-entry
certificates among Participants of DTC, Euroclear and Cedel, they are under no
obligation to perform or to continue to comply with such procedures, and such
procedures may be discontinued at any time. None of the Seller, the Trustee,
the Master Servicer, the Special Servicer or the Underwriters will have any
responsibility for the performance by DTC, Euroclear or Cedel or their
respective direct or Indirect Participants of their respective obligations
under the rules and procedures governing their operations. The information
herein concerning DTC, Cedel and Euroclear and their book-entry systems has
been obtained from sources believed to be reliable, but the Seller takes no
responsibility for the accuracy or completeness thereof.
DEFINITIVE CERTIFICATES
Definitive Certificates will be delivered to beneficial owners of Offered
Certificates ("Certificate Owners") (or their nominees) only if (i) DTC is no
longer willing or able properly to discharge its responsibilities as depository
with respect to the Offered Certificates, and the Seller is unable to locate a
qualified successor, (ii) the Seller or the Trustee, at its sole option, elects
to terminate the book-entry system through DTC, or (iii) after the occurrence
of an event of default under the Pooling Agreement, Certificate Owners
representing a majority in principal amount of the Offered Certificates of any
Class then outstanding advise DTC through DTC Participants in writing that the
continuation of a book-entry system through DTC (or a successor thereto) is no
longer in the best interest of such Certificate Owners.
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<PAGE>
Upon the occurrence of any of the events described in clauses (i) through
(iii) in the immediately preceding paragraph, DTC is required to notify all
affected DTC Participants of the availability through DTC of Definitive
Certificates. Upon delivery of Definitive Certificates, the Trustee,
Certificate Registrar and Master Servicer will recognize the holders of such
Definitive Certificates as holders under the Pooling Agreement ("Holders").
Distributions of principal of and interest on the Definitive Certificates will
be made by the Trustee directly to Holders of Definitive Certificates in
accordance with the procedures set forth in the Prospectus and the Pooling
Agreement.
Upon the occurrence of any of the events described in clauses (i) through
(iii) of the second preceding paragraph, requests for transfer of Definitive
Certificates will be required to be submitted directly to the Certificate
Registrar in a form acceptable to the Certificate Registrar (such as the forms
which will appear on the back of the certificate representing a Definitive
Certificate), signed by the Holder or such Holder's legal representative and
accompanied by the Definitive Certificate or Certificates for which transfer is
being requested.
TRANSFER RESTRICTIONS
Each Class B, Class C, Class D and Class E Certificate will bear a legend
substantially to the effect that such Certificate may not be purchased by a
transferee that is (A) an employee benefit plan or other retirement
arrangement, including an individual retirement account or a Keogh plan, which
is subject to Title I of ERISA, or Section 4975 of the Code, or a "governmental
plan" (as defined in Section 3(32) of ERISA) that is subject to any federal,
state or local law ("Similar Law") which is, to a material extent, similar to
the foregoing provisions of ERISA of the Code (each, a "Plan"), or (B) a
collective investment fund in which Plans are invested, an insurance company
using assets of separate accounts or general accounts which include assets of
Plans (or which are deemed pursuant to ERISA or any Similar Law to include
assets of Plans) or other person acting on behalf of any such Plan or using the
assets of any such Plan, other than an insurance company using the assets of
its general account under circumstances whereby such purchase and the
subsequent holding of such Certificate by such insurance company would be
exempt from the prohibited transaction provisions of ERISA and the Code under
Prohibited Transaction Class Exemption 95-60.
Holders of Class B, Class C, Class D and Class E Certificates that are in
book-entry form will be deemed to have represented that they are not persons or
entities referred to in clause (A) or (B) of the legend described in the
preceding paragraph. In the event that holders of the Class B, Class C, Class D
and Class E Certificates become entitled to receive Definitive Certificates
under the circumstances described under "--Definitive Certificates," each
prospective transferee of a Class B, Class C, Class D and Class E Certificate
that is a Definitive Certificate will be required to either deliver to the
Seller, the Certificate Registrar and the Trustee a representation letter
substantially in the form set forth as an exhibit to the Pooling Agreement
stating that such transferee is not a person or entity referred to in clause
(A) or (B) of the legend or provide an opinion to the Seller, the Certificate
Registrar and the Trustee as described in the Pooling Agreement. Any transfer
of a Class B, Class C, Class D or Class E Certificate that would result in a
prohibited transaction under ERISA or Section 4975 of the Code, or a materially
similar characterization under any Similar Law will be deemed absolutely null
and void ab initio.
S-57
<PAGE>
YIELD, PREPAYMENT AND MATURITY CONSIDERATIONS
YIELD
The yield to maturity on the Offered Certificates will depend upon the
price paid by the Certificateholders, the rate and timing of the distributions
in reduction of Certificate Principal Amounts or Notional Amount, as
applicable, of the related Classes of Certificates, the extent to which
prepayment premiums, yield maintenance charges and Excess Interest allocated to
a Class of Certificates are collected, and the rate, timing and severity of
losses on the Mortgage Loans and the extent to which such losses are allocable
in reduction of the Certificate Principal Amounts or Notional Amounts, as
applicable, of such Classes of Certificates, as well as prevailing interest
rates at the time of payment or loss realization.
The rate of distributions in reduction of the Certificate Principal Amount
or Notional Amount, as applicable, of any Class of Offered Certificates, the
aggregate amount of distributions on any Class of Offered Certificates and the
yield to maturity of any Class of Offered Certificates will be directly related
to the rate of payments of principal (both scheduled and unscheduled) on the
Mortgage Loans and the amount and timing of borrower defaults and the severity
of losses occurring upon a default. While voluntary prepayments of Mortgage
Loans are generally prohibited during applicable prepayment lockout periods,
effective prepayments may occur if a sufficiently significant portion of the
Mortgaged Property is lost due to casualty or condemnation. In addition, such
distributions in reduction of Certificate Principal Amount or Notional Amount,
as applicable, may result from repurchases of Mortgage Loans made by the
Responsible Parties due to missing or defective documentation or breaches of
representations and warranties with respect to the Mortgage Loans as described
herein under "Description of the Mortgage Pool--Representations and Warranties"
or purchases of the Mortgage Loans in the manner described under "The Pooling
Agreement--Optional Termination; Optional Mortgage Loan Purchase." To the
extent a Mortgage Loan requires payment of a prepayment premium or yield
maintenance charge in connection with a voluntary prepayment, any such
prepayment premium or yield maintenance charge generally is not due in
connection with a prepayment due to casualty or condemnation, is not included
in the purchase price of a Mortgage Loan purchased or repurchased due to a
breach of a representation or warranty, and may not be enforceable or
collectible upon a default.
Principal payments (whether resulting from differences in amortization
terms, prepayments following expirations of the respective prepayment lockout
periods or otherwise) on the Mortgage Loans will affect the Pass-Through Rate
of the Class X Certificates and, to the extent the WAC Rate would be reduced
below the fixed Pass-Through Rate on such Classes, the Class A-2, Class B,
Class C, Class D and Class E Certificates, for one or more future periods and
therefore the yield on such Classes.
The Certificate Principal Amount or Notional Amount, as applicable, of any
Class of Offered Certificates may be reduced without distributions thereon as a
result of the occurrence and allocation of Realized Losses, reducing the
maximum amount distributable in respect of Certificate Principal Amount, if
applicable, as well as the amount of interest that would have accrued on such
Certificates in the absence of such reduction. In general, a Realized Loss
occurs when the aggregate principal balance of a Mortgage Loan is reduced
without an equal distribution to applicable Certificateholders in reduction of
the Certificate Principal Amounts of the Certificates. Realized Losses are
likely to occur only in connection with a default on a Mortgage Loan and the
liquidation of the related Mortgaged Properties or a reduction in the principal
balance of a Mortgage Loan by a bankruptcy court. Realized Losses will be
allocated to the Certificates (other than the Class Q, Class X, Class R and
Class LR Certificates) in reverse alphabetical order.
Because the Notional Amount of the Class X Certificates is based upon the
Certificate Principal Amounts of the Sequential Pay Certificates, the yield to
maturity on the Class X Certificates will be extremely sensitive to the rate
and timing of prepayments of principal (including both voluntary and
involuntary prepayments, delinquencies, defaults and liquidations) on the
Mortgage Loans and any repurchases due to missing or defective documentation or
breaches of representations and warranties with respect to the Mortgage Loans
to the extent such payments of principal are allocated to the Sequential Pay
Certificates in reduction of the Certificate Principal Amounts thereof.
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<PAGE>
Certificateholders are not entitled to receive distributions of Monthly
Payments when due except to the extent they are either covered by an Advance or
actually received. Consequently, any defaulted Monthly Payment for which no
such Advance is made will tend to extend the weighted average lives of the
Certificates, whether or not a permitted extension of the due date of the
related Mortgage Loan has been effected.
The rate of payments (including voluntary and involuntary prepayments) on
pools of mortgage loans is influenced by a variety of economic, geographic,
social and other factors, including the level of mortgage interest rates and
the rate at which borrowers default on their Mortgage Loans. The terms of the
Mortgage Loans (in particular, the term of any prepayment lock-out period, the
extent to which prepayment premiums or yield maintenance charges are due with
respect to any principal prepayments, the right of the mortgagee to apply
condemnation and casualty proceeds to prepay the Mortgage Loan, the
availability of certain rights to defease all or a portion of the Mortgage
Loan, and any increase in the interest rate and the application of Excess Cash
Flow, if applicable, to prepay the related Mortgage Loan) may affect the rate
of principal payments on Mortgage Loans, and consequently, the yield to
maturity of the Classes of Offered Certificates. See Annex A hereto for a
description of prepayment lock-out periods, prepayment premiums and yield
maintenance charges.
The timing of changes in the rate of prepayment on the Mortgage Loans may
significantly affect the actual yield to maturity experienced by an investor
even if the average rate of principal payments experienced over time is
consistent with such investor's expectation. In general, the earlier a
prepayment of principal on the Mortgage Loans, the greater the effect on such
investor's yield to maturity. As a result, the effect on such investor's yield
of principal payments occurring at a rate higher (or lower) than the rate
anticipated by the investor during the period immediately following the
issuance of the Offered Certificates would not be fully offset by a subsequent
like reduction (or increase) in the rate of principal payments.
No representation is made as to the rate of principal payments on the
Mortgage Loans or as to the yield to maturity of any Class of Offered
Certificates. In addition, although Excess Cash Flow is applied to reduce
principal of the respective ARD Loans after their respective Anticipated
Repayment Dates, there can be no assurance that any of such ARD Loans will be
prepaid on that date or any date prior to maturity. An investor is urged to
make an investment decision with respect to any Class of Offered Certificates
based on the anticipated yield to maturity of such Class of Offered
Certificates resulting from its purchase price and such investor's own
determination as to anticipated Mortgage Loan prepayment rates under a variety
of scenarios. The extent to which any Class of Offered Certificates is
purchased at a discount or a premium and the degree to which the timing of
payments on such Class of Offered Certificates is sensitive to prepayments will
determine the extent to which the yield to maturity of such Class of Offered
Certificates may vary from the anticipated yield. An investor should carefully
consider the associated risks, including, in the case of any Offered
Certificates purchased at a discount, the risk that a slower than anticipated
rate of principal payments on the Mortgage Loans could result in an actual
yield to such investor that is lower than the anticipated yield and, in the
case of any Offered Certificates purchased at a premium, the risk that a faster
than anticipated rate of principal payments could result in an actual yield to
such investor that is lower than the anticipated yield.
In general, with respect to the Class X Certificates and any other Class
of Offered Certificates that is purchased at a premium, if principal
distributions thereon occur at a rate faster than anticipated at the time of
purchase, the investor's actual yield to maturity will be lower than that
assumed at the time of purchase. In particular, the yield to maturity of the
Class X Certificates will be highly sensitive to the rate and timing of
principal payments (including by reason of prepayments, defaults and
liquidations) with respect to the Mortgage Loans. Investors in the Class X
Certificates should fully consider the risks of significant variability in the
rate and timing of such payments, including the risk that an extremely rapid
rate of principal collections on the Mortgage Loans could result in the failure
of such investors to recover fully their initial investments. Conversely, if a
Class of Offered Certificates is purchased at a discount and principal
distributions thereon occur at a rate slower than that assumed at the time of
purchase, the investor's actual yield to maturity will be lower than that
assumed at the time of purchase.
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<PAGE>
An investor should consider the risk that rapid rates of prepayments on
the Mortgage Loans, and therefore of amounts distributable in reduction of the
Certificate Principal Amount of Offered Certificates entitled to distributions
of principal, may coincide with periods of low prevailing interest rates.
During such periods, the effective interest rates on securities in which an
investor may choose to reinvest such amounts distributed to it may be lower
than the applicable Pass-Through Rate. Conversely, slower rates of prepayments
on the Mortgage Loans, and therefore, of amounts distributable in reduction of
principal balance of the Offered Certificates entitled to distributions of
principal, may coincide with periods of high prevailing interest rates. During
such periods, the amount of principal distributions resulting from prepayments
available to an investor in such Certificates for reinvestment at such high
prevailing interest rates may be relatively small.
The effective yield to holders of Offered Certificates will be lower than
the yield otherwise produced by the applicable Pass-Through Rate and applicable
purchase prices because while interest will accrue during each Interest Accrual
Period, the distribution of such interest will not be made until the
Distribution Date immediately following such Interest Accrual Period, and
principal paid on any Distribution Date will not bear interest during the
period from the end of such Interest Accrual Period to the Distribution Date
that follows.
The "Rated Final Distribution Date" for the Certificates will be November
18, 2030, which is the Distribution Date following the second anniversary after
the date at which all the Mortgage Loans have zero balances, assuming no
Balloon Payments or prepayments on the Mortgage Loans are made, and Mortgage
Loans which are Balloon Mortgage Loans or ARD Loans fully amortize according to
their stated amortization schedules.
WEIGHTED AVERAGE LIFE OF THE OFFERED CERTIFICATES
Weighted average life refers to the average amount of time from the date
of issuance of a security until each dollar of principal of such security will
be repaid to the investor. The weighted average life of the Offered
Certificates will be influenced by the rate at which principal payments
(including scheduled payments, principal prepayments and payments made pursuant
to any applicable policies of insurance) on the Mortgage Loans are made.
Principal payments on the Mortgage Loans may be in the form of scheduled
amortization or prepayments (for this purpose, the term "prepayment" includes
prepayments, partial prepayments and liquidations due to a default or other
dispositions of the Mortgage Loans).
Calculations reflected in the following tables assume that the Mortgage
Loans have the characteristics shown on Annex A to this Prospectus Supplement,
and are based on the following additional assumptions ("Modeling Assumptions"):
(i) each Mortgage Loan is assumed to prepay at the indicated level of constant
prepayment rate ("CPR"), or in accordance with a prepayment scenario in which
prepayments in full occur, after expiration of any applicable lock-out period,
defeasance option and requirement for prepayment premiums or yield maintenance
charges in connection with prepayments, with each ARD Loan paying in full on
its Anticipated Repayment Date, (ii) there are no delinquencies, (iii)
scheduled interest and principal payments on the Mortgage Loans are timely
received on their respective Due Dates, commencing in February 1999 (assumed in
all cases to be the first day of each month) at the indicated levels of CPR or
in accordance with the prepayment scenario set forth in the tables, (iv)
partial prepayments on the Mortgage Loans are permitted, but are assumed not to
affect the amortization schedules, (v) no prepayment premiums or yield
maintenance charges are collected, (vi) no party exercises its right of
optional termination of the Trust Fund described herein, (vii) no Mortgage Loan
is required to be purchased from the Trust Fund, (viii) the Servicing Fee Rate
for each Mortgage Loan is 0.0838% per annum (or 0.1838% per annum in the case
of the Mortgage Loan identified on Annex A hereto as loan number I0066), (ix)
there are no Excess Prepayment Interest Shortfalls, other shortfalls unrelated
to defaults or Appraisal Reduction Amounts allocated to any class of Offered
Certificates, (x) distributions on the Certificates are made on the 18th day
(each assumed to be a Business Day) of each month, commencing in February 1999,
(xi) the Certificates will be issued on January 20, 1999, (xii) no Balloon
Payment is extended beyond its maturity date, and (xiii) the Class A-1
Pass-Through Rate is 5.66%, the Class A-2 Pass-Through Rate is the lesser of
6.02% and the WAC Rate, the Class B Pass-Through Rate is the lesser of 6.28%
and the WAC Rate, the Class C Pass-Through Rate is the
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lesser of 6.53% and the WAC Rate, the Class D and Class E Pass-Through Rates
are the lesser of 7.33% or the WAC Rate, the Class F, Class G and Class H
Pass-Through Rates are 5.80%, the Class J Pass-Through Rate is the lesser of
5.80% and the WAC Rate and the initial Class X Pass-Through Rate is 1.069%.
The weighted average life of any Class A-1, Class A-2, Class B, Class C,
Class D or Class E Certificate refers to the average amount of time that will
elapse from the date of its issuance until each dollar allocable to principal
of such Certificates is distributed to the investor. The weighted average life
of any such Offered Certificate will be influenced by, among other things, the
rate at which principal on the Mortgage Loans is paid or otherwise collected or
advanced and applied to pay principal of such Offered Certificate. The
Principal Distribution Amount for each Distribution Date will be distributable
as described in "Description of the Offered
Certificates--Distributions--Payment Priorities" herein.
The following tables indicate the percentage of the initial Certificate
Principal Amount of each Class of Offered Certificates that would be
outstanding after each of the dates shown under each of the indicated
prepayment assumptions and the corresponding weighted average life of each such
Class of Offered Certificates. The tables have been prepared on the basis of,
among others, the Modeling Assumptions. To the extent that the Mortgage Loans
or the Certificates have characteristics that differ from those assumed in
preparing the tables, the Class A-1, Class A-2, Class B, Class C, Class D
and/or Class E Certificates may mature earlier or later than indicated by the
tables. Accordingly, the Mortgage Loans will not prepay at any constant rate,
and it is highly unlikely that the Mortgage Loans will prepay in a manner
consistent with the assumptions described herein. In addition, variations in
the actual prepayment experience and the balance of the Mortgage Loans that
prepay may increase or decrease the percentages of initial Certificate
Principal Amount (and shorten or extend the weighted average lives) shown in
the following tables. Investors are urged to conduct their own analyses of the
rates at which the Mortgage Loans may be expected to prepay.
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PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS A-1 CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 93% 93% 93% 93% 93%
January 18, 2001 ......................... 86% 86% 86% 86% 86%
January 18, 2002 ......................... 78% 78% 78% 78% 77%
January 18, 2003 ......................... 69% 69% 68% 67% 65%
January 18, 2004 ......................... 57% 57% 56% 56% 56%
January 18, 2005 ......................... 47% 46% 46% 45% 38%
January 18, 2006 ......................... 15% 15% 15% 15% 15%
January 18, 2007 ......................... 4% 4% 4% 4% 4%
January 18, 2008 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 5.01 4.99 4.97 4.95 4.88
First Principal Payment Date ............. Feb-1999 Feb-1999 Feb-1999 Feb-1999 Feb-1999
Last Principal Payment Date .............. Jun-2007 May-2007 May-2007 May-2007 Apr-2007
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS A-2 CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 100% 100% 100% 100% 100%
January 18, 2001 ......................... 100% 100% 100% 100% 100%
January 18, 2002 ......................... 100% 100% 100% 100% 100%
January 18, 2003 ......................... 100% 100% 100% 100% 100%
January 18, 2004 ......................... 100% 100% 100% 100% 100%
January 18, 2005 ......................... 100% 100% 100% 100% 100%
January 18, 2006 ......................... 100% 100% 100% 100% 100%
January 18, 2007 ......................... 100% 100% 100% 100% 100%
January 18, 2008 ......................... 93% 91% 88% 83% 57%
January 18, 2009 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 9.47 9.42 9.37 9.30 9.02
First Principal Payment Date ............. Jun-2007 May-2007 May-2007 May-2007 Apr-2007
Last Principal Payment Date .............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 May-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-62
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS B CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 100% 100% 100% 100% 100%
January 18, 2001 ......................... 100% 100% 100% 100% 100%
January 18, 2002 ......................... 100% 100% 100% 100% 100%
January 18, 2003 ......................... 100% 100% 100% 100% 100%
January 18, 2004 ......................... 100% 100% 100% 100% 100%
January 18, 2005 ......................... 100% 100% 100% 100% 100%
January 18, 2006 ......................... 100% 100% 100% 100% 100%
January 18, 2007 ......................... 100% 100% 100% 100% 100%
January 18, 2008 ......................... 100% 100% 100% 100% 100%
January 18, 2009 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 9.74 9.74 9.74 9.74 9.37
First Principal Payment Date ............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 May-2008
Last Principal Payment Date .............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jun-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS C CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 100% 100% 100% 100% 100%
January 18, 2001 ......................... 100% 100% 100% 100% 100%
January 18, 2002 ......................... 100% 100% 100% 100% 100%
January 18, 2003 ......................... 100% 100% 100% 100% 100%
January 18, 2004 ......................... 100% 100% 100% 100% 100%
January 18, 2005 ......................... 100% 100% 100% 100% 100%
January 18, 2006 ......................... 100% 100% 100% 100% 100%
January 18, 2007 ......................... 100% 100% 100% 100% 100%
January 18, 2008 ......................... 100% 100% 100% 100% 100%
January 18, 2009 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 9.74 9.74 9.74 9.74 9.49
First Principal Payment Date ............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jun-2008
Last Principal Payment Date .............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jul-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-63
<PAGE>
PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS D CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 100% 100% 100% 100% 100%
January 18, 2001 ......................... 100% 100% 100% 100% 100%
January 18, 2002 ......................... 100% 100% 100% 100% 100%
January 18, 2003 ......................... 100% 100% 100% 100% 100%
January 18, 2004 ......................... 100% 100% 100% 100% 100%
January 18, 2005 ......................... 100% 100% 100% 100% 100%
January 18, 2006 ......................... 100% 100% 100% 100% 100%
January 18, 2007 ......................... 100% 100% 100% 100% 100%
January 18, 2008 ......................... 100% 100% 100% 100% 100%
January 18, 2009 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 9.82 9.81 9.79 9.77 9.54
First Principal Payment Date ............. Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jul-2008
Last Principal Payment Date .............. Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PERCENTAGES OF THE INITIAL CERTIFICATE PRINCIPAL AMOUNT OF
THE CLASS E CERTIFICATES AT THE SPECIFIED CPRS
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
<TABLE>
<CAPTION>
PREPAYMENT ASSUMPTION (CPR)
--------------------------------------------------------------------------------
DISTRIBUTION DATE 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------------------ -------------- -------------- -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Initial .................................. 100% 100% 100% 100% 100%
January 18, 2000 ......................... 100% 100% 100% 100% 100%
January 18, 2001 ......................... 100% 100% 100% 100% 100%
January 18, 2002 ......................... 100% 100% 100% 100% 100%
January 18, 2003 ......................... 100% 100% 100% 100% 100%
January 18, 2004 ......................... 100% 100% 100% 100% 100%
January 18, 2005 ......................... 100% 100% 100% 100% 100%
January 18, 2006 ......................... 100% 100% 100% 100% 100%
January 18, 2007 ......................... 100% 100% 100% 100% 100%
January 18, 2008 ......................... 100% 100% 100% 100% 100%
January 18, 2009 and
thereafter .............................. 0% 0% 0% 0% 0%
Weighted Average Life (in years) ......... 9.83 9.83 9.83 9.83 9.58
First Principal Payment Date ............. Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
Last Principal Payment Date .............. Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-64
<PAGE>
PRICE/YIELD TABLES
The tables set forth below show the corporate bond equivalent ("CBE")
yield, weighted average life (as described under "--Weighted Average Life of
the Offered Certificates" above) and the period during which principal payments
would be received with respect to each Class of Offered Certificates (other
than the Class X Certificates) under the Modeling Assumptions. Purchase prices
set forth below for each such Class of Offered Certificates are expressed in
32nds (i.e., 99.16 means 99 16/32%) as a percentage of the initial Certificate
Principal Amount of such Class of Certificates, before adding accrued interest.
The yields set forth in the following tables were calculated by
determining the monthly discount rates which, when applied to the assumed
stream of cash flows to be paid on each Class of Offered Certificates (other
than the Class X Certificates), would cause the discounted present value of
such assumed stream of cash flows as of the Closing Date to equal the assumed
purchase prices, plus accrued interest at the applicable Pass-Through Rate as
described in the Modeling Assumptions, from and including January 1, 1999 to
but excluding the Closing Date, and converting such monthly rates to
semi-annual corporate bond equivalent rates. Such calculation does not take
into account variations that may occur in the interest rates at which investors
may be able to reinvest funds received by them as reductions of the Certificate
Principal Amounts of such Classes of Offered Certificates and consequently does
not purport to reflect the return on any investment in such Classes of Offered
Certificates when such reinvestment rates are considered.
S-65
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE,
LAST PRINCIPAL PAYMENT DATE FOR THE CLASS A-1 CERTIFICATES AT THE SPECIFIED
CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
-----------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
98.16 6.027% 6.028% 6.029% 6.030% 6.034%
98.24 5.966% 5.967% 5.967% 5.968% 5.971%
99.00 5.905% 5.905% 5.906% 5.906% 5.909%
99.08 5.844% 5.844% 5.845% 5.845% 5.847%
99.16 5.783% 5.784% 5.784% 5.784% 5.785%
99.24 5.723% 5.723% 5.723% 5.723% 5.723%
100.00 5.663% 5.663% 5.662% 5.662% 5.661%
100.08 5.603% 5.602% 5.602% 5.602% 5.600%
100.16 5.543% 5.542% 5.542% 5.541% 5.539%
100.24 5.484% 5.483% 5.482% 5.481% 5.478%
101.00 5.424% 5.423% 5.422% 5.421% 5.417%
101.08 5.365% 5.364% 5.363% 5.362% 5.357%
101.16 5.306% 5.305% 5.303% 5.302% 5.297%
101.24 5.248% 5.246% 5.244% 5.243% 5.237%
102.00 5.189% 5.187% 5.185% 5.184% 5.177%
102.08 5.131% 5.129% 5.127% 5.125% 5.117%
102.16 5.073% 5.070% 5.068% 5.066% 5.058%
Weighted Average Life (yrs.) 5.014 4.989 4.972 4.955 4.881
First Principal Payment Date Feb-1999 Feb-1999 Feb-1999 Feb-1999 Feb-1999
Last Principal Payment Date Jun-2007 May-2007 May-2007 May-2007 Apr-2007
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE, LAST PRINCIPAL PAYMENT DATE FOR THE CLASS A-2 CERTIFICATES
AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
-----------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
99.16 6.127% 6.127% 6.127% 6.127% 6.128%
99.24 6.091% 6.091% 6.091% 6.091% 6.091%
100.00 6.056% 6.055% 6.055% 6.055% 6.054%
100.08 6.020% 6.020% 6.020% 6.019% 6.017%
100.16 5.985% 5.985% 5.984% 5.983% 5.981%
100.24 5.950% 5.949% 5.949% 5.948% 5.944%
101.00 5.915% 5.914% 5.913% 5.912% 5.908%
101.08 5.880% 5.879% 5.878% 5.877% 5.872%
101.16 5.845% 5.844% 5.843% 5.841% 5.835%
101.24 5.810% 5.809% 5.808% 5.806% 5.799%
102.00 5.775% 5.774% 5.773% 5.771% 5.763%
102.08 5.741% 5.740% 5.738% 5.736% 5.728%
102.16 5.706% 5.705% 5.703% 5.701% 5.692%
102.24 5.672% 5.671% 5.669% 5.666% 5.656%
103.00 5.638% 5.636% 5.634% 5.632% 5.621%
103.08 5.604% 5.602% 5.600% 5.597% 5.585%
103.16 5.570% 5.568% 5.566% 5.563% 5.550%
Weighted Average Life (yrs.) 9.466 9.424 9.373 9.301 9.017
First Principal Payment Date Jun-2007 May-2007 May-2007 May-2007 Apr-2007
Last Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 May-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-66
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE, LAST PRINCIPAL PAYMENT DATE FOR THE CLASS B CERTIFICATES
AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
-----------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
99.16 6.391% 6.391% 6.391% 6.391% 6.392%
99.24 6.356% 6.356% 6.356% 6.356% 6.356%
100.00 6.321% 6.321% 6.321% 6.321% 6.320%
100.08 6.286% 6.286% 6.286% 6.286% 6.284%
100.16 6.251% 6.251% 6.251% 6.251% 6.248%
100.24 6.216% 6.216% 6.216% 6.216% 6.212%
101.00 6.181% 6.181% 6.181% 6.181% 6.176%
101.08 6.147% 6.147% 6.147% 6.147% 6.140%
101.16 6.112% 6.112% 6.112% 6.112% 6.105%
101.24 6.078% 6.078% 6.078% 6.078% 6.069%
102.00 6.043% 6.043% 6.043% 6.043% 6.034%
102.08 6.009% 6.009% 6.009% 6.009% 5.999%
102.16 5.975% 5.975% 5.975% 5.975% 5.964%
102.24 5.941% 5.941% 5.941% 5.941% 5.929%
103.00 5.907% 5.907% 5.907% 5.907% 5.894%
103.08 5.873% 5.873% 5.873% 5.873% 5.859%
103.16 5.840% 5.840% 5.840% 5.840% 5.824%
Weighted Average Life (yrs.) 9.744 9.744 9.744 9.744 9.371
First Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 May-2008
Last Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jun-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE, LAST PRINCIPAL PAYMENT DATE FOR THE CLASS C CERTIFICATES
AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
-----------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------ ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
99.16 6.647% 6.647% 6.647% 6.647% 6.647%
99.24 6.611% 6.611% 6.611% 6.611% 6.611%
100.00 6.576% 6.576% 6.576% 6.576% 6.575%
100.08 6.540% 6.540% 6.540% 6.540% 6.538%
100.16 6.505% 6.505% 6.505% 6.505% 6.502%
100.24 6.469% 6.469% 6.469% 6.469% 6.466%
101.00 6.434% 6.434% 6.434% 6.434% 6.431%
101.08 6.399% 6.399% 6.399% 6.399% 6.395%
101.16 6.364% 6.364% 6.364% 6.364% 6.359%
101.24 6.329% 6.329% 6.329% 6.329% 6.324%
102.00 6.295% 6.295% 6.295% 6.295% 6.288%
102.08 6.260% 6.260% 6.260% 6.260% 6.253%
102.16 6.225% 6.225% 6.225% 6.225% 6.218%
102.24 6.191% 6.191% 6.191% 6.191% 6.183%
103.00 6.157% 6.157% 6.157% 6.157% 6.148%
103.08 6.123% 6.123% 6.123% 6.123% 6.113%
103.16 6.088% 6.088% 6.088% 6.088% 6.078%
Weighted Average Life (yrs.) 9.744 9.744 9.744 9.744 9.491
First Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jun-2008
Last Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jul-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-67
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE, LAST PRINCIPAL PAYMENT DATE FOR THE CLASS D CERTIFICATES
AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
------------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------ ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
99.16 7.342% 7.342% 7.342% 7.342% 7.342%
99.24 7.305% 7.305% 7.305% 7.305% 7.304%
100.00 7.269% 7.269% 7.268% 7.268% 7.267%
100.08 7.232% 7.232% 7.232% 7.232% 7.230%
100.16 7.196% 7.196% 7.195% 7.195% 7.193%
100.24 7.160% 7.159% 7.159% 7.159% 7.156%
101.00 7.124% 7.123% 7.123% 7.122% 7.119%
101.08 7.088% 7.087% 7.087% 7.086% 7.082%
101.16 7.052% 7.051% 7.051% 7.050% 7.045%
101.24 7.016% 7.015% 7.015% 7.014% 7.009%
102.00 6.980% 6.980% 6.979% 6.979% 6.973%
102.08 6.945% 6.944% 6.944% 6.943% 6.936%
102.16 6.909% 6.909% 6.908% 6.907% 6.900%
102.24 6.874% 6.873% 6.873% 6.872% 6.864%
103.00 6.839% 6.838% 6.837% 6.837% 6.828%
103.08 6.804% 6.803% 6.802% 6.801% 6.792%
103.16 6.769% 6.768% 6.767% 6.766% 6.757%
Weighted Average Life (yrs.) 9.819 9.806 9.790 9.768 9.537
First Principal Payment Date Oct-2008 Oct-2008 Oct-2008 Oct-2008 Jul-2008
Last Principal Payment Date Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PRINCIPAL PAYMENT
DATE, LAST PRINCIPAL PAYMENT DATE FOR THE CLASS E CERTIFICATES AT
THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE,
PREPAYMENT PREMIUMS--
OTHERWISE AT INDICATED CPR
-----------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------------- ---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
94.16 8.102% 8.102% 8.102% 8.102% 8.115%
94.24 8.063% 8.062% 8.062% 8.062% 8.075%
95.00 8.024% 8.023% 8.023% 8.023% 8.035%
95.08 7.985% 7.984% 7.984% 7.984% 7.996%
95.16 7.946% 7.946% 7.946% 7.946% 7.956%
95.24 7.907% 7.907% 7.907% 7.907% 7.917%
96.00 7.869% 7.868% 7.868% 7.868% 7.878%
96.08 7.830% 7.830% 7.830% 7.830% 7.839%
96.16 7.792% 7.792% 7.792% 7.792% 7.800%
96.24 7.754% 7.753% 7.753% 7.754% 7.761%
97.00 7.716% 7.715% 7.715% 7.716% 7.722%
97.08 7.678% 7.678% 7.678% 7.678% 7.683%
97.16 7.640% 7.640% 7.640% 7.640% 7.645%
97.24 7.602% 7.602% 7.602% 7.602% 7.607%
98.00 7.565% 7.565% 7.565% 7.565% 7.569%
98.08 7.527% 7.527% 7.527% 7.527% 7.530%
98.16 7.490% 7.490% 7.490% 7.490% 7.492%
Weighted Average Life (yrs.) 9.828 9.828 9.828 9.828 9.578
First Principal Payment Date Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
Last Principal Payment Date Nov-2008 Nov-2008 Nov-2008 Nov-2008 Aug-2008
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
S-68
<PAGE>
YIELD SENSITIVITY OF THE CLASS X CERTIFICATES
The yield to maturity of the Class X Certificates will be highly sensitive
to the rate and timing of principal payments (including by reason of
prepayments, hyper-amortization, loan extensions, defaults and liquidations)
and losses on or in respect of the Mortgage Loans. Investors in the Class X
Certificates should fully consider the associated risks, including the risk
that an extremely rapid rate of amortizations, prepayment or other liquidation
of the Mortgage Loans could result in the failure of such investors to recoup
fully their initial investments.
The following tables indicate the approximate pre-tax yield to maturity on
a CBE basis, weighted average lives, and first and last payment dates on the
Class X Certificates for the specified CPRs based on the Modeling Assumptions.
It was also assumed that the purchase price of the Class X Certificates is as
specified below, expressed in 32nds (i.e., 4.28 means 4 28/32%) as a percentage
of the initial Notional Amount of such Certificates, plus accrued interest.
The yields set forth in the following tables were calculated by
determining the monthly discount rates that, when applied to the assumed
streams of cash flows to be paid on the Class X Certificates, would cause the
discounted present value of such assumed stream of cash flows to equal the
assumed purchase price thereof, and by converting such monthly rates to
semi-annual corporate bond equivalent rates. Such calculation does not take
into account shortfalls in collection of interest due to prepayments (or other
liquidations) of the Mortgage Loans or the interest rates at which investors
may be able to reinvest funds received by them as distributions on the Class X
Certificates (and, accordingly, does not purport to reflect the return on any
investment in the Class X Certificates when such reinvestment rates are
considered).
The characteristics of the Mortgage Loans may differ from those assumed in
preparing the tables below. In addition, there can be no assurance that the
Mortgage Loans will prepay in accordance with the above assumptions at any of
the rates shown in the tables or at any other particular rate, that the cash
flows on the Class X Certificates will correspond to the cash flows shown
herein or that the aggregate purchase price of the Class X Certificates will be
as assumed. In addition, it is unlikely that the Mortgage Loans will prepay in
accordance with the above assumptions at any of the specified CPRs until
maturity or that all the Mortgage Loans will so prepay at the same rate. Timing
of changes in the rate of prepayments may significantly affect the actual yield
to maturity to investors, even if the average rate of principal prepayments is
consistent with the expectations of investors. Investors must make their own
decisions as to the appropriate prepayment assumption to be used in deciding
whether to purchase Class X Certificates.
S-69
<PAGE>
PRE-TAX YIELD TO MATURITY (CBE), WEIGHTED AVERAGE LIFE, FIRST PAYMENT DATE AND
LAST PAYMENT DATE FOR THE CLASS X CERTIFICATES AT THE SPECIFIED CPRS
<TABLE>
<CAPTION>
0% CPR DURING LOCKOUT, DEFEASANCE, YIELD MAINTENANCE, PREPAYMENT
PREMIUMS--
OTHERWISE AT INDICATED CPR
----------------------------------------------------------------
ASSUMED
PRICE (32NDS) 0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- ------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
5.23 .................... 13.695% 13.634% 13.572% 13.491% 13.107%
5.27 .................... 13.098% 13.036% 12.973% 12.891% 12.502%
5.31 .................... 12.522% 12.459% 12.396% 12.313% 11.918%
6.03 .................... 11.965% 11.902% 11.838% 11.754% 11.354%
6.07 .................... 11.428% 11.364% 11.300% 11.214% 10.809%
6.11 .................... 10.908% 10.844% 10.779% 10.692% 10.283%
6.15 .................... 10.405% 10.340% 10.274% 10.187% 9.773%
6.19 .................... 9.917% 9.853% 9.786% 9.698% 9.280%
6.23 .................... 9.445% 9.380% 9.313% 9.224% 8.801%
6.27 .................... 8.987% 8.922% 8.854% 8.765% 8.338%
6.31 .................... 8.543% 8.477% 8.409% 8.319% 7.888%
7.03 .................... 8.112% 8.045% 7.977% 7.886% 7.451%
7.07 .................... 7.693% 7.626% 7.557% 7.465% 7.027%
7.11 .................... 7.285% 7.218% 7.149% 7.056% 6.615%
7.15 .................... 6.889% 6.822% 6.752% 6.659% 6.214%
7.19 .................... 6.504% 6.436% 6.366% 6.272% 5.823%
7.23 .................... 6.128% 6.060% 5.990% 5.895% 5.444%
Weighted Average Life
(yrs.) ................. 9.205 9.176 9.144 9.099 8.870
First Payment Date ...... Feb-1999 Feb-1999 Feb-1999 Feb-1999 Feb-1999
Last Payment Date ....... Jun-2028 Jun-2028 Jun-2028 Jun-2028 Dec-2027
</TABLE>
* "PP" means 100% of each loan prepays when it becomes freely prepayable.
Notwithstanding the assumed prepayment rates reflected in the preceding
tables in this "Yield, Prepayment and Maturity Considerations" section, it is
highly unlikely that the Mortgage Loans will be prepaid according to one
particular pattern. For this reason and because the timing of principal
payments is critical to determining weighted average lives, the weighted
average lives of the Offered Certificates are likely to differ from those shown
in the tables, even if all of the Mortgage Loans prepay at the indicated
percentages of CPR or prepayment scenario over any given time period or over
the entire life of the Offered Certificates.
There can be no assurance that the Mortgage Loans will prepay at any
particular rate. Moreover, the various remaining terms to maturity of the
Mortgage Loans could produce slower or faster principal distributions than
indicated in the preceding tables at the various percentages of CPR specified,
even if the weighted average remaining term to maturity of the Mortgage Loans
is as assumed. Investors are urged to make their investment decisions based on
their determinations as to anticipated rates of prepayment under a variety of
scenarios.
For additional considerations relating to the yield on the Certificates,
see "Yield Considerations" in the Prospectus.
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THE POOLING AGREEMENT
GENERAL
The Certificates will be issued pursuant to a Pooling and Servicing
Agreement to be dated as of January 10, 1999 (the "Pooling Agreement"), by and
among the Seller, the Master Servicer, the Special Servicer, the Trustee, the
Fiscal Agent and the Responsible Parties.
Reference is made to the Prospectus for important information in addition
to that set forth herein regarding the terms of the Pooling Agreement and terms
and conditions of the Offered Certificates. The Seller will provide to a
prospective or actual holder of an Offered Certificate without charge, upon
written request, a copy (without exhibits) of the Pooling Agreement. Requests
should be addressed to GS Mortgage Securities Corporation II, 85 Broad Street,
New York, New York 10004, Attention: Rolf Edwards.
ASSIGNMENT OF THE MORTGAGE LOANS
On the Closing Date, the Seller will sell, transfer or otherwise convey,
assign or cause the assignment of the Mortgage Loans, without recourse, to the
Trustee for the benefit of the holders of Certificates. On or prior to the
Closing Date, the Seller will cause to be delivered to the Trustee with respect
to each Mortgage Loan, (i) the original Mortgage Note endorsed without recourse
to the order of the Trustee, as trustee; (ii) the original Mortgage(s) thereof;
(iii) the assignment(s) of the Mortgage(s) in recordable form in favor of the
Trustee; (iv) to the extent not contained in the Mortgages, the original
assignment of leases and rents; (v) if applicable, the original assignment of
assignment of leases and rents to the Trustee; (vi) where applicable, a copy of
the UCC-1 financing statements, if any, including UCC-3 assignments; (vii) the
original lender's title insurance policy (or marked commitments to insure); and
(viii) collateral assignments of management agreements and such other loan
documents as are in the possession of the Seller, including original
assignments thereof to the Trustee, unless the Seller is delayed in making such
delivery by reason of the fact that such documents shall not have been returned
by the appropriate recording office in which case it shall notify the Trustee
in writing of such delay and shall deliver such documents to the Trustee, with
copies of them to the Master Servicer, promptly upon the Seller's receipt
thereof.
The Trustee, or any custodian for the Trustee, will be required to hold
such documents in trust for the benefit of the holders of Certificates. The
Trustee is obligated to review such documents for each Mortgage Loan (in
certain cases only to the extent such documents are identified by the Seller as
being part of the related mortgage file) within 45 days after the later of
delivery or execution of the Pooling Agreement and report any missing documents
or certain types of defects therein to the Seller and the applicable
Responsible Party.
SERVICING OF THE MORTGAGE LOANS; COLLECTION OF PAYMENTS
The Pooling Agreement requires each of the Master Servicer and the Special
Servicer to service and administer the Mortgage Loans on behalf of the Trust
Fund in the best interests of and for the benefit of all of the holders of
Certificates (as determined by the Master Servicer or the Special Servicer in
the exercise of its good faith and reasonable judgment) in accordance with
applicable law, the terms of the Pooling Agreement and the Mortgage Loans, and
to the extent not inconsistent with the foregoing, in the same manner in which,
and with the same care, skill and diligence as is normal and usual in its
general mortgage servicing and REO Property management activities on behalf of
third parties or on behalf of itself, whichever is higher, with respect to
mortgage loans and REO properties that are comparable to the Mortgaged
Properties, and in each event with a view to the timely collection of all
scheduled payments of principal and interest under the Mortgage Loans or, if a
Mortgage Loan comes into and continues in default and if, in the good faith and
reasonable judgment of the Special Servicer, no satisfactory arrangements can
be made for the collection of the delinquent payments, the maximization of the
recovery on such Mortgage Loan to the Certificateholders (as a collective
whole) on a present value basis (the relevant discounting of anticipated
collection that will be distributable to Certificateholders to
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be performed at the related Net Mortgage Rate). Such servicing is required to
be undertaken without regard to (i) any known relationship that the Master
Servicer or the Special Servicer, or an affiliate of the Master Servicer or the
Special Servicer, as applicable, may have with the borrowers or any other
parties to the Pooling Agreement; (ii) the ownership of any Certificate by the
Master Servicer or the Special Servicer or any affiliate of the Master Servicer
or the Special Servicer, as applicable; (iii) the Master Servicer's obligation
to make Advances; or (iv) the right of the Master Servicer (or any affiliate
thereof) or the Special Servicer (or any affiliate thereof), as the case may
be, to receive reimbursement of costs, or the sufficiency of any compensation
for its services under the Pooling Agreement or with respect to any particular
transaction (the "Servicing Standard").
The Master Servicer and the Special Servicer are permitted, at their own
expense, to employ subservicers, agents or attorneys in performing any of their
respective obligations under the Pooling Agreement. Notwithstanding any
subservicing agreement, the Master Servicer or Special Servicer, as applicable,
shall remain primarily liable to the Trustee and Certificateholders for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of the Pooling Agreement without diminution of such obligation or
liability by virtue of such subservicing agreement. Any subservicing agreement
entered into by the Master Servicer or Special Servicer, as applicable, will
provide that it may be assumed or terminated by the Trustee, or any successor
Master Servicer or Special Servicer, if the Trustee, or any successor Master
Servicer or Special Servicer, has assumed the duties of the Master Servicer or
Special Servicer, respectively. The Pooling Agreement provides, however, that
none of the Master Servicer, the Special Servicer, or any of their respective
directors, officers, employees or agents shall have any liability to the Trust
Fund or the Certificateholders for taking any action or refraining from taking
any action in good faith, or for errors in judgment. The foregoing provision
would not protect the Master Servicer or the Special Servicer for the breach of
its representations or warranties in the Pooling Agreement, the breach of
certain specified covenants therein or any liability by reason of willful
misconduct, bad faith, fraud or negligence in the performance of its duties or
by reason of its reckless disregard of its obligations or duties under the
Pooling Agreement. The Trustee or any other successor Master Servicer assuming
the obligations of the Master Servicer under the Pooling Agreement will be
entitled to the compensation to which the Master Servicer would have been
entitled after the date of the assumption of the Master Servicer's obligations.
If no successor Master Servicer can be obtained to perform such obligations for
such compensation, additional amounts payable to such successor Master Servicer
will be treated as Realized Losses.
The Master Servicer initially will be responsible for the servicing and
administration of the entire Mortgage Pool. The duties of the Special Servicer
relate to Specially Serviced Mortgage Loans and to any REO Property. The
Pooling Agreement will define a "Specially Serviced Mortgage Loan" to include
any Mortgage Loan with respect to which: (i) the related borrower has not made
two consecutive Monthly Payments (and has not cured at least one such
delinquency by the next due date under the related Mortgage Loan); (ii) the
related borrower has expressed to the Master Servicer an inability to pay or a
hardship in paying the Mortgage Loan in accordance with its terms; (iii) the
Master Servicer has received notice that the related borrower has become the
subject of any bankruptcy, insolvency or similar proceeding, admitted in
writing the inability to pay its debts as they come due or made an assignment
for the benefit of creditors; (iv) the Master Servicer has received notice of a
foreclosure or threatened foreclosure of any lien on the Mortgaged Property
securing such Mortgage Loan; (v) a default of which the Master Servicer has
notice (other than a failure by the related borrower to pay principal or
interest) and which materially and adversely affects the interests of the
Certificateholders has occurred and remains unremedied for the applicable grace
period specified in the Mortgage Loan (or, if no grace period is specified, 60
days); provided, that a default requiring a Property Advance will be deemed to
materially and adversely affect the interests of Certificateholders; or (vi) in
the opinion of the Master Servicer (consistent with the Servicing Standard) a
default under a Mortgage Loan is imminent and such Mortgage Loan deserves the
attention of the Special Servicer; provided however, that a Mortgage Loan will
cease to be a Specially Serviced Mortgage Loan (a) with respect to the
circumstances described in clause (i) above, when the borrower thereunder has
brought the Mortgage Loan current and thereafter made three consecutive full
and timely monthly payments, including pursuant to any workout of the Mortgage
Loan, (b) with respect to the circumstances described in clause (ii), (iii),
(iv) and (vi) above,
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when such circumstances cease to exist in the good faith judgment of the Master
Servicer, or (c) with respect to the circumstances described in clause (v)
above, when such default is cured; provided, in any case, that no circumstance
exists (as described above) that would cause the Mortgage Loan to continue to
be characterized as a Specially Serviced Mortgage Loan. With respect to any
Specially Serviced Mortgage Loan, the Master Servicer will transfer its
servicing responsibilities to the Special Servicer, but will continue to
receive payments on such Mortgage Loan (including amounts collected by the
Special Servicer), to make certain calculations with respect to such Mortgage
Loan and make remittances and prepare certain reports to the Certificateholders
with respect to such Mortgage Loan. Upon the curing of such events, the
servicing of such Mortgage Loan will be returned to the Master Servicer.
The Pooling Agreement requires the Master Servicer or the Special
Servicer, as applicable, to make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans consistent with
the Servicing Standard. Consistent with the above, the Master Servicer or the
Special Servicer may, in its discretion, waive any late payment charge or
penalty fee in connection with any delinquent Monthly Payment with respect to
any Mortgage Loan. For any Mortgage Loan with respect to which, under the terms
of the related loan documents, the mortgagee may, in its discretion, apply
insurance proceeds, condemnation awards or escrowed funds to the prepayment of
such loan prior to the expiration of the related prepayment lockout period, the
Master Servicer or Special Servicer, as applicable, may only require such a
prepayment if the Master Servicer or Special Servicer, as applicable, has
determined in accordance with the Servicing Standard that such prepayment is in
the best interest of all Certificateholders. The Master Servicer and the
Special Servicer will be directed in the Pooling Agreement not to take any
enforcement action other than requests for payment with respect to payment of
Excess Interest or principal in excess of the principal component of the
Monthly Payment prior to the final maturity date. The Master Servicer will also
be permitted to forgive the payment of Excess Interest under the circumstances
described under "--Realization Upon Mortgage Loans-- Modifications, Waivers and
Amendments" below. With respect to any defaulted Mortgage Loan, subject to the
restrictions set forth below under "--Realization Upon Mortgage
Loans--Modifications, Waivers and Amendments," the Special Servicer will be
entitled to pursue any of the remedies set forth in the related Mortgage,
including the right to acquire, through foreclosure, all or any of the
Mortgaged Properties securing such Mortgage Loan. The Special Servicer may
elect to extend a Specially Serviced Mortgage Loan (subject to conditions
described herein) notwithstanding its decision to foreclose on certain of the
Mortgaged Properties.
ADVANCES
The Master Servicer will be obligated to advance, on the Business Day
immediately preceding a Distribution Date (the "Master Servicer Remittance
Date"), an amount (each such amount, a "P&I Advance") equal to the total or any
portion of the Monthly Payment (with interest calculated at the Net Mortgage
Rate plus the Trustee Fee Rate) on a Mortgage Loan that was delinquent as of
the close of business on the immediately preceding Due Date (and which
delinquent payment has not been cured as of the Master Servicer Remittance
Date), or, with respect to a Mortgage Loan for which the Special Servicer has
elected to extend the payments as described in "--Realization Upon Mortgage
Loans-- Modifications, Waivers and Amendments" below, the amount equal to the
Monthly Payment (with interest calculated at the Net Mortgage Rate plus the
Trustee Fee Rate) that was due prior to the maturity date; provided, however,
that the Master Servicer will not be required to make a P&I Advance to the
extent it determines that such Advance (including accrued and unpaid interest
thereon) would not ultimately be recoverable out of related late payments, net
insurance proceeds, net condemnation proceeds, net liquidation proceeds and
certain other collections with respect to such Mortgage Loan as to which such
Advances were made. The Master Servicer will not be required or permitted to
make an advance for Balloon Payments, Excess Interest, Default Interest or
prepayment premiums or yield maintenance charges. The amount required to be
advanced by the Master Servicer with respect to any Distribution Date in
respect of payments on Mortgage Loans that have been subject to an Appraisal
Reduction Event will equal (i) the amount required to be advanced by the Master
Servicer without giving effect to such Appraisal Reduction Amounts less (ii) an
amount equal to the product of (x) the amount required to be advanced by the
Master Servicer in respect to delinquent payments of interest without giving
effect to
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such Appraisal Reduction Amounts, and (y) a fraction, the numerator of which is
the Appraisal Reduction Amount with respect to such Mortgage Loan and the
denominator of which is the Stated Principal Balance of such Mortgage Loan as
of the last day of the related Collection Period.
The Master Servicer will also be obligated (subject to the limitations
described herein) to make cash advances ("Property Advances" and, together with
P&I Advances, "Advances") to pay delinquent real estate taxes, ground lease
rent payments, assessments and hazard insurance premiums and to cover other
similar costs and expenses necessary to preserve the priority of or enforce the
related Mortgage or to maintain such Mortgaged Property.
The obligation of the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, to make Advances with respect to any Mortgage Loan pursuant to the
Pooling Agreement continues through the foreclosure of such Mortgage Loan and
until the liquidation of such Mortgage Loan or related Mortgaged Properties.
Advances are intended to provide a limited amount of liquidity, not to
guarantee or insure against losses. None of the Master Servicer, the Trustee or
the Fiscal Agent will be required to make any Advance that it determines in its
good faith business judgment will not be ultimately recoverable by the Master
Servicer, the Trustee or the Fiscal Agent, as applicable, out of related late
payments, net insurance proceeds, net condemnation proceeds, net liquidation
proceeds and certain other collections with respect to the Mortgage Loan as to
which such Advances were made. In addition, if the Master Servicer, the Trustee
or the Fiscal Agent, as applicable, determines in its good faith business
judgment that any Advance previously made will not be ultimately recoverable
from the foregoing sources, then the Master Servicer, the Trustee or the Fiscal
Agent, as applicable, will be entitled to be reimbursed for such Advance, plus
interest thereon at the Advance Rate, out of amounts payable on or in respect
of all of the Mortgage Loans prior to distributions on the Certificates. Any
such judgment or determination with respect to the recoverability of Advances
must be evidenced by an officers' certificate delivered to the Trustee (or in
the case of the Trustee or Fiscal Agent, the Seller) setting forth such
judgment or determination of nonrecoverability and the procedures and
considerations of the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, forming the basis of such determination (including but not limited
to information selected by the Master Servicer in its good faith discretion
such as related income and expense statements, rent rolls, occupancy status,
property inspections, inquiries by the Master Servicer, the Trustee or the
Fiscal Agent, as applicable, and an independent appraisal performed in
accordance with MAI standards and methodologies on the applicable Mortgaged
Properties).
To the extent the Master Servicer fails to make an Advance it is required
to make under the Pooling Agreement, the Trustee, subject to a determination of
recoverability, will be required to make such required Advance or, in the event
the Trustee fails to make such Advance, the Fiscal Agent, subject to a
determination of recoverability, will make such Advance, in each case pursuant
to the terms of the Pooling Agreement. The Trustee and the Fiscal Agent will be
entitled to rely conclusively on any non-recoverability determination of the
Master Servicer. See "--Duties of the Trustee" and "--Duties of the Fiscal
Agent" below.
The Master Servicer, the Trustee or the Fiscal Agent, as applicable, will
be entitled to reimbursement for any Advance made by it equal to the amount of
such Advance and interest accrued thereon at the Advance Rate from (i) late
payments on the Mortgage Loan by the borrower, (ii) insurance proceeds,
condemnation proceeds or liquidation proceeds from the sale of the defaulted
Mortgage Loan or the related Mortgaged Property or (iii) upon determining in
good faith that such Advance or interest is not recoverable in the manner
described in the preceding two clauses, from any other amounts from time to
time on deposit in the Collection Account.
The Master Servicer, the Trustee and the Fiscal Agent will each be
entitled to receive interest on Advances at the Prime Rate (the "Advance
Rate"), compounded monthly, as of each Master Servicer Remittance Date and the
Master Servicer will be authorized to pay itself, the Trustee or the Fiscal
Agent, as applicable, such interest monthly from general collections with
respect to all of the Mortgage Loans prior to any payment to holders of
Certificates. If the interest on such Advance is not recovered from Default
Interest on such Mortgage Loan, a shortfall will result which will have the
same effect as a Realized Loss. The "Prime Rate" is the rate, for any day, set
forth as such in The Wall Street Journal, New York edition.
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ACCOUNTS
The Master Servicer will be required to deposit amounts collected in
respect of the Mortgage Loans into a segregated account (the "Collection
Account") established pursuant to the Pooling Agreement.
The Trustee will be required to establish and maintain two segregated
accounts, one of which may be a sub-account of the other, (the "Lower-Tier
Distribution Account" and the "Upper-Tier Distribution Account") in the name of
the Trustee for the benefit of the holders of Certificates entitled to
distributions from them. With respect to each Distribution Date, the Master
Servicer will be required to disburse from the Collection Account and deposit
into the Lower-Tier Distribution Account, to the extent of funds on deposit in
the Collection Account, on the Master Servicer Remittance Date an aggregate
amount of immediately available funds equal to the sum of (i) the Available
Funds, and (ii) the portion of the Servicing Compensation representing the
Trustee Fee. In addition, the Master Servicer will be required to deposit all
P&I Advances into the Lower-Tier Distribution Account on the related Master
Servicer Remittance Date. To the extent the Master Servicer fails to do so, the
Trustee or the Fiscal Agent will deposit all P&I Advances into the Lower-Tier
Distribution Account as described herein. On each Distribution Date, the
Trustee (i) will be required to withdraw amounts distributable on such date on
the Regular Certificates and on the Class R Certificates (which are expected to
be zero) from the Lower-Tier Distribution Account and deposit such amounts in
the Upper-Tier Distribution Account. See "Description of the Offered
Certificates--Distributions" herein.
The Trustee will be required to establish and maintain an "Interest
Reserve Account" in the name of the Trustee for the benefit of the holders of
the Certificates. On each Master Servicer Remittance Date occurring in February
and on any Master Servicer Remittance Date occurring in any January which
occurs in a year that is not a leap year, the Master Servicer will be required
to deposit, in respect of each Mortgage Loan which accrues interest on the
basis of a 360-day year and the actual number of days in the related month, an
amount equal to one day's interest at the related Mortgage Rate on the
respective Stated Principal Balance, as of the Due Date in the month preceding
the month in which such Master Servicer Remittance Date occurs, of each such
Mortgage Loan, to the extent a Monthly Payment or P&I Advance is made in
respect thereof (all amounts so deposited in any consecutive January (if
applicable) and February, "Withheld Amounts"). On each Master Servicer
Remittance Date occurring in March, the Trustee will be required to withdraw
from the Interest Reserve Account an amount equal to the Withheld Amounts from
the preceding January (if applicable) and February, if any, and deposit such
amount into the Lower-Tier Distribution Account.
The Trustee will be required to also establish and maintain one or more
segregated accounts for the "Excess Interest Distribution Account" in the name
of the Trustee for the benefit of the Certificateholders entitled to
distributions from it, and the "Class Q Distribution Account" in the name of
the Trustee for the benefit of the holders of the Class Q Certificates.
The Collection Account, the Lower-Tier Distribution Account, the
Upper-Tier Distribution Account, the Interest Reserve Account, the Excess
Interest Distribution Account and the Class Q Distribution Account will be held
in the name of the Trustee (or the Master Servicer on behalf of the Trustee) on
behalf of the holders of Certificates and the Master Servicer will be
authorized to make withdrawals from the Collection Account and the Interest
Reserve Account. Each of the Collection Account, any REO Account, the
Lower-Tier Distribution Account, the Upper-Tier Distribution Account, the
Interest Reserve Account, any escrow account, the Excess Interest Distribution
Account, and the Class Q Distribution Account will be either (i) (A) an account
maintained with either a federal or state chartered depository institution or
trust company the long term unsecured debt obligations (or short-term unsecured
debt obligations if the account holds funds for less than 30 days) or
commercial paper of which are rated by each of the Rating Agencies in its
highest rating category at all times (or in the case of the REO Account,
Collection Account, Interest Reserve Account and Escrow Account, the long term
unsecured debt obligations (or short-term unsecured debt obligations if the
account holds funds for less than 30 days) of which are rated at least "AA-" by
S&P and "Aa3" by Moody's or, if applicable, the short term rating equivalent
thereof) or (B) as to which the Master Servicer or the Trustee, as applicable,
has received written confirmation from each
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of the Rating Agencies that holding funds in such account would not cause any
Rating Agency to qualify, withdraw or downgrade any of its ratings on the
Certificates, or (ii) a segregated trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in
its fiduciary capacity (an "Eligible Bank").
Amounts on deposit in the Collection Account, the Interest Reserve Account
and any REO Account may be invested in certain United States government
securities and other high-quality investments specified in the Pooling
Agreement ("Permitted Investments"). Interest or other income earned on funds
in the Collection Account will be paid to the Master Servicer as additional
servicing compensation and interest or other income earned on funds in any REO
Account will be payable to the Special Servicer. Interest or other income
earned on funds in the Interest Reserve Account will be deposited into the
Collection Account.
WITHDRAWALS FROM THE COLLECTION ACCOUNT
The Master Servicer may make withdrawals from the Collection Account for
the following purposes, to the extent permitted and in the priorities provided
in the Pooling Agreement: (i) to remit on or before each Master Servicer
Remittance Date (A) to the Lower-Tier Distribution Account an amount equal to
the sum of (I) Available Funds and any prepayment premiums or yield maintenance
charges and (II) the Trustee Fee for the related Distribution Date, (B) to the
Class Q Distribution Account an amount equal to the Net Default Interest
received in the related Collection Period, if any, (C) to the Excess Interest
Distribution Account an amount equal to the Excess Interest received in the
related Collection Period, if any, and (D) to the Interest Reserve Account an
amount required to be withheld as described above under "--Accounts"; (ii) to
pay or reimburse the Master Servicer, the Trustee or the Fiscal Agent, as
applicable, pursuant to the terms of the Pooling Agreement for Advances made by
any of them and interest on Advances (the Master Servicer's, the Trustee's or
the Fiscal Agent's right, as applicable, to reimbursement for items described
in this clause (ii) being limited as described above under "--Advances"); (iii)
to pay on or before each Master Servicer Remittance Date to the Master Servicer
and the Special Servicer as compensation, the aggregate unpaid Servicing
Compensation (not including the portion of the Servicing Compensation
representing the Trustee Fee) in respect of the immediately preceding Interest
Accrual Period; (iv) to pay on or before each Distribution Date to any person
with respect to each Mortgage Loan or REO Property that has previously been
purchased or repurchased by such person pursuant to the Pooling Agreement, all
amounts received thereon during the related Collection Period and subsequent to
the date as of which the amount required to effect such purchase or repurchase
was determined; (v) to the extent not reimbursed or paid pursuant to any of the
above clauses, to reimburse or pay the Master Servicer, the Special Servicer,
the Trustee, the Fiscal Agent and/or the Seller for unpaid Servicing
Compensation (in the case of the Master Servicer, the Special Servicer or the
Trustee), and certain other unreimbursed expenses incurred by such person
pursuant to and to the extent reimbursable under the Pooling Agreement and to
satisfy any indemnification obligations of the Trust Fund under the Pooling
Agreement; (vi) to pay to the Trustee amounts requested by it to pay any taxes
imposed on the Upper-Tier REMIC or the Lower-Tier REMIC; (vii) to withdraw any
amount deposited into the Collection Account that was not required to be
deposited therein; and (viii) to clear and terminate the Collection Account
pursuant to a plan for termination and liquidation of the Trust Fund.
ENFORCEMENT OF "DUE-ON-SALE" AND "DUE-ON-ENCUMBRANCE" CLAUSES
Subject to certain exceptions contained in the related loan documents, the
Mortgage Loans contain provisions in the nature of "due-on-sale" clauses, which
by their terms (a) provide that the Mortgage Loans shall, at the mortgagee's
option, become due and payable upon the sale or other transfer of an interest
in the related Mortgaged Property or (b) provide that the Mortgage Loans may
not be assumed without the consent of the related mortgagee in connection with
any such sale or other transfer. The Special Servicer, or the Master Servicer
at the direction of, or with the consent of, the Master Servicer, will not be
required to enforce such due-on-sale clauses and in connection therewith will
not be required to (i) accelerate payments thereon or (ii) withhold its consent
to such an assumption if (x) such provision
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is not exercisable under applicable law or such provision is reasonably likely
to result in meritorious legal action by the borrower or (y) the Special
Servicer determines, in accordance with the Servicing Standard, that granting
such consent would be likely to result in a greater recovery, on a present
value basis (discounting at the related Net Mortgage Rate), than would
enforcement of such clause. If the Special Servicer determines that granting
such consent would be likely to result in a greater recovery, the Special
Servicer, or the Master Servicer at the direction of, or with the consent of,
the Special Servicer, is authorized to take or enter into an assumption
agreement from or with the proposed transferee as obligor thereon, provided
that (a) the proposed transfer is in compliance with the terms of the related
Mortgage and (b) with respect to certain of the Mortgage Loans, the Special
Servicer has received written confirmation from each Rating Agency that such
assumption or substitution would not, in and of itself, cause a downgrade,
qualification or withdrawal of any of the then current ratings assigned to the
Certificates.
Subject to certain exceptions contained in the related loan documents, the
Mortgage Loans contain provisions in the nature of a "due-on-encumbrance"
clause which by their terms (a) provide that the Mortgage Loans shall, at the
mortgagee's option, become due and payable upon the creation of any lien or
other encumbrance on the related Mortgaged Property, or (b) require the consent
of the related mortgagee to the creation of any such lien or other encumbrance
on the related Mortgaged Property. The Special Servicer will not be required to
enforce such due-on-encumbrance clauses and in connection therewith will not be
required to (i) accelerate payments thereon or (ii) withhold its consent to
such lien or encumbrance if the Special Servicer (x) determines, in accordance
with the Servicing Standard, that such enforcement would not be in the best
interests of the Trust Fund and (y) receives prior written confirmation from
each Rating Agency that granting such consent would not, in and of itself,
cause a downgrade, qualification or withdrawal of any of the then current
ratings assigned to the Certificates.
See "Certain Legal Aspects of the Mortgage Loans--Enforceability of
Certain Provisions" in the Prospectus.
INSPECTIONS
The Master Servicer (or with respect to any Specially Serviced Mortgage
Loan, the Special Servicer) is required to inspect or cause to be inspected
each Mortgaged Property at such times and in such manner as are consistent with
the Servicing Standards, but in any event (i) the Master Servicer is required
to inspect each Mortgaged Property with an Allocated Loan Amount of (a)
$1,000,000 or more at least once every 12 months and (b) less than $1,000,000
at least once every 24 months, in each case commencing in December 1999 (or at
such other times, provided each Rating Agency has confirmed in writing to the
Master Servicer that such schedule will not result in the withdrawal,
downgrading or qualification of the then current ratings assigned to the
Certificates) and (ii) if the Mortgage Loan (a) becomes a Specially Serviced
Mortgage Loan, (b) is delinquent for 60 days or (c) has a debt service coverage
ratio of less than 1.0x, the Master Servicer (or with respect to Specially
Serviced Mortgage Loans, the Special Servicer) is required to inspect the
related Mortgaged Properties as soon as practicable and thereafter at least
every twelve months until such condition ceases to exist. The cost of any such
inspection shall be borne by the Master Servicer unless the related Mortgage
Loan is a Specially Serviced Mortgage Loan, in which case such cost will be
borne by the Trust Fund.
EVIDENCE AS TO COMPLIANCE
The Pooling Agreement requires that each of the Master Servicer and the
Special Servicer cause a nationally recognized firm of independent public
accountants (which may render other services to the Master Servicer), which is
a member of the American Institute of Certified Public Accountants, to furnish
to the Trustee on or before April 15 of each year, beginning April 15, 2000, a
report which expresses an opinion to the effect that the assertion of
management of the Master Servicer or the Special Servicer that it has
maintained an effective internal control system over the servicing of the
mortgage loans including the Mortgage Loans for the preceding calendar year is
fairly stated, based on an examination, conducted substantially in compliance
with the Uniform Single Attestation Program for Mortgage Bankers or the Audit
Program for Mortgages serviced for FHLMC, except for such exceptions stated in
such report.
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The Pooling Agreement also requires each of the Master Servicer and the
Special Servicer to deliver to the Trustee, on or before April 15 of each year,
beginning April 15, 2000, an officers' certificate of the Master Servicer or
the Special Servicer, as the case may be, stating that, to the best of each
such officer's knowledge, the Master Servicer, the Special Servicer or any
subservicer, as the case may be, has fulfilled its obligations under the
Pooling Agreement in all material respects throughout the preceding calendar
year or, if there has been a default, specifying each default known to each
such officer and the nature and status thereof, that it has maintained an
effective internal control system over the servicing of mortgage loans
including the Mortgage Loans and the Master Servicer or the Special Servicer,
as the case may be, has received no notice regarding qualification, or
challenging the status, of either Trust REMIC as a REMIC from the Internal
Revenue Service or any other governmental agency or body or, if it has received
any such notice, specifying the details thereof.
CERTAIN MATTERS REGARDING THE SELLER, THE MASTER SERVICER AND THE SPECIAL
SERVICER
Each of the Master Servicer and the Special Servicer may assign its rights
and delegate its duties and obligations under the Pooling Agreement with the
consent of the Seller, provided that certain conditions are satisfied including
obtaining the consent of the Trustee and written confirmation of each of the
Rating Agencies that such assignment or delegation will not cause a
qualification, withdrawal or downgrading of the then current ratings assigned
to the Certificates. The Pooling Agreement provides that the Master Servicer or
the Special Servicer, as the case may be, may not otherwise resign from its
obligations and duties as Master Servicer or the Special Servicer, as the case
may be, thereunder, except upon the determination that performance of its
duties is no longer permissible under applicable law and provided that such
determination is evidenced by an opinion of counsel delivered to the Trustee.
No such resignation may become effective until a successor Master Servicer or
Special Servicer has assumed the obligations of the Master Servicer or the
Special Servicer under the Pooling Agreement. The Trustee or any other
successor Master Servicer or Special Servicer assuming the obligations of the
Master Servicer or the Special Servicer under the Pooling Agreement will be
entitled to the compensation to which the Master Servicer or the Special
Servicer would have been entitled after the date of assumption of such
obligations. If no successor Master Servicer or Special Servicer can be
obtained to perform such obligations for such compensation, additional amounts
payable to such successor Master Servicer or Special Servicer will be treated
as Realized Losses.
The Pooling Agreement also provides that none of the Seller, the Master
Servicer, the Special Servicer, nor any director, officer, employee or agent of
the Seller, the Master Servicer or the Special Servicer will be under any
liability to the Trust Fund or the holders of Certificates for any action taken
or for refraining from the taking of any action in good faith pursuant to the
Pooling Agreement, or for errors in judgment; provided, however, that neither
the Seller, the Master Servicer, the Special Servicer nor any such person will
be protected against any liability which would otherwise be imposed by reason
of (i) any breach of warranty or representation, or other representation or
specific liability provided in the Pooling Agreement, or (ii) any willful
misconduct, bad faith, fraud or negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations or duties
thereunder. The Pooling Agreement further provides that the Seller, the Master
Servicer, the Special Servicer and any director, officer, employee or agent of
the Seller, the Master Servicer or the Special Servicer will be entitled to
indemnification by the Trust Fund for any loss, liability or expense incurred
in connection with or relating to the Pooling Agreement or the Certificates,
other than any loss, liability or expense (i) incurred by reason of willful
misconduct, bad faith, fraud or negligence in the performance of duties
thereunder or by reason of reckless disregard of obligations and duties
thereunder, in each case by the person being indemnified; (ii) imposed by any
taxing authority if such loss, liability or expense is not specifically
reimbursable pursuant to the terms of the Pooling Agreement, or (iii) with
respect to any such party, resulting from the breach by such party of any of
its representations or warranties contained in the Pooling Agreement.
In addition, the Pooling Agreement provides that none of the Seller, the
Master Servicer, nor the Special Servicer will be under any obligation to
appear in, prosecute or defend any legal action unless such action is related
to its duties under the Pooling Agreement and which in its opinion does not
expose it to any expense or liability. The Seller, the Master Servicer or the
Special Servicer may, however, in its
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discretion undertake any such action which it may deem necessary or desirable
with respect to the Pooling Agreement and the rights and duties of the parties
thereto and the interests of the holders of Certificates thereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom will be expenses, costs and liabilities of the Trust Fund, and the
Seller, the Master Servicer and the Special Servicer will be entitled to be
reimbursed therefor from the Collection Account.
The Seller is not obligated to monitor or supervise the performance of the
Master Servicer, the Special Servicer or the Trustee under the Pooling
Agreement. The Seller may, but is not obligated to, enforce the obligations of
the Master Servicer or the Special Servicer under the Pooling Agreement and
may, but is not obligated to, perform or cause a designee to perform any
defaulted obligation of the Master Servicer or the Special Servicer or exercise
any right of the Master Servicer or the Special Servicer under the Pooling
Agreement. In the event the Seller undertakes any such action, it will be
reimbursed and indemnified by the Trust Fund in accordance with the standard
set forth in the paragraph above. Any such action by the Seller will not
relieve the Master Servicer or the Special Servicer of its obligations under
the Pooling Agreement.
Any person into which the Seller, the Master Servicer or the Special
Servicer may be merged or consolidated, or any person resulting from any merger
or consolidation to which the Seller, the Master Servicer or the Special
Servicer is a party, or any person succeeding to the business of the Seller,
the Master Servicer or the Special Servicer, will be the successor of the
Seller, the Master Servicer or the Special Servicer, as the case may be, under
the Pooling Agreement, and shall be deemed to have assumed all of the
liabilities and obligations of the Seller, the Master Servicer or the Special
Servicer under the Pooling Agreement.
EVENTS OF DEFAULT
Events of default of the Master Servicer under the Pooling Agreement
consist, among other things, of (i) any failure by the Master Servicer to remit
to the Collection Account or any failure by the Master Servicer to remit to the
Trustee for deposit into the Upper-Tier Distribution Account, Lower-Tier
Distribution Account, Interest Reserve Account, Excess Interest Distribution
Account or Class Q Distribution Account any amount required to be so remitted
at the time required to be remitted pursuant to the Pooling Agreement (which
failure, with respect to the Lower-Tier Distribution Account, is not remedied
by 11:00 A.M. on the related Distribution Date); or (ii) any failure by the
Master Servicer duly to observe or perform in any material respect any of its
other covenants or agreements or the material breach of its representations or
warranties under the Pooling Agreement which continues unremedied for 30 days
after the giving of written notice of such failure to the Master Servicer by
the Seller or the Trustee, or to the Master Servicer, the Seller and the
Trustee by the holders of Certificates evidencing Percentage Interests of at
least 25% of any affected Class; provided, that if such default is not capable
of being cured within such 30 day period and the Master Servicer is diligently
pursuing such cure, the Master Servicer shall be entitled to an additional 30
day period; provided, further, that the failure of the Master Servicer to
perform any covenant or agreement contained in the Pooling Agreement (other
than as provided in clause (i) above) as a result of an inconsistency between
the Pooling Agreement and any Mortgage Loan document will not be an event of
default; or (iii) any failure by the Master Servicer to make any Property
Advances, which failure continues unremedied for a period of 15 days after the
date on which such Advance is due, as required pursuant to the Pooling
Agreement; or (iv) certain events of bankruptcy, insolvency, readjustment of
debt, marshaling of assets and liabilities or similar proceedings and certain
actions by, on behalf of or against the Master Servicer indicating its
insolvency or inability to pay its obligations; or (v) the Seller or Trustee
receives notice that the continuation of the Master Servicer in such role
would, in and of itself, result in the downgrade, qualification or withdrawal
of the ratings then assigned by Moody's to any Class of Certificates.
Events of default of the Special Servicer under the Pooling Agreement
consist, among other things, of (i) any failure by the Special Servicer to
remit to the Collection Account or REO Account any amount so required under the
Pooling Agreement; or (ii) any failure by the Special Servicer duly to observe
or perform in any material respect any of its other covenants or agreements, or
the material breach of its representations or warranties under the Pooling
Agreement which continues unremedied for a period of
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30 days after the giving of written notice of such failure to the Special
Servicer by the Master Servicer, the Seller or the Trustee, or to the Special
Servicer, the Master Servicer, the Seller and the Trustee by the holders of
Certificates evidencing Percentage Interests of at least 25% of any affected
Class; or (iii) certain events of bankruptcy, insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings and certain actions
by, on behalf of or against the Special Servicer indicating its insolvency or
inability to pay its obligations; or (iv) the Seller or Trustee receives notice
that the continuation of the Special Servicer in such role would, in and of
itself, result in the downgrade, qualification or withdrawal of the ratings
then assigned by Moody's to any Class of Certificates.
RIGHTS UPON EVENT OF DEFAULT
If an event of default with respect to the Master Servicer occurs, then
the Trustee may and, at the direction of the holders of Certificates evidencing
at least 25% of the aggregate Voting Rights of all Certificateholders, will be
required to terminate all of the rights and obligations of the Master Servicer
as master servicer under the Pooling Agreement and in and to the Trust Fund.
Notwithstanding the foregoing, upon any termination of the Master Servicer
under the Pooling Agreement, the Master Servicer will continue to be entitled
to receive all accrued and unpaid servicing compensation through the date of
termination plus reimbursement for all Advances and interest on such Advances
as provided in the Pooling Agreement. In the event that the Master Servicer is
also the Special Servicer and the Master Servicer is terminated, the Master
Servicer will also be terminated as Special Servicer. If the Special Servicer
is not the Master Servicer and an event of default with respect to the Special
Servicer occurs, the Trustee may and, at the direction of the holders of at
least 25% of the aggregate Voting Rights of all Certificateholders, will be
required to terminate the Special Servicer, and the Trustee will succeed to all
the power and authority of the Special Servicer under the Pooling Agreement.
On and after the date of termination following an event of default by the
Master Servicer or the Special Servicer, the Trustee will succeed to all
authority and power of the Master Servicer (and the Special Servicer if the
Special Servicer is also the Master Servicer) or the Special Servicer, as the
case may be, under the Pooling Agreement and will be entitled to the
compensation arrangements to which the Master Servicer or the Special Servicer,
as the case may be, would have been entitled. If the Trustee is unwilling or
unable so to act, or if the holders of Certificates evidencing at least 25% of
the aggregate Voting Rights of all Certificateholders so request, or if the
Rating Agencies do not provide written confirmation that the succession of the
Trustee as Master Servicer or Special Servicer, will not cause a qualification,
withdrawal or downgrading of the then current ratings assigned to the
Certificates, the Trustee must appoint, or petition a court of competent
jurisdiction for the appointment of, a mortgage loan servicing institution the
appointment of which will not result in the downgrading, qualification or
withdrawal of the then current ratings assigned to any Class of Certificates as
evidenced in writing by each Rating Agency to act as successor to the Master
Servicer or Special Servicer, as applicable, under the Pooling Agreement.
Pending such appointment, the Trustee is obligated to act in such capacity. The
Trustee and any such successor may agree upon the servicing compensation to be
paid. If the compensation payable to such successor exceeds that to which the
predecessor Master Servicer or the Special Servicer, as the case may be, was
entitled, the additional servicing compensation will be allocated to the
Certificates in the same manner as Realized Losses.
No Certificateholder will have any right under the Pooling Agreement to
institute any proceeding with respect to the Pooling Agreement or the Mortgage
Loans, unless, with respect to the Pooling Agreement, such holder previously
shall have given to the Trustee a written notice of a default under the Pooling
Agreement, and of the continuance thereof, and unless also the holders of
Certificates of each Class affected thereby evidencing Percentage Interests of
at least 25% of such Class shall have made written request of the Trustee to
institute such proceeding in its own name as Trustee under the Pooling
Agreement and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 60 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute
such proceeding.
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The Trustee will have no obligation to make any investigation of matters
arising under the Pooling Agreement or to institute, conduct or defend any
litigation thereunder or in relation thereto at the request, order or direction
of any of the holders of Certificates, unless such holders of Certificates
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby.
AMENDMENT
The Pooling Agreement may be amended at any time by the Seller, the Master
Servicer, the Special Servicer, the Trustee and the Fiscal Agent without the
consent of any of the holders of Certificates (i) to cure any ambiguity; (ii)
to correct or supplement any provisions therein which may be defective or
inconsistent with any other provisions therein; (iii) to amend any provision
thereof to the extent necessary or desirable to maintain the status of each of
the Upper-Tier REMIC and Lower-Tier REMIC as a REMIC, or to prevent the
imposition of any material state or local taxes; (iv) to amend or supplement a
provision which will not adversely affect in any material respect the interests
of any Certificateholder not consenting thereto, as evidenced in writing by an
opinion of counsel or confirmation in writing from each Rating Agency that such
amendment will not result in a qualification, withdrawal or downgrading of the
then current ratings assigned to the Certificates; (v) to amend or supplement
any provisions therein to the extent necessary or desirable to maintain the
rating assigned to each of the Classes of Certificates by each Rating Agency;
and (vi) to make any other provisions with respect to matters which are not
inconsistent with any other provisions therein and will not result in a
qualification, withdrawal or downgrading of the then current ratings assigned
to the Certificates. The Pooling Agreement provides that no such amendment may
cause the Upper-Tier REMIC or the Lower-Tier REMIC to fail to qualify as a
REMIC.
The Pooling Agreement may also be amended from time to time by the Seller,
the Master Servicer, the Special Servicer, the Trustee and the Fiscal Agent
with the consent of the holders of Certificates evidencing at least 66 2/3% of
the Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Pooling Agreement or modifying in any manner the
rights of the holders of Certificates; provided, however, that no such
amendment may (i) reduce in any manner the amount of, or delay the timing of,
payments on any Certificate; (ii) alter the obligations of the Master Servicer,
the Trustee or the Fiscal Agent to make a P&I Advance or Property Advance or
alter the servicing standards set forth in the Pooling Agreement; (iii) change
the percentages of Voting Rights of holders of Certificates which are required
to consent to any action or inaction under the Pooling Agreement; or (iv) amend
the section in the Pooling Agreement relating to the amendment of the Pooling
Agreement, in each case without the consent of the holders of all Certificates
representing all the Percentage Interests of the Class or Classes affected
thereby.
The "Voting Rights" assigned to each Class shall be (a) 0% in the case of
the Class Q, Class R and Class LR Certificates; (b) 4% in the case of the Class
X Certificates, provided that the Voting Rights of the Class X Certificates
will be reduced to zero upon reduction of the Notional Amount thereof to zero
(the applicable percentage, from time to time is the "Fixed Voting Rights
Percentage") and (c) in the case of the Class A-1, Class A-2, Class B, Class C,
Class D, Class E, Class F, Class G, Class H and Class J Certificates, a
percentage equal to the product of (i) 100% minus the Fixed Voting Rights
Percentage multiplied by (ii) a fraction, the numerator of which is equal to
the aggregate outstanding Certificate Principal Amount of any such Class (which
will be reduced for this purpose by the amount of any Appraisal Reduction
Amounts notionally allocated to such Class, if applicable) and the denominator
of which is equal to the aggregate outstanding Certificate Principal Amounts of
all Classes of Certificates. The Voting Rights of any Class of Certificates
shall be allocated among holders of Certificates of such Class in proportion to
their respective Percentage Interests.
REALIZATION UPON MORTGAGE LOANS
SPECIALLY SERVICED MORTGAGE LOANS; APPRAISALS. Within 60 days following
the occurrence of an Appraisal Reduction Event, the Special Servicer will be
required (i) with respect to any Mortgage Loan
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with an outstanding principal balance equal to or in excess of $1,000,000, to
obtain an appraisal of the Mortgaged Property or REO Property, as the case may
be, from an independent appraiser in accordance with MAI standards (an "Updated
Appraisal"), or (ii) with respect to any Mortgage Loan with an outstanding
principal balance less than $1,000,000, to perform an internal valuation of the
Mortgaged Property; provided, that, the Special Servicer will not be required
to obtain an Updated Appraisal or perform an internal valuation of any
Mortgaged Property with respect to which there exists an appraisal or internal
valuation, as applicable, which is less than twelve months old. The cost of any
Updated Appraisal shall be a Property Advance to be paid by the Master
Servicer.
STANDARDS FOR CONDUCT GENERALLY IN EFFECTING FORECLOSURE OR THE SALE OF
DEFAULTED LOANS. In connection with any foreclosure, enforcement of the loan
documents, or other acquisition, the cost and expenses of any such proceeding
shall be paid by the Master Servicer as a Property Advance.
If the Special Servicer elects to proceed with a non-judicial foreclosure
in accordance with the laws of the state where the Mortgaged Property is
located, the Special Servicer shall not be required to pursue a deficiency
judgment against the related borrower, if available, or any other liable party
if the laws of the state do not permit such a deficiency judgment after a
non-judicial foreclosure or if the Special Servicer determines, in accordance
with the Servicing Standard, that the likely recovery if a deficiency judgment
is obtained will not be sufficient to warrant the cost, time, expense and/or
exposure of pursuing the deficiency judgment and such determination is
evidenced by an officers' certificate delivered to the Trustee.
Notwithstanding anything herein to the contrary, the Pooling Agreement
will provide that the Special Servicer will not, on behalf of the Trust Fund,
obtain title to a Mortgaged Property as a result of foreclosure or by deed in
lieu of foreclosure or otherwise, and will not otherwise acquire possession of,
or take any other action with respect to, any Mortgaged Property if, as a
result of any such action, the Trustee, or the Trust Fund or the holders of
Certificates, would be considered to hold title to, to be a
"mortgagee-in-possession" of, or to be an "owner" or "operator" of, such
Mortgaged Property within the meaning of CERCLA or any comparable law, unless
the Special Servicer has previously determined, based on an environmental
assessment report prepared by an independent person who regularly conducts
environmental audits, that: (i) such Mortgaged Property is in compliance with
applicable environmental laws or, if not, after consultation with an
environmental consultant that it would be in the best economic interest of the
Trust Fund to take such actions as are necessary to bring such Mortgaged
Property in compliance therewith and (ii) there are no circumstances present at
such Mortgaged Property relating to the use, management or disposal of any
hazardous materials for which investigation, testing, monitoring, containment,
clean-up or remediation could be required under any currently effective
federal, state or local law or regulation, or that, if any such hazardous
materials are present for which such action could be required, after
consultation with an environmental consultant it would be in the best economic
interest of the Trust Fund to take such actions with respect to the affected
Mortgaged Property.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
is required to be issued to the Trustee, to a co-trustee or to its nominee, on
behalf of holders of Certificates. Notwithstanding any such acquisition of
title and cancellation of the related Mortgage Loan, such Mortgage Loan shall
be considered to be an REO Mortgage Loan held in the Trust Fund until such time
as the related REO Property shall be sold by the Trust Fund and shall be
reduced only by collections net of expenses.
If the Trust Fund acquires a Mortgaged Property by foreclosure or
deed-in-lieu of foreclosure upon a default of a Mortgage Loan, the Pooling
Agreement provides that the Trustee (or the Special Servicer, on behalf of the
Trustee), must administer such Mortgaged Property so that it qualifies at all
times as "foreclosure property" within the meaning of Code Section 860G(a)(8).
The Pooling Agreement also requires that any such Mortgaged Property be managed
and operated by an "independent contractor," within the meaning of applicable
Treasury regulations, who furnishes or renders services to the tenants of such
Mortgaged Property. Generally, the Lower-Tier REMIC will not be taxable on
income received with respect to a Mortgaged Property to the extent that it
constitutes "rents from real property," within the meaning of Code Section
856(c)(3)(A) and Treasury regulations thereunder. "Rents from real property"
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do not include the portion of any rental based on the net income or gain of any
tenant or sub-tenant. No determination has been made whether rent on any of the
Mortgaged Properties meets this requirement. "Rents from real property" include
charges for services customarily furnished or rendered in connection with the
rental of real property, whether or not the charges are separately stated.
Services furnished to the tenants of a particular building will be considered
as customary if, in the geographic market in which the building is located,
tenants in buildings which are of similar class are customarily provided with
the service. No determination has been made whether the services furnished to
the tenants of the Mortgaged Properties are "customary" within the meaning of
applicable regulations. It is therefore possible that a portion of the rental
income with respect to a Mortgaged Property owned by the Lower-Tier REMIC,
presumably allocated based on the value of any non-qualifying services, would
not constitute "rents from real property." In addition to the foregoing, any
net income from a trade or business operated or managed by an independent
contractor on a Mortgaged Property owned by the Lower-Tier REMIC, such as a
lodging property or a healthcare property, will not constitute "rents from real
property." Any of the foregoing types of income may instead constitute "net
income from foreclosure property," which would be taxable to the Lower-Tier
REMIC at the highest marginal federal corporate rate (currently 35%) and may
also be subject to state or local taxes. Any such taxes would be chargeable
against the related income for purposes of determining the Net REO Proceeds
available for distribution to holders of Certificates. The Pooling Agreement
provides that the Special Servicer will be permitted to cause the Lower-Tier
REMIC to earn "net income from foreclosure property" that is subject to tax if
it determines that the net after-tax benefit to Certificateholders is greater
than another method of operating or net leasing the Mortgaged Property. See
"Federal Income Tax Consequences--REMIC Certificates--Income from Residual
Certificates--Prohibited Transactions; Special Taxes" in the Prospectus.
The Pooling Agreement will provide that the Special Servicer may offer to
sell to any person any defaulted Mortgage Loan or any REO Property, or may
offer to purchase any Specially Serviced Mortgage Loan or any REO Property, if
and when the Special Servicer determines, consistent with the Servicing
Standard, that no satisfactory arrangements can be made for collection of
delinquent payments thereon and such a sale would be in the best economic
interests of the Trust Fund, but shall, in any event, so offer to sell any REO
Property no later than the time determined by the Special Servicer to be
sufficient to result in the sale of such REO Property within the period
specified in the Pooling Agreement, including extensions thereof. The Special
Servicer is required to give the Trustee not less than five days' prior written
notice of its intention to sell any Specially Serviced Mortgage Loan or REO
Property, in which case the Special Servicer is required to accept the highest
offer (of at least three offers) received from any person for any Specially
Serviced Mortgage Loan or any REO Property in an amount at least equal to the
Repurchase Price or, at its option, if it has received no offer at least equal
to the Repurchase Price therefor, purchase the Specially Serviced Mortgage Loan
or REO Property at such Repurchase Price.
In the absence of any such offer (or purchase by the Special Servicer),
the Special Servicer shall accept the highest offer received from any person
that is determined by the Special Servicer to be a fair price for such
Specially Serviced Mortgage Loan or REO Property, if the highest offeror is a
person not affiliated with the Special Servicer, or is determined to be a fair
price by the Trustee (based solely upon updated independent appraisals received
by the Trustee) if the highest offeror is affiliated with the Special Servicer.
Neither the Trustee, in its individual capacity, nor any of its affiliates may
make an offer for or purchase any Specially Serviced Mortgage Loan or any REO
Property.
The Pooling Agreement will not obligate the Special Servicer to accept the
highest offer if the Special Servicer determines, in accordance with the
Servicing Standard, that rejection of such offer would be in the best interests
of the holders of Certificates. In addition, the Special Servicer may accept a
lower offer if it determines, in accordance with the Servicing Standard, that
acceptance of such offer would be in the best interests of the holders of
Certificates (for example, if the prospective buyer making the lower offer is
more likely to perform its obligations, or the terms offered by the prospective
buyer making the lower offer are more favorable), provided that such offeror is
not a person affiliated with the Special Servicer. The Special Servicer is
required to use its best efforts to sell all Specially Serviced Mortgage Loans
and REO Property prior to the Rated Final Distribution Date.
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Following a default in the payment of principal or interest on a Mortgage
Loan, the Special Servicer, after consultation with, and agreement by, the
Master Servicer, may elect not to foreclose or institute similar proceedings or
modify such Mortgage Loan (as described below) and instead the Master Servicer
shall continue to make P&I Advances with respect to such delinquencies so long
as the Special Servicer, in its reasonable judgment, after consultation with,
and agreement by, the Master Servicer, concludes (a) that the election not to
foreclose or modify would likely result in a greater recovery, on a present
value basis, than would foreclosure or modification and (b) such P&I Advances
will not be nonrecoverable. With respect to such conclusions, the Master
Servicer may conclusively rely (absent manifest error) on the Special
Servicer's computations and analysis.
MODIFICATIONS, WAIVERS AND AMENDMENTS. The Pooling Agreement will permit
the Special Servicer to modify, waive or amend any term of any Mortgage Loan if
(a) it determines, in accordance with the servicing standard described above,
that it is appropriate to do so and (b) except as described in the following
paragraph, such modification, waiver or amendment, will not (i) affect the
amount or timing of any scheduled payments of principal, interest or other
amount (including prepayment premiums and yield maintenance charges) payable
under the Mortgage Loan, (ii) affect the obligation of the related borrower to
pay a prepayment premium or yield maintenance charge or permit a principal
prepayment during the applicable prepayment lock-out period, (iii) except as
expressly provided by the related Mortgage or in connection with a material
adverse environmental condition at the related Mortgaged Property, result in a
release of the lien of the related Mortgage on any material portion of such
Mortgaged Property without a corresponding principal prepayment or (iv) in the
judgment of the Special Servicer, materially impair the security for the
Mortgage Loan or reduce the likelihood of timely payment of amounts due
thereon.
Notwithstanding clause (b) of the preceding paragraph, the Special
Servicer may (i) reduce the amounts owing under any Specially Serviced Mortgage
Loan by forgiving principal, accrued interest and/or any prepayment premium or
yield maintenance charge, (ii) reduce the amount of the Monthly Payment on any
Specially Serviced Mortgage Loan, including by way of a reduction in the
related Mortgage Rate, (iii) forbear in the enforcement of any right granted
under any Mortgage Note or Mortgage relating to a Specially Serviced Mortgage
Loan, (iv) extend the maturity date of any Specially Serviced Mortgage Loan,
and/or (v) accept a principal prepayment during any Lockout Period; provided
that (x) the related borrower is in default with respect to the Specially
Serviced Mortgage Loan or, in the judgment of the Special Servicer, such
default is reasonably foreseeable, (y) in the sole, good faith judgment of the
Special Servicer, such modification, waiver or amendment would increase the
recovery to Certificateholders on a net present value basis documented to the
Trustee and (z) such modification, waiver or amendment does not result in a tax
being imposed on the Trust Fund or cause any REMIC created pursuant to the
Pooling Agreement to fail to qualify as a REMIC at any time the Certificates
are outstanding, based on an opinion of counsel obtained at the expense of the
Trust Fund. In no event, however, will the Special Servicer be permitted to (i)
extend the maturity date of a Mortgage Loan beyond a date that is two years
prior to the Rated Final Distribution Date, or (ii) if the Mortgage Loan is
secured by a ground lease, extend the maturity date of such Mortgage Loan
beyond a date which is 10 years prior to the expiration of the term of such
ground lease.
The Special Servicer will prepare a report (an "Asset Status Report") for
each Mortgage Loan which becomes a Specially Serviced Mortgage Loan not later
than 30 days after the servicing of such Mortgage Loan is transferred to the
Special Servicer. Each Asset Status Report will be delivered to the Controlling
Class Representative. The Controlling Class Representative may object to any
Asset Status Report within 10 business days of receipt; provided, however, that
the Special Servicer shall implement the recommended action as outlined in such
Asset Status Report if it makes an affirmative determination that not taking
such action would result in a violation of the Servicing Standard. If the
Controlling Class Representative disapproves such Asset Status Report and the
Special Servicer has not made the affirmative determination described above,
the Special Servicer will revise such Asset Status Report as soon as
practicable thereafter, but in no event later than 30 days after such
disapproval. The Special Servicer will revise such Asset Status Report until
the Controlling Class Representative fails to disapprove such revised Asset
Status Report as described above or until the Special Servicer makes a
determination that such objection is not consistent with the Servicing
Standard.
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Each of the Master Servicer and the Special Servicer will be required to
notify the Trustee, the Rating Agencies and the other servicer of any
modification, waiver or amendment of any term of any Mortgage Loan, and to
deliver to the Trustee or the related custodian, for deposit in the related
mortgage file, an original counterpart of the agreement related to such
modification, waiver or amendment, promptly (and in any event within 10
business days) following the execution thereof. Copies of each agreement
whereby any such modification, waiver or amendment of any term of any Mortgage
Loan is effected are required to be available for review during normal business
hours at the offices of the Trustee.
In addition to the other provisions described herein, the Special Servicer
will be permitted to modify, waive or amend any term of a Mortgage Loan that is
not in default or as to which default is not reasonably foreseeable if, and
only if, such modification, waiver or amendment (a) would not be "significant"
as such term is defined in Treasury Regulations Section 1.860G-2(b)(3), which,
in the judgment of the Special Servicer, may be evidenced by an opinion of
counsel and (b) would be in accordance with the Servicing Standard. The consent
of the majority of Percentage Interests of each Class of Certificates affected
thereby or written confirmation from each Rating Agency that such modification,
waiver or amendment will not result in a qualification, withdrawal or
downgrading of the then-current ratings assigned to the Certificates will not
be required but will be conclusive evidence that such modification, waiver or
amendment would not adversely affect in any material respect the interests of
any Certificateholder not consenting thereto. The Master Servicer or the
Special Servicer, as applicable, is required to provide copies of any
modifications, waiver or amendment to each Rating Agency.
The Master Servicer or Special Servicer shall be permitted, in its
discretion, to waive all or any accrued Excess Interest if, prior to the
related maturity date, the related borrower has requested the right to prepay
the Mortgage Loan in full together with all payments required by the Mortgage
Loan in connection with such prepayment except for all or a portion of accrued
Excess Interest, provided that the Master Servicer or Special Servicer, as
applicable, determines that (i) in the absence of the waiver of such Excess
Interest, there is a reasonable likelihood that the Mortgage Loan will not be
paid in full on the related maturity date and (ii) waiver of the right to such
accrued Excess Interest is reasonably likely to produce a greater payment in
the aggregate to Certificateholders on a present value basis than a refusal to
waive the right to such Excess Interest. Any such waiver shall not be effective
until such prepayment is tendered.
THE CONTROLLING CLASS REPRESENTATIVE
The holders of the Class of Certificates representing the most subordinate
interests in the Trust Fund that equals at least 25% of its initial Certificate
Principal Amount (or if no Class of Certificates has a Certificate Principal
Amount of at least 25% of its initial Certificate Principal Amount, the most
subordinate class outstanding) (the "Controlling Class") will designate a
representative pursuant to the Pooling Agreement (the "Controlling Class
Representative"). The Controlling Class Representative may be a
Certificateholder, an individual, a corporation or another entity, as
determined by the Controlling Class. In addition to the matters set forth
above, the Controlling Class Representative may remove and replace the Special
Servicer with another Special Servicer acceptable to the Rating Agencies.
The Controlling Class Representative will have no liability to the
Certificateholders for any action taken, or for refraining from the taking of
any action, in good faith pursuant to the Pooling Agreement, or for error in
judgment; provided, however, that the Controlling Class Representative will not
be protected against any liability which would otherwise be imposed by reason
of willful misfeasance, bad faith or negligence in the performance of duties or
by reason of reckless disregard of obligations or duties. By its acceptance of
a Certificate, each Certificateholder confirms its understanding that the
Controlling Class Representative may take actions that favor the interest of
one or more Classes of the Certificates over other Classes of the Certificates,
and that the Controlling Class Representative may have special relationships
and interests that conflict with those of holders of some Classes of the
Certificate; and, absent willful misfeasance, bad faith or negligence on the
part of the Controlling Class Representative, each Certificateholder agrees to
take no action against the Controlling Class Representative or any of its
officers, directors, employees, principals or agents as a result of such a
special relationship or conflict.
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OPTIONAL TERMINATION; OPTIONAL MORTGAGE LOAN PURCHASE
The holders of the Controlling Class representing greater than a 50%
Percentage Interest of the Controlling Class, and if the Controlling Class does
not exercise its option, the Special Servicer and, if the Special Servicer does
not exercise its option, the Seller and, if the Seller does not exercise its
option, the Master Servicer and, if none of the Controlling Class, the Special
Servicer, the Seller or the Master Servicer exercises its option, the holders
of the Class LR Certificates representing greater than a 50% Percentage
Interest of the Class LR Certificates will have the option to purchase all of
the Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, and thereby effect termination of the Trust Fund
and early retirement of the then outstanding Certificates, on any Distribution
Date on which the aggregate Stated Principal Balance of the Mortgage Loans
remaining in the Trust Fund is less than 1% of the aggregate Stated Principal
Balance of such Mortgage Loans as of the Cut-Off Date. The purchase price
payable upon the exercise of such option on such a Distribution Date will be an
amount equal to the greater of (i) the sum of (A) 100% of the outstanding
principal balance of each Mortgage Loan included in the Trust Fund as of the
last day of the month preceding such Distribution Date; (B) the fair market
value of all other property included in the Trust Fund as of the last day of
the month preceding such Distribution Date, as determined by an independent
appraiser as of a date not more than 30 days prior to the last day of the month
preceding such Distribution Date; (C) all unpaid interest accrued on such
principal balance of each such Mortgage Loan (including any Mortgage Loans as
to which title to the related Mortgaged Property has been acquired) at the
Mortgage Rate (plus the Excess Rate, to the extent applicable) to the last day
of the Interest Accrual Period preceding such Distribution Date, and (D)
unreimbursed Property Advances, and unpaid servicing compensation, special
servicing compensation, Trustee Fees and Trust Fund expenses, in each case to
the extent permitted under the Pooling Agreement with interest on all
unreimbursed Advances at the Advance Rate and (ii) the aggregate fair market
value of the Mortgage Loans and all other property acquired in respect of any
Mortgage Loan in the Trust Fund, on the last day of the month preceding such
Distribution Date, as determined by an independent appraiser acceptable to the
Master Servicer, together with one month's interest thereon at the related
Mortgage Rates. There can be no assurance that payment of the Certificate
Principal Amount, if any, of each outstanding Class of Certificates plus
accrued interest would be made in full in the event of such a termination of
the Trust Fund. See "Description of the Certificates--Termination" in the
Prospectus.
Any Mortgage Loan purchased under the circumstances described in the
preceding paragraph will be purchased subject to a continuing right of (i) the
holders of the Class Q Certificates to receive from the purchaser(s), from time
to time, payments corresponding to Default Interest with respect to such
Mortgage Loan, and (ii) the holders of the Classes of Certificates entitled to
receive the Excess Interest with respect to such Mortgage Loan, to receive from
the purchaser(s), from time to time, payments corresponding to Excess Interest
with respect to such Mortgage Loan.
THE TRUSTEE
LaSalle National Bank, a national banking association with its principal
offices in Chicago, Illinois, will act as Trustee pursuant to the Pooling
Agreement. The Trustee's corporate trust office is located at 135 South LaSalle
Street, Suite 1625, Chicago, Illinois 60674-4107, Attention: Asset Backed
Securities Trust Services Group--GSMSC II 1999-C1.
The Trustee may resign at any time by giving written notice to the Seller,
the Master Servicer and the Rating Agencies, provided that no such resignation
shall be effective until a successor has been appointed. Upon such notice, the
Seller will appoint a successor trustee reasonably acceptable to the Master
Servicer. If no successor trustee is appointed within one month after the
giving of such notice of resignation, the resigning Trustee may petition the
court for appointment of a successor trustee.
The Seller may remove the Trustee and the Fiscal Agent if, among other
things, the Trustee ceases to be eligible to continue as such under the Pooling
Agreement or if at any time the Trustee becomes incapable of acting, or is
adjudged bankrupt or insolvent, or a receiver of the Trustee or its property is
appointed or any public officer takes charge or control of the Trustee or of
its property. The holders of Certificates evidencing aggregate Voting Rights of
more than 50% of all Certificateholders may remove
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the Trustee and the Fiscal Agent upon written notice to the Seller, the Master
Servicer, the Trustee and the Fiscal Agent. Any resignation or removal of the
Trustee and the Fiscal Agent and appointment of a successor trustee and, if
such trustee is not rated at least "AA" by S&P and "Aa2" by Moody's, fiscal
agent, will not become effective until acceptance of the appointment by the
successor trustee and, if necessary, fiscal agent. Notwithstanding the
foregoing, upon any termination of the Trustee and the Fiscal Agent under the
Pooling Agreement, the Trustee and the Fiscal Agent will continue to be
entitled to receive all accrued and unpaid compensation through the date of
termination plus reimbursement for all Advances made by them and interest
thereon as provided in the Pooling Agreement. Any successor trustee must have a
combined capital and surplus of at least $50,000,000 and such appointment must
not result in the downgrade, qualification or withdrawal of the then-current
ratings assigned to the Certificates, as evidenced in writing by the Rating
Agencies (other than S&P).
Pursuant to the Pooling Agreement, the Trustee will be entitled to receive
a monthly fee (the "Trustee Fee") at a specified rate (the "Trustee Fee Rate"),
payable by the Master Servicer out of the Servicing Fee.
The Trust Fund will indemnify the Trustee and the Fiscal Agent against any
and all losses, liabilities, damages, claims or unanticipated expenses
(including reasonable attorneys' fees) arising in respect of the Pooling
Agreement or the Certificates other than those resulting from the negligence,
bad faith or willful misconduct of the Trustee or the Fiscal Agent, as
applicable. Neither the Trustee nor the Fiscal Agent will be required to expend
or risk its own funds or otherwise incur financial liability in the performance
of any of its duties under the Pooling Agreement, or in the exercise of any of
its rights or powers, if in the Trustee's or the Fiscal Agent's opinion, as
applicable, the repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it. The Master Servicer and the
Special Servicer each indemnify the Trustee, the Fiscal Agent, and certain
related parties for similar losses incurred related to the willful misconduct,
bad faith, fraud and/or negligence in the performance of the Master Servicer's
or the Special Servicer's duties as applicable, under the Pooling Agreement or
by reason of reckless disregard of its respective obligations and duties under
the Pooling Agreement.
At any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Trust Fund or property securing the same
is located, the Seller and the Trustee acting jointly will have the power to
appoint one or more persons or entities approved by the Trustee to act (at the
expense of the Trustee) as co-trustee or co-trustees, jointly with the Trustee,
or separate trustee or separate trustees, of all or any part of the Trust Fund,
and to vest in such co-trustee or separate trustee such powers, duties,
obligations, rights and trusts as the Seller and the Trustee may consider
necessary or desirable. Except as required by applicable law, the appointment
of a co-trustee or separate trustee will not relieve the Trustee of its
responsibilities, obligations and liabilities under the Pooling Agreement.
DUTIES OF THE TRUSTEE
The Trustee (except for the information under the first paragraph of
"--The Trustee") and the Master Servicer (except for the information under
"--The Master Servicer") will make no representation as to the validity or
sufficiency of the Pooling Agreement, the Certificates or the Mortgage Loans,
this Prospectus Supplement or related documents.
In the event that the Master Servicer fails to make a required Advance,
the Trustee will be obligated to make such Advance, provided that the Trustee
shall not be obligated to make any Advance it deems to be nonrecoverable. The
Trustee shall be entitled to rely conclusively on any determination by the
Master Servicer that an Advance, if made, would not be recoverable. The Trustee
will be entitled to reimbursement for each Advance made by it in the same
manner and to same extent as the Master Servicer.
If no event of default has occurred, and after the curing of all events of
default which may have occurred, the Trustee is required to perform only those
duties specifically required under the Pooling Agreement. Upon receipt of the
various certificates, reports or other instruments required to be furnished to
it, the Trustee is required to examine such documents and to determine whether
they conform on their face to the requirements of the Pooling Agreement.
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In addition, pursuant to the Pooling Agreement, the Trustee, at the cost
and expense of the Seller, based upon reports, documents, and other information
provided to the Trustee, will be obligated to file with the Securities and
Exchange Commission (the "Commission"), in respect of the Trust and the
Certificates, copies of the annual reports and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) required
to be filed with the Commission pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934, as amended, and any other Form 8-K reports
required to be filed pursuant to the Pooling Agreement.
THE FISCAL AGENT
ABN AMRO Bank N.V., a banking corporation organized under the laws of The
Netherlands, will act as Fiscal Agent pursuant to the Pooling Agreement. The
Fiscal Agent's office is located at 135 South LaSalle Street, Chicago, Illinois
60674-4107.
The Fiscal Agent may not resign except (i) in the event of the resignation
or removal of the Trustee (in which event, the Fiscal Agent shall be deemed to
have been removed), (ii) upon determination that it may no longer perform such
obligations and duties under applicable law, or (iii) upon written confirmation
from the Rating Agencies (other than S&P) that such resignation, without the
appointment of a successor Fiscal Agent, will not in and of itself result in a
downgrade qualification or withdrawal of the then current rating of any Class
of Certificates. Any such determination in (ii) above is required to be
evidenced by an opinion of counsel to such effect delivered to the Seller and
the Trustee. Except as provided in (iii) above, no resignation or removal of
the Fiscal Agent shall become effective until a successor fiscal agent
acceptable to each Rating Agency, as evidenced in writing (which may be the
Trustee) shall have assumed the Fiscal Agent's obligations and duties under the
Pooling Agreement. The Fiscal Agent will not be accountable for the use or
application by the Seller, the Master Servicer or the Special Servicer of any
Certificates issued to it or of the proceeds of such Certificates, or for the
use of or application of any funds paid to the Seller, the Master Servicer or
the Special Servicer in respect of the assignment of the Mortgage Loans to the
Trust Fund, or any funds deposited in or withdrawn from any borrower accounts,
Collection Account, Upper-Tier Distribution Account, Lower-Tier Distribution
Account, Interest Reserve Account, Excess Interest Distribution Account, Class
Q Distribution Account, or any other account maintained by or on behalf of the
Master Servicer or the Special Servicer, nor will the Fiscal Agent be required
to perform, or be responsible for the manner of performance of, any of the
obligations of the Master Servicer or the Special Servicer under the Pooling
Agreement.
DUTIES OF THE FISCAL AGENT
The Fiscal Agent will make no representation as to the validity or
sufficiency of the Pooling Agreement, the Certificates, any Mortgage Loan, this
Prospectus Supplement (except for the information in the first sentence under
the preceding section with the heading "--The Fiscal Agent") or related
documents. The duties and obligations of the Fiscal Agent consist only of
making Advances as described below and in "--Advances" above; the Fiscal Agent
will not be liable except for the performance of such duties and obligations.
The Fiscal Agent will not be accountable for the use or application by the
Seller, the Master Servicer or the Special Servicer of any Certificates issued
to it or of the proceeds of such Certificates, or for the use of or application
of any funds paid to the Seller, the Master Servicer or the Special Servicer in
respect of the assignment of the Mortgage Loans to the Trust Fund, or any funds
deposited in or withdrawn from the borrower accounts, Collection Account,
Upper-Tier Distribution Account, Lower-Tier Distribution Account, Interest
Reserve Account, Excess Interest Distribution Account, Class Q Distribution
Account or any other account maintained by or on behalf of the Master Servicer
or the Special Servicer, nor will the Fiscal Agent be required to perform, or
be responsible for the manner of performance of, any of the obligations of the
Master Servicer or the Special Servicer under the Pooling Agreement.
In the event that the Master Servicer and the Trustee fail to make a
required Advance, the Fiscal Agent will be obligated to make such Advance,
provided that the Fiscal Agent will not be obligated to make any Advance that
it deems to be nonrecoverable. The Fiscal Agent shall be entitled to rely
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conclusively on any determination by the Master Servicer or the Trustee that an
Advance, if made, would not be recoverable. The Fiscal Agent will be entitled
to reimbursement for each Advance made by it in the same manner and to the same
extent as the Trustee and the Master Servicer.
THE MASTER SERVICER
GMAC Commercial Mortgage Corporation ("GMACCM") will initially act as the
master servicer (in such capacity, the "Master Servicer"). The following
information has been provided by the Master Servicer. None of the Seller, the
Trustee, the Underwriters, or any of their respective affiliates takes any
responsibility therefor or makes any representation or warranty as to the
accuracy or completeness thereof.
GMACCM, a corporation organized under the laws of the State of California,
is a wholly-owned direct subsidiary of GMAC Mortgage Group, Inc., which in turn
is a wholly-owned direct subsidiary of General Motors Acceptance Corporation.
The principal offices of GMACCM are located at 650 Dresher Road, Horsham,
Pennsylvania 19044. Its telephone number is (215) 328-4622. As of June 30,
1998, GMACCM was the servicer of a portfolio of multifamily and commercial
mortgage loans totaling approximately $46 billion in aggregate outstanding
principal amounts. Neither the Master Servicer, its parent nor any of its
affiliates will guarantee the Certificates or the assets included in the Trust
Fund.
Pursuant to the terms of the Pooling Agreement, the Master Servicer will
be required to indemnify the Seller and the Trustee for any losses, fines,
judgments, costs and expenses incurred by them as a result of the Master
Servicer's willful misfeasance, bad faith or negligent failure to comply with
its duties and obligations under the Pooling Agreement.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Pursuant to the Pooling Agreement, the Master Servicer will be entitled to
withdraw monthly from the Collection Account its portion of the Servicing Fee.
The monthly servicing fee (the "Servicing Fee") for any Distribution Date is an
amount per Interest Accrual Period equal to the sum for each Mortgage Loan of
the product of (i) 1/12th times a per annum rate equal to 0.0838% (or, with
respect to the Mortgage Loan identified on Annex A hereto by loan number I0066,
0.1838%) (in each case, the "Servicing Fee Rate") and (ii) the Stated Principal
Balance of such Mortgage Loan; provided, that such amounts shall be computed on
the basis of the same principal amount, and, in connection with any partial
interest payment, for the same period respecting which any related interest
payment due or deemed due on the related Mortgage Loan is computed. The
Servicing Fee includes the compensation payable to the Master Servicer and the
Trustee Fee. With respect to any Distribution Date, to the extent that there
are Prepayment Interest Shortfalls with respect to Principal Prepayments
received during the related Collection Period, the Servicing Fee payable to the
Master Servicer with respect to all the Mortgage Loans (but not the fees
payable to the Trustee or Rating Agencies) for the related Distribution Date
shall be reduced up to the amount sufficient to fully offset such Prepayment
Interest Shortfalls; provided, however, that in no event shall the amount
exceed the product of (x) 1/12th and (y) 0.04% of the Stated Principal Balance
of the Mortgage Loans for the related Collection Period. The Master Servicer's
portion of the Servicing Fee relating to each Mortgage Loan will be retained
(to the extent not otherwise offset by Prepayment Interest Excesses) by the
Master Servicer from payments and collections (including insurance proceeds,
condemnation proceeds and liquidation proceeds) in respect of such Mortgage
Loan. The Master Servicer will also be entitled to retain as additional
servicing compensation all investment income earned on amounts on deposit in
the Collection Account (to the extent not payable to the related borrower under
the related Mortgage Loan or applicable law). The Servicing Fee includes
certain amounts which will be paid to the Rating Agencies for on-going
monitoring and surveillance of the Certificates by the Rating Agencies and for
certain filing fees and related expenses.
In addition, the Master Servicer will be entitled to receive, as
additional servicing compensation, to the extent permitted by applicable law
and the related Mortgage Loans, any late payment charges, loan service
transaction fees, beneficiary statement charges or similar items (but not
including any yield maintenance charge or prepayment premiums), in each case to
the extent received by the Master
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Servicer on Mortgage Loans which are not Specially Serviced Mortgage Loans and
not required to be deposited or retained in the Collection Account pursuant to
the Pooling Agreement.
The Master Servicer will be required to pay all expenses incurred in
connection with its responsibilities under the Pooling Agreement (subject to
reimbursement as described herein), including all fees of any subservicers
retained by it.
THE SPECIAL SERVICER
Lennar Partners, Inc., a Florida corporation, a subsidiary of LNR Property
Corporation, will initially be appointed as special servicer of the Mortgage
Loans, (in such capacity, the "Special Servicer"). The Special Servicer will,
among other things, oversee the resolution of non-performing Mortgage Loans and
act as disposition manager of REO Properties. The Pooling Agreement will
provide that although more than one Special Servicer may be appointed, only one
Special Servicer may specially service any Mortgage Loan. The following
information has been provided by the Special Servicer. None of the Seller, the
Trustee, the Underwriters, or any of their respective affiliates takes any
responsibility therefor or makes any representation or warranty as to the
accuracy or completeness thereof.
As of September 1, 1998, the Special Servicer and its affiliates were
managing a portfolio including over 8,900 assets in most states with an
original face value of over $30 billion, most of which are commercial real
estate assets. Included in this managed portfolio are $23.6 billion of
commercial real estate assets representing 44 securitization transactions, for
which the Special Servicer is the master servicer or special servicer.
The Special Servicer will be obligated to, among other things, oversee the
resolution of non-performing Mortgage Loans and act as disposition manager of
REO Properties. The Pooling Agreement provides that the Controlling Class
Representative may remove and replace the Special Servicer with another Special
Servicer acceptable to the Rating Agencies.
Pursuant to the Pooling Agreement, the Special Servicer will be entitled
to certain fees, including a special servicing fee (and if the Special Servicer
is the Master Servicer, such fees will be in addition to the Servicing Fee),
payable with respect to each Interest Accrual Period, equal to the product of
(i) 1/12th times 0.025% and (ii) the Stated Principal Balance of each related
Specially Serviced Mortgage Loan (the "Special Servicing Fee"); provided, that
such amounts shall be computed on the basis of the same principal amount and,
in connection with any partial interest payment, for the same period respecting
which any related interest payment due or deemed due on the related Mortgage
Loan is computed. The Special Servicer will be entitled, in addition to the
Special Servicing Fee, to receive a "Liquidation Fee" equal to the applicable
Principal Recovery Percentage of the amount equal to (x) the proceeds of the
sale of any Mortgage Loan or REO Property minus (y) any broker's commission and
related brokerage referral fees and to receive a "Rehabilitation Fee" with
respect to any Mortgage Loan which ceases to be specially serviced and has made
three consecutive Monthly Payments on or prior to the related Due Dates after
the Mortgage Loan has ceased to be a Specially Serviced Mortgage Loan in an
amount equal to the applicable Principal Recovery Percentage of the highest
Stated Principal Balance of such Mortgage Loan during the period in which it
was specially serviced; provided, however, that such Rehabilitation Fee shall
be due only once for each Mortgage Loan during the term of the Pooling
Agreement. The "Principal Recovery Percentage" will be equal to 1.00%. However,
no Liquidation Fee or Rehabilitation Fee will be payable in connection with, or
out of, Liquidation Proceeds resulting from the purchase of any Specially
Serviced Mortgage Loan or REO Property (i) by any Responsible Party as
described herein under "Description of the Mortgage Pool--Representations and
Warranties," (ii) by the Master Servicer, the Special Servicer, the Seller or
the Certificateholders as described herein under "--Optional Termination;
Optional Mortgage Loan Purchase," or (iii) in certain other limited
circumstances. Each of the foregoing fees, along with certain expenses related
to special servicing of a Mortgage Loan, shall be payable out of funds
otherwise available to make payments on the Certificates.
In addition, the Special Servicer will be entitled to receive, as
additional servicing compensation, to the extent permitted by applicable law
and the related Mortgage Loans, all assumption fees, loan modification fees and
extension fees on all Mortgage Loans and any late payment charges, loan service
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transaction fees, beneficiary statement charges or similar items (but not
including any yield maintenance charge or prepayment premiums) to the extent
received by the Special Servicer on Specially Serviced Mortgage Loans and, in
each case, to the extent not required to be deposited or retained in the REO
Account or Collection Account pursuant to the Pooling Agreement.
MASTER SERVICER AND SPECIAL SERVICER PERMITTED TO BUY CERTIFICATES
The Master Servicer and the Special Servicer will be permitted to purchase
any Class of Certificates and it is expected that the Special Servicer or an
affiliate will purchase all or a portion of certain Classes of non-offered
Certificates. Such a purchase by the Master Servicer or the Special Servicer
could cause a conflict relating to the Master Servicer's or the Special
Servicer's duties pursuant to the Pooling Agreement and the Master Servicer's
or the Special Servicer's interest as a holder of Certificates, especially to
the extent that certain actions or events have a disproportionate effect on one
or more Classes of Certificates. The Pooling Agreement provides that the Master
Servicer or Special Servicer shall administer the Mortgage Loans in accordance
with the servicing standard set forth therein without regard to ownership of
any Certificate by the Master Servicer or the Special Servicer or any affiliate
thereof. Additionally, the Pooling Agreement provides that (i) an affiliate of
a borrower may not vote with respect to matters where there is a potential
conflict of interest, (ii) any Certificateholder that is also the holder of any
debt of any of the affiliates of any of the borrowers under the Mortgage Loans
may not vote with respect to selecting, or directing the actions of the Special
Servicer with respect to such Mortgage Loan, and (iii) the Special Servicer may
not be the holder of any debts of the affiliates of the borrowers under the
Mortgage Loans.
REPORTS TO CERTIFICATEHOLDERS
The Master Servicer is required to deliver to the Trustee prior to each
Distribution Date, and the Trustee is to deliver to each Certificateholder, the
Seller, each Rating Agency and, if requested, any potential investor in the
Certificates, on each Distribution Date, the following six reports:
(a) A "Comparative Financial Status Report" setting forth, to the extent
such information is provided by the related borrowers, among other things, the
occupancy, revenue, net operating income and DSCR for the Mortgage Loans as of
the current date for each of the following periods: (i) the most current
available year-to-date, (ii) the previous two full fiscal years, and (iii) the
"base year" (representing the original underwriting information used as of the
Cut-Off Date).
(b) A "Delinquent Loan Status Report" setting forth, among other things,
those Mortgage Loans which, as of the close of business on the Determination
Date immediately preceding the preparation of such report, were delinquent one
Collection Period, delinquent two Collection Periods, delinquent three or more
Collection Periods, current but specially serviced, or in foreclosure but not
REO Property.
(c) An "Historical Loan Modification Report" setting forth, among other
things, those Mortgage Loans which, as of the close of business on the
Determination Date immediately preceding the preparation of such report, have
been modified pursuant to the Pooling Agreement (i) during the related
Collection Period and (ii) since the Cut-Off Date, showing the original and the
revised terms thereof.
(d) An "Historical Loss Estimate Report" setting forth, among other
things, as of the close of business on the Determination Date immediately
preceding the preparation of such report, (i) the aggregate amount of
liquidation proceeds and liquidation expenses, both for the current period and
historically, and (ii) the amount of Realized Losses occurring during the
related Collection Period, set forth on a Mortgage Loan-by-Mortgage Loan basis.
(e) An "REO Status Report" setting forth, among other things, with respect
to each REO Property that was included in the Trust Fund as of the close of
business on the Determination Date immediately preceding the preparation of
such report, (i) the acquisition date of such REO Property, (ii) the amount of
income collected with respect to any REO Property net of related expenses and
other amounts, if any, received on such REO Property during the related
Collection Period and (iii) the value of the REO Property based on the most
recent appraisal or other valuation thereof available to the Master Servicer as
of such date of determination (including any prepared internally by the Special
Servicer).
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(f) A "Watch List" setting forth, among other things, any Mortgage Loan
that is in jeopardy of becoming a Specially Serviced Mortgage Loan.
Subject to the receipt of necessary information from any subservicer, such
loan-by-loan reports will be made available electronically in the form of the
standard CSSA loan file and CSSA property file; provided, however, the Trustee
will provide Certificateholders with a written copy of such report upon
request. The information that pertains to Specially Serviced Mortgage Loans and
REO Properties reflected in such reports shall be based solely upon the reports
delivered by the Special Servicer to the Master Servicer at least one business
day following the Determination Date. Absent manifest error, none of the Master
Servicer, the Special Servicer or the Trustee shall be responsible for the
accuracy or completeness of any information supplied to it by a borrower or
third party that is included in any reports, statements, materials or
information prepared or provided by the Master Servicer, the Special Servicer
or the Trustee, as applicable.
The Master Servicer is also required to deliver to the Trustee the
following materials:
(a) Annually, on or before June 30 of each year, commencing with June 30,
1999, with respect to each Mortgaged Property and REO Property, an "Operating
Statement Analysis" together with copies of the operating statements and rent
rolls (but only to the extent the related borrower is required by the Mortgage
to deliver, or otherwise agrees to provide such information) for such Mortgaged
Property or REO Property as of the end of the preceding calendar year. The
Master Servicer (or the Special Servicer in the case of Specially Serviced
Mortgage Loans and REO Properties) is required to use its best reasonable
efforts to obtain said annual operating statements and rent rolls.
(b) Within thirty days of receipt by the Master Servicer (or within twenty
days of receipt from the Special Servicer with respect to any Specially
Serviced Mortgage Loan or REO Property) of annual operating statements, if any,
with respect to any Mortgaged Property or REO Property, an "NOI Adjustment
Worksheet" for such Mortgaged Property (with the annual operating statements
attached thereto as an exhibit), presenting the computations made in accordance
with the methodology described in the Pooling Agreement to "normalize" the full
year net operating income and debt service coverage numbers used by the Master
Servicer in the other reports referenced above.
The Trustee is to deliver a copy of each Operating Statement Analysis
report and NOI Adjustment Worksheet that it receives from the Master Servicer
to the Seller, the and each Rating Agency promptly after its receipt thereof.
Upon request, the Trustee will make such reports available to the
Certificateholders and the Special Servicer. Any Certificateholder and any
potential investor in the Certificates may obtain a copy of any NOI Adjustment
Worksheet for a Mortgaged Property or REO Property in the possession of the
Trustee upon request.
USE OF PROCEEDS
The net proceeds from the sale of the Certificates will be used by the
Seller to pay the purchase price of the Mortgage Loans.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS
The following discussion contains summaries of certain legal aspects of
mortgage loans in Texas (approximately 13.0% of the Mortgage Loans by Initial
Pool Balance), California (approximately 10.5% of the Mortgage Loans by Initial
Pool Balance), Florida (approximately 7.9% of the Mortgage Loans by Initial
Pool Balance), New York (approximately, 7.3% of the Mortgage Loans by Initial
Pool Balance), Arizona (approximately 6.4% of the Mortgage Loans by Initial
Pool Balance), Georgia (approximately 5.2% of the Mortgage Loans by Initial
Pool Balance) which are general in nature. The summaries do not purport to be
complete and are qualified in their entirety by reference to the applicable
federal and state laws governing the Mortgage Loans.
Texas, California, Florida, New York, Arizona, Georgia and various other
states have imposed statutory prohibitions or limitations that limit the
remedies of a mortgagee under a mortgage or a beneficiary under a deed of
trust. All of the Mortgage Loans are nonrecourse loans as to which, in the
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event of default by a borrower, recourse may be had only against the specific
property pledged to secure the Mortgage Loan and not against the borrower's
other assets. Even if recourse is available pursuant to the terms of the
Mortgage Loan, certain states have adopted statutes which impose prohibitions
against or limitations on such recourse. The limitations described below and
similar or other restrictions in other jurisdictions where Mortgaged Properties
are located may restrict the ability of the Master Servicer or the Special
Servicer, as applicable, to realize on the Mortgage Loans and may adversely
affect the amount and timing of receipts on the Mortgage Loans.
Under Texas law, a deed of trust customarily is foreclosed by non-judicial
process; judicial process is generally not used. A mortgagee does not preclude
its ability to sue on a recourse note by instituting foreclosure proceedings.
Unless a longer period or other curative rights are provided by the loan
documents, at least 21 days notice prior to foreclosure is required and
foreclosure sales must be held on the first Tuesday of a calendar month. Absent
contrary provisions in the loan documents, deficiency judgments are obtainable
under Texas law. To determine the amount of any deficiency judgment, a borrower
is given credit for the greater of the actual sale price (excluding trustee's
and other allowable costs) or the fair market value of the property. Under a
relation-back theory, the entire amount of any mechanic's or materialmen's lien
takes priority over the lien of a deed of trust if the lien claimant began work
or delivered its first materials prior to recordation of the deed of trust,
provided that the loan affidavit is timely and properly perfected.
California statutes limit the right of the beneficiary to obtain a
deficiency judgment against the trustor (i.e., obligor) following the
non-judicial foreclosure sale under a deed of trust. A deficiency judgment is a
personal judgment against the obligor in most cases equal to the difference
between the amount due to the beneficiary and the fair market value of the
collateral. No deficiency judgment is permitted under California law following
a nonjudicial sale under the power of sale provision in a deed of trust. Other
California statutes require the beneficiary to exhaust the security afforded
under the deed of trust by foreclosure in an attempt to satisfy the full debt
before bringing a personal action (if otherwise permitted) against the obligor
for recovery of the debt except in certain cases involving environmentally
impaired real property. California case law has held that acts such as an
offset of an unpledged account or the application of rents from secured
property prior to foreclosure, under some circumstances, constitute violations
of such statutes. Violations of such statutes may result in the loss of some or
all of the security under the loan. Finally, other statutory provisions in
California limit any deficiency judgment (if otherwise permitted) against the
former trustor following a judicial sale to the excess of the outstanding debt
over the greater of (i) the fair market value of the property at the time of
the public sale or (ii) the amount of the winning bid in the foreclosure, and
give the borrower a one-year period within which to redeem the property.
California statutes also provide priority to certain tax liens over the lien of
previously recorded deeds of trust.
Under Florida law, Mortgage Loans involving real property are generally
secured by mortgages and foreclosures are accomplished by judicial foreclosure.
There is no power of sale in Florida, except as permitted by federal law. After
an action for foreclosure is commenced and the lender secures a judgment, the
final judgment will provide that the property be sold at public sale at the
courthouse if the full amount of the judgment is not paid prior to the
scheduled sale. Generally, the foreclosure sale must occur no earlier than 30
days after the judgment is entered. During this period, a notice of sale must
be published twice in the county in which the property is located. The
mortgagor or any junior lienor may redeem the property at any time before the
sale by paying the amount of the judgment. There is no right of redemption
after issuance of the certificate of title to the buyer of the property.
Florida does not have a "one action rule" or "anti-deficiency legislation."
Subsequent to a foreclosure sale, however, a lender may be required to prove
the value of the property sold as of the date of foreclosure in order to
recover a deficiency. In certain circumstances, the lender may have a receiver
appointed.
Under New York law, while a foreclosure may proceed either judicially or
non-judicially, nonjudicial foreclosures are virtually unused today. Under New
York law, upon default of a mortgage, a mortgagee is generally presented with
the choice of either proceeding in equity to foreclose upon the mortgaged
property or to proceed at law and sue on the note. New York law does not
require that the mortgagee must bring a foreclosure action before being
entitled to sue on the note. However, once having begun
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a foreclosure action or an action to sue on the note or guaranty, a mortgagee
is generally not permitted to initiate the other without leave of court. New
York does not restrict a mortgagee from seeking a deficiency judgment. In order
to obtain a deficiency judgment, a series of procedural and substantive
requirements must be satisfied. In New York, liens for unpaid real estate taxes
take priority over the lien of a previously recorded mortgage.
Under Arizona law, a deed of trust may be foreclosed judicially by filing
a foreclosure action in Superior Court, or non-judicially by exercise of the
power of sale given under the deed of trust. Since judicial foreclosure is a
long process and allows the property owner trustor six months to redeem the
property after sale, judicial foreclosure is rarely used. A non-judicial
foreclosure under the power of sale can be held ninety days after the recording
of a notice of sale and there is no right of redemption in the property owner
trustor. A separate action may be brought on the note secured by the deed of
trust, but such action must be dismissed prior to the time the non-judicial
foreclosure takes place. The property owner trustor or any junior lienholder
may cure the default and stop the sale at any time prior to 5:00 p.m. the day
before the sale is scheduled to take place by paying all costs of sale and the
amount due excluding any portion of the debt which is due only as a result of
acceleration. After a deed of trust sale, a deficiency can be obtained, unless
prohibited by the documents, only by bringing a deficiency action within ninety
days after the sale. If no deficiency action is brought, the debt is deemed
satisfied. In a deficiency action, the property owner trustor must be given
credit against the debt for the greater of the sales price or the fair market
value of the property.
Under Georgia law, Mortgage Loans are generally secured by deeds to secure
debt on the related real estate. Foreclosure of a deed to secure debt is, in
most cases, accomplished by power of sale granted in the deed to secure debt
(although judicial foreclosure is available). Public notice of the sale is
given for a statutory period of time after which the subject property may be
sold by the grantee. A non-judicial foreclosure sale may, where appropriate, by
enjoined or set aside. There is no statutory right of redemption with respect
to either judicial or power of sale foreclosure.
FEDERAL INCOME TAX CONSEQUENCES
Elections will be made to treat applicable portions of the Trust Fund and,
in the opinion of Cadwalader, Wickersham & Taft, special tax counsel to the
Seller, such portions of the Trust Fund will qualify, as two separate real
estate mortgage investment conduits (each, a "REMIC") (the "Upper-Tier REMIC"
and the "Lower-Tier REMIC," respectively) within the meaning of Code Section
860D. The Lower-Tier REMIC will hold the Mortgage Loans (exclusive of the
Excess Interest and the Default Interest), the Collection Account, the
Lower-Tier Distribution Account, the Interest Reserve Account and any REO
Property, and will issue (i) certain uncertificated classes of regular
interests (the "Lower-Tier Regular Interests") to the Upper-Tier REMIC and (ii)
the Class LR Certificates, which will represent the sole class of residual
interests in the Lower-Tier REMIC. The Upper-Tier REMIC will hold the
Lower-Tier Regular Interests and the Upper-Tier Distribution Account in which
distributions thereon will be deposited and will issue (i) classes of regular
interests represented by the Regular Certificates and (ii) the Class R
Certificates, which will represent the sole class of residual interests in the
Upper-Tier REMIC. In addition, the Class A-2, Class B, Class C, Class D, Class
E, Class F and Class G Certificates will represent pro rata undivided
beneficial interests in designated portions of the Excess Interest and the
related portions of the Excess Interest Distribution Account, which portion of
the Trust Fund will be treated as part of a grantor trust for federal income
tax purposes. Although holders of these Classes of Certificates will be
required to allocate their purchase price between their interests in the
regular interests in the Upper-Tier REMIC and their beneficial interests in
Excess Interest based on the relative fair market values of each, it is
anticipated that the rights to Excess Interest will have negligible value as of
the Closing Date. The Class Q Certificates will represent pro rata, undivided,
beneficial interests in the portion of the Trust Fund consisting of the Default
Interest (subject to the obligation to pay interest on Advances) and the Class
Q Distribution Account, which portion will also be part of the grantor trust
for federal income tax purposes.
The Offered Certificates will be treated as "real estate assets" under
Code Section 856(c)(4)(A), to the extent that the assets of the REMICs are so
treated. The interest on the Offered Certificates will be
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"interest on obligations secured by mortgages on real property" described in
Code Section 856(c)(3)(B) for a real estate investment trust, in the same
proportion that the income of the REMICs is so treated.
A beneficial owner's interest in an Offered Certificate will qualify for
the foregoing treatments under Sections 856(c)(4)(A) and 856(c)(3)(B) in their
entirety if at least 95% of the REMICs' assets qualify for such treatment, and
otherwise will qualify to the extent of the REMICs' percentage of such assets.
A Mortgage Loan that has been defeased with U.S. Treasury securities will not
qualify for such treatment. A beneficial owner's interest in an Offered
Certificate will constitute "loans . . . secured by an interest in real
property which is . . . residential real property" within the meaning of Code
Section 7701(a)(19)(C)(v) in the case of a domestic building and loan
association only to the extent of the percentage of the REMICs' assets
consisting of loans secured by multifamily properties and healthcare
properties. The Lower-Tier REMIC and the Upper-Tier REMIC will be treated as
one REMIC solely for the purpose of making the foregoing determinations.
The regular interests represented by the Offered Certificates generally
will be treated as newly originated debt instruments for federal income tax
purposes. Beneficial owners of the Offered Certificates will be required to
report income on the regular interests represented by the Offered Certificates
in accordance with the accrual method of accounting and any income from Excess
Interest as such amounts are accrued by the Trust Fund. See "Federal Income Tax
Consequences--REMIC Certificates--Income from Regular Certificates--General" in
the Prospectus.
It is anticipated that the regular interests represented by the Class ,
Class and Class Certificates will be issued at a premium and that the
regular interest represented by the Class and Class Certificates will
be issued with original issue discount for federal income tax purposes.
Although unclear for federal income tax purposes, it is anticipated that
the Class X Certificates will be treated as issued with original issue discount
in an amount equal to the excess of all distributions of interest expected to
be received thereon over their respective issue prices (including accrued
interest). Any "negative" amounts of original issue discount ("OID") on the
Class X Certificates attributable to rapid prepayment with respect to the
Mortgage Loans will not be deductible currently, but may be offset against
future positive accruals of original issue discount, if any. Finally, a holder
of a Class X Certificate may be entitled to a loss deduction to the extent it
becomes certain that such holder will not recover a portion of its basis in
such Certificate, assuming no further prepayments. In the alternative, it is
possible that rules similar to the "noncontingent bond method" of the
contingent interest rules in the OID regulations, as amended on June 12, 1996,
may be promulgated with respect to the Class X Certificates. Under the
noncontingent bond method, if the interest payable for any period is greater or
less than the amount projected, the amount of income included for that period
would be either increased or decreased accordingly. Any net reduction in the
income accrual for the taxable year below zero (a "Negative Adjustment") would
be treated by a Certificateholder as ordinary loss to the extent of prior
income accruals and would be carried forward to offset future interest
accruals. At maturity, any remaining Negative Adjustment would be treated as a
loss on retirement of the Certificate. The legislative history of relevant
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
indicates, however, that negative amounts of original issue discount on an
instrument such as a REMIC regular interest may not give rise to taxable losses
in any accrual period prior to the instrument's disposition or retirement.
Thus, it is not clear whether any losses resulting from a Negative Adjustment
would be recognized currently or be carried forward until disposition or
retirement of the debt obligation. However, unless and until otherwise required
under applicable regulations, the Seller does not intend to treat the payments
of interest on the Class X Certificates as contingent interest.
The prepayment assumption that will be used to accrue original issue
discount, to amortize premium of an initial owner, or to determine whether
original issue discount is de minimis will be 0% CPR, with each ARD Loan
prepaying in full on its Anticipated Repayment Date. See "Yield, Prepayment and
Maturity Considerations--Weighted Average Life of the Offered Certificates"
above.
Although not free from doubt, it is anticipated that any prepayment
premiums and yield maintenance charges will be treated as ordinary income to
the extent allocable to beneficial owners of the Offered Certificates as such
amounts become due to such beneficial owners.
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STATE TAX CONSIDERATIONS
In addition to the federal income tax consequences described in "Federal
Income Tax Consequences" herein, potential investors should consider the state
income tax consequences of the acquisition, ownership, and disposition of the
Offered Certificates. State income tax law may differ substantially from the
corresponding federal law, and this discussion does not purport to describe any
aspect of the income tax laws of any state. Therefore, potential investors
should consult their own tax advisors with respect to the various tax
consequences of investments in the Offered Certificates.
ERISA CONSIDERATIONS
A fiduciary of any retirement plan or other employee benefit plan or
arrangement, including individual retirement accounts and annuities, Keogh
plans and collective investment funds and separate accounts in which such
plans, accounts or arrangements are invested, and any entity whose underlying
assets include assets of such a plan by reason of any such plan's investment in
the entity that is subject to the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Code (each, a "Plan") should
carefully review with its legal advisors whether the purchase or holding of any
class of Offered Certificates could give rise to a transaction that is
prohibited or is not otherwise permitted either under ERISA or Section 4975 of
the Code.
The U.S. Department of Labor issued individual exemptions to Goldman,
Sachs & Co., Prohibited Transaction Exemption 89-88 (October 17, 1989), as
amended, and to Norwest Investment Services, Inc., Prohibited Transaction
Exemption 97-28 (May 23, 1997) (collectively, the "Exemptions"), which
generally exempt from the application of certain prohibited transaction
provisions of Sections 406 and 407 of ERISA, and the excise taxes imposed on
such prohibited transactions pursuant to Sections 4975(a) and (b) of the Code
and the civil penalties imposed on such prohibited transactions pursuant to
Section 502(i) of ERISA, certain transactions, among others, relating to the
servicing and operation of mortgage pools and the purchase, sale and holding of
mortgage pass-through certificates underwritten by an Underwriter (as
hereinafter defined), provided that certain conditions set forth in the
Exemptions are satisfied. For purposes of this Section "ERISA Considerations",
the term "Underwriter" shall include (a) Goldman, Sachs & Co., (b) Norwest
Investment Services, Inc., (c) any person directly or indirectly, through one
or more intermediaries, controlling, controlled by or under common control with
Goldman, Sachs & Co. or Norwest Investor Services, Inc. and (d) any member of
the underwriting syndicate or selling group of which a person described in
clauses (a), (b) or (c) is a manager or co-manager with respect to the Class
A-1, Class A-2 and Class X Certificates.
The Exemptions set forth six general conditions which must be satisfied
for a transaction involving the purchase, sale and holding of such classes of
Offered Certificates to be eligible for exemptive relief thereunder. First, the
acquisition of such classes of Offered Certificates by a Plan must be on terms
(including the price) that are at least as favorable to the Plan as they would
be in an arm's-length transaction with an unrelated party. Second, the rights
and interests evidenced by such classes of Offered Certificates must not be
subordinate to the rights and interests evidenced by the other certificates of
the same trust. Third, such classes of Offered Certificates at the time of
acquisition by the Plan must be rated in one of the three highest generic
rating categories by S&P, Moody's, Duff & Phelps Credit Rating Co. or Fitch
IBCA, Inc. Fourth, the Trustee cannot be an affiliate of any member of the
"Restricted Group," which consists of the Underwriters, the Seller, the Master
Servicer, the Special Servicer, any entity that provides insurance or other
credit support to the Trust Fund, any borrower with respect to Mortgage Loans
constituting more than 5% of the aggregate unamortized principal balance of the
Mortgage Loans as of the date of initial issuance of such classes of Offered
Certificates and any affiliate of any of the foregoing entities. Fifth, the sum
of all payments made to and retained by the Underwriter must represent not more
than reasonable compensation for underwriting such classes of Offered
Certificates; the sum of all payments made to and retained by the Seller
pursuant to the assignment of the Mortgage Loans to the Trust Fund must
represent not more than the fair market value of such obligations; and the sum
of all payments made to and retained by the Master Servicer and the Special
Servicer must represent not more than reasonable compensation for such person's
services under the Agreements and reimbursement of such person's reasonable
expenses in connection
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therewith. Sixth, the investing Plan must be an accredited investor as defined
in Rule 501 (a)(1) of Regulation D of the Securities and Exchange Commission
under the Securities Act of 1933, as amended.
Because the Class A-1, Class A-2 and Class X Certificates are not
subordinate to any other class of Certificates, the second general condition
set forth above is satisfied with respect to such Certificates. It is a
condition of the issuance of such Classes of Certificates that they be rated
"AAA" by S&P and "Aaa" by Moody's. A fiduciary of a Plan contemplating
purchasing any such class of Certificates in the secondary market must make its
own determination that at the time of such acquisition, any such class of
Certificates continues to satisfy the third general condition set forth above.
The Seller expects that the fourth general condition set forth above will be
satisfied with respect to each of such classes of Certificates. A fiduciary of
a Plan contemplating purchasing any such class of Certificate must make its own
determination that the first, third, fifth and sixth general conditions set
forth above will be satisfied with respect to any such class of Certificate.
The Class B, Class C, Class D and Class E Certificates do not satisfy the
second condition described above because they are subordinated to the Class A
and Class X Certificates, and furthermore the Class D and Class E Certificates
are not expected to satisfy the third condition described above. Accordingly,
the Class B, Class C, Class D and Class E Certificates may not be purchased
with the assets of a Plan, unless such purchase is made pursuant to Prohibited
Transaction Exemption 95-60, described below, or another prohibited transaction
exemption.
Before purchasing any class of Certificate, a fiduciary of a Plan should
itself confirm (a) that such Certificates constitute "certificates" for
purposes of the Exemptions and (b) that the specific and general conditions of
the Exemptions and the other requirements set forth in the Exemptions would be
satisfied. In addition to making its own determination as to the availability
of the exemptive relief provided in the Exemptions, the Plan fiduciary should
consider the availability of any other prohibited transaction exemptions.
Purchasers using insurance company general account funds to effect such
purchase should consider the availability of Section III of Prohibited
Transaction Exemption 95-60 (60 Fed. Reg. 35925, July 12, 1995) issued by the
U.S. Department of Labor.
Any Plan fiduciary considering whether to purchase any class of
Certificate on behalf of a Plan should consult with its counsel regarding the
applicability of the fiduciary responsibility and prohibited transaction
provisions of ERISA and the Code to such investment. See "ERISA Considerations"
in the Prospectus.
LEGAL INVESTMENT
None of the Certificates will be "mortgage related securities" within the
meaning of the Secondary Mortgage Market Enhancement Act of 1984, as amended
("SMMEA"). In addition, institutions whose investment activities are subject to
review by certain regulatory authorities may be or may become subject to
restrictions, which may be retroactively imposed by such regulatory
authorities, on the investment by such institutions in certain forms of
mortgage-backed securities.
No representations are made as to the proper characterization of the
Offered Certificates for legal investment, financial institution regulatory or
other purposes, or as to the ability of particular investors to purchase the
Offered Certificates under applicable legal investment restrictions. These
uncertainties may adversely affect the liquidity of the Offered Certificates.
Accordingly, all institutions whose investment activities are subject to legal
investment laws and regulations, regulatory capital requirements or review by
regulatory authorities should consult with their own legal advisors in
determining whether and to what extent the Offered Certificates constitute a
legal investment or are subject to investment, capital or other restrictions.
See "Legal Investment" in the Prospectus.
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UNDERWRITING
The Seller, Goldman, Sachs & Co. ("Goldman, Sachs") and Norwest Investment
Services, Inc. ("Norwest", and collectively with Goldman, Sachs, the
"Underwriters") have entered into an underwriting agreement with respect to the
Offered Certificates. Subject to certain conditions, the Underwriters have
agreed to purchase all the Offered Certificates. Norwest has agreed to purchase
$ of Certificate Principal Amount of the Class A-1 Certificates and
Goldman, Sachs has agreed to purchase the remainder of the Offered
Certificates.
The Seller estimates that its share of the total expenses of the offering,
excluding underwriting discounts and commissions, will be approximately
$ .
The Seller has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
The Offered Certificates are a new issue of securities with no established
trading market. The Seller has been advised by the Underwriters that they
intend to make a market in the Offered Certificates but is not obligated to do
so and may discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for the Offered
Certificates.
In connection with the offering, the Underwriters may purchase and sell
the Offered Certificates in the open market. These transactions may include
purchases to cover short sales, stabilizing transactions and purchases to cover
portions created by short sales. Short sales involve the sale by the
Underwriters of a greater number of Certificates than they are required to
purchase in the offering. Stabilizing transactions consist of certain bids or
purchases made for the purpose of preventing or retarding a decline in the
market price of the Certificates while the offering is in progress.
The Underwriters also may impose a penalty bid. This occurs when a
particular broker-dealer repays to an Underwriter a portion of the underwriting
discount received by it because the representatives have repurchased
Certificates sold by or for the account of such Underwriter in stabilizing or
short covering transactions.
These activities by either Underwriter may stabilize, maintain or
otherwise affect the market price of the Certificates. As a result, the price
of the Certificates may be higher than the price that otherwise might exist in
the open market. If these activities are commenced, they may be discontinued by
the Underwriters at any time. These transactions may be effected in the
over-the-counter market or otherwise.
Goldman, Sachs is an affiliate of the Seller and GSMC, a Loan Seller.
The Offered Certificates are offered by the Underwriters when, as and if
issued by the Seller, delivered to and accepted by the Underwriters and subject
to their right to reject orders in whole or in part. It is expected that
delivery of the Offered Certificates will be made in book-entry form through
the facilities of DTC against payment therefor on or about January 20, 1999,
which is the th business day following the date of pricing of the Offered
Certificates.
LEGAL MATTERS
The validity of the Offered Certificates and certain federal income tax
matters will be passed upon for the Seller and the Underwriters by Cadwalader,
Wickersham & Taft, New York, New York. Certain legal matters will be passed
upon for ACLI by Andrews & Kurth L.L.P., Dallas, Texas and for DFC and DREFC by
Schulte Roth & Zabel LLP, New York, New York.
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RATINGS
It is a condition to the issuance of each Class of Offered Certificates
that they be rated as follows by Standard & Poor's Rating Services, a division
of The McGraw-Hill Companies, Inc. ("S&P") and Moody's Investor Service
("Moody's" and, together with S&P, the "Rating Agencies"), respectively:
<TABLE>
<CAPTION>
CLASS RATING
- ----------------------- ----------
<S> <C>
Class A-1 .......... AAA/Aaa
Class A-2 .......... AAA/Aaa
Class X ............ AAAr/Aaa
Class B ............ AA/Aa2
Class C ............ A/A2
Class D ............ BBB/Baa
Class E ............ BBB-/Baa3
</TABLE>
The ratings on mortgage pass-through certificates address the likelihood
of the receipt by holders thereof of payments to which they are entitled
including the receipt of all principal payments by the Rated Final Distribution
Date. Such ratings take into consideration the credit quality of the mortgage
pool, structural and legal aspects associated with the certificates, and the
extent to which the payment stream in the mortgage pool is adequate to make
payments required under the certificates.
Such ratings on the Offered Certificates do not, however, constitute a
statement regarding frequency or likelihood of prepayments (whether voluntary
or involuntary) of the Mortgage Loans, or the degree to which such prepayments
might differ from those originally anticipated, or the likelihood of the
collection of prepayment premiums, excess interest, default interest, yield
maintenance charges, or the tax treatment of the Certificates, and do not
address the possibility that Certificateholders might suffer a lower than
anticipated yield. A rating on the Class X Certificates does not address the
possibility that the Holders of such Certificates may fail to recover fully
their initial investments due to a rapid rate of prepayments, defaults or
liquidations. See "Risk Factors." S&P assigns the additional rating of "r" to
highlight classes of securities that S&P believes may experience high
volatility or high variability in expected returns due to non-credit risks.
There can be no assurance as to whether any rating agency not requested to
rate the Offered Certificates will nonetheless issue a rating and, if so, what
such rating would be. A rating assigned to the Offered Certificates by a rating
agency that has not been requested by the Seller to do so may be lower than the
rating assigned by S&P or Moody's pursuant to the Seller's request.
The rating of the Offered Certificates should be evaluated independently
from similar ratings on other types of securities. A security rating is not a
recommendation to buy, sell or hold securities and may be subject to downgrade,
qualification or withdrawal at any time by the assigning rating agency. Each
security rating should be evaluated independently of any other security rating.
A security rating does not address the frequency or likelihood of prepayments
(whether voluntary or involuntary) of Mortgage Loans, or the corresponding
effect on the yield to investors.
The ratings do not address the fact that the Pass-Through Rates on the
Class A-2, Class X, Class B, Class C, Class D and Class E Certificates, to the
extent that they are based on the weighted average interest rate of the
mortgage loans, may be affected by changes therein.
S-99
<PAGE>
INDEX OF SIGNIFICANT DEFINITIONS
<TABLE>
<S> <C>
1997 NOI ................................ A-1
1998 NOI ................................ A-1
30/360 basis ............................ S-11
ACLI .................................... S-36
ACLP .................................... S-35
ACM ..................................... S-28
Actual/360 .............................. A-2
ADA ..................................... S-28
Advance Rate ............................ S-74
Advances ................................ S-13, S-74
Allocated Loan Amount ................... S-37
ALTA .................................... S-41
AMRESCO Loans ........................... S-35
Annual Debt Service ..................... A-1
Anticipated Repayment Date .............. S-31
Appraisal Reduction Amount .............. S-53
Appraisal Reduction Event ............... S-53
Appraised Value ......................... A-2
Archon Loans ............................ S-35
ARD Loans ............................... S-38
ARDLTV .................................. A-2
Aries ................................... S-8
Aries Loans ............................. S-35
Asset Status Report ..................... S-84
ASTM .................................... S-28
Available Funds ......................... S-43
Balloon Mortgage Loan ................... S-37
Balloon Payment ......................... S-31
Bankruptcy Code ......................... S-22
Base Interest Fraction .................. S-50
Business Day ............................ S-43
CBE ..................................... S-65
Cedel ................................... S-7
Cedel Participants ...................... S-56
CERCLA .................................. S-28
Certificate Owners ...................... S-56
Certificate Principal Amount ............ S-42
Certificate Registrar ................... S-54
Certificateholder ....................... S-54
Certificates ............................ S-7
Class ................................... S-42
Class A Certificates .................... S-42
Class Q Distribution Account ............ S-75
</TABLE>
<TABLE>
<S> <C>
Code .................................... S-95
Collection Account ...................... S-75
Collection Period ....................... S-45
Commission .............................. S-88
Comparative Financial Status Report S-91
Controlling Class ....................... S-85
Controlling Class Representative ........ S-85
CPC Loans ............................... S-35
CPR ..................................... S-60
Cross-Collateralized Group .............. A-2
Cross-over Date ......................... S-50
Cut-Off Date Balance .................... S-35
Cut-Off Date LTV Ratio .................. A-1
Cut-Off Date Principal Balance/Unit ..... A-1
Debt Service Coverage Ratio ............. A-1
Default Interest ........................ S-45
Default Rate ............................ S-45
Defeasance Deposit ...................... S-38
Defeasance Loans ........................ S-38
Defeasance Lock-Out Period .............. S-38
Defeasance Option ....................... S-38
Definitive Certificate .................. S-54
Delinquent Loan Status Report ........... S-91
Depositories ............................ S-55
Determination Date ...................... S-45
DFC ..................................... S-7
Distribution Date ....................... S-43
DREFC ................................... S-7
DSCR .................................... S-36, A-1
DTC ..................................... S-7
Due Date ................................ S-37
Eligible Bank ........................... S-76
Environmental Report .................... S-28
ERISA ................................... S-96
ETS ..................................... S-28
Euroclear ............................... S-7
Euroclear Participants .................. S-56
Excess Cashflow ......................... S-38
Excess Interest ......................... S-45
Excess Interest Distribution Account S-75
Excess Prepayment Interest
Shortfall ............................... S-52
Excess Rate ............................. S-45
</TABLE>
S-100
<PAGE>
<TABLE>
<S> <C>
Exemptions .............................. S-96
FIRREA .................................. S-40
Fixed Voting Rights Percentage .......... S-81
Form 8-K ................................ S-41
GMACCM .................................. S-89
Goldman, Sachs .......................... S-98
GSMC .................................... S-7
Historical Loan Modification Report ..... S-91
Historical Loss Estimate Report ......... S-91
Holders ................................. S-57
Indirect Participants ................... S-55
Initial Pool Balance .................... S-35
Initial Rate ............................ S-38
Interest Accrual Amount ................. S-46
Interest Accrual Period ................. S-46
Interest Distribution Amount ............ S-46
Interest Reserve Account ................ S-75
Interest Shortfall ...................... S-46
ITLA .................................... S-8
ITLA Loans .............................. S-35
Largest Tenant .......................... A-1
Largest Tenant % of Total Net
Square Feet ............................. A-1
Largest Tenant Lease Expiration
Date .................................... A-1
LBP ..................................... S-28
Liquidation Fee ......................... S-90
Loan Sellers ............................ S-36
Loan-to-Value Ratio ..................... S-36
Lower-Tier Distribution Account ......... S-75
Lower-Tier Regular Interests ............ S-94
Lower-Tier REMIC ........................ S-94
LTV ..................................... S-36
LTV at Maturity ......................... S-36, A-2
MAI ..................................... S-53
Master Servicer ......................... S-89
Master Servicer Remittance Date ......... S-73
Maturity Date LTV ....................... A-2
Modeling Assumptions .................... S-60
Monthly Payment ......................... S-44
Moody's ................................. S-16, S-99
Mortgage ................................ S-35
Mortgage Loans .......................... S-35
Mortgage Note ........................... S-35
</TABLE>
<TABLE>
<S> <C>
Mortgage Pool ........................... S-8
Mortgage Rate ........................... S-47
Mortgaged Property ...................... S-35
Negative Adjustment ..................... S-95
Net Cash Flow ........................... A-2
Net Default Interest .................... S-45
Net Mortgage Rate ....................... S-47
Net REO Proceeds ........................ S-44
NOI Adjustment Worksheet ................ S-92
Norwest ................................. S-98
Notional Amount ......................... S-43
Occupancy ............................... A-2
Offered Certificates .................... S-42
OID ..................................... S-95
Operating Statement Analysis ............ S-92
Original Balance ........................ A-2
Originators ............................. S-35
PAR ..................................... S-40
Parman .................................. S-8
Parmann Loans ........................... S-35
Participants ............................ S-54
Pass-Through Rate ....................... S-11, S-46
Percentage Interest ..................... S-43
Permitted Investments ................... S-76
Phase I ................................. S-28
Phase II ................................ S-28
P&I Advance ............................. S-13, S-73
Plan .................................... S-57, S-96
Pooling Agreement ....................... S-71
Prepayment Interest Excess .............. S-52
Prepayment Interest Shortfall ........... S-52
Prepayment Penalty Description .......... A-2
Prepayment Period ....................... S-45
Prime Rate .............................. S-74
Principal Distribution Amount ........... S-47
Principal Prepayments ................... S-45
Principal Recovery Percentage ........... S-90
Principal Shortfall ..................... S-48
Progress ................................ S-8
Progress Loans .......................... S-35
Property Advances ....................... S-13, S-74
Rated Final Distribution Date ........... S-60
Rating Agencies ......................... S-99
Realized Loss ........................... S-51
</TABLE>
S-101
<PAGE>
<TABLE>
<S> <C>
Record Date .............................. S-43
Regular Certificates ..................... S-47
Rehabilitation Fee ....................... S-90
Related Group ............................ A-2
Release Date ............................. S-38
REMIC .................................... S-94
REO Account .............................. S-42
REO Mortgage Loan ........................ S-48
REO Property ............................. S-42
REO Status Report ........................ S-91
Repurchase Price ......................... S-45
Responsible Party ........................ S-37
Restricted Group ......................... S-96
Revised Rate ............................. S-38
Rules .................................... S-56
Secore ................................... S-8
Secore Loans ............................. S-35
Seller ................................... S-2
Sequential Pay Certificates .............. S-42
Servicing Compensation ................... S-44
Servicing Fee ............................ S-89
Servicing Fee Rate ....................... S-89
Servicing Standard ....................... S-72
Similar Law .............................. S-57
SMMEA .................................... S-97
S&P ...................................... S-16, S-99
Special Servicer ......................... S-90
Special Servicer's Appraisal
Reduction Estimate ....................... S-53
Special Servicing Fee .................... S-90
Specially Serviced Mortgage Loan ......... S-72
Stated Principal Balance ................. S-47
Subordinate Debt ......................... S-29
</TABLE>
<TABLE>
<S> <C>
Sutter ................................... S-8
Sutter Loans ............................. S-35
Terms and Conditions ..................... S-56
The Torpedo Factory ...................... S-29
Treasury Rate ............................ S-38
Trust Fund ............................... S-35
Trustee Fee .............................. S-87
Trustee Fee Rate ......................... S-87
Closing Date ............................. S-8
Cut-Off Date ............................. S-8
Fiscal Agent ............................. S-8
Trustee .................................. S-8
Underwriters ............................. S-98
Underwritten DSCR ........................ A-1
Underwritten Net Cash Flow ............... A-2
Underwritten NOI ......................... A-2
Unscheduled Payments ..................... S-44
Updated Appraisal ........................ S-82
Upper-Tier Distribution Account .......... S-75
Upper-Tier REMIC ......................... S-94
USTs ..................................... S-28
U/W NCF .................................. A-2
U/W NOI .................................. A-2
Voting Rights ............................ S-81
WAC Rate ................................. S-47
Watch List ............................... S-92
Weighted Average Mortgage Rate ........... A-2
Weighted Average Original
Amortization Term ........................ S-36
Wingate .................................. S-8
Wingate Loans ............................ S-35
Withheld Amounts ......................... S-75
</TABLE>
S-102
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
Annex A hereto sets forth certain information with respect to the Mortgage
Loans and the Mortgaged Properties. The information in this Annex A with
respect to the Mortgage Loans and the Mortgaged Properties is based upon the
Mortgage Pool as it is expected to be constituted as of the close of business
on the Closing Date, assuming that (i) all scheduled principal and interest
payments due on or before the Cut-Off Date will be made, and (ii) there will be
no principal prepayments on or before the Closing Date. Where a Mortgage Loan
is secured by multiple properties, statistical information in this Annex A
relating to geographical locations and property types of the mortgaged
properties is based on the loan amount allocated to such property. Such
allocation, where not stated in the Mortgage Loan documents, is generally based
on the relative appraised values of such properties. With respect to 2 of the
Mortgage Loans, the allocated loan amount has been calculated by dividing the
aggregate appraised value by the number of Mortgaged Properties. In addition,
wherever information is presented in this Annex A with respect to LTVs or
DSCRs, the LTV or DSCR of each Mortgaged Property securing a Mortgage Loan
secured by multiple Mortgaged Properties is assumed to be the LTV or DSCR of
such Mortgage Loan in the aggregate. The statistics in Annex A were primarily
derived from information provided to the Seller by each Responsible Party,
which information may have been obtained from the borrowers without independent
verification except as noted.
1. "1997 NOI" and "1998 NOI" (which is for the period ending as of the
date specified in Annex A) is the net operating income for a Mortgaged Property
as established by information provided by the borrowers, except that in certain
cases such net operating income has been adjusted by removing certain
non-recurring expenses and revenue or by certain other normalizations. 1997 NOI
and 1998 NOI do not necessarily reflect accrual of certain costs such as taxes
and capital expenditures and do not reflect non-cash items such a depreciation
or amortization. In some cases, capital expenditures may have been treated by a
borrower as an expense or expenses treated as capital expenditures. The Seller
has not made any attempt to verify the accuracy of any information provided by
each borrower or to reflect changes in net operating income that may have
occurred since the date of the information provided by each borrower for the
related Mortgaged Property. 1997 NOI and 1998 NOI were not necessarily
determined in accordance with generally accepted accounting principles.
Moreover, 1997 NOI and 1998 NOI are not a substitute for net income determined
in accordance with generally accepted accounting principles as a measure of the
results of a property's operations or a substitute for cash flows from
operating activities determined in accordance with generally accepted
accounting principles as a measure of liquidity and in certain cases may
reflect partial-year annualizations.
2. "Annual Debt Service" means for any Mortgage Loan the current annual
debt service payable during the twelve month period commencing on January 1,
1999 on the related Mortgage Loan.
3. "Cut-Off Date LTV Ratio" means, with respect to any Mortgage Loan, the
principal balance of such Mortgage Loan as of the Cut-Off Date divided by the
Appraised Value of the Mortgaged Properties securing such Mortgage Loan.
4. "Cut-Off Date Principal Balance/Unit" means the principal balance per
unit of measure as of the Cut-Off Date.
5. "DSCR", "Debt Service Coverage Ratio" or "Underwritten DSCR" means, for
any Mortgage Loan, the ratio of Underwritten Net Cash Flow produced by the
related Mortgaged Property or Mortgaged Properties to the aggregate amount of
the Annual Debt Service.
6. "Largest Tenant" means, with respect to any Mortgaged Property, the
tenant occupying the largest amount of net rentable square feet.
7. "Largest Tenant Lease Expiration Date" means the date at which the
applicable Largest Tenant's lease is scheduled to expire.
8. "Largest Tenant % of Total Net Square Feet" means the net rentable
square feet leased to the Largest Tenant as a percentage of the total square
feet of the Mortgaged Property.
A-1
<PAGE>
9. "LTV at Maturity", "Maturity Date LTV" or "ARDLTV" for any Mortgage
Loan is calculated in the same manner as the Cut-Off Date LTV Ratio, except
that the Mortgage Loan Cut-Off Date Principal Balance used to calculate the
Cut-Off Date LTV Ratio has been adjusted to give effect to the amortization of
the applicable Mortgage Loan as of its maturity date or Anticipated Repayment
Date, as applicable. Such calculation thus assumes that the appraised value of
the Mortgaged Property or Properties securing a Mortgage Loan on the maturity
date or the Anticipated Repayment Date, as applicable, is the same as the
Appraised Value. There can be no assurance that the value of any particular
Mortgaged Property will not have declined from the Appraised Value.
10. "Net Cash Flow," "U/W NCF" or "Underwritten Net Cash Flow" with
respect to a given Mortgage Loan or Mortgaged Property means cash flow
available for debt service, as determined by the related Responsible Party
based upon borrower supplied information for a recent period which is generally
the twelve months prior to the origination of such Mortgage Loan, adjusted for
stabilization and, in the case of certain Mortgage Loans, may have been updated
to reflect a more recent operating period. Net Cash Flow does not reflect debt
service, non-cash items such as depreciation or amortization, and does not
reflect actual capital expenditures and may have been adjusted for other items
and assumptions determined by the Responsible Party.
11. "Occupancy" means the percentage of net rentable square feet, rooms,
units, beds or sites of the Mortgaged Property that are leased. Occupancy rates
are calculated within a recent period and in certain cases reflect the average
occupancy rate over a period of time.
12. "Original Balance" means the principal balance of the Mortgage Loan as
of the date of origination.
13. "Underwritten NOI" or "U/W NOI" means Net Cash Flow before deducting
for replacement reserves and capital expenditures, tenant improvements and
leasing commissions.
14. "Appraised Value" means for each of the Mortgaged Properties, the
appraised value of such property as determined by an appraisal thereof and in
accordance with MAI standards made not more than 16 months prior to the
origination date (or purchase date, as applicable) of the related Mortgage
Loan, as described under "Appraised Date".
15. "Weighted Average Mortgage Rate" means the weighted average of the
Mortgage Rates as of the Cut-Off Date.
16. "Cross-Collateralized Group" identifies Mortgage Loans in the Mortgage
Pool cross collateralized with other Mortgage Loans in Pool. Each
Cross-Collateralized Group is identified by a separate letter.
17. "Related Group" identifies Mortgage Loans in the Mortgage Pool with
borrowers affiliated with other borrowers in the Mortgage Pool. Each Related
Group is identified by a separate number.
18. "Prepayment Penalty Description" means the number of months from one
month prior to the first payment date (or in the case of certain loans, from
the first payment date) for which a Mortgage Loan is locked out from
prepayment, charges a prepayment premium or yield maintenance charges, permits
defeasance, or allows a prepayment without a prepayment premium or yield
maintenance charge.
19. "Actual/360" means the related Mortgage Loan accrues interest on the
basis of a 360-day year and the actual number of days in the related month.
CERTAIN OTHER LOAN CHARACTERISTICS
Loan Number 924 (Westminster Towers). The loan documents with respect to
this Mortgage Loan permit the related borrower to choose between a yield
maintenance charge or defeasance after the expiration of the related lockout
period. For purpose of this Prospectus Supplement (including the tables
presented herein), it has been assumed that the borrower chooses yield
maintenance.
A-2
<PAGE>
Loan Number 09-0001148 (CVS Drugstore -- Carlisle, PA). The Monthly
Payment on this Mortgage Loan increases overtime as follows: (A) 08/01/02 -
increase to $12,193.98 and (B) 08/01/07 - increase to $13,389.37.
Loan Number 09-0001149 (CVS Drugstore -- Gloucester, PA). The Monthly
Payment on this Mortgage Loan increases overtime as follows: (A) 10/01/03 -
increase to $13,629.76 and (B) 10/01/08 - increase to $14,738.70.
Loan Number 09-0001150 (CVS Drugstore -- Paulsboro, NJ). The Monthly
Payment on this Mortgage Loan increases overtime as follows: (A) 10/01/03 -
increase to $11,331.55, (B) 10/01/08 - increase to $12,279.76 and (C) 10/01/13
- - increase to $13,284.23.
Loan Number 09-0001151 (CVS Drugstore -- Oaklyn, NJ). The Monthly Payment
on this Mortgage Loan increases overtime as follows: (A) 05/01/02 - increase to
$10,368.89 and (B) 05/01/07 - increase to $11,453.14.
Loan Numbers 09-0001187 and 400031124 (Lufkin Apartment Portfolio and
Sunshine Properties Portfolio). With respect to these Mortgage Loans, the
Allocated Loan Amount was calculated by dividing the aggregate Cut-Off Date
Balance for the applicable Mortgage Loan by the number of Mortgaged Properties.
A-3
<PAGE>
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<PAGE>
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<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX A
CERTAIN CHARACTERISTICS OF THE
MORTGAGE LOANS
<TABLE>
<CAPTION>
CONTROL LOAN RESPONSIBLE
NUMBER NUMBER PARTY (ORIGINATOR) PROPERTY NAME PROPERTY ADDRESS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 400029165 ACLI(ACLP) The Torpedo Factory 201 N. Union Street
2 948 DFC (Aries) Whitehall Hotel 105 East Deleware Place
3 400029229 ACLI(ACLP) Granada Apartments 1417-1717 Kuntz Road
4 947 DFC (Secore) Roswell Town Center 608 Holcomb Bridge Road
- -----------------------------------------------------------------------------------------------------------------------------------
5 914 DFC Salter Healthcare Portfolio
5 914A DFC Aberjona Nursing Center 184 Swanton Street
5 914B DFC Winchester Nursing Center 223 Swanton Street
5 914C DFC Woburn Nursing Center 18 Frances Street
6 908 DFC (Aries) Goodings International Plaza 8201-8291 International Drive
- -----------------------------------------------------------------------------------------------------------------------------------
7 09-0001186 GSMC(Archon) The Atrium Hotel 18700 MacArthur Blvd.
8 09-0001199 GSMC(Archon) Bruckner Nursing Home 1010 Underhill Avenue
9 400029179 ACLI(ACLP) The Phillips Building 7900-7920 Norfolk Avenue
10 943 DFC (Aries) Holiday Inn Select 160 Union Avenue
11 924 DREFC Westminster Towers 1341 North Avenue & 801 North Broad Street
- -----------------------------------------------------------------------------------------------------------------------------------
12 400029303 ACLI(ACLP) Arbour Village Apartments 11600 MacKay Boulevard
13 400031043 ACLI(ACLP) Springs Plaza Shopping Center 8951 Bonita Beach Road
14 930 DREFC Meridian East Apartments 8110 East Speedway Boulevard
15 400029281 ACLI(ACLP) North Valley Power Center 8085-8235 West Bell Road
16 400029270 ACLI(ACLP) Renton Village Shopping Center 401-601 South Grady Way
- -----------------------------------------------------------------------------------------------------------------------------------
17 09-0001145 GSMC(Archon) Tully/I-10 Shopping Center 12151 Katy Freeway
18 400030928 ACLI(ACLP) Howard Johnson Riverwalk PlazaHotel 100 Villita Street
19 09-0001201 GSMC(Archon) Stevens Center 2425 & 2440 Stevens Drive
20 400029261 ACLI(ACLP) Evans Mill Place Apartments 2795 Evans Mill Road
21 R0492 GSMC(CPC) Southlake Shopping Center 20623 West Catawba Avenue
- -----------------------------------------------------------------------------------------------------------------------------------
22 921 DFC (Aries) Holiday Inn Select 1350 Holiday Lane
23 400030943 ACLI(ACLP) Comfort Inn Gold Coast 11201 Coastal Highway
24 400031116 ACLI(ACLP) 175 Beacon Street 175 Beacon Street
25 400029289 ACLI(ACLP) Old Times Union Building 16-32 Sheridan Street
26 400029254 ACLI(ACLP) Avondale Office Center 6323 North Avondale Avenue
- -----------------------------------------------------------------------------------------------------------------------------------
27 400031126 ACLI(ACLP) Park Villa Townhomes 4974 South 76th East Avenue
28 400029283 ACLI(ACLP) Sandhill Airport Park 6320-6340 South Sandhill Road
29 400030930 ACLI(ACLP) Woolworth Office Building 7800 West Brown Deer Road
30 09-0001170 GSMC(Archon) Oxford/Santa Fe Business Park 1800-1880 West Oxford Ave. & 4111-4251 South Natches Co
31 931 DREFC Fountain Springs Apartments 1645 East Thomas Road
- -----------------------------------------------------------------------------------------------------------------------------------
32 400030878 ACLI(ACLP) North Medical Campus 5100 West Taft
33 942 DFC (Aries) International Town Center 6169 Westwood Boulevard
34 400030941 ACLI(ACLP) 21 East 66th Street Retail Condos 21 East 66th Street
35 400029230 ACLI(ACLP) Humana Office Complex 4626, 4646 Frey Street & 709 N. Segoe Rd.
36 901 DFC (Secore) Occidental Business Center 9400/9410/9420/9430 Topanga Canyon Blvd.
- -----------------------------------------------------------------------------------------------------------------------------------
37 932 DREFC Hayden Place Apartments 625 West 1st Street
38 R0869 GSMC(CPC) Harwin Wholesale Shopping Center 7501 Harwin Drive
39 09-0001179 GSMC(Archon) Kenwood Business Park 877 South Pearl Street & 7 Binghamton Street
40 400031127 ACLI(ACLP) Hilgard Apartments 972 Hilgard Avenue
41 400031122 ACLI(ACLP) Falls of Point West Apartments 5850 Park Front Drive
- -----------------------------------------------------------------------------------------------------------------------------------
42 927 DREFC Park Inn Club & Breakfast 4450 47th Street West
43 09-0001189 GSMC(Archon) North Pointe Apartments 12603 Northborough Drive
44 917 DREFC Irvington Arms Apartments 378-404 Stuyvesant Avenue
45 09-0001188 GSMC(Archon) Parkway Plaza 3115 Parker Road
46 M0345 GSMC(CPC) Lantern Square Apartments 2690 Drury Way
- -----------------------------------------------------------------------------------------------------------------------------------
47 944 DREFC Fountain Ridge Apartments 2025 West Indian School Road
48 09-0001197 GSMC(Archon) The Castro Convertible Buildings 43-47 West 23rd Street
49 400030946 ACLI(ACLP) ADS Technology 9235 South Mckerny Street
50 400030933 ACLI(ACLP) Powder Hill Place Office Park 19265-19302-19332-19362 PowderHill Place
- -----------------------------------------------------------------------------------------------------------------------------------
51 I0198 GSMC(CPC) Lindbergh Industrial Portfolio
51 I0198A GSMC(CPC) Lindbergh Industrial 7500 Lindbergh Drive
51 I0198B GSMC(CPC) Lindbergh Industrial 7510-7520 Lindbergh Drive
51 I0198C GSMC(CPC) Lindbergh Industrial - Sunshine Acres 22301-22311 Georgia Avenue
52 400029117 ACLI(ACLP) Albertson's Marketplace and Crossroads Center 26850-26930 Sierra Highway/18755 Via Princessa
- -----------------------------------------------------------------------------------------------------------------------------------
53 400029280 ACLI(ACLP) Fairway Center 14220 - 14240 Interurban Avenue South
54 400029203 ACLI(ACLP) Quail Orient Medical Office Development 500 South Rancho Drive
55 400030988 ACLI(ACLP) Boise - Marketplace 1700 - 1790 West State Street
56 903 DFC (Aries) Bargain World/Sports Dominator 6454 International Drive
57 400029268 ACLI(ACLP) Creekside at Greenwood Village 6053-6099 South Quebec Street
- -----------------------------------------------------------------------------------------------------------------------------------
58 09-0001191 GSMC(Archon) CMI Building 4200 International Parkway
59 09-0001173 GSMC(Archon) Mercury Plaza 1114 Mercury Boulevard
60 400029271 ACLI(ACLP) Renton Village Cinemas 25 South Grady Way
61 400030919 ACLI(ACLP) Foxwood Crossing Apartments 4500 South 124th Street
62 400030920 ACLI(ACLP) Hampton Inn - Savannah North 7050 Georgia Highway 21
- -----------------------------------------------------------------------------------------------------------------------------------
63 910 DFC (Aries) Sleep Inn - Phoenix, AZ 2621 South 47th Place
64 M0536 GSMC(CPC) Bluegrass Village Apartments 549 East Main Street
65 922 DFC (Sutter) The Colony Inn 1157 Chapel Street
66 09-0001180 GSMC(Archon) Calliope Memorial Shopping Ctr 14520 Memorial Drive
- -----------------------------------------------------------------------------------------------------------------------------------
67 09-0001165 GSMC(Archon) Cuero Nursing Center 1310 East Broadway
68 400030912 ACLI(ACLP) 1250 North McDowell Boulevard 1250 North McDowell Boulevard
69 400029260 ACLI(ACLP) River Park Center Office Building 205 S.E. Spokane Avenue
70 911 DREFC Fountainhead Apartments 4326 North 35th Avenue
- -----------------------------------------------------------------------------------------------------------------------------------
71 915 DREFC Cambridge Gardens Apartments 343-381 Schley Street
72 906 DREFC Holiday Inn 200 Dawahare Drive
73 M0543 GSMC(CPC) Perkins Woods Apartments 4635 Forest Oak Drive
74 400029272 ACLI(ACLP) Evergreen Office Building 15 South Grady Way
- -----------------------------------------------------------------------------------------------------------------------------------
75 400031124 ACLI(ACLP) Sunshine Properties Portfolio
75 400031124A ACLI(ACLP) Brentwood Terrace 6505 Shirley Ave
75 400031124B ACLI(ACLP) Circle Oaks I Apartments 6408 Burns Street
75 400031124C ACLI(ACLP) Carmel Apartments 702 Lamar Place
75 400031124D ACLI(ACLP) Vineyard Apartments 6309 Burns Street
- -----------------------------------------------------------------------------------------------------------------------------------
76 400030936 ACLI(ACLP) Food-4-Less Center 3985 S. Higuera St.
77 09-0001154 GSMC(Archon) K-Mart - Port Orchard 1353 Olney Avenue SE
78 09-0001152 GSMC(Archon) K-Mart - Atascadero 3980-4260 El Camino Real
79 09-0001196 GSMC(Archon) Marketplace Shopping Center 201 North Commerce Drive
80 400030931 ACLI(ACLP) Sanese Services Building 6465 Busch Boulevard
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81 582 DREFC Field & Stream/Woodridge Apartments
81 582A DREFC Field & Stream Apartments 1021-1037 Cross Keys Road
81 582B DREFC Woodridge Apartments 1545 Alexandria Drive
82 400029288 ACLI(ACLP) Dicks Clothing & Sporting Goods Store 1175 Marketplace Drive
83 400030892 ACLI(ACLP) Perimeter Place 3988-4084 Flowers Road
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84 400030879 ACLI(ACLP) Wells Plaza Route One
85 639 DREFC 89-07, 89-11 34th Avenue Apartments 89-07, 89-11 34th Avenue
86 09-0001182 GSMC(Archon) 324 Royal Palm Way 324 Royal Palm Way
87 09-0001153 GSMC(Archon) K-Mart - Bishop 910-924 North Main Street
88 09-0001184 GSMC(Archon) Slifer Design Building 105 Edwards Village Boulevard
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89 935 DFC (Sutter) Jones Street Terrace 729 Jones Street
90 400031118 ACLI(ACLP) Rayo de Sol Apartments 2200-2300 West Rochelle Road
91 916 DREFC Bayfront Manor/Baypark Apartments 530 NE 31st St., 600-650 NE 31st St.
92 09-0001178 GSMC(Archon) Comfort Inn - Addison 14975 Landmark Boulevard
93 400029266 ACLI(ACLP) Orthopedic Institute of Illinois 303 North Kumpf Boulevard
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94 950 DFC (Aries) Best Western Bell Motel 17211 North Black Canyon Highway
95 09-0001198 GSMC(Archon) Hampton Inn - Tyler 3130 Troup Highway
96 09-0001172 GSMC(Archon) Mayde Creek Shopping Center 2311-2439 Fry Road
97 400031129 ACLI(ACLP) Bay View Apartments 30911 1st Avenue South
98 I0066 GSMC(CPC) Van Dresser Building 75 Ontario Street
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99 400030873 ACLI(ACLP) Shops of Boardman Park III 377 State Route 224
100 636 DFC (Sutter) Albion Terrace Apartments 225 Nova Albion Way
101 09-0001176 GSMC(Archon) Comfort Suites - Biloxi 1634 Beach Boulevard
102 M0433 GSMC(CPC) Seven Courts Apartments 2800 Martin Luther King Jr. Drive
103 925 DREFC Bella Apartments 1111 W. 46th Street
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104 400029296 ACLI(ACLP) Festival at Perry Hall 4130 Joppa Road
105 400030932 ACLI(ACLP) Woodlawn/Catonsville EZ Self Storage 7233 Windsor Mill Road
106 949 DREFC Brentwood Town Center 13050 San Vicente Boulevard
107 400030970 ACLI(ACLP) Carbonero Creek 4742 Scotts Valley Drive
108 400030918 ACLI(ACLP) Meadow Brook Apartments 13 Meadow Brook Lane
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109 M0553 GSMC(CPC) Red Oaks Apartments 2162 Wilson Road
110 610 DREFC Sutter House Apartments 1140 Sutter Street
111 400029298 ACLI(ACLP) 21st St. Pavilion Shopping 201 & 222 21st Street
112 R0020 GSMC(CPC) East Cooper Plaza Shopping Ctr 607-629 Johnnie Dodds Boulevard
113 929 DREFC Holiday Inn Express 909 Hingham Street
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114 913 DFC (Sutter) Roland Way Office Center 401 Roland Way
115 400030917 ACLI(ACLP) Dana Corporation Office Whse 1100 North Dana Avenue
116 400030937 ACLI(ACLP) Days Inn - Stone Mountain 3006 Glenn Club Drive
117 400031119 ACLI(ACLP) Sunrise Apartments 11342 Brydan Drive
118 400029276 ACLI(ACLP) Greenbriar Atrium II Office Building 16770 Imperial Valley Drive
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119 400029273 ACLI(ACLP) James Allen Court 4270 & 4290 South Cameron St.
120 400029305 ACLI(ACLP) Acorn Self Storage 5205 Railroad Avenue
121 907 DFC (Aries) Tropical Inn 5200-5210 Estero Boulevard
122 400030942 ACLI(ACLP) American Medical Response Lot 7A Industrial Boulevard
123 400030971 ACLI(ACLP) Cielo Hills Apartments 2819 Southeast Military Drive
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124 400030986 ACLI(ACLP) Broadway Crossing Shopping Ctr 5606 & 5610 South Broadway Avenue
125 400029245 ACLI(ACLP) Petcare Superstore 6220 West 95th Street
126 400030947 ACLI(ACLP) Greenspring/Riderwood Building 1922 Greenspring Road
127 573 DFC (Sutter) Twin Palms Apartments 400 East Hillsdale Boulevard
128 R0451 GSMC(CPC) Wagner and Sons, Inc. 7204 May Wagner Lane
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129 912 DFC (Aries) Ramada Inn 116 San Marco Avenue
130 09-0001159 GSMC(Archon) Best Western El Grande Inn - Clear Lake 15135 Lakeshore Drive
131 09-0001155 GSMC(Archon) K-Mart - Oak Harbor 32165 State Road 20
132 937 DFC (Sutter) Creekside Manor Apartments 1777 - 1779 Woodland Avenue
133 621 DREFC 114 - 05 170th Street 114-05 170th Street
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134 400029312 ACLI(ACLP) Poplar Creek Shopping Center 320-340 Leonardwood Drive
135 09-0001158 GSMC(Archon) Best Western - Tyler 2828 N. Northwest Loop 323
136 611 DFC (Aries) Pacifica Villas Apartments 229 16th Street
137 09-0001169 GSMC(Archon) Ramada Inn - Santa Fe 2907 Cerrillos Road
138 400029293 ACLI(ACLP) Walgreen's - Tucson, AZ 1415 West River Road
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139 09-0001181 GSMC(Archon) 231 Royal Palm Way 231 Royal Palm Way
140 09-0001177 GSMC(Archon) Comfort Inn - Biloxi 1648 Beach Boulevard
141 400030894 ACLI(ACLP) 208 Ashley Ave Office Building 208 Ashley Avenue
142 400031131 ACLI(ACLP) Tuscany Apartments 1428 6th Street
143 09-0001156 GSMC(Archon) Gateway Apartments 13455 Kit Lane
144 502 DREFC Keller Springs Village Shopping Center 2155 Marsh Lane
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145 M0435 GSMC(CPC) Peachcrest Gardens Apartments 4082-4112 Glenwood Road
146 938 DFC (Sutter) O'Keefe Apartments 360-380 East O'Keefe Street
147 09-0001183 GSMC(Archon) Walnut Business Park 2332-2462 Walnut Ridge Street,11041-11057 Ables Lane
148 591 DREFC 16 Barrow Street 16 Barrow Street
149 613 DREFC Village Square Shopping Center 909-935 West Parker Road
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150 900 DFC (Aries) Compass Pointe Apartments 4100 Chicot Road
151 510 DFC (Wingate) Sahara View Apartments 3600 El Conlon Avenue
152 O0521 GSMC(CPC) The Soaper Hotel Building 136 Second Street
153 902 DFC (Aries) Carriage House Apartments 1625 Martin Bluff Road
154 09-0001175 GSMC(Archon) Kinko's Center-Addison 4570 Belt Line Road
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155 519 DREFC Joplin Portfolio
155 519A DREFC Airport Drive Apartments 101-108 Betty Rose Lane
155 519B DREFC Cherry Street 508-110 Cherry Street
155 519C DREFC Park Lane 1507 Park Lane
155 519D DREFC Terrill Lane Apartments 116-118 Terrill Lane
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156 400030921 ACLI(ACLP) Gladstone Office Building 6910 North Holmes Street
157 400030976 ACLI(ACLP) Buckeye Tower 3300 Buckeye Road
158 09-0001108 GSMC(Archon) Country Villa University Healthcare 230 East Adams Boulevard
159 400030949 ACLI(ACLP) Gardsman Apartments 30 Novato Street
160 400030962 ACLI(ACLP) Baytown Central Shopping Center 4508 Garth Road
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161 400030955 ACLI(ACLP) Solitude Building 6149 Meeker Place
162 606 DREFC Marquee Apartments 2525 McCue Street
163 400031117 ACLI(ACLP) 41 Belmont Street Apartments 41 Belmont Street
164 905 DFC (Aries) Dorsey Business Center 6855 Deerpath Road
165 589 DREFC Northline Shopping Center 56-88 East Crosstimbers
- -----------------------------------------------------------------------------------------------------------------------------------
166 627 DREFC Marine Plaza Apartments 660 NE 78th Street
167 09-0001161 GSMC(Archon) Super 8 - Lafayette 2224 Northeast Evangeline Throughway
168 09-0001190 GSMC(Archon) Rite Aid - Massena 87 Main Street
169 09-0001194 GSMC(Archon) Cady Industrial Center 38110-120,/38140,/6262-6406, Executive Drive
170 527 DREFC Colonial Village - Regency Apartments 14 Ritchie Avenue
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171 09-0001143 GSMC(Archon) Bee Cave Road Office Building 3423 Bee Caves Road
172 569 DREFC Versailles Apartments 3290 Van Buren Ave.
173 09-0001174 GSMC(Archon) Hunter's Crossing Apartments 1800 Wisdom Drive
174 09-0001185 GSMC(Archon) Slifer Design Warehouse 45 Marmot Lane
175 594 DREFC 72-82 Wadsworth Terrace 72-82 Wadsworth Terrace
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176 09-0001149 GSMC(Archon) CVS Drug Store - Gloucester, NJ 589 Crosskeys Road
177 M0434 GSMC(CPC) Harbour Vines Apartments 1800-1816 Memorial Drive
178 524 DFC (Wingate) Windsor Square Apartments 929 North Gilmore Avenue
179 09-0001150 GSMC(Archon) CVS Drug Store - Paulsboro, NJ 231 West Broad Street
180 09-0001195 GSMC(Archon) Woodlands IV & V Business Center 2001-2003 108th Street
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181 400029277 ACLI(ACLP) Tech Plaza 2411 Tech Center Court
182 09-0001157 GSMC(Archon) Comfort Inn - Lincoln 2811 Woodlawn Road
183 400029302 ACLI(ACLP) Lincoln Industrial Center 4040 E. Lone Mt. Rd. and 4837 Lincoln Rd.
184 500 DREFC Stuyvesant Avenue 358-372 Stuyvesant Avenue
185 940 DREFC 41 - 98 Forley Street 41 - 98 Forley Street
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186 400030984 ACLI(ACLP) 16000 Memorial Office Building 16000 Memorial Drive
187 521 DFC (ITLA) Maryland Green Apartments 749 East Maryland Avenue
188 400029244 ACLI(ACLP) Blockbuster Shopping Center 5363-5367 Ridge Road
189 400029198 ACLI(ACLP) 110 Industrial Park 110 Industrial Park Road
190 585 DFC (ITLA) Timpanogos Apartments 455 North 400 West
191 504 DREFC 101 Lincoln Road 101 Lincoln Road
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192 400030945 ACLI(ACLP) Ocean Technology Park 4/127 John Clarke Road
193 M0406 GSMC(CPC) Garden Trails Apartments 300 Highway 12
194 400030929 ACLI(ACLP) Welch Healthcare Building 52 Accord Park Drive
195 09-0001148 GSMC(Archon) CVS Drug Store - Carlisle, PA 765 South West Street
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196 614 DREFC Pinehill Plaza & Apartments 7927 - 7991 Johnson Street
197 09-0001171 GSMC(Archon) Comfort Inn - Sweetwater 216 S.E. Georgia Avenue
198 920 DFC (Aries) Econo Lodge 1240 Southwest Wanamaker Road
199 586 DREFC Dorian Court 606 Lloyd Street
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200 09-0001187 GSMC(Archon) Lufkin Apartment Portfolio
200 09-0001187A GSMC(Archon) The Hidden Oaks 3200 Daniel McCall
200 09-0001187B GSMC(Archon) Azalea Trails 1406 Tulane Street
200 09-0001187C GSMC(Archon) Kentwood 115 Kentwood
201 622 DFC (Sutter) Ignacio Hills Apartments - XII 445 Ignacio Boulevard
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202 09-0001162 GSMC(Archon) Days Inn - Kerrville 2000 Sidney Baker Street
203 09-0001192 GSMC(Archon) Days Inn - New Bern 925 Broad Street
204 623 DFC (Sutter) Ignacio Hills Apartments - XVI 511 & 531 Alameda del Prado
205 400030975 ACLI(ACLP) Bays-Fill Industrial Building 13850-13872 Dawsons Bch. Rd. &13848-13876 Carveth Pl.
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206 09-0001151 GSMC(Archon) CVS Drug Store - Oaklyn, NJ 4 White Horse Pike (Route 30)
207 O0520 GSMC(CPC) The Salms Building 115 East Second Street
208 515 DFC (ITLA) Partridge Apartments 3812 Partridge Lane NE
209 09-0001193 GSMC(Archon) Days Inn - Winslow 2035 West Highway 66
210 595 DREFC Renshaw Terrace Renshaw Road
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211 09-0001144 GSMC(Archon) Alaska Archives Warehouse 165 East 56th Avenue
212 09-0001131 GSMC(Archon) Emery Park Apartments 1930 Atlantic Street
213 09-0001126 GSMC(Archon) Pecan Plaza 3400 Lombardy Lane
214 933 DREFC 112 Lincoln Street 112 Lincoln Street
215 400030905 ACLI(ACLP) Blockbuster - Denver 4151 E. Colfax Avenue
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216 400030899 ACLI(ACLP) Blockbuster - Wheatridge, CO. 3500 Youngfield Street
217 535 DFC (ITLA) Sycamores Apartments 351 East Center
218 400030911 ACLI(ACLP) Blockbuster-Las Vegas (Sahara) 9240 West Sahara Avenue
219 605 DREFC Maple Place North Apartments 1352 & 1360 North Ave and 1414 Euclid Avenue
220 608 DFC (Secore) Quinnipiac Arms 1275-1291 Quinnipiac Avenue & 530-54 Eastern Street
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221 400030906 ACLI(ACLP) Blockbuster - Edgewater 1921 Sheraton Boulevard
222 543 DREFC Centre Park Place Apartments 601-609 North 5th Street
223 400030889 ACLI(ACLP) Cypress Industrial Building 2325 W. Cypress Street
224 618 DREFC Hunter's Point Center 13091 Pond Springs Road
225 602 DREFC Hamilton Park House 1660 East Main Street
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226 511 DREFC Sedgley Gardens 844 North 29th Street
227 532 DFC (ITLA) Helena Gardens Apartments 4810,4830,4850 Bandera Street
228 536 DREFC 3044 Kingsbridge Avenue 3044 Kingsbridge Avenue
229 558 DFC (ITLA) Banyan Woods 900-902 SE 1st Street
230 551 DREFC 389 Massachusetts Avenue 389 Massachusetts Avenue
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231 400030898 ACLI(ACLP) Blockbuster-Wauwatosa 6102 W. North Avenue
232 578 DFC (ITLA) Desert Inn Professional Building 1580 East Desert Inn Road
233 592 DREFC Taos Apartments 1505 Park Place
234 600 DFC (Secore) Rosslyn Heights 7015 Woodsman Trail Drive
235 554 DREFC Cedar Village Apartments 1729 Eastern Road
236 O0519 GSMC(CPC) The Newberry-Wile Building 101 East Second Street
237 546 DFC (Parmann) 154 Rockaway Parkway 154 Roackaway Parkway
238 400030904 ACLI(ACLP) Blockbuster - Forest Hills 3200 S.E. Loop 820
239 400030909 ACLI(ACLP) Blockbuster - Indianapolis 3520 Mann Road
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240 601 DFC Douglas Park Apartments 3109 Douglas Avenue
241 609 DREFC Mayfair Garden Apartments 6615-37 Charles Street
242 501 DFC (Wingate) Bradford Place Apartments 340 Bradford Drive
243 400030903 ACLI(ACLP) Blockbuster-Las Vegas/Flamingo 3495 East Flamingo Road
244 400030897 ACLI(ACLP) Blockbuster-Tulsa 1337 East 71st Street
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245 934 DREFC 140 - 146 Chancellor Avenue 140 - 146 Chancellor Avenue
246 549 DREFC 148 - 156 Chancellor Avenue 148 Chancellor Avenue
247 528 DFC (Aries) Sherwood Court Apartments 1807-1825 Sherwood Street
248 400030957 ACLI(ACLP) SportsTech Warehouse 10909C East 56th Street
249 553 DREFC 5900 Balcones Office Building 5900 Balcones Drive
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250 598 DREFC Ashland Retail Center 1117-27 Claremont Avenue
251 604 DREFC Harrison Avenue Apartments 370 South Harrison Street
252 508 DFC (ITLA) Clearview Apartments 1195 Clearview Avenue NE
253 635 DREFC 92 - 96 Waldo Avenue 92 - 96 Waldo Avenue
254 400030908 ACLI(ACLP) Blockbuster-Bay City 3915 Wilder Road
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255 400030900 ACLI(ACLP) Blockbuster-Elkhart(Cassopoliss) 1545 Cassopolis Street
256 400030974 ACLI(ACLP) Lighthouse Point Professional Center 5340 North Federal Highway
257 M0436 GSMC(CPC) White Oak Arms Apartments 245-251 Candler Road
258 09-0001146 GSMC(Archon) Econolodge - Elkridge 5895 Bonnie View Lane
259 550 DREFC Randolph Park Apartments 4053 Warrensville
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260 400030888 ACLI(ACLP) Brookshire Grocery 3354 Gilmer Road
261 616 DFC (Sutter) Quail Lodge Apartments 340 East O'Keefe Street
262 945 DREFC 9416 34th Road 9416 34th Road
263 567 DREFC 98 Strathmore Road 98 Strathmore Road
264 518 DFC (ITLA) Southside Apartments 4652 Sunnyside Road SE
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265 537 DREFC Huntington Apartments 610-670 N. Huntington Boulevard
266 576 DREFC 2942 Third Avenue 2942 Third Avenue
267 904 DFC (Aries) Churchill Townhomes 4300-4530 Churchill Circle
268 634 DFC (Parmann) 354 East 21st Street 354 East 21st Street
269 542 DFC (Sutter) Lawndale Apartments 1500 Lawndale Plaza
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270 509 DREFC Garden Walk Apartments 1720 Moritz Drive
271 559 DREFC Windswept Apartments 4170 Easton Avenue & 3210-3228 Reeve Drive
272 568 DREFC Northshore Manor Apartments 111 East Lorain Avenue
273 538 DREFC Golden Eagle Apartments 129-145 White Street
274 534 DREFC Oakland Oaks 1054 Oakland Drive
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275 939 DREFC Adobe House Apartments 1110 Caliente Drive
276 541 DREFC Northern Pine Apartments 3206 Lobit Drive
277 641 DREFC 259-61 & 269 West Walnut Lane 259-61 & 269 West Walnut Lane
278 400030910 ACLI(ACLP) Blockbuster - Wind Gap 951 Male Road
279 588 DREFC Village at Deer Park 1233 & 1241 Dutch Dutch Avenue/1233 & 1241 Cedar Street
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280 400030907 ACLI(ACLP) Blockbuster - Elkhart (Hively) 115 Hively Avenue
281 400030901 ACLI(ACLP) Blockbuster-Chicago 4812 South Kedzie Avenue
282 565 DREFC Howard Warren Apartments 1520-1530 Meridian Avenue
283 577 DREFC Holmesburg Station Apartments 8020 Ditman Avenue
284 I0162 GSMC(CPC) Cumberland Airport Center 1930 Airport Industrial Park Drive
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285 561 DREFC Wingate Apartments 4424-30 Wingate Street
286 530 DFC (Progress) Prospect Square 444-450 Prospect Street
287 525 DFC (Wingate) 506 South Broadway 506 South Broadway
288 09-0001109 GSMC(Archon) Country Villa Cheviot Healthcare 3533 South Motor Ave.
289 615 DFC (Sutter) The Blount Apartments 2109-2119 NW 64th Avenue
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290 529 DREFC LaPetite Apartments 1250 Cedar Post Lane
291 637 DREFC Avenue R Duplexes 1705-1717, 1741-1745 & 1730 Avenue R
292 514 DFC (ITLA) Peppertree Apartments 19926 Ballinger Way
293 612 DFC (Wingate) Newport Apartments 1530-1532 Spruce Street
294 400030902 ACLI(ACLP) Blockbuster-Watertown 1240 Arsenal Street
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295 579 DREFC 8th Street Apartments 801-811 8th Street
296 596 DREFC Regency House 2440 Fairfield Avenue
297 632 DREFC 527 West 48th Street 527 West 48th Street
298 540 DREFC Whisperwoods Apartments 220 S. Jupiter Road
299 522 DFC (ITLA) Palomares Apartments 625 & 677 South Palomares Street
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300 503 DFC (Wingate) Richmond Apartments 5122 Bowser Avenue
301 572 DFC (ITLA) Fernwood Apartments 5600 Fernwood Avenue
302 936 DREFC 2267 - 2269 Kennedy Boulevard 2267 Kennedy Boulevard
303 570 DREFC Baycrest Apartments 8570 Chesapeake Boulevard
304 587 DREFC 45 Church Street & 35 Railroad Avenue 45 Church Street & 35 Railroad Avenue
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF CROSS - ANTICIPATED LOAN
ZIP PROPERTY ORIGINAL CUT-OFF CUT-OFF COLLATERALIZED RELATED BALANCE
CITY STATE CODE TYPE BALANCE DATE BALANCE DATE BALANCE GROUP GROUP AT MATURITY / ARD
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Alexandria VA 22302 Office $20,170,000 $20,007,359 2.25% - - $17,396,887
Chicago IL 60611 Lodging 18,896,684 18,879,907 2.12 - - 15,726,798
Millcreek PA 16509 Multifamily18,870,000 18,745,566 2.10 - - 16,451,801
Roswell GA 30076 Retail 17,282,732 17,274,576 1.94 - - 15,687,825
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12,000,000 11,886,833 1.33 9,385,412
Winchester MA 01890 Healthcare - - - - - -
Winchester MA 01890 Healthcare - - - - - -
Woburn MA 01801 Healthcare - - - - - -
Orlando FL 32804 Retail 12,000,000 11,883,227 1.33 - - 7,734,709
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Irvine CA 92612 Lodging 11,500,000 11,474,944 1.29 - - 9,270,087
Bronx NY 10472 Healthcare 11,400,000 11,379,636 1.28 - - 9,471,290
Bethesda MD 20814 Office 10,900,000 10,805,080 1.21 - - 9,424,891
Memphis TN 38103 Lodging 10,400,000 10,359,122 1.16 - - 7,940,735
Elizabeth NJ 07201 Multifamily10,000,000 9,939,997 1.12 - - 0
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Orlando FL 32826 Multifamily 9,900,000 9,857,540 1.11 - - 9,100,455
Bonita Springs FL 34135 Retail 9,350,000 9,327,291 1.05 - - 8,020,226
Tucson AZ 85710 Multifamily 9,100,000 9,071,554 1.02 - 1 7,874,757
Peoria AZ 85382 Retail 9,000,000 8,970,384 1.01 - - 7,741,000
Renton WA 98055 Retail 8,550,000 8,529,234 0.96 - 2 7,334,003
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Houston TX 77079 Retail 8,500,000 8,480,788 0.95 - - 7,350,267
San Antonio TX 78205 Lodging 8,400,000 8,369,383 0.94 - - 6,619,877
Richland WA 99352 Office 8,350,000 8,346,523 0.94 - - 7,503,896
Lithonia GA 30058 Multifamily 8,100,000 8,094,812 0.91 - - 7,121,117
Cornelius NC 28036 Retail 8,000,000 7,989,091 0.90 - - 7,022,620
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Fairfield CA 94533 Lodging 8,025,000 7,982,537 0.90 - 3 6,490,060
Ocean City MD 21842 Lodging 8,000,000 7,972,547 0.90 - - 6,370,223
Sommerville MA 02143 Multifamily 8,000,000 7,965,441 0.89 - 4 6,830,698
Albany NY 12210 Office 7,600,000 7,564,133 0.85 - - 6,394,531
Chicago IL 60631 Office 7,500,000 7,467,998 0.84 - - 6,532,449
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Tulsa OK 74145 Multifamily 7,300,000 7,284,197 0.82 - - 6,341,833
Las Vegas NV 89104 Industrial 7,000,000 6,969,977 0.78 - - 6,093,689
Milwaukee WI 53223 Office 6,700,000 6,680,925 0.75 - 5 5,858,738
Sheridan CO 80110 Industrial 6,600,000 6,585,712 0.74 - - 5,733,711
Phoenix AZ 85016 Multifamily 6,400,000 6,386,775 0.72 - 6 5,586,745
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Town of Clay (LiverpoolNY 13086 Office 6,200,000 6,171,013 0.69 - - 4,944,075
Orlando FL 32821 Retail 6,000,000 5,988,920 0.67 - - 5,294,780
New York City NY 10021 Retail 6,000,000 5,975,204 0.67 - - 4,621,692
Madison WI 53705 Office 6,000,000 5,949,762 0.67 - 5 5,298,722
Chatsworth CA 91311 Office 6,000,000 5,926,346 0.67 - - 5,535,227
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Tempe AZ 85281 Multifamily 6,100,000 5,889,662 0.66 - - 5,150,742
Houston TX 77036 Retail 5,600,000 5,593,309 0.63 - - 4,980,405
Albany NY 12202 Industrial 5,520,000 5,508,304 0.62 - - 4,787,024
Los Angeles CA 90024 Multifamily 5,400,000 5,383,436 0.60 - - 4,470,089
Houston TX 77036 Multifamily 5,400,000 5,383,318 0.60 - - 4,949,146
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Bradenton FL 34210 Lodging 5,400,000 5,361,632 0.60 - - 4,404,185
Houston TX 77067 Multifamily 5,350,000 5,341,666 0.60 - - 4,628,267
Irvington NJ 07111 Multifamily 5,306,457 5,302,632 0.60 - 7 4,611,229
Plano TX 75023 Retail 5,200,000 5,192,687 0.58 - - 4,549,911
Memphis TN 38128 Multifamily 5,200,000 5,187,859 0.58 - 8 4,480,513
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Phoenix AZ 85015 Multifamily 5,070,000 5,054,448 0.57 - 6 4,396,925
New York NY 10010 Office 5,000,000 4,994,333 0.56 - - 4,468,323
Tempe AZ 85284 Industrial 4,800,000 4,792,309 0.54 - - 4,138,774
Poulsbo WA 98370 Office 4,800,000 4,783,339 0.54 - - 3,814,884
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4,750,000 4,743,113 0.53 4,142,520
Gaithersburg MD 20879 Industrial - - - - - -
Gaithersburg MD 20879 Industrial - - - - - -
Brookeville MD 20833 Retail - - - - - -
Santa Clarita CA 91351 Retail 7,300,000 4,687,639 0.53 - - 4,575,322
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Tukwila WA 98168 Industrial 4,700,000 4,669,992 0.52 - - 3,792,456
Las Vegas NV 89102 Office 4,700,000 4,657,515 0.52 - - 3,764,577
Boise ID 83702 Retail 4,650,000 4,639,304 0.52 - - 4,013,283
Orlando FL 32819 Retail 4,750,000 4,600,573 0.52 - - 0
Greenwood Village CO 80111 Office 4,600,000 4,581,221 0.51 - - 4,024,664
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Carrollton TX 75007 Office 4,500,000 4,490,195 0.50 - - 3,627,425
Murfreesboro TN 37133 Retail 4,500,000 4,489,675 0.50 - - 3,884,896
Renton WA 98055 Retail 4,500,000 4,483,781 0.50 - 2 3,553,655
Greenfield WI 53228 Multifamily 4,450,000 4,436,350 0.50 - - 3,683,684
Port Wentworth GA 31407 Lodging 4,400,000 4,380,672 0.49 - - 1,768,325
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Phoenix AZ 85034 Lodging 4,350,000 4,296,853 0.48 - - 3,387,393
Hendersonville TN 37075 Multifamily 4,300,000 4,289,960 0.48 - 8 3,705,040
New Haven CT 06511 Lodging 4,300,000 4,284,096 0.48 - - 3,320,750
Houston TX 77079 Retail 4,100,000 4,091,986 0.46 - - 3,598,719
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Cuero TX 77954 Healthcare 4,000,000 3,986,221 0.45 - - 3,183,100
Petaluma CA 94954 Industrial 4,000,000 3,978,134 0.45 - - 3,218,157
Portland OR 97202 Office 4,000,000 3,977,673 0.45 - - 3,207,236
Phoenix AZ 85017 Multifamily 4,000,000 3,972,677 0.45 - 6 3,509,989
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Newark NJ 07112 Multifamily 4,000,000 3,970,897 0.45 - 7 3,486,964
Hazard KY 41701 Lodging 4,000,000 3,966,587 0.45 - - 3,124,836
Memphis TN 38118 Multifamily 3,930,000 3,920,824 0.44 - 8 3,386,234
Renton WA 98055 Office 3,850,000 3,836,253 0.43 - 2 3,045,243
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3,800,000 3,791,625 0.43 3,484,185
Austin TX 78752 Multifamily - - - - - -
Austin TX 78752 Multifamily - - - - - -
Austin TX 78752 Multifamily - - - - - -
Austin TX 78752 Multifamily - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
San Luis Obispo CA 93401 Retail 3,800,000 3,777,721 0.42 - - 0
Port Orchard WA 98366 Retail 3,750,000 3,739,088 0.42 A(1) 9 3,271,378
Atascadero CA 93422 Retail 3,600,000 3,589,524 0.40 A(2) 9 3,140,525
Ardmore OK 73401 Retail 3,500,000 3,495,764 0.39 - - 3,108,946
Columbus OH 43229 Industrial 3,500,000 3,488,081 0.39 - - 2,790,489
- -----------------------------------------------------------------------------------------------------------------------------------
3,500,000 3,486,035 0.39 2,864,014
Lexington KY 40505 Multifamily - - - - - -
Lexington KY 40504 Multifamily - - - - - -
Henrietta NY 14467 Retail 3,500,000 3,483,607 0.39 - - 2,790,134
Doraville GA 30060 Industrial 3,500,000 3,479,106 0.39 - - 2,774,705
- -----------------------------------------------------------------------------------------------------------------------------------
Wells ME 04090 Retail 3,500,000 3,477,937 0.39 - - 2,747,526
Jackson Heights NY 11372 Multifamily 3,300,000 3,297,582 0.37 - 10 2,759,089
Palm Beach FL 33480 Office 3,300,000 3,293,056 0.37 - 11 2,875,319
Bishop CA 93514 Retail 3,285,000 3,275,441 0.37 A(2) 9 2,865,727
Edwards CO 81632 Retail 3,275,000 3,268,091 0.37 - 12 2,852,776
- -----------------------------------------------------------------------------------------------------------------------------------
San Francisco CA 94109 Multifamily 3,200,000 3,194,371 0.36 - 13 2,836,296
Irving TX 76062 Multifamily 3,200,000 3,187,886 0.36 - - 2,772,540
Miami FL 33137 Multifamily 3,200,000 3,179,729 0.36 - 14 2,585,255
Addison TX 75240 Lodging 3,175,000 3,165,500 0.36 - - 2,583,143
Peoria IL 61605 Office 3,200,000 3,160,322 0.35 - - 0
- -----------------------------------------------------------------------------------------------------------------------------------
Phoenix AZ 85023 Lodging 3,200,000 3,141,599 0.35 - - 2,498,919
Tyler TX 75701 Lodging 3,025,000 3,019,935 0.34 - - 2,535,663
Houston TX 77027 Retail 3,000,000 2,994,261 0.34 - - 2,638,639
Federal Way WA 98003 Multifamily 3,000,000 2,993,287 0.34 - - 2,597,054
Norwalk OH 44857 Industrial 3,000,000 2,991,706 0.34 - - 2,771,401
- -----------------------------------------------------------------------------------------------------------------------------------
Boardman OH 44512 Retail 3,000,000 2,983,128 0.33 - - 2,020,609
San Rafael CA 94903 Multifamily 2,983,000 2,979,417 0.33 - 15 2,651,658
Biloxi MS 39531 Lodging 2,950,000 2,934,505 0.33 B 16 2,012,194
Atlanta GA 30311 Multifamily 2,925,000 2,916,266 0.33 C 17 2,380,440
Kansas City MO 64112 Multifamily 2,900,000 2,887,944 0.32 - 1 2,532,667
- -----------------------------------------------------------------------------------------------------------------------------------
Perry Hall MD 21236 Retail 2,900,000 2,887,786 0.32 - - 2,639,971
Baltimore MA 21244 Self-Storage2,850,000 2,835,602 0.32 - - 2,235,376
Los Angeles CA 90048 Retail 2,800,000 2,794,451 0.31 - - 2,291,111
Scotts Valley CA 95066 Industrial 2,800,000 2,787,516 0.31 - - 2,157,394
Center Township PA 16001 Multifamily 2,780,000 2,772,352 0.31 - - 2,149,764
- -----------------------------------------------------------------------------------------------------------------------------------
Memphis TN 38116 Multifamily 2,750,000 2,743,579 0.31 - 8 2,369,501
San Francisco CA 94109 Multifamily 2,750,000 2,741,484 0.31 - 13 2,382,330
Norfolk VA 23517 Retail 2,750,000 2,737,329 0.31 - - 2,198,436
Mount Pleasant SC 29464 Retail 2,700,000 2,694,387 0.30 - - 2,192,973
Rockland MA 02370 Lodging 2,700,000 2,672,836 0.30 - - 1,876,661
- -----------------------------------------------------------------------------------------------------------------------------------
Oakland CA 94621 Office 2,680,000 2,658,422 0.30 - - 2,186,204
Vinita OK 74301 Industrial 2,650,000 2,636,166 0.30 - - 2,147,681
Stone Mountain GA 30087 Lodging 2,620,000 2,606,528 0.29 - - 0
Taylor MI 48180 Multifamily 2,600,000 2,591,718 0.29 - - 2,244,997
Houston TX 77060 Office 2,500,000 2,489,686 0.28 - - 2,304,052
- -----------------------------------------------------------------------------------------------------------------------------------
Las Vegas NV 89103 Industrial 2,500,000 2,489,578 0.28 - - 2,182,706
Pittsburg CA 94565 Self-Storage2,500,000 2,486,308 0.28 - - 1,862,414
Fort Myers Beach FL 33931 Lodging 2,500,000 2,464,604 0.28 - - 1,775,955
Brockton MA 02379 Industrial 2,450,000 2,441,268 0.27 - - 1,787,845
San Antonio TX 78223 Multifamily 2,440,000 2,433,795 0.27 - - 2,081,647
- -----------------------------------------------------------------------------------------------------------------------------------
Tyler TX 75703 Retail 2,400,000 2,395,359 0.27 - - 2,020,269
Oak Lawn IL 60453 Retail 2,400,000 2,391,224 0.27 - - 2,087,294
Timonium MD 21093 Office 2,400,000 2,377,132 0.27 - - 0
San Mateo CA 94403 Multifamily 2,400,000 2,374,931 0.27 - - 0
Glen Burnie MD 21061 Industrial 2,375,000 2,367,487 0.27 - - 1,915,986
- -----------------------------------------------------------------------------------------------------------------------------------
St. Augustine FL 32084 Lodging 2,400,000 2,365,665 0.27 - 3 1,860,862
Clear Lake CA 95422 Lodging 2,350,000 2,342,492 0.26 - - 1,892,919
Oak Harbor WA 98277 Retail 2,310,000 2,303,278 0.26 A(1) 9 2,015,169
East Palo Alto CA 94303 Multifamily 2,309,000 2,302,195 0.26 - 13 1,882,763
St. Albans NY 11434 Multifamily 2,300,000 2,292,873 0.26 - 10 1,861,417
- -----------------------------------------------------------------------------------------------------------------------------------
Frankfort KY 40601 Retail 2,300,000 2,290,536 0.26 - - 2,010,744
Tyler TX 75702 Lodging 2,260,000 2,253,279 0.25 - - 1,840,344
San Diego CA 92101 Multifamily 2,225,000 2,212,946 0.25 - - 1,951,357
Santa Fe NM 87505 Lodging 2,200,000 2,193,040 0.25 - - 1,774,809
Tucson AZ 85704 Retail 2,200,000 2,188,674 0.25 - - 1,880,706
- -----------------------------------------------------------------------------------------------------------------------------------
Palm Beach FL 33480 Office 2,150,000 2,145,476 0.24 - 11 1,873,314
Biloxi MS 39531 Lodging 2,150,000 2,139,863 0.24 B 16 1,506,407
West Springfield MA 01089 Office 2,100,000 2,095,194 0.24 - - 1,813,453
Santa Monica CA 90401 Multifamily 2,100,000 2,093,661 0.24 - - 1,755,989
Dallas TX 75240 Multifamily 2,100,000 2,093,420 0.24 - - 1,816,754
Carrollton TX 75006 Retail 2,100,000 2,078,590 0.23 - - 1,712,882
- -----------------------------------------------------------------------------------------------------------------------------------
Atlanta GA 30032 Multifamily 2,070,000 2,064,125 0.23 C 17 1,697,113
East Palo Alto CA 94133 Multifamily 2,031,000 2,025,014 0.23 - 13 1,656,082
Dallas TX 75229 Industrial 2,000,000 1,995,878 0.22 - 31 1,746,319
New York NY 10014 Multifamily 2,000,000 1,991,433 0.22 - 10 1,618,390
Plano TX 75075 Retail 2,000,000 1,985,429 0.22 - - 1,624,861
- -----------------------------------------------------------------------------------------------------------------------------------
Pascagoula MS 39567 Multifamily 1,970,000 1,945,944 0.22 - 18 0
Las Vegas NV 89102 Multifamily 1,950,000 1,940,119 0.22 - - 0
Henderson KY 42420 Office 1,925,000 1,918,581 0.22 - 19 1,540,068
Gautier MS 39553 Multifamily 1,930,000 1,906,015 0.21 - 18 0
Addison TX 75244 Retail 1,900,000 1,896,443 0.21 - - 1,674,555
- -----------------------------------------------------------------------------------------------------------------------------------
1,900,000 1,888,326 0.21 1,684,512
Joplin MO 64801 Multifamily - - - - - -
Carl Junction MO 64834 Multifamily - - - - - -
Carl Junction MO 64834 Multifamily - - - - - -
Carl Junction MO 64834 Multifamily - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
Gladstone MO 64118 Office 1,900,000 1,886,669 0.21 - - 0
Atlanta GA 30341 Office 1,900,000 1,880,881 0.21 - - 1,385,871
Los Angeles CA 90011 Healthcare 1,800,000 1,796,968 0.20 D 32 1,507,581
San Rafael CA 94901 Multifamily 1,800,000 1,795,911 0.20 - - 1,355,828
Baytown TX 77521 Retail 1,800,000 1,793,378 0.20 - - 1,416,411
- -----------------------------------------------------------------------------------------------------------------------------------
Boise ID 83713 Office 1,800,000 1,789,004 0.20 - - 1,184,809
Houston TX 77056 Multifamily 1,750,000 1,741,856 0.20 - - 1,442,763
Sommerville MA 02143 Multifamily 1,725,000 1,717,548 0.19 - 4 1,472,835
Dorsey MD 21227 Office 1,720,000 1,707,275 0.19 - - 1,394,019
Houston TX 77022 Retail 1,685,000 1,673,615 0.19 - - 724,469
- -----------------------------------------------------------------------------------------------------------------------------------
Miami FL 33138 Multifamily 1,675,000 1,668,317 0.19 - 14 1,370,635
Lafayette LA 70501 Lodging 1,670,000 1,664,560 0.19 - - 1,341,047
Massena NY 13662 Retail 1,664,000 1,660,374 0.19 - - 1,341,341
Westland MI 48185 Industrial 1,645,000 1,643,050 0.18 - - 1,464,064
Ravenswood WV 26164 Multifamily 1,650,000 1,637,348 0.18 - 20 1,355,736
- -----------------------------------------------------------------------------------------------------------------------------------
West Lake Hills TX 78746 Office 1,630,000 1,620,915 0.18 - - 1,092,902
Ogden UT 84201 Multifamily 1,624,000 1,617,205 0.18 - - 1,319,086
Amarillo TX 79106 Multifamily 1,600,000 1,596,702 0.18 - - 1,397,055
Eagle CO 81632 Industrial 1,593,000 1,589,853 0.18 - 12 1,396,784
New York NY 10040 Multifamily 1,600,000 1,582,981 0.18 - - 0
- -----------------------------------------------------------------------------------------------------------------------------------
Gloucester NJ 08081 Retail/CTL 1,579,000 1,561,882 0.18 - 21 0
Atlanta GA 30311 Multifamily 1,555,000 1,550,587 0.17 C 17 1,274,884
Lakeland FL 33801 Multifamily 1,560,000 1,544,857 0.17 - - 1,281,839
Paulsboro NJ 08066 Retail/CTL 1,550,000 1,541,161 0.17 - 21 0
Grand Prairie TX 75050 Industrial 1,500,000 1,498,367 0.17 - 31 1,345,273
- -----------------------------------------------------------------------------------------------------------------------------------
Las Vegas NV 89106 Industrial 1,500,000 1,492,558 0.17 - - 1,288,092
Lincoln IL 62656 Lodging 1,500,000 1,491,899 0.17 - - 0
North Las Vegas NV 89031 Industrial 1,500,000 1,489,734 0.17 - - 1,196,913
Irvington NJ 07111 Multifamily 1,500,000 1,487,244 0.17 - 7 1,307,582
Elmhurst NY 11373 Multifamily 1,450,000 1,445,507 0.16 - 10 1,173,503
- -----------------------------------------------------------------------------------------------------------------------------------
Houston TX 77079 Office 1,450,000 1,431,753 0.16 - - 0
Phoenix AZ 85014 Multifamily 1,440,000 1,424,594 0.16 - - 1,165,752
Cincinnati OH 45209 Retail 1,425,000 1,419,152 0.16 - 22 1,246,115
Hingham MA 02043 Industrial 1,400,000 1,392,156 0.16 - - 1,121,835
Provo UT 84601 Multifamily 1,400,000 1,390,750 0.16 - - 1,154,259
Brooklyn NY 11225 Multifamily 1,400,000 1,384,504 0.16 - 7 1,153,223
- -----------------------------------------------------------------------------------------------------------------------------------
Middletown RI 02842 Office 1,370,000 1,364,770 0.15 - - 1,071,005
West Blocton AL 35184 Multifamily 1,360,000 1,356,840 0.15 - - 1,172,478
Norwell MA 02061 Office 1,360,000 1,355,189 0.15 - - 1,077,447
Carlisle PA 17013 Retail/CTL 1,364,000 1,348,733 0.15 - 21 0
- -----------------------------------------------------------------------------------------------------------------------------------
Pembroke Pines FL 33024 Multifamily 1,350,000 1,342,751 0.15 - - 0
Sweetwater TX 79556 Lodging 1,312,500 1,308,405 0.15 - - 1,061,094
Topeka KS 66604 Lodging 1,320,000 1,307,700 0.15 - - 0
Chester PA 19013 Multifamily 1,310,000 1,305,140 0.15 E 23 1,083,653
- -----------------------------------------------------------------------------------------------------------------------------------
1,300,000 1,298,057 0.15 1,129,971
Lufkin TX 75904 Multifamily - - - - - -
Lufkin TX 75904 Multifamily - - - - - -
Lufkin TX 75901 Multifamily - - - - - -
Novato CA 94949 Multifamily 1,270,000 1,264,836 0.14 - 15 1,111,594
- -----------------------------------------------------------------------------------------------------------------------------------
Kerrville TX 78028 Lodging 1,260,000 1,253,298 0.14 - - 0
New Bern NC 28560 Lodging 1,250,000 1,247,450 0.14 - - 1,018,297
Novato CA 94596 Multifamily 1,228,000 1,223,007 0.14 - 15 1,074,834
Woodbridge VA 22191 Industrial 1,200,000 1,195,618 0.13 - - 945,500
- -----------------------------------------------------------------------------------------------------------------------------------
Oaklyn NJ 08107 Retail/CTL 1,196,000 1,180,615 0.13 - 21 0
Owensboro KY 42303 Office 1,175,000 1,171,082 0.13 - 19 940,041
Keizer OR 97303 Multifamily 1,200,000 1,167,817 0.13 - 24 0
Winslow AZ 86047 Lodging 1,150,000 1,143,555 0.13 - - 557,315
Chester PA 19013 Multifamily 1,140,000 1,135,771 0.13 E 23 943,027
- -----------------------------------------------------------------------------------------------------------------------------------
Anchorage AK 99518 Industrial 1,125,000 1,119,948 0.13 - - 903,278
Dallas TX 75208 Multifamily 1,115,000 1,112,492 0.12 - - 964,711
Dallas TX 75220 Retail 1,084,000 1,082,074 0.12 - - 959,959
East Orange NJ 07107 Multifamily 1,072,000 1,069,075 0.12 - 25 883,754
Denver CO 80220 Retail 1,050,000 1,047,733 0.12 - 22 912,428
- -----------------------------------------------------------------------------------------------------------------------------------
Wheat Ridge CO 80033 Retail 1,050,000 1,047,733 0.12 - 22 912,428
Provo UT 84606 Multifamily 1,050,000 1,043,908 0.12 - - 859,550
Las Vegas NV 89117 Retail 1,025,000 1,022,787 0.11 - 22 890,703
Atlanta GA 30307 Multifamily 1,025,000 1,021,008 0.11 - - 841,816
New Haven CT 06513 Multifamily 1,020,000 1,012,746 0.11 - - 831,778
- -----------------------------------------------------------------------------------------------------------------------------------
Edgewater CO 80214 Retail 1,010,000 1,007,819 0.11 - 22 877,668
Reading PA 19602 Multifamily 1,012,000 1,006,422 0.11 - - 834,506
Pheonix AZ 85009 Industrial 1,000,000 996,925 0.11 - - 916,832
Austin TX 78729 Office 1,000,000 994,967 0.11 - 26 810,607
Waterbury CT 06702 Multifamily 1,000,000 994,860 0.11 - 20 812,400
- -----------------------------------------------------------------------------------------------------------------------------------
Philadelphia PA 19130 Multifamily 1,000,000 990,984 0.11 - - 818,520
Montclair CA 91763 Multifamily 1,000,000 990,764 0.11 - 27 653,906
Bronx NY 10462 Multifamily 990,000 980,977 0.11 - - 0
Pompano Beach FL 33060 Multifamily 975,000 969,343 0.11 - - 798,152
Arlington MA 02174 Multifamily 970,000 965,254 0.11 - 28 793,901
- -----------------------------------------------------------------------------------------------------------------------------------
Wauwatosa WI 53213 Retail 950,000 947,949 0.11 - 22 825,528
Las Vegas NV 89109 Office 950,000 943,077 0.11 - - 786,236
College Station TX 77840 Multifamily 950,000 942,811 0.11 - 26 797,188
Houston TX 77040 Multifamily 940,000 931,433 0.10 - - 0
South Daytona FL 32119 Multifamily 925,000 918,767 0.10 - - 773,683
Owensboro KY 42302 Office 900,000 896,999 0.10 - 19 720,032
Brooklyn NY 11212 Multifamily 900,000 895,040 0.10 - - 742,149
Forest Hills TX 76140 Retail 875,000 873,111 0.10 - 22 760,356
Inidanapolis IN 46158 Retail 860,000 858,143 0.10 - 22 747,321
- -----------------------------------------------------------------------------------------------------------------------------------
Dallas TX 75219 Multifamily 862,000 856,305 0.10 - - 710,693
Philadelphia PA 19135 Multifamily 860,000 855,998 0.10 - 29 709,015
Charlotte NC 28208 Multifamily 860,000 850,695 0.10 - - 710,938
Las Vegas NV 89121 Retail 850,000 848,165 0.10 - 22 738,631
Tulsa OK 74136 Retail 850,000 848,165 0.10 - 22 738,631
- -----------------------------------------------------------------------------------------------------------------------------------
Newark NJ 07112 Multifamily 850,000 847,681 0.10 - 25 700,738
Newark NJ 07112 Multifamily 850,000 845,058 0.09 - 25 713,239
Greensboro NC 27403 Multifamily 840,000 833,878 0.09 - - 695,197
Tulsa OK 74136 Industrial 840,000 832,227 0.09 - - 0
Austin TX 78731 Office 826,000 820,543 0.09 - - 681,014
- -----------------------------------------------------------------------------------------------------------------------------------
Ashland OH 44805 Retail 800,000 796,959 0.09 - - 659,408
East Orange NJ 07018 Multifamily 800,000 796,086 0.09 - - 654,764
Keizer OR 97303 Multifamily 800,000 778,545 0.09 - 24 0
Jersey City NJ 07306 Multifamily 770,000 767,633 0.09 - 30 0
Bay City MI 48706 Retail 760,000 758,359 0.09 - 22 660,424
- -----------------------------------------------------------------------------------------------------------------------------------
Elkhart IN 46514 Retail 750,000 748,381 0.08 - 22 651,734
Lighthouse Point FL 33064 Office 750,000 748,372 0.08 - - 651,382
Atlanta GA 30311 Multifamily 750,000 747,871 0.08 C 17 614,896
Elkridge MD 21075 Lodging 750,000 747,053 0.08 - - 615,157
Highland Hills OH 44122 Multifamily 750,000 745,407 0.08 - - 624,980
- -----------------------------------------------------------------------------------------------------------------------------------
Longview TX 75604 Retail 750,000 744,183 0.08 - - 426,323
East Palo Alto CA 94303 Multifamily 738,000 736,502 0.08 - - 601,649
Jackson Heights NY 11372 Multifamily 730,000 727,738 0.08 - 10 590,798
Boston (Brighton) MA 02146 Multifamily 730,000 726,428 0.08 - 28 597,472
Salem OR 97302 Multifamily 730,000 710,422 0.08 - 24 0
- -----------------------------------------------------------------------------------------------------------------------------------
Pomona CA 91768 Multifamily 712,000 707,656 0.08 - 27 462,674
Bronx NY 10455 Retail 700,000 693,840 0.08 - - 575,066
Monroe LA 71203 Multifamily 690,000 681,425 0.08 - 18 0
Brooklyn NY 11226 Multifamily 679,000 677,749 0.08 - - 561,653
Houston TX 77023 Multifamily 675,000 671,280 0.08 - - 556,612
- -----------------------------------------------------------------------------------------------------------------------------------
Houston TX 77055 Multifamily 675,000 669,623 0.08 - - 562,508
Bethlehem PA 18020 Multifamily 654,000 650,488 0.07 - - 541,238
Oberlin OH 44074 Multifamily 650,000 647,407 0.07 - - 531,888
Springfield MA 01108 Multifamily 652,000 647,370 0.07 - - 541,531
Irving TX 75060 Multifamily 652,000 646,539 0.07 - - 539,511
- -----------------------------------------------------------------------------------------------------------------------------------
Jacksonville FL 32211 Multifamily 648,000 646,185 0.07 - - 532,279
Dickinson TX 77539 Multifamily 650,000 645,384 0.07 - - 539,868
Philadelphia PA 19144 Multifamily 640,000 638,850 0.07 - - 531,272
Wind Gap PA 13601 Retail 640,000 638,618 0.07 - 22 556,146
Deer Park TX 77536 Multifamily 629,000 626,780 0.07 - - 524,004
- -----------------------------------------------------------------------------------------------------------------------------------
Elkhart IN 46517 Retail 625,000 623,650 0.07 - 22 543,112
Chicago IL 60644 Retail 625,000 623,650 0.07 - 22 543,112
Miami Beach FL 33139 Multifamily 625,000 621,865 0.07 - - 509,648
Philadelphia PA 19136 Multifamily 620,000 617,115 0.07 - 29 511,150
Marietta GA 30062 Industrial 610,000 608,732 0.07 - - 495,449
- -----------------------------------------------------------------------------------------------------------------------------------
Philadelphia PA 19136 Multifamily 610,000 607,161 0.07 - 29 502,906
East Orange NJ 07111 Multifamily 612,000 606,615 0.07 - - 502,772
Yonkers NY 10705 Multifamily 612,000 602,978 0.07 - - 0
Los Angeles CA 90034 Healthcare 600,000 598,989 0.07 D 32 502,527
Sunrise FL 33313 Multifamily 600,000 596,607 0.07 - - 492,975
- -----------------------------------------------------------------------------------------------------------------------------------
Houston TX 77055 Multifamily 600,000 596,025 0.07 - - 511,998
Plano TX 75074 Multifamily 592,000 590,909 0.07 - - 489,689
Seattle WA 98155 Multifamily 600,000 583,909 0.07 - 24 0
Philadelphia PA 19102 Multifamily 585,000 580,168 0.07 - - 475,361
Watertown NY 13601 Retail 580,000 578,748 0.06 - 22 504,007
- -----------------------------------------------------------------------------------------------------------------------------------
Miami Beach FL 33139 Multifamily 575,000 570,701 0.06 - - 474,172
Fort Wayne IN 46807 Multifamily 568,000 565,423 0.06 - - 469,963
New York NY 10036 Multifamily 560,000 558,863 0.06 - - 456,536
Garland TX 75042 Multifamily 560,000 556,226 0.06 - - 468,392
Pomona CA 91766 Multifamily 555,000 549,874 0.06 - 27 362,919
- -----------------------------------------------------------------------------------------------------------------------------------
Dallas TX 75209 Multifamily 550,000 545,050 0.06 - - 456,831
Los Angeles CA 90028 Multifamily 540,000 535,015 0.06 - - 446,932
Jersey City NJ 07304 Multifamily 521,250 518,899 0.06 - 30 0
Norfolk VA 23503 Multifamily 520,000 518,583 0.06 - - 465,144
Patchogue NY 11772 Multifamily 520,000 517,423 0.06 - - 434,915
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST INTEREST GRACE ORIGINAL TERM ORIGINAL
LOAN MORTGAGE NOTE PAYMENT ACCRUAL MONTHLY PAYMENT PERIOD TO MATURITY / ARD AMORTIZATION
TYPE RATE DATE DATE METHOD PAYMENT FREQUENCY (DAYS) (MONTHS) TERM (MONTHS)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 7.220% 02/11/98 04/01/98 30 / 360 $137,185 Monthly 10 120 360
Balloon 7.710 11/19/98 01/01/99 Actual / 360 142,236 Monthly 5 113 300
Balloon 6.980 03/31/98 05/01/98 Actual / 360 125,289 Monthly 10 120 360
Balloon 7.860 11/24/98 01/01/99 Actual / 360 125,132 Monthly 10 107 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.890 04/27/98 06/01/98 Actual / 360 94,362 Monthly 7 120 276
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
Balloon 7.350 03/27/98 05/01/98 Actual / 360 87,511 Monthly 5 180 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.250 10/05/98 12/01/98 Actual / 360 83,123 Monthly 5 120 300
Balloon 8.280 10/22/98 12/01/98 Actual / 360 90,112 Monthly 5 120 300
Balloon 7.330 01/27/98 03/01/98 30 / 360 74,950 Monthly 10 120 360
Balloon 7.150 09/11/98 11/01/98 Actual / 360 76,887 Monthly 5 120 276
Fully Amortizing 6.860 05/29/98 07/01/98 30 / 360 65,593 Monthly 0 360 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.920 06/12/98 08/01/98 Actual / 360 65,334 Monthly 5 84 360
Balloon 6.390 09/16/98 11/01/98 Actual / 360 58,424 Monthly 10 120 360
Balloon 6.710 08/31/98 10/01/98 Actual / 360 58,781 Monthly 7 120 360
Balloon 6.490 08/26/98 10/01/98 Actual / 360 56,827 Monthly 10 120 360
Balloon 6.390 09/03/98 11/01/98 Actual / 360 53,425 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.680 09/25/98 11/01/98 Actual / 360 54,736 Monthly 5 120 360
Balloon 6.530 09/25/98 11/01/98 Actual / 360 56,875 Monthly 10 120 300
Balloon 8.200 11/09/98 01/01/99 Actual / 360 62,437 Monthly 0 120 360
Balloon 6.920 05/27/98 01/01/99 Actual / 360 53,455 Monthly 5 120 360
Balloon 7.250 10/07/98 12/01/98 Actual / 360 54,574 Monthly 15 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.350 07/08/98 09/01/98 Actual / 360 58,523 Monthly 5 120 300
Balloon 6.850 09/24/98 11/01/98 Actual / 360 55,779 Monthly 10 120 300
Balloon 6.790 07/07/98 09/01/98 30 / 360 52,101 Monthly 10 120 360
Balloon 7.270 05/27/98 07/01/98 Actual / 360 51,949 Monthly 10 144 360
Balloon 6.940 06/18/98 08/01/98 Actual / 360 49,596 Monthly 10 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.850 09/30/98 11/01/98 Actual / 360 47,834 Monthly 10 120 360
Balloon 6.920 06/05/98 08/01/98 Actual / 360 46,196 Monthly 5 120 360
Balloon 7.100 08/06/98 10/01/98 Actual / 360 45,026 Monthly 0 120 360
Balloon 6.850 09/17/98 11/01/98 Actual / 360 43,247 Monthly 5 120 360
Balloon 7.030 09/02/98 11/01/98 Actual / 360 42,708 Monthly 0 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.900 08/24/98 10/01/98 Actual / 360 43,426 Monthly 10 120 300
Balloon 7.450 09/14/98 11/01/98 Actual / 360 41,748 Monthly 5 120 360
Balloon 5.840 09/29/98 11/01/98 Actual / 360 38,073 Monthly 10 120 300
Balloon 7.430 05/01/98 06/01/98 Actual / 360 44,067 Monthly 0 84 300
Balloon 7.420 01/30/98 03/01/98 Actual / 360 44,028 Monthly 0 60 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.990 09/03/98 11/01/98 Actual / 360 39,202 Monthly 0 120 360
Balloon 7.770 10/13/98 12/01/98 Actual / 360 40,197 Monthly 5 120 360
Balloon 7.350 09/25/98 11/01/98 Actual / 360 38,436 Monthly 0 120 360
Balloon 6.790 08/20/98 10/01/98 Actual / 360 35,168 Monthly 5 144 360
Balloon 6.760 08/06/98 10/01/98 Actual / 360 35,060 Monthly 5 84 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.630 06/01/98 07/01/98 Actual / 360 40,363 Monthly 0 120 300
Balloon 6.700 10/06/98 12/01/98 Actual / 360 34,522 Monthly 0 120 360
Balloon 6.960 11/05/98 01/01/99 Actual / 360 35,628 Monthly 0 112 345
Balloon 7.125 10/07/98 12/01/98 Actual / 360 35,033 Monthly 5 120 360
Balloon 6.550 09/25/98 11/01/98 Actual / 360 33,039 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.790 08/25/98 10/01/98 Actual / 360 33,019 Monthly 0 120 360
Balloon 7.970 10/15/98 12/01/98 Actual / 360 36,584 Monthly 5 120 360
Balloon 6.580 10/01/98 12/01/98 Actual / 360 30,592 Monthly 5 120 360
Balloon 6.790 09/30/98 11/01/98 Actual / 360 33,285 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.000 10/15/98 12/01/98 Actual / 360 31,602 Monthly 4 120 360
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
Balloon 7.350 03/23/98 05/01/98 30 / 360 32,526 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.270 06/05/98 08/01/98 Actual / 360 34,033 Monthly 5 120 300
Balloon 7.030 04/15/98 06/01/98 Actual / 360 33,309 Monthly 5 120 300
Balloon 6.610 09/29/98 11/01/98 Actual / 360 29,728 Monthly 10 120 360
Fully Amortizing 7.350 02/02/98 04/01/98 30 / 360 43,629 Monthly 5 180 180
Balloon 7.110 06/25/98 08/01/98 Actual / 360 30,944 Monthly 10 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.250 10/07/98 12/01/98 Actual / 360 32,526 Monthly 5 120 300
Balloon 6.620 10/01/98 11/01/98 Actual / 360 28,799 Monthly 5 120 360
Balloon 6.590 09/03/98 11/01/98 Actual / 360 30,638 Monthly 5 120 300
Balloon 6.790 08/31/98 10/01/98 Actual / 360 28,981 Monthly 10 144 360
Balloon 7.240 08/18/98 10/01/98 Actual / 360 31,775 Monthly 7 240 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.750 02/06/98 04/01/98 Actual / 360 33,815 Monthly 5 120 276
Balloon 6.550 09/25/98 11/01/98 Actual / 360 27,320 Monthly 5 120 360
Balloon 7.500 09/08/98 11/01/98 Actual / 360 32,740 Monthly 0 120 276
Balloon 7.240 09/25/98 11/01/98 Actual / 360 27,941 Monthly 0 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.830 09/10/98 11/01/98 Actual / 360 27,839 Monthly 5 120 300
Balloon 7.180 07/15/98 09/01/98 Actual / 360 28,732 Monthly 10 120 300
Balloon 7.070 07/02/98 09/01/98 Actual / 360 28,450 Monthly 5 120 300
Balloon 7.220 02/26/98 04/01/98 Actual / 360 27,206 Monthly 0 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.970 02/17/98 04/01/98 Actual / 360 26,532 Monthly 0 120 360
Balloon 7.860 05/21/98 07/01/98 Actual / 360 31,377 Monthly 4 120 276
Balloon 6.550 09/25/98 11/01/98 Actual / 360 24,970 Monthly 5 120 360
Balloon 6.640 09/03/98 11/01/98 Actual / 360 26,333 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.780 09/30/98 11/01/98 Actual / 360 24,723 Monthly 10 84 360
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 6.900 09/03/98 11/01/98 30 / 360 29,234 Monthly 10 240 240
Balloon 7.010 09/01/98 10/01/98 Actual / 360 24,974 Monthly 0 120 360
Balloon 7.010 09/01/98 10/01/98 Actual / 360 23,975 Monthly 0 120 360
Balloon 7.720 10/16/98 12/01/98 Actual / 360 25,002 Monthly 5 120 360
Balloon 6.890 09/03/98 11/01/98 Actual / 360 24,492 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.750 08/25/98 10/01/98 Actual / 360 26,437 Monthly 5 120 300
- - - - - - - - - -
- - - - - - - - - -
Balloon 6.890 08/26/98 10/01/98 Actual / 360 24,492 Monthly 10 120 300
Balloon 6.710 07/13/98 09/01/98 Actual / 360 24,094 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.940 07/23/98 09/01/98 30 / 360 24,603 Monthly 10 120 300
Balloon 8.500 11/02/98 01/01/99 Actual / 360 26,572 Monthly 5 120 300
Balloon 6.960 09/29/98 11/01/98 Actual / 360 21,866 Monthly 5 120 360
Balloon 7.010 09/01/98 10/01/98 Actual / 360 21,877 Monthly 0 120 360
Balloon 6.950 09/30/98 11/01/98 Actual / 360 21,679 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.625 09/28/98 11/01/98 Actual / 360 22,649 Monthly 5 120 360
Balloon 6.750 07/10/98 09/01/98 Actual / 360 20,755 Monthly 10 120 360
Balloon 7.310 06/18/98 08/01/98 Actual / 360 23,254 Monthly 0 120 300
Balloon 7.550 09/23/98 11/01/98 Actual / 360 23,566 Monthly 0 120 300
Fully Amortizing 6.950 08/26/98 10/01/98 Actual / 360 28,673 Monthly 5 180 180
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.620 09/05/97 11/01/97 30 / 360 26,688 Monthly 5 120 276
Balloon 8.600 10/16/98 12/01/98 Actual / 360 24,562 Monthly 5 120 300
Balloon 7.320 09/21/98 11/01/98 Actual / 360 20,608 Monthly 5 120 360
Balloon 6.720 09/10/98 11/01/98 Actual / 360 19,398 Monthly 5 120 360
Balloon 7.220 08/27/98 10/01/98 Actual / 360 20,404 Monthly 4 84 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.710 09/25/98 11/01/98 Actual / 360 22,740 Monthly 10 120 240
Balloon 7.750 10/13/98 12/01/98 Actual / 360 21,371 Monthly 5 120 360
Balloon 7.200 09/22/98 11/01/98 Actual / 360 23,227 Monthly 5 121 240
Balloon 7.560 09/15/98 11/01/98 Actual / 360 21,730 Monthly 5 120 300
Balloon 7.040 06/10/98 08/01/98 Actual / 360 19,371 Monthly 0 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.920 07/31/98 09/01/98 30 / 360 19,138 Monthly 5 84 360
Balloon 6.910 08/14/98 10/01/98 30 / 360 19,980 Monthly 10 120 300
Balloon 7.750 10/09/98 12/01/98 Actual / 360 21,149 Monthly 5 120 300
Balloon 5.770 10/05/98 12/01/98 30 / 360 19,690 Monthly 5 84 240
Balloon 7.240 08/12/98 10/01/98 Actual / 360 18,946 Monthly 5 180 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.550 09/25/98 11/01/98 Actual / 360 17,472 Monthly 5 120 360
Balloon 6.750 09/01/98 10/01/98 Actual / 360 17,836 Monthly 5 120 360
Balloon 6.980 08/21/98 10/01/98 Actual / 360 19,401 Monthly 10 120 300
Hyperamortizing 7.500 10/08/98 12/01/98 Actual / 360 19,953 Monthly 7 120 300
Balloon 7.570 06/09/98 08/01/98 Actual / 360 21,867 Monthly 0 120 240
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.630 04/27/98 06/01/98 Actual / 360 20,032 Monthly 0 120 300
Balloon 7.420 07/31/98 09/01/98 Actual / 360 19,446 Monthly 10 120 300
Fully Amortizing 7.350 09/11/98 11/01/98 Actual / 360 20,867 Monthly 5 240 240
Balloon 6.630 08/28/98 10/01/98 Actual / 360 16,657 Monthly 10 120 360
Balloon 7.070 06/30/98 08/01/98 Actual / 360 16,750 Monthly 5 84 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.030 06/12/98 08/01/98 Actual / 360 16,683 Monthly 10 120 360
Balloon 7.170 07/31/98 09/01/98 Actual / 360 17,942 Monthly 5 144 300
Balloon 8.200 03/31/98 05/01/98 Actual / 360 21,223 Monthly 5 120 240
Balloon 6.650 09/28/98 11/01/98 Actual / 360 16,773 Monthly 5 144 300
Balloon 6.200 09/30/98 11/01/98 Actual / 360 14,944 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 5.750 10/09/98 12/01/98 Actual / 360 14,006 Monthly 10 120 360
Balloon 6.890 07/08/98 09/05/98 Actual / 360 15,790 Monthly 5 120 360
Fully Amortizing 6.840 08/28/98 10/01/98 30 / 360 19,348 Monthly 5 216 216
Fully Amortizing 7.500 02/26/98 04/01/98 Actual / 360 17,736 Monthly 5 300 300
Balloon 7.270 09/11/98 11/01/98 Actual / 360 17,197 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.650 01/12/98 03/01/98 Actual / 360 18,503 Monthly 5 120 276
Balloon 7.220 09/03/98 11/01/98 Actual / 360 16,941 Monthly 0 120 300
Balloon 7.010 09/01/98 10/01/98 Actual / 360 15,384 Monthly 0 120 360
Balloon 7.625 09/29/98 11/01/98 Actual / 360 17,251 Monthly 5 120 300
Balloon 7.375 09/10/98 11/01/98 Actual / 360 16,810 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.080 06/29/98 08/01/98 Actual / 360 15,426 Monthly 5 120 360
Balloon 7.580 09/03/98 11/01/98 Actual / 360 16,819 Monthly 0 120 300
Balloon 7.200 04/22/98 06/01/98 Actual / 360 15,103 Monthly 5 120 360
Balloon 7.270 09/16/98 11/01/98 Actual / 360 15,930 Monthly 0 120 300
Balloon 6.840 06/08/98 08/01/98 30 / 360 14,401 Monthly 10 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.960 09/29/98 11/01/98 Actual / 360 14,246 Monthly 5 120 360
Balloon 7.950 09/22/98 11/01/98 Actual / 360 17,917 Monthly 5 121 240
Balloon 6.630 09/16/98 11/01/98 Actual / 360 13,453 Monthly 5 120 360
Balloon 5.970 09/23/98 11/01/98 30 / 360 12,550 Monthly 5 120 360
Balloon 6.700 09/01/98 10/01/98 Actual / 360 13,551 Monthly 0 120 360
Balloon 7.625 02/20/98 04/01/98 Actual / 360 15,690 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.810 09/15/98 11/01/98 Actual / 360 15,717 Monthly 5 120 300
Balloon 7.625 09/29/98 11/01/98 Actual / 360 15,174 Monthly 5 120 300
Balloon 7.040 09/28/98 11/01/98 Actual / 360 13,360 Monthly 0 120 360
Balloon 7.375 08/18/98 10/01/98 Actual / 360 14,618 Monthly 5 120 300
Balloon 7.500 05/27/98 07/01/98 Actual / 360 14,780 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 7.450 01/29/98 03/01/98 Actual / 360 14,494 Monthly 5 300 300
Fully Amortizing 8.000 03/06/98 05/01/98 Actual / 360 14,308 Monthly 5 360 360
Balloon 7.000 09/28/98 11/01/98 Actual / 360 13,606 Monthly 5 120 300
Fully Amortizing 7.350 01/29/98 03/01/98 Actual / 360 14,075 Monthly 5 300 300
Balloon 7.400 09/24/98 11/01/98 Actual / 360 13,155 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.625 02/20/98 04/01/98 Actual / 360 13,448 Monthly 5 120 360
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 7.350 08/27/98 10/01/98 Actual / 360 15,132 Monthly 5 240 240
Balloon 6.900 09/01/98 10/01/98 Actual / 360 15,844 Monthly 5 84 204
Balloon 8.570 10/13/98 12/01/98 Actual / 360 14,579 Monthly 5 120 300
Balloon 6.660 10/01/98 11/01/98 Actual / 360 11,567 Monthly 5 180 360
Balloon 6.480 09/18/98 11/01/98 Actual / 360 12,131 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.100 09/30/98 11/01/98 Actual / 360 13,000 Monthly 10 120 240
Balloon 8.000 07/17/98 09/01/98 Actual / 360 13,507 Monthly 5 120 300
Balloon 6.790 07/07/98 09/01/98 30 / 360 11,234 Monthly 10 120 360
Balloon 7.420 05/22/98 07/01/98 Actual / 360 12,621 Monthly 5 120 300
Balloon 7.625 08/13/98 10/01/98 Actual / 360 13,703 Monthly 5 180 240
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.750 08/27/98 10/01/98 Actual / 360 12,652 Monthly 5 120 300
Balloon 7.120 09/04/98 11/01/98 Actual / 360 11,931 Monthly 0 120 300
Balloon 7.250 10/07/98 12/01/98 Actual / 360 12,028 Monthly 0 120 300
Balloon 7.800 10/14/98 12/01/98 Actual / 360 11,842 Monthly 5 120 360
Balloon 7.875 04/03/98 06/01/98 Actual / 360 12,599 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Hyperamortizing 7.020 09/09/98 11/01/98 Actual / 360 12,758 Monthly 5 120 240
Balloon 7.500 08/31/98 10/01/98 Actual / 360 12,001 Monthly 5 120 300
Balloon 7.040 09/22/98 11/01/98 Actual / 360 10,688 Monthly 5 120 360
Balloon 7.200 09/30/98 11/01/98 Actual / 360 10,813 Monthly 5 120 360
Fully Amortizing 8.375 05/28/98 07/01/98 Actual / 360 13,759 Monthly 5 240 240
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 6.350 09/01/98 10/01/98 30 / 360 12,601 Monthly 5 184 184
Balloon 7.810 09/15/98 11/01/98 Actual / 360 11,807 Monthly 5 120 300
Balloon 7.875 02/13/98 04/01/98 Actual / 360 11,911 Monthly 5 120 300
Fully Amortizing 6.410 09/01/98 10/01/98 30 / 360 10,472 Monthly 5 240 240
Balloon 8.120 10/14/98 12/01/98 Actual / 360 11,132 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.030 06/12/98 08/01/98 30 / 360 10,010 Monthly 10 120 360
Fully Amortizing 7.260 09/02/98 11/01/98 Actual / 360 11,960 Monthly 0 240 240
Balloon 6.910 06/23/98 08/01/98 Actual / 360 10,516 Monthly 5 120 300
Balloon 7.000 01/30/98 03/01/98 Actual / 360 9,980 Monthly 5 120 360
Balloon 7.375 09/10/98 11/01/98 Actual / 360 10,598 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 6.790 08/31/98 10/01/98 Actual / 360 12,863 Monthly 10 180 180
Balloon 7.375 02/12/98 04/01/98 Actual / 360 10,525 Monthly 5 120 300
Balloon 7.090 06/11/98 08/05/98 Actual / 360 9,567 Monthly 5 120 360
Balloon 7.050 07/13/98 09/01/98 Actual / 360 9,940 Monthly 5 120 300
Balloon 8.000 05/29/98 07/01/98 Actual / 360 10,805 Monthly 5 120 300
Balloon 8.000 01/30/98 03/01/98 Actual / 360 10,805 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.280 09/25/98 11/01/98 Actual / 360 9,063 Monthly 5 120 300
Balloon 6.570 09/30/98 11/01/98 Actual / 360 8,659 Monthly 5 120 360
Balloon 6.690 09/14/98 11/01/98 Actual / 360 9,345 Monthly 5 120 300
Fully Amortizing 6.350 09/01/98 10/01/98 30 / 360 11,004 Monthly 5 172 172
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 8.125 06/09/98 08/01/98 Actual / 360 10,532 Monthly 5 300 300
Balloon 7.340 09/18/98 11/01/98 Actual / 360 9,563 Monthly 5 120 300
Fully Amortizing 8.100 06/12/98 08/01/98 Actual / 360 11,123 Monthly 5 240 240
Balloon 8.125 08/21/98 10/01/98 Actual / 360 10,220 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.875 10/02/98 12/01/98 Actual / 360 8,540 Monthly 0 120 360
- - - - - - - - - -
- - - - - - - - - -
- - - - - - - - - -
Balloon 7.125 06/16/98 08/01/98 Actual / 360 8,556 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 7.380 09/09/98 11/01/98 Actual / 360 10,141 Monthly 0 240 240
Balloon 7.600 10/09/98 12/01/98 Actual / 360 9,319 Monthly 0 120 300
Balloon 7.125 06/16/98 08/01/98 Actual / 360 8,273 Monthly 5 120 360
Balloon 6.520 09/24/98 11/01/98 Actual / 360 8,117 Monthly 10 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Fully Amortizing 6.350 09/01/98 10/01/98 30 / 360 10,145 Monthly 5 172 172
Balloon 7.000 09/28/98 11/01/98 Actual / 360 8,305 Monthly 5 120 300
Fully Amortizing 7.500 03/05/98 05/01/98 Actual / 360 11,124 Monthly 5 180 180
Balloon 7.950 10/09/98 12/01/98 Actual / 360 10,957 Monthly 0 120 180
Balloon 8.125 08/21/98 10/01/98 Actual / 360 8,893 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.120 08/28/98 10/01/98 Actual / 360 8,038 Monthly 0 120 300
Balloon 6.700 09/02/98 11/01/98 Actual / 360 7,195 Monthly 0 120 360
Balloon 7.590 09/14/98 11/01/98 Actual / 360 7,646 Monthly 5 120 360
Balloon 8.000 09/28/98 11/01/98 Actual / 360 8,274 Monthly 5 120 300
Balloon 6.860 09/21/98 11/05/98 Actual / 360 6,887 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.860 09/21/98 11/05/98 Actual / 360 6,887 Monthly 5 120 360
Balloon 7.750 06/30/98 08/01/98 Actual / 360 7,931 Monthly 5 120 300
Balloon 6.860 09/24/98 11/05/98 Actual / 360 6,723 Monthly 5 120 360
Balloon 7.875 08/27/98 10/01/98 Actual / 360 7,826 Monthly 5 120 300
Balloon 7.625 05/13/98 07/01/98 Actual / 360 7,621 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.860 09/23/98 11/05/98 Actual / 360 6,625 Monthly 5 120 360
Balloon 8.000 06/10/98 08/01/98 Actual / 360 7,811 Monthly 5 120 300
Balloon 6.780 08/26/98 10/01/98 Actual / 360 6,506 Monthly 10 84 360
Balloon 7.500 09/14/98 11/01/98 Actual / 360 8,056 Monthly 5 84 240
Balloon 7.500 07/08/98 09/01/98 Actual / 360 7,390 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.750 03/10/98 05/01/98 Actual / 360 7,553 Monthly 5 120 300
Balloon 7.625 03/13/98 05/01/98 Actual / 360 7,471 Monthly 5 180 300
Fully Amortizing 8.250 06/30/98 08/01/98 Actual / 360 8,435 Monthly 5 240 240
Balloon 7.750 06/12/98 08/01/98 Actual / 360 7,364 Monthly 5 120 300
Balloon 7.750 07/10/98 09/01/98 Actual / 360 7,327 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.860 09/24/98 11/05/98 Actual / 360 6,231 Monthly 5 120 360
Balloon 8.125 04/30/98 06/01/98 Actual / 360 7,411 Monthly 5 120 300
Balloon 8.625 03/03/98 05/01/98 Actual / 360 7,730 Monthly 5 120 300
Fully Amortizing 8.250 06/19/98 08/01/98 Actual / 360 8,009 Monthly 5 240 240
Balloon 8.500 04/29/98 06/01/98 Actual / 360 7,448 Monthly 5 120 300
Balloon 7.000 09/28/98 11/01/98 Actual / 360 6,361 Monthly 5 120 300
Balloon 8.000 06/30/98 08/01/98 Actual / 360 6,946 Monthly 5 120 300
Balloon 6.860 09/28/98 11/05/98 Actual / 360 5,739 Monthly 5 120 360
Balloon 6.860 09/25/98 11/05/98 Actual / 360 5,641 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.000 05/15/98 07/01/98 Actual / 360 6,653 Monthly 5 120 300
Balloon 8.000 07/24/98 09/01/98 Actual / 360 6,638 Monthly 5 120 300
Balloon 8.125 01/23/98 03/01/98 Actual / 360 6,709 Monthly 5 120 300
Balloon 6.860 09/24/98 11/05/98 Actual / 360 5,575 Monthly 5 120 360
Balloon 6.860 09/30/98 11/05/98 Actual / 360 5,575 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.000 09/28/98 11/01/98 Actual / 360 6,560 Monthly 5 120 300
Balloon 8.625 05/22/98 07/01/98 Actual / 360 6,916 Monthly 5 120 300
Balloon 8.125 04/08/98 06/01/98 Actual / 360 6,553 Monthly 5 120 300
Fully Amortizing 6.860 09/18/98 11/10/98 Actual / 360 7,485 Monthly 5 180 180
Balloon 8.000 05/15/98 07/01/98 Actual / 360 6,375 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.000 08/14/98 10/01/98 Actual / 360 6,175 Monthly 5 120 300
Balloon 7.750 07/30/98 09/01/98 Actual / 360 6,043 Monthly 5 120 300
Fully Amortizing 7.500 03/05/98 05/01/98 Actual / 360 7,416 Monthly 5 180 180
Fully Amortizing 8.250 10/13/98 12/01/98 Actual / 360 6,561 Monthly 5 240 240
Balloon 6.860 09/24/98 11/05/98 Actual / 360 4,985 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.860 09/23/98 11/05/98 Actual / 360 4,919 Monthly 5 120 360
Balloon 6.840 09/15/98 11/01/98 Actual / 360 4,909 Monthly 5 120 360
Balloon 7.810 09/15/98 11/01/98 Actual / 360 5,695 Monthly 5 120 300
Balloon 7.830 08/31/98 10/01/98 Actual / 360 5,704 Monthly 0 120 300
Balloon 8.375 05/08/98 07/01/98 Actual / 360 5,976 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.990 08/24/98 10/01/98 30 / 360 5,810 Monthly 10 144 240
Balloon 7.625 10/01/98 12/01/98 Actual / 360 5,514 Monthly 5 120 300
Balloon 7.375 09/18/98 11/01/98 Actual / 360 5,335 Monthly 5 120 300
Balloon 7.750 07/10/98 09/01/98 Actual / 360 5,514 Monthly 5 120 300
Fully Amortizing 7.500 03/05/98 05/01/98 Actual / 360 6,767 Monthly 5 180 180
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.500 06/30/98 08/01/98 Actual / 360 5,262 Monthly 5 180 300
Balloon 7.875 03/26/98 05/01/98 Actual / 360 5,345 Monthly 5 120 300
Fully Amortizing 7.350 01/29/98 03/01/98 Actual / 360 5,032 Monthly 5 300 300
Balloon 8.125 10/15/98 12/01/98 Actual / 360 5,297 Monthly 5 120 300
Balloon 8.000 06/26/98 08/01/98 Actual / 360 5,210 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.375 03/11/98 05/01/98 Actual / 360 5,379 Monthly 5 120 300
Balloon 8.125 06/18/98 08/01/98 Actual / 360 5,102 Monthly 5 120 300
Balloon 7.750 08/27/98 10/01/98 Actual / 360 4,910 Monthly 5 120 300
Balloon 8.250 04/17/98 06/01/98 Actual / 360 5,141 Monthly 5 120 300
Balloon 8.125 03/31/98 05/01/98 Actual / 360 5,086 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 7.875 09/25/98 11/01/98 Actual / 360 4,948 Monthly 5 120 300
Balloon 8.250 04/23/98 06/01/98 Actual / 360 5,125 Monthly 5 120 300
Balloon 8.250 10/21/98 12/01/98 Actual / 360 5,046 Monthly 5 120 300
Balloon 6.860 09/28/98 11/05/98 Actual / 360 4,198 Monthly 5 120 360
Balloon 8.375 08/12/98 10/01/98 Actual / 360 5,012 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 6.860 09/25/98 11/05/98 Actual / 360 4,100 Monthly 5 120 360
Balloon 6.860 09/28/98 11/05/98 Actual / 360 4,100 Monthly 5 120 360
Balloon 7.625 07/21/98 09/01/98 Actual / 360 4,670 Monthly 5 120 300
Balloon 8.000 07/24/98 09/01/98 Actual / 360 4,785 Monthly 5 120 300
Balloon 7.500 10/15/98 12/01/98 Actual / 360 4,508 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.000 07/24/98 09/01/98 Actual / 360 4,708 Monthly 5 120 300
Balloon 7.875 03/26/98 05/01/98 Actual / 360 4,673 Monthly 5 120 300
Fully Amortizing 8.625 02/11/98 04/01/98 Actual / 360 5,360 Monthly 5 240 240
Balloon 8.570 10/13/98 12/01/98 Actual / 360 4,860 Monthly 5 120 300
Balloon 7.875 06/18/98 08/01/98 Actual / 360 4,581 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 9.250 03/31/98 05/01/98 Actual / 360 5,138 Monthly 5 120 300
Balloon 8.125 10/14/98 12/01/98 Actual / 360 4,618 Monthly 5 120 300
Fully Amortizing 7.500 03/05/98 05/01/98 Actual / 360 5,562 Monthly 5 180 180
Balloon 7.500 04/24/98 06/01/98 Actual / 360 4,323 Monthly 5 120 300
Balloon 6.860 09/30/98 11/05/98 Actual / 360 3,804 Monthly 5 120 360
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.000 04/09/98 06/01/98 Actual / 360 4,438 Monthly 5 120 300
Balloon 8.125 07/20/98 09/01/98 Actual / 360 4,431 Monthly 5 120 300
Balloon 7.625 10/07/98 12/01/98 Actual / 360 4,184 Monthly 5 120 300
Balloon 8.500 04/30/98 06/01/98 Actual / 360 4,509 Monthly 5 120 300
Balloon 7.625 03/13/98 05/01/98 Actual / 360 4,147 Monthly 5 180 300
- --------------------------------------------------------------------------------------------------------------------------------
Balloon 8.250 02/06/98 04/01/98 Actual / 360 4,336 Monthly 5 120 300
Balloon 8.125 02/19/98 04/01/98 Actual / 360 4,213 Monthly 5 120 300
Fully Amortizing 8.250 09/25/98 11/01/98 Actual / 360 4,441 Monthly 5 240 240
Balloon 8.000 07/24/98 09/01/98 Actual / 360 3,816 Monthly 5 120 360
Balloon 8.500 06/10/98 08/01/98 Actual / 360 4,187 Monthly 5 120 300
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
REMAINING TERM REMAINING AMORTIZATION PREPAYMENT
TO MATURITY / ARD TERM TO MATURITY SEASONING SCHEDULED SCHEDULED BEGIN
(MONTHS) (MONTHS) (MONTHS) MATURITY DATE ARD DATE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
110 350 10 03/01/08 - 03/01/01
112 299 1 05/01/08 - 02/01/01
111 351 9 04/01/08 - 05/01/02
106 359 1 11/01/07 - 02/01/01
- ------------------------------------------------------------------------------------------------
112 268 8 05/01/08 05/01/01
- - - - - -
- - - - - -
- - - - - -
171 291 9 04/01/13 - 02/01/01
- ------------------------------------------------------------------------------------------------
118 298 2 11/01/08 - 11/01/01
118 298 2 11/01/08 - 11/01/01
109 349 11 02/01/08 - 03/01/02
117 273 3 10/01/08 - 02/01/01
353 353 7 06/01/28 - 07/01/00
- ------------------------------------------------------------------------------------------------
78 354 6 07/01/05 - 07/01/01
117 357 3 10/01/08 - 11/01/03
116 356 4 09/01/08 - 02/01/01
116 356 4 09/01/08 - 10/01/02
117 357 3 10/01/08 - 11/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 10/01/01
119 359 1 12/01/08 - 12/01/01
113 359 7 06/01/08 - 07/01/01
118 358 2 11/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
115 295 5 08/01/08 - 02/01/01
117 297 3 10/01/08 - 11/01/01
115 355 5 08/01/08 - 09/01/02
137 353 7 06/01/10 - 07/01/04
114 354 6 07/01/08 - 08/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 11/01/01
114 354 6 07/01/08 - 08/01/02
116 356 4 09/01/08 - 10/01/01
117 357 3 10/01/08 - 10/01/01
117 357 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
116 296 4 09/01/08 - 10/01/02
117 357 3 10/01/08 - 02/01/01
117 297 3 10/01/08 - 11/01/02
76 292 8 05/01/05 - 06/01/01
49 289 11 02/01/03 - 02/01/01
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 02/01/01
118 358 2 11/01/08 - 11/01/01
117 357 3 10/01/08 - 02/01/01
140 356 4 09/01/10 - 10/01/02
80 356 4 09/01/05 - 10/01/01
- ------------------------------------------------------------------------------------------------
113 293 7 06/01/08 - 02/01/01
118 358 2 11/01/08 - 11/01/01
111 344 1 04/01/08 - 04/01/01
118 358 2 11/01/08 - 11/01/01
117 357 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
116 356 4 09/01/08 - 09/01/01
118 358 2 11/01/08 - 11/01/01
118 358 2 11/01/08 - 12/01/02
117 297 3 10/01/08 - 11/01/02
- ------------------------------------------------------------------------------------------------
118 358 2 11/01/08 02/01/01
- - - - - -
- - - - - -
- - - - - -
111 351 9 04/01/08 - 05/01/02
- ------------------------------------------------------------------------------------------------
114 294 6 07/01/08 - 08/01/02
112 292 8 05/01/08 - 06/01/02
117 357 3 10/01/08 - 11/01/02
170 170 10 03/01/13 - 02/01/01
114 354 6 07/01/08 - 08/01/02
- ------------------------------------------------------------------------------------------------
118 298 2 11/01/08 - 11/01/01
117 357 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 11/01/02
140 356 4 09/01/10 - 10/01/01
236 296 4 09/01/18 - 10/01/01
- ------------------------------------------------------------------------------------------------
110 266 10 03/01/08 - 03/01/02
117 357 3 10/01/08 - 10/01/01
117 273 3 10/01/08 - 02/01/01
117 357 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
117 297 3 10/01/08 - 10/01/01
115 295 5 08/01/08 - 09/01/02
115 295 5 08/01/08 - 09/01/02
110 350 10 03/01/08 - 03/01/01
- ------------------------------------------------------------------------------------------------
110 350 10 03/01/08 - 03/01/01
113 269 7 06/01/08 - 02/01/01
117 357 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 11/01/02
- ------------------------------------------------------------------------------------------------
81 357 3 10/01/05 11/01/01
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- ------------------------------------------------------------------------------------------------
237 237 3 10/01/18 - 11/01/08
116 356 4 09/01/08 - 09/01/01
116 356 4 09/01/08 - 09/01/01
118 358 2 11/01/08 - 11/01/01
117 297 3 10/01/08 - 11/01/03
- ------------------------------------------------------------------------------------------------
116 296 4 09/01/08 09/01/02
- - - - - -
- - - - - -
116 296 4 09/01/08 - 10/01/02
115 295 5 08/01/08 - 09/01/02
- ------------------------------------------------------------------------------------------------
115 295 5 08/01/08 - 09/01/01
119 299 1 12/01/08 - 12/01/02
117 357 3 10/01/08 - 10/01/01
116 356 4 09/01/08 - 09/01/01
117 357 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 10/01/02
115 355 5 08/01/08 - 09/01/01
114 294 6 07/01/08 - 07/01/01
117 297 3 10/01/08 - 10/01/01
176 176 4 09/01/13 - 10/01/02
- ------------------------------------------------------------------------------------------------
105 261 15 10/01/07 - 10/01/01
118 298 2 11/01/08 - 11/01/01
117 357 3 10/01/08 - 10/01/01
117 357 3 10/01/08 - 11/01/02
80 356 4 09/01/05 - 02/01/01
- ------------------------------------------------------------------------------------------------
117 237 3 10/01/08 - 11/01/03
118 358 2 11/01/08 - 11/01/02
118 237 3 11/01/08 - 10/01/01
117 297 3 10/01/08 - 10/01/01
114 354 6 07/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
79 355 5 08/01/05 - 09/01/01
116 296 4 09/01/08 - 10/01/02
118 298 2 11/01/08 - 02/01/01
82 238 2 11/01/05 - 12/01/02
176 356 4 09/01/13 - 10/01/05
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 10/01/01
116 356 4 09/01/08 - 09/01/02
116 296 4 09/01/08 - 10/01/01
118 298 2 11/01/23 11/01/08 11/01/01
114 234 6 07/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
112 292 8 05/01/08 - 02/01/01
115 295 5 08/01/08 - 09/01/03
237 237 3 10/01/18 - 11/01/05
116 356 4 09/01/08 - 10/01/02
78 354 6 07/01/05 - 08/01/01
- ------------------------------------------------------------------------------------------------
114 354 6 07/01/08 - 08/01/01
139 295 5 08/01/10 - 09/01/02
111 231 9 04/01/08 - 02/01/01
141 297 3 10/01/10 - 11/01/02
117 357 3 10/01/08 - 11/01/01
- ------------------------------------------------------------------------------------------------
118 358 2 11/01/08 - 12/01/02
115 355 5 08/05/08 - 09/05/02
212 212 4 09/01/16 - 10/01/07
290 290 10 03/01/23 - 02/01/01
117 297 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
109 265 11 02/01/08 - 02/01/02
117 297 3 10/01/08 - 10/01/01
116 356 4 09/01/08 - 09/01/01
117 297 3 10/01/08 - 10/01/02
117 297 3 10/01/08 - 10/01/02
- ------------------------------------------------------------------------------------------------
114 354 6 07/01/08 - 08/01/01
117 297 3 10/01/08 - 10/01/01
112 352 8 05/01/08 - 02/01/01
117 297 3 10/01/08 - 10/01/01
114 354 6 07/01/08 - 08/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/01/08 - 10/01/01
118 237 3 11/01/08 - 10/01/01
117 357 3 10/01/08 - 11/01/02
117 357 3 10/01/08 - 11/01/02
116 356 4 09/01/08 - 09/01/01
110 290 10 03/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
117 297 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 10/01/02
117 357 3 10/01/08 - 10/01/01
116 296 4 09/01/08 - 09/01/02
113 293 7 06/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
289 289 11 02/01/23 - 02/01/01
351 351 9 04/01/28 - 04/01/23
117 297 3 10/01/08 - 10/01/01
289 289 11 02/01/23 - 02/01/01
117 357 3 10/01/08 - 10/01/01
- ------------------------------------------------------------------------------------------------
110 350 10 03/01/08 03/01/02
- - - - - -
- - - - - -
- - - - - -
- - - - - -
- ------------------------------------------------------------------------------------------------
236 236 4 09/01/18 - 10/01/02
80 200 4 09/01/05 - 10/01/02
118 298 2 11/01/08 - 02/01/01
177 357 3 10/01/13 - 11/01/02
117 297 3 10/01/08 - 11/01/02
- ------------------------------------------------------------------------------------------------
117 237 3 10/01/08 - 11/01/01
115 295 5 08/01/08 - 08/01/02
115 355 5 08/01/08 - 09/01/02
113 293 7 06/01/08 - 02/01/01
176 236 4 09/01/13 - 02/01/01
- ------------------------------------------------------------------------------------------------
116 296 4 09/01/08 - 09/01/02
117 297 3 10/01/08 - 10/01/01
118 298 2 11/01/08 - 11/01/01
118 358 2 11/01/08 - 11/01/01
112 292 8 05/01/08 - 05/01/02
- ------------------------------------------------------------------------------------------------
117 237 3 10/01/18 10/01/08 10/01/01
116 296 4 09/01/08 - 09/01/02
117 357 3 10/01/08 - 10/01/01
117 357 3 10/01/08 - 10/01/01
233 233 7 06/01/18 - 06/01/13
- ------------------------------------------------------------------------------------------------
180 180 4 01/01/14 - 09/01/01
117 297 3 10/01/08 - 10/01/01
110 290 10 03/01/08 - 03/01/02
236 236 4 09/01/18 - 09/01/01
118 358 2 11/01/08 - 11/01/01
- ------------------------------------------------------------------------------------------------
114 354 6 07/01/08 - 08/01/01
237 237 3 10/01/18 - 10/01/01
114 294 6 07/01/08 - 08/01/02
109 349 11 02/01/08 - 02/01/02
117 297 3 10/01/08 - 10/01/02
- ------------------------------------------------------------------------------------------------
176 176 4 09/01/13 - 10/01/01
110 290 10 03/01/08 - 03/01/02
114 354 6 07/05/08 - 08/05/02
115 295 5 08/01/08 - 09/01/02
113 293 7 06/01/08 - 06/01/02
109 289 11 02/01/08 - 02/01/02
- ------------------------------------------------------------------------------------------------
117 297 3 10/01/08 - 11/01/02
117 357 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 11/01/02
168 168 4 01/01/13 - 09/01/01
- ------------------------------------------------------------------------------------------------
294 294 6 07/01/23 - 07/01/18
117 297 3 10/01/08 - 10/01/01
234 234 6 07/01/18 - 02/01/01
116 296 4 09/01/08 - 09/01/02
- ------------------------------------------------------------------------------------------------
118 358 2 11/01/08 11/01/01
- - - - - -
- - - - - -
- - - - - -
114 354 6 07/01/08 - 07/01/02
- ------------------------------------------------------------------------------------------------
237 237 3 10/01/18 - 10/01/01
118 298 2 11/01/08 - 11/01/01
114 354 6 07/01/08 - 07/01/02
117 297 3 10/01/08 - 11/01/02
- ------------------------------------------------------------------------------------------------
168 168 4 01/01/13 - 09/01/01
117 297 3 10/01/08 - 10/01/01
171 171 9 04/01/13 - 04/01/08
118 178 2 11/01/08 - 11/01/01
116 296 4 09/01/08 - 09/01/02
- ------------------------------------------------------------------------------------------------
116 296 4 09/01/08 - 09/01/01
117 357 3 10/01/08 - 10/01/01
117 357 3 10/01/08 - 10/01/01
117 297 3 10/01/08 - 10/01/02
117 357 3 10/05/08 - 11/05/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/05/08 - 11/05/02
114 294 6 07/01/08 - 02/01/01
117 357 3 10/05/08 - 11/05/02
116 296 4 09/01/08 - 09/01/02
113 293 7 06/01/08 - 06/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/05/08 - 11/05/02
114 294 6 07/01/08 - 07/01/02
80 356 4 09/01/05 - 10/01/01
81 237 3 10/01/05 - 02/01/01
115 295 5 08/01/08 - 08/01/02
- ------------------------------------------------------------------------------------------------
111 291 9 04/01/08 - 04/01/02
171 291 9 04/01/13 - 04/01/08
234 234 6 07/01/18 - 07/01/13
114 294 6 07/01/08 - 07/01/02
115 295 5 08/01/08 - 08/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/05/08 - 11/05/02
112 292 8 05/01/08 - 05/01/01
111 291 9 04/01/08 - 04/01/02
234 234 6 07/01/18 - 07/01/13
112 292 8 05/01/08 - 05/01/02
117 297 3 10/01/08 - 10/01/01
114 294 6 07/01/08 - 07/01/02
117 357 3 10/05/08 - 11/05/02
117 357 3 10/05/08 - 11/05/02
- ------------------------------------------------------------------------------------------------
113 293 7 06/01/08 - 06/01/02
115 295 5 08/01/08 - 08/01/02
109 289 11 02/01/08 - 02/01/02
117 357 3 10/05/08 - 11/05/02
117 357 3 10/05/08 - 11/05/02
- ------------------------------------------------------------------------------------------------
117 297 3 10/01/08 - 10/01/02
113 293 7 06/01/08 - 06/01/02
112 292 8 05/01/08 - 05/01/02
177 177 3 10/10/13 - 11/10/03
113 293 7 06/01/08 - 02/01/01
- ------------------------------------------------------------------------------------------------
116 296 4 09/01/08 - 02/01/01
115 295 5 08/01/08 - 08/01/02
171 171 9 04/01/13 - 04/01/08
238 238 2 11/01/18 - 11/01/13
117 357 3 10/05/08 - 11/05/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/05/08 - 11/05/02
117 357 3 10/01/08 - 11/01/02
117 297 3 10/01/08 - 10/01/01
116 296 4 09/01/08 - 09/01/01
113 293 7 06/01/08 - 06/01/02
- ------------------------------------------------------------------------------------------------
140 236 4 09/01/10 - 10/01/01
118 298 2 11/01/08 - 11/01/02
117 297 3 10/01/08 - 10/01/02
115 295 5 08/01/08 - 08/01/02
171 171 9 04/01/13 - 04/01/08
- ------------------------------------------------------------------------------------------------
174 294 6 07/01/13 - 07/01/08
111 291 9 04/01/08 - 02/01/01
289 289 11 02/01/23 - 02/01/01
118 298 2 11/01/08 - 11/01/02
114 294 6 07/01/08 - 07/01/02
- ------------------------------------------------------------------------------------------------
111 291 9 04/01/08 - 04/01/02
114 294 6 07/01/08 - 07/01/02
116 296 4 09/01/08 - 09/01/02
112 292 8 05/01/08 - 05/01/02
111 291 9 04/01/08 - 04/01/02
- ------------------------------------------------------------------------------------------------
117 297 3 10/01/08 - 10/01/02
112 292 8 05/01/08 - 05/01/02
118 298 2 11/01/08 - 11/01/02
117 357 3 10/05/08 - 11/05/02
116 296 4 09/01/08 - 09/01/02
- ------------------------------------------------------------------------------------------------
117 357 3 10/05/08 - 11/05/02
117 357 3 10/05/08 - 11/05/02
115 295 5 08/01/08 - 08/01/02
115 295 5 08/01/08 - 08/01/02
118 298 2 11/01/08 - 11/01/01
- ------------------------------------------------------------------------------------------------
115 295 5 08/01/08 - 08/01/02
111 291 9 04/01/08 - 04/01/02
230 230 10 03/01/18 - 03/01/02
118 298 2 11/01/08 - 02/01/01
114 294 6 07/01/08 - 07/01/02
- ------------------------------------------------------------------------------------------------
111 291 9 04/01/08 - 04/01/02
118 298 2 11/01/08 - 11/01/02
171 171 9 04/01/13 - 04/01/08
112 292 8 05/01/08 - 05/01/02
117 357 3 10/05/08 - 11/05/02
- ------------------------------------------------------------------------------------------------
112 292 8 05/01/08 - 05/01/02
115 295 5 08/01/08 - 08/01/02
118 298 2 11/01/08 - 11/01/02
112 292 8 05/01/08 - 05/01/02
171 291 9 04/01/13 - 04/01/08
- ------------------------------------------------------------------------------------------------
110 290 10 03/01/08 - 03/01/02
110 290 10 03/01/08 - 03/01/02
237 237 3 10/01/18 - 10/01/13
115 355 5 08/01/08 - 08/01/02
114 294 6 07/01/08 - 07/01/02
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
YIELD ORIGINATION
MAINTENANCE APPRAISED APPRAISAL DATE LTV CONTROL
PREPAYMENT PENALTY DESCRIPTION (MONTHS) TYPE VALUE DATE RATIO NUMBER
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Lock/36_Defeasance/84 - $26,900,000 12/16/97 74.98% 1
Lock/26_Defeasance/81_0%/6 - 29,500,000 10/01/97 64.06 2
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 24,000,000 02/25/98 78.63 3
Lock/26_Defeasance/75_0%/6 - 24,000,000 08/01/98 72.01 4
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/78_0%/6 20,200,000 59.41 5
- - 8,400,000 12/11/97 - 5
- - 4,500,000 12/11/97 - 5
- - 7,300,000 12/11/97 - 5
Lock/34_Defeasance/140_0%/6 - 16,100,000 02/20/98 74.53 6
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 19,800,000 09/01/98 58.08 7
Lock/36_Defeasance/81_0%/3 - 15,000,000 08/10/98 76.00 8
Lock/48_>YM or 1%/66_0%6 Treasury Flat 14,700,000 03/15/98 74.15 9
Lock/28_Defeasance/86_0%/6 - 14,850,000 04/28/98 70.03 10
Lock/24_>YM or 1%/96_1%/234_0%/6; Treasury Flat 13,100,000 04/22/98 76.34 11
or Lock/24_Defeasance/330_0%/6
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/42_0%/6 - 12,700,000 05/08/98 77.95 12
Lock/60_>YM of 1%/54_0%/6 Treasury Flat 14,400,000 07/28/98 64.93 13
Lock/29_Defeasance/85_0%/6 - 11,400,000 08/25/98 79.82 14
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 12,630,000 05/01/98 71.26 15
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 11,450,000 01/11/98 74.67 16
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 10,620,000 07/15/98 80.04 17
Lock/36_Defeasance/81_0%/3 - 11,100,000 06/10/98 75.68 18
Lock/36_Defeasance/81_0%/3 - 12,550,000 09/15/98 66.53 19
Lock/36_>YM or 1%/78_0%/6 Treasury Flat 10,100,000 04/21/98 80.20 20
Lock/27_Defeasance/87_0%/6 - 11,400,000 05/04/98 70.18 21
- ---------------------------------------------------------------------------------------------------------------------
Lock/30_Defeasance/84_0%/6 - 10,700,000 04/24/98 75.00 22
Lock/36_Defeasance/78_0%/6 - 11,600,000 08/01/98 68.97 23
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 10,080,000 05/06/98 79.37 24
Lock/72_>YM or 1%/66_0%/6 Treasury Flat 9,600,000 03/12/98 79.17 25
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 10,300,000 03/02/98 72.82 26
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 9,200,000 06/17/98 79.35 27
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 9,265,000 05/10/98 75.55 28
Lock/36_Defeasance/78_0%/6 - 9,300,000 07/17/98 72.04 29
Lock/36_Defeasance/81_0%/3 - 8,810,000 07/20/98 74.91 30
Lock/36_>YM or 1%/84 Treasury Flat 8,040,000 05/11/98 79.60 31
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 8,845,000 06/09/98 70.10 32
Lock/28_Defeasance/86_0%/6 - 8,000,000 04/30/98 75.00 33
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 15,200,000 07/30/98 39.47 34
Lock/36_Defeasance/42_0%/6 - 8,200,000 03/26/98 73.17 35
Lock/36_Defeasance/18_0%/6 - 7,600,000 01/02/98 78.95 36
- ---------------------------------------------------------------------------------------------------------------------
Lock/28_Defeasance/86_0%/6 - 7,800,000 07/25/98 78.21 37
Lock/36_Defeasance/78_0%/6 - 8,100,000 08/18/98 69.14 38
Lock/28_Defeasance/89_0%/3 - 6,900,000 09/10/98 80.00 39
Lock/48_>YM or 1%/90_0%/6 Treasury Flat 6,800,000 06/26/98 79.41 40
Lock/36_Defeasance/48 - 7,200,000 06/09/98 75.00 41
- ---------------------------------------------------------------------------------------------------------------------
Lock/32_Defeasance/82_0%/6 - 7,500,000 03/26/98 72.00 42
Lock/36_Defeasance/81_0%/3 - 6,630,000 08/06/98 80.69 43
Lock/28_Defeasance/78_0%/6 - 8,350,000 11/13/97 63.55 44
Lock/36_Defeasance/81_0%/3 - 6,600,000 08/03/98 78.79 45
Lock/36_Defeasance/78_0%/6 - 6,800,000 08/20/98 76.47 46
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_>YM or 1%/84 Treasury Flat 6,340,000 05/11/98 79.97 47
Lock/36_Defeasance/81_0%/3 - 8,100,000 08/10/98 61.73 48
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 6,000,000 08/20/98 80.00 49
Lock/48_>YM or l%/66_0%/6 Treasury Flat 6,450,000 07/22/98 74.42 50
- ---------------------------------------------------------------------------------------------------------------------
Lock/27_Defeasance/87_0%/6 6,380,000 74.45 51
- - 2,900,000 10/02/98 - 51
- - 2,400,000 10/02/98 - 51
- - 1,080,000 10/07/98 - 51
Lock/48_>YM of 1%/66_0%/6 Treasury Flat 7,800,000 10/01/98 93.59 52
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 6,300,000 04/01/98 74.60 53
Lock/48_>YM or 1%/67_0%/6 Treasury Flat 7,100,000 02/13/98 66.20 54
Lock/48_>YM of 1%/66_0/6 Treasury Flat 6,200,000 08/05/98 75.00 55
Lock/35_Defeasance/139_0%/6 - 6,350,000 10/30/97 74.80 56
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 7,850,000 05/07/98 58.60 57
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 5,700,000 07/10/98 78.95 58
Lock/36_Defeasance/81_0%/3 - 5,600,000 07/29/98 80.36 59
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 6,425,000 01/11/98 70.04 60
Lock/36_Defeasance/102_0%/6 - 5,660,000 07/27/98 78.62 61
Lock/36_>YM or 1%/198_0%/6 Treasury Flat 6,200,000 07/06/98 70.97 62
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_Defeasance/67_0%/5 - 6,330,000 12/17/97 68.72 63
Lock/36_Defeasance/78_0%/6 - 5,630,000 08/14/98 76.38 64
Lock/28_Defeasance/86_0%/6 - 6,300,000 05/05/98 68.25 65
Lock/36_Defeasance/81_0%/3 - 6,250,000 02/18/98 65.60 66
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 5,400,000 07/27/98 74.07 67
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 6,250,000 02/27/98 64.00 68
Lock/48_YM or 1%/66_0%/6 Treasury Flat 6,000,000 01/06/98 66.67 69
Lock/36_>YM or 1%/84 Treasury Flat 5,400,000 11/17/97 74.07 70
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/78_0%/6 - 6,900,000 11/13/97 57.97 71
Lock/32_Defeasance/82_0%/6 - 5,700,000 11/19/97 70.18 72
Lock/36_Defeasance/78_0%/6 - 4,900,000 08/20/98 80.20 73
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 5,700,000 01/01/98 67.54 74
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/45_0%/3 4,875,000 09/30/98 77.95 75
- - - 75
- - - 75
- - - 75
- - - 75
- ---------------------------------------------------------------------------------------------------------------------
Lock/120_>YM or 1%/114_0%/6 Treasury Flat 5,100,000 08/04/98 74.51 76
Lock/36_Defeasance/81_0%/3 - 5,000,000 05/23/98 75.00 77
Lock/36_Defeasance/81_0%/3 - 4,800,000 06/15/98 75.00 78
Lock/36_Defeasance/81_0%/3 - 4,950,000 08/16/98 70.71 79
Lock/60_Defeasance/54_0%/6 - 4,750,000 06/04/98 73.68 80
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 4,700,000 74.47 81
- - 2,200,000 04/30/98 - 81
- - 2,500,000 04/30/98 - 81
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 5,200,000 05/20/98 67.31 82
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 5,950,000 06/03/98 58.82 83
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_>YM or 1%/78_0%/6 Treasury Flat 4,800,000 06/16/98 72.92 84
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 4,600,000 05/19/98 71.74 85
Lock/36_Defeasance/81_0%/3 - 4,500,000 08/24/98 73.33 86
Lock/36_Defeasance/81_0%/3 - 4,400,000 06/12/98 74.66 87
Lock/36_Defeasance/81_0%/3 - 4,500,000 08/15/98 72.78 88
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_ 0%/6 Treasury Flat 4,500,000 08/13/98 71.11 89
Lock/36_Defeasance/78_0%/6 - 4,000,000 05/20/98 80.00 90
Lock/36_5%/36_4%/12_3%/12_2%/12_1%/6_0%/6 - 4,200,000 04/08/98 76.19 91
Lock/36_Defeasance/81_0%/3 - 4,900,000 07/15/98 64.80 92
Lock/48_>YM or 1%/126_0%/6 Treasury Flat 4,400,000 06/15/98 72.73 93
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_Defeasance/66_0%/6 - 5,170,000 07/30/97 61.90 94
Lock/36_Defeasance/81_0%/3 - 4,825,000 08/19/98 62.69 95
Lock/36_Defeasance/81_0%/3 - 4,200,000 08/14/98 71.43 96
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,900,000 07/29/98 76.92 97
Lock/29_Defeasance/49_0%/6 - 4,000,000 04/04/98 75.00 98
- ---------------------------------------------------------------------------------------------------------------------
Lock/60_>YM or 1%/54_0%/6 Treasury Flat 4,250,000 06/18/98 70.59 99
Lock/48_>YM or 1%/66_ 0%/6 Treasury Flat 4,550,000 04/01/98 65.56 100
Lock/36_Defeasance/82_0%/3 - 5,500,000 06/16/98 53.64 101
Lock/36_Defeasance/78_0%/6 - 3,635,000 05/14/98 80.47 102
Lock/31_Defeasance/83_0%/6 - 3,700,000 04/03/98 78.38 103
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/42_0%/6 - 4,420,000 05/20/98 65.61 104
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 4,300,000 07/21/98 66.28 105
Lock/27_Defeasance/87_0%/6 - 4,850,000 08/03/98 57.73 106
Lock/48_>YM or 1%/30_0%/6 Treasury Flat 3,800,000 06/03/98 73.68 107
Lock/84_> YM or 1%/90_0%/6 Treasury Flat 3,500,000 05/21/98 79.43 108
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/78_0%/6 - 3,450,000 08/25/98 79.71 109
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,900,000 07/17/98 70.51 110
Lock/36_>YM or 1%/78_0%/6 Treasury Flat 3,700,000 06/24/98 74.32 111
Lock/36_Defeasance/78_0%/6 - 4,800,000 05/20/98 56.25 112
Lock/31_Defeasance/83_0%/6 - 4,250,000 03/18/98 63.53 113
- ---------------------------------------------------------------------------------------------------------------------
Lock/33_Defeasance/81_0%/6 - 3,575,000 02/12/98 74.97 114
Lock/60_>YM or 1%/54_0%/6 Treasury Flat 3,350,000 06/30/98 79.10 115
Lock/84_>YM or 1%/150_0%/6 Treasury Flat 3,800,000 07/31/98 68.95 116
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,950,000 07/27/98 65.82 117
Lock/36_Defeasance/45_0%/3 - 3,400,000 05/06/98 73.53 118
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/84 - 3,350,000 05/19/98 74.63 119
Lock/48_>YM or 1%/90_0%/6 Treasury Flat 3,700,000 06/02/98 67.57 120
Lock/34_Defeasance/80_0%/6 - 3,900,000 10/16/97 64.10 121
Lock/48_>YM or 1%/90_0%/6 Treasury Flat 3,200,000 08/25/98 76.56 122
Lock/36_Defeasance/78_0%/6 - 3,050,000 08/21/98 80.00 123
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,000,000 08/26/98 80.00 124
Lock/48_>YM or 1%/66_0%6 Treasury Flat 3,075,000 04/23/98 78.05 125
Lock/108_>YM or 1%/102_0%/6 Treasury Flat 3,260,000 07/03/98 73.62 126
Lock/35_Defeasance/259_0%/6 - 4,830,000 01/21/98 49.69 127
Lock/36_Defeasance/78_0%/6 - 3,275,000 02/09/98 72.52 128
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,750,000 12/01/97 64.00 129
Lock/36_Defeasance/81_0%/3 - 3,450,000 03/24/98 68.12 130
Lock/36_Defeasance/81_0%/3 - 4,000,000 05/23/98 57.75 131
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,250,000 07/16/98 71.05 132
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,100,000 05/19/98 74.19 133
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/78_0%/6 - 3,050,000 04/30/98 75.41 134
Lock/36_Defeasance/81_0%/3 - 3,250,000 06/22/98 69.54 135
Lock/33_Defeasance/81_0%/6 - 3,000,000 01/24/98 74.17 136
Lock/36_Defeasance/81_0%/3 - 3,000,000 06/11/98 73.33 137
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,050,000 04/21/98 72.13 138
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 3,200,000 08/24/98 67.19 139
Lock/36_Defeasance/82_0%/3 - 4,400,000 06/16/98 48.86 140
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,650,000 06/17/98 79.25 141
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,000,000 06/29/98 70.00 142
Lock/36_Defeasance/81_0%/3 - 2,640,000 07/07/98 79.55 143
Lock/35_Defeasance/79_0%/6 - 2,730,000 10/23/97 76.92 144
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/78_0%/6 - 2,610,000 05/14/98 79.31 145
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,800,000 07/16/98 72.54 146
Lock/36_Defeasance/81_0%/3 - 2,670,000 07/23/98 74.91 147
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 3,100,000 05/19/98 64.52 148
Lock/32_Defeasance/82_0%/6 - 4,610,000 03/18/98 43.38 149
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_>YM or 1%/120_1%/138_0%/6 Treasury Flat 2,950,000 11/23/97 66.78 150
Lock/300_>YM or 1%/54_0%/6 Treasury Flat 2,640,000 10/23/97 73.86 151
Lock/36_Defeasance/78_0%/6 - 2,400,000 07/17/98 80.21 152
Lock/36_>YM or 1%/120_1%/138_0%/6 Treasury Flat 2,580,000 11/23/97 74.81 153
Lock/36_Defeasance/81_0%/3 - 2,500,000 08/24/98 76.00 154
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,400,000 79.17 155
- - 1,400,000 11/25/97 - 155
- - 460,000 11/25/97 - 155
- - 230,000 11/25/97 - 155
- - 310,000 11/25/97 - 155
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/186_0%/6 Treasury Flat 2,950,000 07/17/98 64.41 156
Lock/48_>YM or 1%/30_0%/6 Treasury Flat 2,400,000 07/13/98 79.17 157
Lock/27_Defeasance/90_0%/3 - 2,900,000 07/24/98 62.07 158
Lock/48_>YM or 1%/126_0%/6 Treasury Flat 2,600,000 08/13/98 69.23 159
Lock/48_Defeasance/69_0%/3 - 2,400,000 07/11/98 75.00 160
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/84 - 2,800,000 08/10/98 64.29 161
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,480,000 04/01/98 70.56 162
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,320,000 05/06/98 74.35 163
Lock/32_Defeasance/82_0%/6 - 2,850,000 12/01/97 60.35 164
Lock/29_Defeasance/145_0%/6 - 2,500,000 05/07/98 67.40 165
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,285,000 03/30/98 73.30 166
Lock/36_Defeasance/81_0%/3 - 2,350,000 07/15/98 71.06 167
Lock/36_Defeasance/81_0%/3 - 2,080,000 07/28/98 80.00 168
Lock/36_Defeasance/81_0%/3 - 2,500,000 09/15/98 65.80 169
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,300,000 11/10/97 71.74 170
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 - 2,400,000 07/06/98 67.92 171
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,125,000 07/01/98 76.42 172
Lock/36_Defeasance/81_0%/3 - 2,300,000 07/30/98 69.57 173
Lock/36_Defeasance/81_0%/3 - 2,125,000 08/15/98 74.96 174
Lock/180_>YM or 1%/54_0%/6 Treasury Flat 2,650,000 02/12/98 60.38 175
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/145_0%/3 - 1,740,000 07/31/98 90.75 176
Lock/36_Defeasance/78_0%/6 - 1,995,000 05/14/98 77.94 177
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,100,000 09/30/97 74.29 178
Lock/36_Defeasance/201_0%/3 - 1,600,000 07/31/98 96.88 179
Lock/36_Defeasance/81_0%/3 - 2,150,000 08/11/98 69.77 180
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/84 - 2,100,000 06/09/98 71.43 181
Lock/36_Defeasance/201_0%/3 - 2,100,000 05/12/98 71.43 182
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,150,000 05/08/98 69.77 183
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,100,000 11/13/97 71.43 184
Lock/48_ >YM or 1%/66_ 0%/6 Treasury Flat 2,000,000 05/19/98 72.50 185
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/141_0%/3 - 2,350,000 03/27/98 61.70 186
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,150,000 11/21/97 66.98 187
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,800,000 04/21/98 79.17 188
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,150,000 02/24/98 65.12 189
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,975,000 04/28/98 70.89 190
lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,200,000 10/21/97 63.64 191
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,000,000 08/11/98 68.50 192
Lock/36_Defeasance/78_0%6 - 1,700,000 06/24/98 80.00 193
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,900,000 06/30/98 71.58 194
Lock/36_Defeasance/133_0%/3 - 1,475,000 07/31/98 92.47 195
- ---------------------------------------------------------------------------------------------------------------------
Lock/240_>YM or 1%/54_0%/6 Treasury Flat 1,825,000 02/17/98 73.97 196
Lock/36_Defeasance/81_0%/3 - 1,750,000 06/10/98 75.00 197
Lock/31_Defeasance/203_0%/6 - 1,760,000 01/14/98 75.00 198
Lock/48_>YM or 1%/66_0%6 Treasury Flat 1,880,000 03/17/98 69.68 199
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/81_0%/3 2,100,000 08/26/98 61.90 200
- - - 200
- - 0 - 200
- - 0 - 200
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 2,000,000 04/01/98 63.50 201
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/201_0%/3 - 1,735,000 07/23/98 72.62 202
Lock/36_Defeasance/81_0%/3 - 1,850,000 08/03/98 67.57 203
Lock/48_>YM or 1%/66_O%/6 Treasury Flat 2,000,000 04/01/98 61.40 204
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,750,000 08/15/98 68.57 205
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/133_0%/3 - 1,400,000 07/31/98 85.43 206
Lock/36_Defeasance/78_0%/6 - 1,500,000 07/17/98 78.33 207
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 3,000,000 11/19/97 40.00 208
Lock/36_Defeasance/81_0%/3 - 1,800,000 08/13/98 63.89 209
Lock/48_>YM or 1%/66_0%6 Treasury Flat 1,625,000 04/09/98 70.15 210
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/83_0%/1 - 1,500,000 08/12/98 75.00 211
Lock/36_Defeasance/81_0%/3 - 1,400,000 07/03/98 79.64 212
Lock/36_Defeasance/81_0%/3 - 1,600,000 05/28/98 67.75 213
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,430,000 07/14/98 74.97 214
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,345,000 06/18/98 78.07 215
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,350,000 06/18/98 77.78 216
Lock/31_Defeasance/83_0%/6 - 1,550,000 04/06/98 67.74 217
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,350,000 06/15/98 75.93 218
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,385,000 05/05/98 74.01 219
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,360,000 01/14/98 75.00 220
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,295,000 06/18/98 77.99 221
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,350,000 10/17/97 74.96 222
Lock/36_Defeasance/45_0%/3 - 1,210,000 06/30/98 82.64 223
Lock/28_Defeasance/50_0%/6 - 1,700,000 06/15/98 58.82 224
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,600,000 11/07/97 62.50 225
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,400,000 09/04/97 71.43 226
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 1,350,000 11/20/97 74.07 227
Lock/180_>YM or 1%/54_0%/6 Treasury Flat 1,400,000 02/12/98 70.71 228
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,300,000 04/20/98 75.00 229
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,550,000 03/12/98 62.58 230
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,285,000 06/17/98 73.93 231
Lock/36_0%/84 - 1,800,000 02/11/98 52.78 232
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,500,000 01/15/98 63.33 233
Lock/180_>YM or 1%/54_0%/6 Treasury Flat 1,350,000 03/13/98 69.63 234
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,250,000 02/27/98 74.00 235
Lock/36_Defeasance/78_0%/6 - 1,400,000 07/17/98 64.29 236
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,300,000 03/13/98 69.23 237
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,170,000 07/06/98 74.79 238
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,100,000 06/18/98 78.18 239
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,150,000 12/12/97 74.96 240
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,275,000 02/19/98 67.45 241
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,150,000 11/25/97 74.78 242
Lock/48_YM or 1%/66_0%/6 Treasury Flat 1,090,000 06/15/98 77.98 243
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,100,000 06/08/98 77.27 244
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_ >YM or 1%/66_ 0%/6 Treasury Flat 1,220,000 07/14/98 69.67 245
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,250,000 03/06/98 68.00 246
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,150,000 12/17/97 73.04 247
Lock/60_>YM or 1%/114_0%/6 Treasury Flat 1,160,000 08/04/98 72.41 248
Lock/32_Defeasance/82_0%/6 - 1,500,000 04/08/98 55.07 249
- ---------------------------------------------------------------------------------------------------------------------
Lock/29_Defeasance/85_0%6 - 1,200,000 12/17/97 66.67 250
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,100,000 04/17/98 72.73 251
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 2,550,000 11/19/97 31.37 252
Lock/180_>YM or 1%/54_0%/6 Treasury Flat 1,060,000 06/01/98 72.64 253
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,000,000 06/18/98 76.00 254
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 980,000 06/17/98 76.53 255
Lock/48_>YM of 1%/66_0%/6 Treasury Flat 1,250,000 07/20/98 60.00 256
Lock/36_Defeasance/78_0%/6 - 945,000 05/14/98 79.37 257
Lock/36_Defeasance/81_0%/3 - 1,000,000 04/30/98 75.00 258
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,000,000 02/24/98 75.00 259
- ---------------------------------------------------------------------------------------------------------------------
Lock/36_Defeasance/108 - 950,000 05/20/98 78.95 260
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,125,000 07/16/98 65.60 261
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,100,000 05/19/98 66.36 262
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,050,000 03/12/98 69.52 263
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 2,000,000 11/19/97 36.50 264
- ---------------------------------------------------------------------------------------------------------------------
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 950,000 03/13/98 74.95 265
Lock/34_Defeasance/80_0%/6 - 950,000 10/22/97 73.68 266
Lock/36_>YM or 1%/120_1%/138_0%/6 Treasury Flat 865,000 11/20/97 79.77 267
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 970,000 04/22/98 70.00 268
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 920,000 08/07/98 73.37 269
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 950,000 01/07/98 71.05 270
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,000,000 11/17/97 65.40 271
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 990,000 06/29/98 65.66 272
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 900,000 02/09/98 72.44 273
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 870,000 01/12/98 74.94 274
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_ 0%/6 Treasury Flat 900,000 06/23/98 72.00 275
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 900,000 01/17/98 72.22 276
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 900,000 07/28/98 71.11 277
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 810,000 06/26/98 79.01 278
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 850,000 07/10/98 74.00 279
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 810,000 06/17/98 77.16 280
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 820,000 06/17/98 76.22 281
Lock/48_>YM or 1%/66_0%6 Treasury Flat 1,000,000 01/29/98 62.50 282
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 890,000 02/19/98 69.66 283
Lock/36_>YM or 1%/78_0%/6 Treasury Flat 835,000 08/04/98 73.05 284
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 875,000 02/19/98 69.71 285
Lock/48_>YM or 1%/66_0%6 Treasury Flat 1,000,000 01/23/98 61.20 286
Lock/48_>YM or 1%/186_0%/6 Treasury Flat 900,000 11/20/97 68.00 287
Lock/27_Defeasance/90_0%/3 - 3,400,000 07/24/98 17.65 288
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 800,000 01/29/98 75.00 289
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 860,000 01/29/98 69.77 290
Lock/48_>YM or 1%/66_ 0%/6 Treasury Flat 790,000 05/14/98 74.94 291
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 1,400,000 11/18/97 42.86 292
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 1,600,000 12/18/97 36.56 293
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 740,000 06/25/98 78.38 294
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 830,000 01/08/98 69.28 295
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 760,000 04/20/98 74.74 296
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 850,000 08/19/97 65.88 297
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 760,000 02/25/98 73.68 298
Lock/120_>YM or 1%/54_0%/6 Treasury Flat 750,000 11/20/97 74.00 299
- ---------------------------------------------------------------------------------------------------------------------
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 800,000 12/16/97 68.75 300
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 720,000 12/16/97 75.00 301
Lock/180_>YM or 1%/54_ 0%/6 Treasury Flat 730,000 06/01/98 71.40 302
Lock/48_>YM or 1%/66_0%6 Treasury Flat 700,000 05/27/98 74.29 303
Lock/48_>YM or 1%/66_0%/6 Treasury Flat 790,000 01/27/98 65.82 304
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CUT-OFF ANTICIPATED
LOAN LOAN SELLER/ DATE LTV LTV RATIO YEAR (S) YEAR (S)
NUMBER ORIGINATOR PROPERTY NAME RATIO AT MATURITY / ARD BUILT RENOVATED
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
400029165 GSMC(ACLP) The Torpedo Factory 74.38% 64.67% 1942 1983
948 Daiwa Securities Whitehall Hotel 64.00 53.31 1928 1994
400029229 GSMC(ACLP) Granada Apartments 78.11 68.55 1972, 90 1994
947 Daiwa Securities Roswell Town Center 71.98 65.37 1974, 79 1997
- ---------------------------------------------------------------------------------------------------------------------------
914 Daiwa Securities Salter Healthcare Portfolio 58.85 46.46
914A Daiwa Securities Aberjona Nursing Center - - 1979 1994
914B Daiwa Securities Winchester Nursing Center - - 1965 1995
914C Daiwa Securities Woburn Nursing Center - - 1955 1993
908 Daiwa Securities Goodings International Plaza 73.81 48.04 1991 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
09-0001186 GSMC(Archon) The Atrium Hotel 57.95 46.82 1970 1992 - 1997
09-0001199 GSMC(Archon) Bruckner Nursing Home 75.86 63.14 1972 Unknown
400029179 GSMC(ACLP) The Phillips Building 73.50 64.11 1964 1996, 97
943 Daiwa Securities Holiday Inn Select 69.76 53.47 1969 1996 - 1997
924 Daiwa Securities Westminster Towers 75.88 0.00 1963 1995
- ---------------------------------------------------------------------------------------------------------------------------
400029303 GSMC(ACLP) Arbour Village Apartments 77.62 71.66 1974 Unknown
400031043 GSMC(ACLP) Springs Plaza Shopping Center 64.77 55.70 1974, 75 1982, 83
930 Daiwa Securities Meridian East Apartments 79.58 69.08 1987 Not Applicable
400029281 GSMC(ACLP) North Valley Power Center 71.02 61.29 1993 Not Applicable
400029270 GSMC(ACLP) Renton Village Shopping Center 74.49 64.05 1965 1997
- ---------------------------------------------------------------------------------------------------------------------------
09-0001145 GSMC(Archon) Tully/I-10 Shopping Center 79.86 69.21 1974 1997, 98
400030928 GSMC(ACLP) Howard Johnson Riverwalk PlazaHotel 75.40 59.64 1933, 70 1987, 88
09-0001201 GSMC(Archon) Stevens Center 66.51 59.79 1991, 92 Not Applicable
400029261 GSMC(ACLP) Evans Mill Place Apartments 80.15 70.51 1971 1997, 98
R0492 GSMC(CPC) Southlake Shopping Center 70.08 61.60 1989 1997
- ---------------------------------------------------------------------------------------------------------------------------
921 Daiwa Securities Holiday Inn Select 74.60 60.65 1970 1988, 1995 - 1996
400030943 GSMC(ACLP) Comfort Inn Gold Coast 68.73 54.92 1988 1997
400031116 GSMC(ACLP) 175 Beacon Street 79.02 67.76 1988 - 1989 Unknown
400029289 GSMC(ACLP) Old Times Union Building 78.79 66.61 1920, 30 1986
400029254 GSMC(ACLP) Avondale Office Center 72.50 63.42 1952 1987
- ---------------------------------------------------------------------------------------------------------------------------
400031126 GSMC(ACLP) Park Villa Townhomes 79.18 68.93 1971 1994, 98
400029283 GSMC(ACLP) Sandhill Airport Park 75.23 65.77 1997 Not Applicable
400030930 GSMC(ACLP) Woolworth Office Building 71.84 63.00 1972 - 1973 Not Applicable
09-0001170 GSMC(Archon) Oxford/Santa Fe Business Park 74.75 65.08 1983, 84 Not Applicable
931 Daiwa Securities Fountain Springs Apartments 79.44 69.49 1964, 80 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
400030878 GSMC(ACLP) North Medical Campus 69.77 55.90 1988 - 1989 Unknown
942 Daiwa Securities International Town Center 74.86 66.18 1986 1997
400030941 GSMC(ACLP) 21 East 66th Street Retail Condos 39.31 30.41 1927 1998
400029230 GSMC(ACLP) Humana Office Complex 72.56 64.62 1961, 71, 81 1986
901 Daiwa Securities Occidental Business Center 77.98 72.83 1987 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
932 Daiwa Securities Hayden Place Apartments 75.51 66.04 1985 Not Applicable
R0869 GSMC(CPC) Harwin Wholesale Shopping Center 69.05 61.49 1995 - 1996 Not Applicable
09-0001179 GSMC(Archon) Kenwood Business Park 79.83 69.38 1991 - 1992 1998
400031127 GSMC(ACLP) Hilgard Apartments 79.17 65.74 1981 Unknown
400031122 GSMC(ACLP) Falls of Point West Apartments 74.77 68.74 1975 1997
- ---------------------------------------------------------------------------------------------------------------------------
927 Daiwa Securities Park Inn Club & Breakfast 71.49 58.72 1989 1997
09-0001189 GSMC(Archon) North Pointe Apartments 80.57 69.81 1979 1997
917 Daiwa Securities Irvington Arms Apartments 63.50 55.22 1964 - 1966 1996 - 1997
09-0001188 GSMC(Archon) Parkway Plaza 78.68 68.94 1981 1990
M0345 GSMC(CPC) Lantern Square Apartments 76.29 65.89 1976 1995
- ---------------------------------------------------------------------------------------------------------------------------
944 Daiwa Securities Fountain Ridge Apartments 79.72 69.35 1973 Not Applicable
09-0001197 GSMC(Archon) The Castro Convertible Buildings 61.66 55.16 1903 1989
400030946 GSMC(ACLP) ADS Technology 79.87 68.98 1997 Not Applicable
400030933 GSMC(ACLP) Powder Hill Place Office Park 74.16 59.15 1996 - 1997 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
I0198 GSMC(CPC) Lindbergh Industrial Portfolio 74.34 64.93
I0198A GSMC(CPC) Lindbergh Industrial - - 1990 - 1991 Not Applicable
I0198B GSMC(CPC) Lindbergh Industrial - - 1990 - 1991 Not Applicable
I0198C GSMC(CPC) Lindbergh Industrial - Sunshine Acres - - 1989 Not Applicable
400029117 GSMC(ACLP) Albertson's Marketplace and 60.10 58.66 1997 Not Applicable
Crossroads Ceneter
- ---------------------------------------------------------------------------------------------------------------------------
400029280 GSMC(ACLP) Fairway Center 74.13 60.20 1990 1996
400029203 GSMC(ACLP) Quail Orient Medical Office Development 65.60 53.02 1988 Unknown
400030988 GSMC(ACLP) Boise - Marketplace 74.83 64.73 1981 1990
903 Daiwa Securities Bargain World/Sports Dominator 72.45 0.00 1987, 94 Not Applicable
400029268 GSMC(ACLP) Creekside at Greenwood Village 58.36 51.27 1982 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
09-0001191 GSMC(Archon) CMI Building 78.78 63.64 1998 Not Applicable
09-0001173 GSMC(Archon) Mercury Plaza 80.17 69.37 1966 1997
400029271 GSMC(ACLP) Renton Village Cinemas 69.79 55.31 1990 Not Applicable
400030919 GSMC(ACLP) Foxwood Crossing Apartments 78.38 65.08 1995 - 1997 Not Applicable
400030920 GSMC(ACLP) Hampton Inn - Savannah North 70.66 28.52 1997 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
910 Daiwa Securities Sleep Inn - Phoenix, AZ 67.88 53.51 1995, 96 Not Applicable
M0536 GSMC(CPC) Bluegrass Village Apartments 76.20 65.81 1974 1997
922 Daiwa Securities The Colony Inn 68.00 52.71 1962 1993
09-0001180 GSMC(Archon) Calliope Memorial Shopping Ctr 65.47 57.58 1984 1996
- ---------------------------------------------------------------------------------------------------------------------------
09-0001165 GSMC(Archon) Cuero Nursing Center 73.82 58.95 1992 Not Applicable
400030912 GSMC(ACLP) 1250 North McDowell Boulevard 63.65 51.49 1975 Unknown
400029260 GSMC(ACLP) River Park Center Office Building 66.29 53.45 1986 Unknown
911 Daiwa Securities Fountainhead Apartments 73.57 65.00 1984 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
915 Daiwa Securities Cambridge Gardens Apartments 57.55 50.54 1950 1997
906 Daiwa Securities Holiday Inn 69.59 54.82 1988 -
M0543 GSMC(CPC) Perkins Woods Apartments 80.02 69.11 1971 1995
400029272 GSMC(ACLP) Evergreen Office Building 67.30 53.43 1969 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
400031124 GSMC(ACLP) Sunshine Properties Portfolio 77.78 71.47
400031124A GSMC(ACLP) Brentwood Terrace - - 1986 Unknown
400031124B GSMC(ACLP) Circle Oaks I Apartments - - 1983 Unknown
400031124C GSMC(ACLP) Carmel Apartments - - 1972 Unknown
400031124D GSMC(ACLP) Vineyard Apartments - - 1972 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
400030936 GSMC(ACLP) Food-4-Less Center 74.07 0.00 1997 Not Applicable
09-0001154 GSMC(Archon) K-Mart - Port Orchard 74.78 65.43 1988 Unknown
09-0001152 GSMC(Archon) K-Mart - Atascadero 74.78 65.43 1989 Unknown
09-0001196 GSMC(Archon) Marketplace Shopping Center 70.62 62.81 1998 Not Applicable
400030931 GSMC(ACLP) Sanese Services Building 73.43 58.75 1974 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
582 Daiwa Securities Field & Stream/Woodridge Apartments 74.17 60.94
582A Daiwa Securities Field & Stream Apartments - - 1965 1997
582B Daiwa Securities Woodridge Apartments - - 1964 1997
400029288 GSMC(ACLP) Dicks Clothing & Sporting Goods Store 66.99 53.66 1993 1994
400030892 GSMC(ACLP) Perimeter Place 58.47 46.63 1984 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030879 GSMC(ACLP) Wells Plaza 72.46 57.24 1974 1993
639 Daiwa Securities 89-07, 89-11 34th Avenue Apartments 71.69 59.98 1927 1995
09-0001182 GSMC(Archon) 324 Royal Palm Way 73.18 63.90 1960 1998
09-0001153 GSMC(Archon) K-Mart - Bishop 74.44 65.13 1989 Unknown
09-0001184 GSMC(Archon) Slifer Design Building 72.62 63.40 1997 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
935 Daiwa Securities Jones Street Terrace 70.99 63.03 1910 1995 - 1996
400031118 GSMC(ACLP) Rayo de Sol Apartments 79.70 69.31 1964 1997
916 Daiwa Securities Bayfront Manor/Baypark Apartments 75.71 61.55 1947, 49 1997
09-0001178 GSMC(Archon) Comfort Inn - Addison 64.60 52.72 1995 1997
400029266 GSMC(ACLP) Orthopedic Institute of Illinois 71.83 0.00 1991 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
950 Daiwa Securities Best Western Bell Motel 60.77 48.33 1974 Not Applicable
09-0001198 GSMC(Archon) Hampton Inn - Tyler 62.59 52.55 1996 Not Applicable
09-0001172 GSMC(Archon) Mayde Creek Shopping Center 71.29 62.82 1984 -
400031129 GSMC(ACLP) Bay View Apartments 76.75 66.59 1985 Not Applicable
I0066 GSMC(CPC) Van Dresser Building 74.79 69.29 1967 1976, 78, 97
- ---------------------------------------------------------------------------------------------------------------------------
400030873 GSMC(ACLP) Shops of Boardman Park III 70.19 47.54 1996 Not Applicable
636 Daiwa Securities Albion Terrace Apartments 65.48 58.28 1962 Not Applicable
09-0001176 GSMC(Archon) Comfort Suites - Biloxi 53.35 36.59 1995 Not Applicable
M0433 GSMC(CPC) Seven Courts Apartments 80.23 65.49 1966 1996, 97
925 Daiwa Securities Bella Apartments 78.05 68.45 1962 1993
- ---------------------------------------------------------------------------------------------------------------------------
400029296 GSMC(ACLP) Festival at Perry Hall 65.33 59.73 1987 Unknown
400030932 GSMC(ACLP) Woodlawn/Catonsville EZ Self Storage 65.94 51.99 1990 Unknown
949 Daiwa Securities Brentwood Town Center 57.62 47.24 1992 Not Applicable
400030970 GSMC(ACLP) Carbonero Creek 73.36 56.77 1984 Unknown
400030918 GSMC(ACLP) Meadow Brook Apartments 79.21 61.42 1995 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
M0553 GSMC(CPC) Red Oaks Apartments 79.52 68.68 1975 1995 - 1997
610 Daiwa Securities Sutter House Apartments 70.29 61.09 1911 1996, 97
400029298 GSMC(ACLP) 21st St. Pavilion Shopping 73.98 59.42 1949, 87 1985
R0020 GSMC(CPC) East Cooper Plaza Shopping Ctr 56.13 45.69 1974, 77 Unknown
929 Daiwa Securities Holiday Inn Express 62.89 44.16 1985 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
913 Daiwa Securities Roland Way Office Center 74.36 61.15 1982 Not Applicable
400030917 GSMC(ACLP) Dana Corporation Office Whse 78.69 64.11 1984 Unknown
400030937 GSMC(ACLP) Days Inn - Stone Mountain 68.59 0.00 1989 Unknown
400031119 GSMC(ACLP) Sunrise Apartments 65.61 56.84 1971 1982 - 1986
400029276 GSMC(ACLP) Greenbriar Atrium II Office Building 73.23 67.77 1979 1986
- ---------------------------------------------------------------------------------------------------------------------------
400029273 GSMC(ACLP) James Allen Court 74.32 65.16 1993 - 1995 Not Applicable
400029305 GSMC(ACLP) Acorn Self Storage 67.20 50.34 1997 Not Applicable
907 Daiwa Securities Tropical Inn 63.19 45.54 1966,80,96 Not Applicable
400030942 GSMC(ACLP) American Medical Response 76.29 55.87 1998 Not Applicable
400030971 GSMC(ACLP) Cielo Hills Apartments 79.80 68.25 1970 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030986 GSMC(ACLP) Broadway Crossing Shopping Ctr 79.85 67.34 1995 Not Applicable
400029245 GSMC(ACLP) Petcare Superstore 77.76 67.88 1998 Not Applicable
400030947 GSMC(ACLP) Greenspring/Riderwood Building 72.92 0.00 1991 Unknown
573 Daiwa Securities Twin Palms Apartments 49.17 0.00 1964 Not Applicable
R0451 GSMC(CPC) Wagner and Sons, Inc. 72.29 58.50 1972,86,93 1995 - 1998
- ---------------------------------------------------------------------------------------------------------------------------
912 Daiwa Securities Ramada Inn 63.08 49.62 1973 1985
09-0001159 GSMC(Archon) Best Western El Grande Inn - Clear Lake 67.90 54.87 1985 Unknown
09-0001155 GSMC(Archon) K-Mart - Oak Harbor 57.58 50.38 1988 1991
937 Daiwa Securities Creekside Manor Apartments 70.84 57.93 1961 1996
621 Daiwa Securities 114 - 05 170th Street 73.96 60.05 1966 1995 - 1998
- ---------------------------------------------------------------------------------------------------------------------------
400029312 GSMC(ACLP) Poplar Creek Shopping Center 75.10 65.93 1997 Not Applicable
09-0001158 GSMC(Archon) Best Western - Tyler 69.33 56.63 1985 Unknown
611 Daiwa Securities Pacifica Villas Apartments 73.76 65.05 1991 1995 - 1997
09-0001169 GSMC(Archon) Ramada Inn - Santa Fe 73.10 59.16 1964, 73, 78 1997
400029293 GSMC(ACLP) Walgreen's - Tucson, AZ 71.76 61.66 1996 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
09-0001181 GSMC(Archon) 231 Royal Palm Way 67.05 58.54 1973 1997 - 1998
09-0001177 GSMC(Archon) Comfort Inn - Biloxi 48.63 34.24 1993 Unknown
400030894 GSMC(ACLP) 208 Ashley Ave Office Building 79.06 68.43 1996 Not Applicable
400031131 GSMC(ACLP) Tuscany Apartments 69.79 58.53 1998 Not Applicable
09-0001156 GSMC(Archon) Gateway Apartments 79.30 68.82 1970 1996
502 Daiwa SecuritiesKeller Springs Village Shopping Center 76.14 62.74 1985 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
M0435 GSMC(CPC) Peachcrest Gardens Apartments 79.09 65.02 1963 1996 - 1997
938 Daiwa Securities O'Keefe Apartments 72.32 59.15 1964 1998
09-0001183 GSMC(Archon) Walnut Business Park 74.75 65.41 1978 1996
591 Daiwa Securities 16 Barrow Street 64.24 52.21 1902 1997
613 Daiwa Securities Village Square Shopping Center 43.07 35.25 1985 1996
- ---------------------------------------------------------------------------------------------------------------------------
900 Daiwa Securities Compass Pointe Apartments 65.96 0.00 1974 Not Applicable
510 Daiwa Securities Sahara View Apartments 73.49 0.00 1986 Not Applicable
O0521 GSMC(CPC) The Soaper Hotel Building 79.94 64.17 1924 1997 - 1998
902 Daiwa Securities Carriage House Apartments 73.88 0.00 1975 Unknown
09-0001175 GSMC(Archon) Kinko's Center-Addison 75.86 66.98 1977 1996
- ---------------------------------------------------------------------------------------------------------------------------
519 Daiwa Securities Joplin Portfolio 78.68 70.19
519A Daiwa Securities Airport Drive Apartments - - 1995 Not Applicable
519B Daiwa Securities Cherry Street - - 1994 Not Applicable
519C Daiwa Securities Park Lane - - 1995 Not Applicable
519D Daiwa Securities Terrill Lane Apartments - - 1995 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
400030921 GSMC(ACLP) Gladstone Office Building 63.95 0.00 1975 1997
400030976 GSMC(ACLP) Buckeye Tower 78.37 57.74 1973 - 1974 1995
09-0001108 GSMC(Archon) Country Villa University Healthcare 61.96 51.99 1971 Unknown
400030949 GSMC(ACLP) Gardsman Apartments 69.07 52.15 1963 1998
400030962 GSMC(ACLP) Baytown Central Shopping Center 74.72 59.02 1994,97,98 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
400030955 GSMC(ACLP) Solitude Building 63.89 42.31 1997 Not Applicable
606 Daiwa Securities Marquee Apartments 70.24 58.18 1963 1994 - 1998
400031117 GSMC(ACLP) 41 Belmont Street Apartments 74.03 63.48 1970 Unknown
905 Daiwa Securities Dorsey Business Center 59.90 48.91 1987 Not Applicable
589 Daiwa Securities Northline Shopping Center 66.94 28.98 1967 1972, 94, 98
- ---------------------------------------------------------------------------------------------------------------------------
627 Daiwa Securities Marine Plaza Apartments 73.01 59.98 1965 1997
09-0001161 GSMC(Archon) Super 8 - Lafayette 70.83 57.07 1989 Unknown
09-0001190 GSMC(Archon) Rite Aid - Massena 79.83 64.49 1998 Not Applicable
09-0001194 GSMC(Archon) Cady Industrial Center 65.72 58.56 1986 - 1988 Unknown
527 Daiwa Securities Colonial Village - Regency Apartments 71.19 58.95 1957 1996, 97
- ---------------------------------------------------------------------------------------------------------------------------
09-0001143 GSMC(Archon) Bee Cave Road Office Building 67.54 45.54 1986 1998
569 Daiwa Securities Versailles Apartments 76.10 62.07 1963, 68, 72 1991, 96
09-0001174 GSMC(Archon) Hunter's Crossing Apartments 69.42 60.74 1972 1995 - 1996
09-0001185 GSMC(Archon) Slifer Design Warehouse 74.82 65.73 1996 - 1997 Not Applicable
594 Daiwa Securities 72-82 Wadsworth Terrace 59.74 0.00 1927 1997
- ---------------------------------------------------------------------------------------------------------------------------
09-0001149 GSMC(Archon) CVS Drug Store - Gloucester, NJ 89.76 0.00 1998 Not Applicable
M0434 GSMC(CPC) Harbour Vines Apartments 77.72 63.90 1961 1996 - 1997
524 Daiwa Securities Windsor Square Apartments 73.56 61.04 1970 - 1975 On Going
09-0001150 GSMC(Archon) CVS Drug Store - Paulsboro, NJ 96.32 0.00 1998 Not Applicable
09-0001195 GSMC(Archon) Woodlands IV & V Business Center 69.69 62.57 1981 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
400029277 GSMC(ACLP) Tech Plaza 71.07 61.34 1997 - 1998 Not Applicable
09-0001157 GSMC(Archon) Comfort Inn - Lincoln 71.04 0.00 1991 1997
400029302 GSMC(ACLP) Lincoln Industrial Center 69.29 55.67 1997 Not Applicable
500 Daiwa Securities Stuyvesant Avenue 70.82 62.27 1930's CIRCA 1997
940 Daiwa Securities 41 - 98 Forley Street 72.28 58.68 1963 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030984 GSMC(ACLP) 16000 Memorial Office Building 60.93 0.00 1980 Unknown
521 Daiwa Securities Maryland Green Apartments 66.26 54.22 1967, 82 1995
400029244 GSMC(ACLP) Blockbuster Shopping Center 78.84 69.23 1997 Not Applicable
400029198 GSMC(ACLP) 110 Industrial Park 64.75 52.18 1970, 78 1997
585 Daiwa Securities Timpanogos Apartments 70.42 58.44 1970 1994
504 Daiwa Securities 101 Lincoln Road 62.93 52.42 1938 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030945 GSMC(ACLP) Ocean Technology Park 68.24 53.55 1985 Unknown
M0406 GSMC(CPC) Garden Trails Apartments 79.81 68.97 1996 - 1997 Not Applicable
400030929 GSMC(ACLP) Welch Healthcare Building 71.33 56.71 1983 Unknown
09-0001148 GSMC(Archon) CVS Drug Store - Carlisle, PA 91.44 0.00 1997 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
614 Daiwa Securities Pinehill Plaza & Apartments 73.58 0.00 1968 1995
09-0001171 GSMC(Archon) Comfort Inn - Sweetwater 74.77 60.63 1996 Not Applicable
920 Daiwa Securities Econo Lodge 74.30 0.00 1993 Not Applicable
586 Daiwa Securities Dorian Court 69.42 57.64 1976 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
09-0001187 GSMC(Archon) Lufkin Apartment Portfolio 61.81 53.81
09-0001187A GSMC(Archon) The Hidden Oaks - - 1980 1993
09-0001187B GSMC(Archon) Azalea Trails - - 1977 1993
09-0001187C GSMC(Archon) Kentwood - - 1982 1993
622 Daiwa Securities Ignacio Hills Apartments - XII 63.24 55.58 1974 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
09-0001162 GSMC(Archon) Days Inn - Kerrville 72.24 0.00 1996 Not Applicable
09-0001192 GSMC(Archon) Days Inn - New Bern 67.43 55.04 1970 1997
623 Daiwa Securities Ignacio Hills Apartments - XVI 61.15 53.74 1974 Not Applicable
400030975 GSMC(ACLP) Bays-Fill Industrial Building 68.32 54.03 1986 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
09-0001151 GSMC(Archon) CVS Drug Store - Oaklyn, NJ 84.33 0.00 1997 Not Applicable
O0520 GSMC(CPC) The Salms Building 78.07 62.67 1904 1996
515 Daiwa Securities Partridge Apartments 38.93 0.00 1989 Not Applicable
09-0001193 GSMC(Archon) Days Inn - Winslow 63.53 30.96 1995 Not Applicable
595 Daiwa Securities Renshaw Terrace 69.89 58.03 1975 On Going
- ---------------------------------------------------------------------------------------------------------------------------
09-0001144 GSMC(Archon) Alaska Archives Warehouse 74.66 60.22 1982 Unknown
09-0001131 GSMC(Archon) Emery Park Apartments 79.46 68.91 1972 Unknown
09-0001126 GSMC(Archon) Pecan Plaza 67.63 60.00 1982 Unknown
933 Daiwa Securities 112 Lincoln Street 74.76 61.80 1930 1993
400030905 GSMC(ACLP) Blockbuster - Denver 77.90 67.84 1993 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
400030899 GSMC(ACLP) Blockbuster - Wheatridge, CO. 77.61 67.59 1993 Not Applicable
535 Daiwa Securities Sycamores Apartments 67.35 55.45 1971 Not Applicable
400030911 GSMC(ACLP) Blockbuster-Las Vegas (Sahara) 75.76 65.98 1993 Unknown
605 Daiwa Securities Maple Place North Apartments 73.72 60.78 1957 1996
608 Daiwa Securities Quinnipiac Arms 74.47 61.16 1959 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030906 GSMC(ACLP) Blockbuster - Edgewater 77.82 67.77 1993 Not Applicable
543 Daiwa Securities Centre Park Place Apartments 74.55 61.82 1920 1987- 1988
400030889 GSMC(ACLP) Cypress Industrial Building 82.39 75.77 1970 1997
618 Daiwa Securities Hunter's Point Center 58.53 47.68 1987 On Going
602 Daiwa Securities Hamilton Park House 62.18 50.77 1970 On Going
- ---------------------------------------------------------------------------------------------------------------------------
511 Daiwa Securities Sedgley Gardens 70.78 58.47 1909 1981
532 Daiwa Securities Helena Gardens Apartments 73.39 48.44 1962 1995 - 1997
536 Daiwa Securities 3044 Kingsbridge Avenue 70.07 0.00 1930 1996 - 1997
558 Daiwa Securities Banyan Woods 74.56 61.40 1970 1990
551 Daiwa Securities 389 Massachusetts Avenue 62.27 51.22 1926 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
400030898 GSMC(ACLP) Blockbuster-Wauwatosa 73.77 64.24 1991 Unknown
578 Daiwa Securities Desert Inn Professional Building 52.39 43.68 1974 1995 - 1996
592 Daiwa Securities Taos Apartments 62.85 53.15 1975 1994
600 Daiwa Securities Rosslyn Heights 69.00 0.00 1984 1995
554 Daiwa Securities Cedar Village Apartments 73.50 61.89 1979 1997
O0519 GSMC(CPC) The Newberry-Wile Building 64.07 51.43 1915 1993
546 Daiwa Securities 154 Rockaway Parkway 68.85 57.09 1940 1997
400030904 GSMC(ACLP) Blockbuster - Forest Hills 74.62 64.99 1992 Not Applicable
400030909 GSMC(ACLP) Blockbuster - Indianapolis 78.01 67.94 1995 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
601 Daiwa Securities Douglas Park Apartments 74.46 61.80 1962 Not Applicable
609 Daiwa Securities Mayfair Garden Apartments 67.14 55.61 1960 1998
501 Daiwa Securities Bradford Place Apartments 73.97 61.82 1971 1996
400030903 GSMC(ACLP) Blockbuster-Las Vegas/Flamingo 77.81 67.76 1993 Not Applicable
400030897 GSMC(ACLP) Blockbuster-Tulsa 77.11 67.15 1992 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
934 Daiwa Securities 140 - 146 Chancellor Avenue 69.48 57.44 1930 1995
549 Daiwa Securities 148 - 156 Chancellor Avenue 67.60 57.06 1930 1992
528 Daiwa Securities Sherwood Court Apartments 72.51 60.45 1973 On Going
400030957 GSMC(ACLP) SportsTech Warehouse 71.74 0.00 1972 1996, 97, 98
553 Daiwa Securities 5900 Balcones Office Building 54.70 45.40 1982 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
598 Daiwa Securities Ashland Retail Center 66.41 54.95 1954, 59 1996
604 Daiwa Securities Harrison Avenue Apartments 72.37 59.52 1968 Not Applicable
508 Daiwa Securities Clearview Apartments 30.53 0.00 1977 Not Applicable
635 Daiwa Securities 92 - 96 Waldo Avenue 72.42 0.00 1930 On Going
400030908 GSMC(ACLP) Blockbuster-Bay City 75.84 66.04 1992 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
400030900 GSMC(ACLP) Blockbuster-Elkhart(Cassopoliss) 76.37 66.50 1996 Not Applicable
400030974 GSMC(ACLP) Lighthouse Point Professional Center 59.87 52.11 1987 Unknown
M0436 GSMC(CPC) White Oak Arms Apartments 79.14 65.07 1966 Unknown
09-0001146 GSMC(Archon) Econolodge - Elkridge 74.71 61.52 1977 1996 - 1998
550 Daiwa Securities Randolph Park Apartments 74.54 62.50 1960 1997
- ---------------------------------------------------------------------------------------------------------------------------
400030888 GSMC(ACLP) Brookshire Grocery 78.34 44.88 1992 Unknown
616 Daiwa Securities Quail Lodge Apartments 65.47 53.48 1964 1996
945 Daiwa Securities 9416 34th Road 66.16 53.71 1928 1995 - 1997
567 Daiwa Securities 98 Strathmore Road 69.18 56.90 1925 Unknown
518 Daiwa Securities Southside Apartments 35.52 0.00 1971 - 1972 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
537 Daiwa Securities Huntington Apartments 74.49 48.70 1953 1998
576 Daiwa Securities 2942 Third Avenue 73.04 60.53 1930 1997
904 Daiwa Securities Churchill Townhomes 78.78 0.00 1984 Unknown
634 Daiwa Securities 354 East 21st Street 69.87 57.90 1900 Not Applicable
542 Daiwa Securities Lawndale Apartments 72.97 60.50 1945 1997
- ---------------------------------------------------------------------------------------------------------------------------
509 Daiwa Securities Garden Walk Apartments 70.49 59.21 1970 1997
559 Daiwa Securities Windswept Apartments 65.05 54.12 1973, 81 1997
568 Daiwa Securities Northshore Manor Apartments 65.39 53.73 1963 1996 - 1997
538 Daiwa Securities Golden Eagle Apartments 71.93 60.17 1968 On Going
534 Daiwa Securities Oakland Oaks 74.31 62.01 1985 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
939 Daiwa Securities Adobe House Apartments 71.80 59.14 1960 1998
541 Daiwa Securities Northern Pine Apartments 71.71 59.99 1971 On Going
641 Daiwa Securities 259-61 & 269 West Walnut Lane 70.98 59.03 1920 On Going
400030910 GSMC(ACLP) Blockbuster - Wind Gap 78.84 68.66 1995 Not Applicable
588 Daiwa Securities Village at Deer Park 73.74 61.65 1969, 70 1988
- ---------------------------------------------------------------------------------------------------------------------------
400030907 GSMC(ACLP) Blockbuster - Elkhart (Hively) 76.99 67.05 1996 Not Applicable
400030901 GSMC(ACLP) Blockbuster-Chicago 76.05 66.23 1995 Not Applicable
565 Daiwa Securities Howard Warren Apartments 62.19 50.96 1940 On Going
577 Daiwa Securities Holmesburg Station Apartments 69.34 57.43 1960 On Going
I0162 GSMC(CPC) Cumberland Airport Center 72.90 59.34 1984 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
561 Daiwa Securities Wingate Apartments 69.39 57.47 1960 On Going
530 Daiwa Securities Prospect Square 60.66 50.28 1949 1994
525 Daiwa Securities 506 South Broadway 67.00 0.00 1930 1996
09-0001109 GSMC(Archon) Country Villa Cheviot Healthcare 17.62 14.78 1969 1997 - 1998
615 Daiwa Securities The Blount Apartments 74.58 61.62 1969 1997
- ---------------------------------------------------------------------------------------------------------------------------
529 Daiwa Securities LaPetite Apartments 69.31 59.53 1971 Not Applicable
637 Daiwa Securities Avenue R Duplexes 74.80 61.99 1963 1997
514 Daiwa Securities Peppertree Apartments 41.71 0.00 1985 Not Applicable
612 Daiwa Securities Newport Apartments 36.26 29.71 1901 1989
400030902 GSMC(ACLP) Blockbuster-Watertown 78.21 68.11 1996 Unknown
- ---------------------------------------------------------------------------------------------------------------------------
579 Daiwa Securities 8th Street Apartments 68.76 57.13 1937 1994
596 Daiwa Securities Regency House 74.40 61.84 1963 1989
632 Daiwa Securities 527 West 48th Street 65.75 53.71 1900 1997
540 Daiwa Securities Whisperwoods Apartments 73.19 61.63 1964 1994 - 1997
522 Daiwa Securities Palomares Apartments 73.32 48.39 1964 Not Applicable
- ---------------------------------------------------------------------------------------------------------------------------
503 Daiwa Securities Richmond Apartments 68.13 57.10 1969 1997
572 Daiwa Securities Fernwood Apartments 74.31 62.07 1929 1997
936 Daiwa Securities 2267 - 2269 Kennedy Boulevard 71.08 0.00 1930 1995 - 1998
570 Daiwa Securities Baycrest Apartments 74.08 66.45 1996 Not Applicable
587 Daiwa Securities45 Church Street & 35 Railroad Avenue 65.50 55.05 1932 1998
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TOTAL PROPERTY LOAN BALANCE OCCUPANCY
LOCKBOX LOCKBOX UNITS OF UNIT OF PER SF/UNIT/ OCCUPANCY AS OF
REQUIRED TYPE MEASURE MEASURE ROOM/BED/SPACE PERCENT DATE LARGEST TENANT
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
No Not Applicable 104,900 Sq Ft 191 100% 08/31/98 Crown Life
Yes In Place 221 Rooms 85,429 63 06/30/98 -
No Not Applicable 746 Units 25,128 93 09/30/98 -
Yes In Place 380,387 Sq Ft 45 100 10/06/98 Burlington Coat Factory
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 384 Beds 30,955
- - 123 Beds - 98 07/31/98 -
- - 121 Beds - 98 07/31/98 -
- - 140 Beds - 96 12/11/97 -
No Not Applicable 82,007 Sq Ft 145 100 09/30/98 Goodings
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 214 Rooms 53,621 72 09/01/98 -
No Not Applicable 200 Beds 56,898 99 10/09/98 -
No Not Applicable 107,996 Sq Ft 100 100 07/31/98 Walnut Brewery, Inc.
No Not Applicable 192 Rooms 53,954 76 07/01/98 -
No Not Applicable 203 Units 48,966 100 10/21/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 400 Units 24,644 99 09/18/98 -
No Not Applicable 171,329 Sq Ft 54 88 09/09/98 Kash and Karry
No Not Applicable 312 Units 29,075 92 09/30/98 Hair Salon
No Not Applicable 167,997 Sq Ft 53 100 07/31/98 JC Penny Home Store
No Not Applicable 88,504 Sq Ft 96 100 08/12/98 Associated Grocers
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 126,600 Sq Ft 67 95 09/24/98 Seekers Grocery
No Not Applicable 132 Rooms 63,404 56 07/31/98 -
No Not Applicable 144,020 Sq Ft 58 100 08/31/98 General Service Administration
No Not Applicable 280 Units 28,910 96 04/24/98 -
Yes Springing 126,187 Sq Ft 63 100 09/30/98 SteinMart
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 142 Rooms 56,215 77 03/30/98 -
No Not Applicable 202 Rooms 39,468 55 08/01/98 -
No Not Applicable 55 Units 144,826 100 07/01/98 -
No Not Applicable 100,300 Sq Ft 75 100 05/07/98 Offices of General Services
No Not Applicable 136,575 Sq Ft 55 81 10/01/98 Peryam & Kroll
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 259 Units 28,124 97 09/15/98 -
No Not Applicable 123,592 Sq Ft 56 89 05/29/98 Diversified Data & Comm., Inc.
No Not Applicable 175,610 Sq Ft 38 100 07/17/98 Kinney Shoe Corp.
No Not Applicable 190,492 Sq Ft 35 100 09/17/98 Reinke Brothers
No Not Applicable 382 Units 16,719 91 06/02/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 35,838 Sq Ft 172 100 08/20/98 North Med PC
No Not Applicable 51,725 Sq Ft 116 93 08/19/98 Naya Gifts
No Not Applicable 3,890 Sq Ft 1,536 100 08/17/98 Paul & Shark Shops, Inc.
No Not Applicable 95,944 Sq Ft 62 100 08/27/98 Humana
No Not Applicable 93,987 Sq Ft 63 94 09/28/98 Software Dynamics
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 163 Units 36,133 98 09/15/98 -
Yes Springing 152,300 Sq Ft 37 95 10/13/98 Capital Merchandise
No Not Applicable 169,600 Sq Ft 32 100 09/10/98 Kaman Industrial Tech., Inc.
No Not Applicable 44 Units 122,351 100 07/14/98 -
No Not Applicable 364 Units 14,789 94 09/30/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 130 Rooms 41,243 76 03/31/98 -
No Not Applicable 300 Units 17,806 93 09/28/98 -
No Not Applicable 257 Units 20,633 98 10/20/98 Madison Deli
No Not Applicable 61,493 Sq Ft 84 99 09/01/98 The Little Gym of Plano
Yes Springing 226 Units 22,955 96 09/22/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 280 Units 18,052 95 06/02/98 -
No Not Applicable 76,800 Sq Ft 65 100 09/09/98 Phipps House Services
No Not Applicable 81,200 Sq Ft 59 100 09/16/98 Orion Industries
No Not Applicable 42,919 Sq Ft 111 100 09/01/98 Boxlight Corporation
- ----------------------------------------------------------------------------------------------------------------------
Yes Springing 72,927 Sq Ft 65
- - 32,528 Sq Ft - 100 10/02/98 Swingin' Door
- - 32,316 Sq Ft - 100 10/02/98 Custom Doors
- - 8,083 Sq Ft - 100 10/07/98 Unites States Post Office
No Not Applicable 35,365 Sq Ft 133 92 10/18/98 Kragen Auto Parts
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 77,716 Sq Ft 60 100 05/08/98 Measurement Systems Int'l. Inc
No Not Applicable 47,336 Sq Ft 98 90 04/07/98 Nephrology
No Not Applicable 43,750 Sq Ft 106 90 09/30/98 Burger King
No Not Applicable 45,500 Sq Ft 101 100 08/31/98 Bargain World
No Not Applicable 70,026 Sq Ft 65 96 06/22/98 First City Financial
- ----------------------------------------------------------------------------------------------------------------------
Yes In Place 42,537 Sq Ft 106 100 10/07/98 C.M.I.
No Not Applicable 180,190 Sq Ft 25 96 09/17/98 Rose's Stores, Inc.
No Not Applicable 37,383 Sq Ft 120 100 09/02/98 General Cinema Cor. of WA
No Not Applicable 72 Units 61,616 100 08/25/98 -
No Not Applicable 106 Rooms 41,327 77 05/30/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 105 Rooms 40,922 53 12/17/97 -
Yes Springing 152 Units 28,223 94 08/24/98 -
No Not Applicable 86 Rooms 49,815 74 12/31/97 -
No Not Applicable 103,830 Sq Ft 39 82 01/31/98 Hollywood Video
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 120 Beds 33,219 80 09/07/98 -
No Not Applicable 131,500 Sq Ft 30 100 06/25/98 Fantastic Foods, Inc.
No Not Applicable 49,805 Sq Ft 80 100 06/25/98 Management Compensation Group
No Not Applicable 273 Units 14,552 85 02/23/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 130 Units 30,545 98 10/16/98 -
No Not Applicable 80 Rooms 49,582 70 09/30/97 -
Yes Springing 167 Units 23,478 99 07/20/98 -
No Not Applicable 81,758 Sq Ft 47 88 08/01/98 Synergistic Software
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 154 Units 24,621
- - 38 Units - 92 05/22/98 -
- - 30 Units - 97 09/22/98 -
- - 38 Units - 87 09/21/98 -
- - 48 Units - 94 09/22/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 49,725 Sq Ft 76 100 08/04/98 Food-4-Less
No Not Applicable 69,346 Sq Ft 54 100 07/31/98 K-Mart
No Not Applicable 84,802 Sq Ft 42 94 06/15/98 K-Mart
No Not Applicable 59,188 Sq Ft 59 95 09/11/98 Winn Dixie
Yes In Place 104,146 Sq Ft 33 100 08/31/98 Sanese Services, Inc
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 158 Units 22,064
- - 79 Units - 91 06/08/98 -
- - 79 Units - 93 08/05/98 Juanita Ryker - Ladies Wear
No Not Applicable 65,000 Sq Ft 54 100 08/18/98 Dick's Clothing & Sport. Goods
No Not Applicable 102,587 Sq Ft 34 99 06/29/98 Boat America Corporation
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 94,665 Sq Ft 37 100 05/31/98 Ames Department Store
No Not Applicable 133 Units 24,794 100 09/01/98 -
No Not Applicable 22,781 Sq Ft 145 96 09/02/98 Legg Mason
No Not Applicable 66,213 Sq Ft 49 95 07/31/98 K-Mart
No Not Applicable 19,825 Sq Ft 165 100 09/01/98 Slifer Designs
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 80 Units 39,930 99 08/01/98 -
No Not Applicable 160 Units 19,924 97 06/23/98 -
No Not Applicable 92 Units 34,562 93 09/30/98 -
No Not Applicable 86 Rooms 36,808 70 05/31/98 -
No Not Applicable 22,981 Sq Ft 138 100 08/12/98 Orthopedic Associates of Peori
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 103 Rooms 30,501 89 08/31/98 -
No Not Applicable 78 Rooms 38,717 75 08/19/98 -
No Not Applicable 56,487 Sq Ft 53 96 08/31/98 Jo-Ann Stores dba Clothworld
No Not Applicable 83 Units 36,064 98 08/31/98 -
Yes Springing 213,980 Sq Ft 14 95 11/01/98 Janesville Products- Jason,Inc
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 35,825 Sq Ft 83 100 08/13/98 The Gap (Old Navy)
No Not Applicable 40 Units 74,485 98 09/01/98 -
No Not Applicable 70 Rooms 41,922 76 06/16/98 -
Yes Springing 191 Units 15,268 82 08/15/98 -
No Not Applicable 58 Units 49,792 98 08/25/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 34,363 Sq Ft 84 87 07/31/98 White Marsh Child Care, Inc.
No Not Applicable 52,975 Sq Ft 54 83 07/07/98 -
No Not Applicable 11,940 Sq Ft 234 94 10/06/98 Yogazone
No Not Applicable 30,106 Sq Ft 93 100 09/18/98 Mercury Diagnostics, Inc.
No Not Applicable 120 Units 23,103 92 07/10/98 -
- ----------------------------------------------------------------------------------------------------------------------
Yes Springing 155 Units 17,701 95 09/22/98 -
No Not Applicable 49 Units 55,949 100 06/01/98 Hoot Judkins Furniture
No Not Applicable 142,766 Sq Ft 19 100 07/23/98 Farm Fresh
Yes Springing 93,505 Sq Ft 29 100 10/08/98 Pennsylvania House
No Not Applicable 76 Rooms 35,169 57 03/31/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 39,700 Sq Ft 67 100 09/01/98 American Protective
No Not Applicable 108,016 Sq Ft 24 100 07/08/98 Dana Corporation
No Not Applicable 81 Rooms 32,179 73 09/25/98 -
No Not Applicable 128 Units 20,248 95 08/01/98 -
Yes Springing 86,624 Sq Ft 29 100 07/09/98 The Kroger Company
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 32,839 Sq Ft 76 100 06/01/98 Quality Glass & Mirror, Inc.
No Not Applicable 51,440 Sq Ft 48 97 06/03/98 -
No Not Applicable 31 Rooms 79,503 80 08/31/98 -
No Not Applicable 46,000 Sq Ft 53 100 09/09/98 American Medical Response
No Not Applicable 101 Units 24,097 90 09/15/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 31,952 Sq Ft 75 100 09/30/98 PetsMart, Inc.
No Not Applicable 14,495 Sq Ft 165 100 02/25/98 PetCare Plus, Inc.
No Not Applicable 31,862 Sq Ft 75 100 07/31/98 Kinsley Construction Inc.
No Not Applicable 57 Units 41,665 100 12/01/97 -
Yes Springing 83,376 Sq Ft 28 100 09/11/98 H & M Wagner & Sons, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 100 Rooms 23,657 40 08/30/98 -
No Not Applicable 68 Rooms 34,448 56 12/31/97 -
No Not Applicable 67,332 Sq Ft 34 100 05/23/98 K-Mart
No Not Applicable 54 Units 42,633 93 08/18/98 -
No Not Applicable 79 Units 29,024 99 05/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 34,100 Sq Ft 67 100 06/22/98 Goody's Family Clothing, Inc.
No Not Applicable 90 Rooms 25,036 70 05/31/98 -
No Not Applicable 100 Units 22,129 99 02/15/98 -
No Not Applicable 102 Rooms 21,500 58 06/11/98 -
No Not Applicable 15,525 Sq Ft 141 100 04/21/98 Walgreen Arizona Drug Company
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 10,967 Sq Ft 196 100 08/24/98 Munder Capital Mgt.
No Not Applicable 68 Rooms 31,469 84 06/18/98 -
No Not Applicable 16,862 Sq Ft 124 95 09/14/98 Pioneer Valley Dialysis
No Not Applicable 24 Units 87,236 100 09/18/98 -
No Not Applicable 76 Units 27,545 96 07/31/98 -
No Not Applicable 39,778 Sq Ft 52 100 08/01/98 Chung's Taekwondo
- ----------------------------------------------------------------------------------------------------------------------
Yes Springing 148 Units 13,947 81 08/15/98 -
No Not Applicable 40 Units 50,625 98 09/01/98 -
No Not Applicable 72,174 Sq Ft 28 100 09/08/98 Mauro Enterprises (Exec. Spas
No Not Applicable 14 Units 142,245 100 05/01/98 Time Cafe - South on Seventh
No Not Applicable 81,834 Sq Ft 24 95 04/03/98 24 Hour Fitness
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 113 Units 17,221 97 09/25/98 -
No Not Applicable 81 Units 23,952 96 11/04/97 -
Yes Springing 35,000 Sq Ft 55 100 09/23/98 Western Kentucky Energy
No Not Applicable 102 Units 18,686 99 09/25/98 -
No Not Applicable 13,851 Sq Ft 137 100 07/31/98 Kinko's
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 58 Units 32,557
- - 32 Units - 94 12/01/97 -
- - 12 Units - 88 12/01/97 -
- - 6 Units - 100 12/01/97 -
- - 8 Units - 100 11/25/97 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 43,881 Sq Ft 43 92 07/22/98 Social Security Admin.
No Not Applicable 49,824 Sq Ft 38 95 08/27/98 Pathology & Lab Medicine, P.C.
No Not Applicable 88 Beds 20,420 78 10/12/98 -
No Not Applicable 39 Units 46,049 100 08/31/98 -
No Not Applicable 21,441 Sq Ft 84 95 09/01/98 CATO Fashions
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 22,784 Sq Ft 79 100 09/16/98 Healthcast Information Network
No Not Applicable 101 Units 17,246 100 06/29/98 -
No Not Applicable 28 Units 61,341 100 07/01/98 -
No Not Applicable 35,420 Sq Ft 48 100 09/01/98 ADT Security Systems
No Not Applicable 36,300 Sq Ft 46 100 01/14/98 EZ Corp.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 65 Units 25,666 94 08/01/98 -
No Not Applicable 71 Rooms 23,445 95 07/31/98 -
Yes In Place 11,282 Sq Ft 147 100 10/07/98 Rite Aid of New York, Inc.
No Not Applicable 50,000 Sq Ft 33 100 09/15/98 Metro Glass
No Not Applicable 142 Units 11,531 92 03/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
Yes In Place 20,695 Sq Ft 78 100 09/09/98 TX Council on Family Violence
No Not Applicable 64 Units 25,269 92 08/10/98 -
No Not Applicable 101 Units 15,809 88 09/10/98 -
No Not Applicable 21,902 Sq Ft 73 100 09/01/98 Silfer Designs, Inc.
No Not Applicable 84 Units 18,845 99 03/16/98 -
- ----------------------------------------------------------------------------------------------------------------------
Yes In Place 10,125 Sq Ft 154 100 08/18/98 Sickerville Road CVS, Inc.
Yes Springing 124 Units 12,505 95 08/15/98 -
No Not Applicable 240 Units 6,437 95 11/30/97 -
Yes In Place 10,125 Sq Ft 152 100 08/18/98 Paulsboro CVS, Inc
No Not Applicable 58,500 Sq Ft 26 100 08/04/98 Geneflex Corp
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 18,876 Sq Ft 79 100 06/05/98 ADT Security Services, Inc.
No Not Applicable 52 Rooms 28,690 65 12/31/97 -
No Not Applicable 44,656 Sq Ft 33 100 05/27/98 Lodge Graphics
No Not Applicable 64 Units 23,238 97 12/10/97 -
No Not Applicable 65 Units 22,239 98 05/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 28,229 Sq Ft 51 97 08/24/98 Kaufman Meeks + Partners Co
No Not Applicable 78 Units 18,264 96 06/30/98 -
No Not Applicable 9,355 Sq Ft 152 100 05/06/98 Blockbuster Videos, Inc.
No Not Applicable 39,000 Sq Ft 36 96 06/16/98 DYNAVAC
No Not Applicable 44 Units 31,608 100 05/01/98 -
No Not Applicable 84 Units 16,482 100 11/17/97 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 45,000 Sq Ft 30 77 08/11/98 Tuition Management Systems
Yes Springing 50 Units 27,137 96 09/30/98 -
No Not Applicable 16,464 Sq Ft 82 100 07/29/98 Welch Healthcare & Retirement
Yes In Place 10,125 Sq Ft 133 100 07/31/98 CVS of Pennsylvania, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 43 Units 31,227 98 02/01/98 Vendo Pen & George Samora
No Not Applicable 44 Rooms 29,736 72 06/10/98 -
No Not Applicable 47 Rooms 27,823 82 09/27/98 -
No Not Applicable 80 Units 16,314 95 06/30/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 136 Units 9,545
- - 72 Units - 88 07/31/98 -
- - 52 Units - 89 07/31/98 -
- - 12 Units - 100 07/31/98 -
No Not Applicable 20 Units 63,242 100 09/21/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 42 Rooms 29,840 77 06/30/98 -
No Not Applicable 110 Rooms 11,340 48 07/31/98 -
No Not Applicable 20 Units 61,150 100 09/21/98 -
No Not Applicable 37,800 Sq Ft 32 90 09/22/98 Ultimate Collision
- ----------------------------------------------------------------------------------------------------------------------
Yes In Place 9,000 Sq Ft 131 100 08/18/98 Oaklyn CVS, Inc.(CVS #2090-01)
Yes Springing 17,500 Sq Ft 67 100 08/25/98 Sheffer Hoffman LP
No Not Applicable 92 Units 12,694 100 11/06/97 -
No Not Applicable 64 Rooms 17,868 54 07/31/98 -
No Not Applicable 77 Units 14,750 96 06/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 24,000 Sq Ft 47 100 08/12/98 IMS, Inc.
No Not Applicable 64 Units 17,383 100 07/10/98 -
No Not Applicable 18,500 Sq Ft 58 100 08/20/98 Las Ranitas
No Not Applicable 43 Units 24,862 98 06/01/98 -
No Not Applicable 6,500 Sq Ft 161 100 07/31/98 Blockbuster Videos, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 6,500 Sq Ft 161 100 07/31/98 Blockbuster Videos, Inc.
No Not Applicable 29 Units 35,997 100 03/23/98 -
No Not Applicable 6,225 Sq Ft 164 100 08/31/98 Blockbuster Videos, Inc.
No Not Applicable 33 Units 30,940 100 05/15/98 -
No Not Applicable 40 Units 25,319 95 08/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 6,500 Sq Ft 155 100 08/02/98 Blockbuster Videos, Inc.
No Not Applicable 50 Units 20,128 98 04/01/98 -
No Not Applicable 34,872 Sq Ft 29 100 07/31/98 Levin Distributing
No Not Applicable 30,160 Sq Ft 33 100 10/01/98 Ten X Technology
No Not Applicable 94 Units 10,584 94 03/31/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 24 Units 41,291 96 06/30/98 -
No Not Applicable 42 Units 23,590 93 12/31/97 -
No Not Applicable 39 Units 25,153 100 04/01/98 -
No Not Applicable 41 Units 23,643 98 04/08/98 -
No Not Applicable 28 Units 34,473 100 04/29/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 6,500 Sq Ft 146 100 06/17/98 Blockbuster Videos, Inc.
No Not Applicable 12,262 Sq Ft 77 100 02/11/98 HealthSouth Corporation
No Not Applicable 54 Units 17,459 100 01/14/98 -
No Not Applicable 60 Units 15,524 97 03/01/98 -
No Not Applicable 52 Units 17,669 100 02/20/98 -
Yes Springing 16,200 Sq Ft 55 100 08/25/98 Sheffer - Hoffman LP
No Not Applicable 42 Units 21,310 100 06/23/98 -
No Not Applicable 6,500 Sq Ft 134 100 08/31/98 Blockbuster Videos, Inc.
No Not Applicable 6,510 Sq Ft 132 100 08/31/98 Blockbuster Videos, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 60 Units 14,272 100 12/20/97 -
No Not Applicable 53 Units 16,151 92 04/21/98 -
No Not Applicable 44 Units 19,334 95 08/31/98 -
No Not Applicable 6,272 Sq Ft 135 100 08/10/98 Blockbuster Videos, Inc.
No Not Applicable 6,517 Sq Ft 130 100 06/08/98 Blockbuster Videos, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 36 Units 23,547 97 06/02/98 -
No Not Applicable 36 Units 23,474 94 03/01/98 -
No Not Applicable 36 Units 23,163 92 08/10/98 -
No Not Applicable 59,930 Sq Ft 14 100 08/20/98 SportsTech Services, Inc.
No Not Applicable 15,537 Sq Ft 53 96 03/25/98 Choice Asset Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 19,331 Sq Ft 41 100 08/14/98 Family Dollar
No Not Applicable 30 Units 26,536 100 04/01/98 -
No Not Applicable 96 Units 8,110 99 11/06/97 -
No Not Applicable 48 Units 15,992 98 06/03/98 -
No Not Applicable 6,500 Sq Ft 117 100 07/31/98 Blockbuster Videos, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 6,510 Sq Ft 115 100 07/31/98 Blockbuster Videos, Inc.
No Not Applicable 23,119 Sq Ft 32 97 09/10/98 Driver's Alert
Yes Springing 40 Units 18,697 100 08/15/98 -
No Not Applicable 40 Rooms 18,676 54 04/30/98 -
No Not Applicable 30 Units 24,847 100 03/31/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 36,334 Sq Ft 20 100 07/23/98 Brookshire Grocery Company
No Not Applicable 21 Units 35,072 90 08/07/98 -
No Not Applicable 43 Units 16,924 100 05/01/98 -
No Not Applicable 18 Units 40,357 100 04/01/98 -
No Not Applicable 64 Units 11,100 97 11/06/97 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 36 Units 19,657 92 04/13/98 -
No Not Applicable 2,500 Sq Ft 278 100 10/31/97 Jimmy Khezrie DBA Jimmy Jazz
No Not Applicable 32 Units 21,295 100 08/31/98 -
No Not Applicable 34 Units 19,934 97 06/30/98 -
No Not Applicable 90 Units 7,459 98 09/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 40 Units 16,741 100 11/30/97 -
No Not Applicable 20 Units 32,524 100 04/22/98 -
No Not Applicable 30 Units 21,580 97 06/11/98 -
No Not Applicable 45 Units 14,386 93 03/01/98 -
No Not Applicable 38 Units 17,014 100 12/31/97 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 52 Units 12,427 100 07/10/98 -
No Not Applicable 57 Units 11,323 95 08/01/98 -
No Not Applicable 20 Units 31,943 100 09/01/98 -
No Not Applicable 5,500 Sq Ft 116 100 06/26/98 Blockbuster Videos, Inc.
No Not Applicable 44 Units 14,245 100 05/20/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 6,500 Sq Ft 96 100 07/31/98 Blockbuster Videos, Inc.
No Not Applicable 6,528 Sq Ft 96 100 07/31/98 Blockbuster Videos, Inc.
No Not Applicable 28 Units 22,209 96 02/12/98 -
No Not Applicable 34 Units 18,150 94 04/21/98 -
No Not Applicable 19,600 Sq Ft 31 100 10/15/98 Radio Repair Center, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 33 Units 18,399 100 04/30/98 -
No Not Applicable 31 Units 19,568 97 06/30/98 -
No Not Applicable 18 Units 33,499 100 11/05/97 Latino Restaurant
No Not Applicable 99 Beds 6,050 95 10/11/98 -
No Not Applicable 24 Units 24,859 100 03/01/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 36 Units 16,556 97 03/16/98 -
No Not Applicable 22 Units 26,860 100 08/20/98 -
No Not Applicable 30 Units 19,464 100 11/18/97 -
No Not Applicable 45 Units 12,893 100 12/31/97 Rittenhouse Bridge Club
No Not Applicable 5,500 Sq Ft 105 100 07/31/98 Blockbuster Videos, Inc.
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 22 Units 25,941 100 11/14/97 -
No Not Applicable 36 Units 15,706 97 04/20/98 -
No Not Applicable 20 Units 27,943 100 06/01/98 Doorika Productions
No Not Applicable 33 Units 16,855 100 02/28/98 -
No Not Applicable 24 Units 22,911 100 01/06/98 -
- ----------------------------------------------------------------------------------------------------------------------
No Not Applicable 50 Units 10,901 98 06/30/98 -
No Not Applicable 44 Units 12,159 100 12/19/97 -
No Not Applicable 29 Units 17,893 93 03/25/98 -
No Not Applicable 18 Units 28,810 94 05/01/98 -
No Not Applicable 25 Units 20,697 100 04/22/98 -
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LARGEST LARGEST LARGEST
TENANT TENANT % OF TENANT 1997 1997 1998 1998 U/W U/W U/W GROUND
LEASED SF TOTAL NSF LEASE EXPIRATION NOI NCF NOI NCF NOI NCF DSCR LEASE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
15,197 14.49% 08/01/00 $2,355,547 $2,355,547 $2,891,800 $2,808,564 $2,241,599 $2,068,738 1.26x No
- - - 2,475,952 2,475,952 3,252,653 3,252,653 2,803,247 2,328,683 1.36 No
- - - 2,064,183 2,014,615 1,711,477 1,682,884 2,107,306 1,958,306 1.30 No
100,000 26.29 01/31/08 934,528 934,528 2,261,016 2,261,016 2,222,100 1,903,336 1.27 No
- -----------------------------------------------------------------------------------------------------------------------------------
2,193,548 2,193,548 1,868,767 1,868,767 1,752,386 1,637,186 1.45 No
- - - - No
- - - - - - - - - - No
- - - - - - - - - - No
28,330 34.55 09/30/12 - - 1,542,986 1,542,986 1,373,671 1,332,152 1.27 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 1,766,562 1,766,562 2,165,947 2,165,947 1,967,998 1,661,433 1.67 No
- - - 1,484,040 1,484,040 1,577,635 1,577,635 2,000,514 1,950,514 1.80 No
10,583 9.80 06/30/11 498,561 498,561 - - 1,353,264 1,218,675 1.35 No
- - - 1,087,857 1,087,857 1,740,548 1,740,548 1,543,795 1,333,417 1.45 Yes
- - - 1,119,043 1,119,043 - - 1,144,090 1,093,746 1.39 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - - - 1,210,813 1,122,742 1,197,820 1,077,820 1.37 No
41,869 24.44 10/31/06 777,745 777,745 881,751 881,751 1,088,890 968,262 1.38 No
2,230 1.01 11/30/98 747,216 702,475 - - 1,103,428 1,031,438 1.46 No
53,984 32.13 01/01/05 1,133,578 1,072,714 928,054 593,509 1,146,836 1,030,877 1.51 No
30,720 34.71 03/31/14 1,050,343 1,026,343 1,144,765 1,144,765 980,116 944,587 1.47 No
- -----------------------------------------------------------------------------------------------------------------------------------
35,693 28.19 06/30/08 469,435 469,435 - - 991,496 882,046 1.34 No
- - - 1,201,281 1,137,281 1,136,512 1,136,512 1,132,847 976,609 1.43 No
99,822 69.31 10/31/02 1,272,668 1,272,668 1,303,820 1,303,820 1,139,420 1,039,335 1.39 No
- - - 743,248 743,248 818,656 818,656 1,056,441 1,000,441 1.56 No
38,500 30.51 04/30/08 1,026,025 1,020,445 929,151 929,151 1,056,415 977,462 1.49 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 1,513,469 1,513,469 1,410,344 1,410,344 1,201,582 1,036,612 1.48 No
- - - 1,274,526 1,118,789 1,293,700 1,168,700 1,116,781 966,345 1.44 Yes
- - - 967,068 967,068 1,046,934 1,046,934 908,926 897,926 1.44 No
100,300 100.00 09/30/98 917,953 917,953 1,143,655 1,143,655 924,372 817,725 1.31 No
27,274 19.97 03/31/03 955,746 955,746 857,361 805,977 1,013,976 883,026 1.48 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 835,284 788,091 860,849 813,627 796,109 737,834 1.29 No
12,692 10.27 03/31/02 366,564 212,359 573,354 542,846 826,248 757,065 1.37 No
89,101 50.74 01/31/00 -925,086 -925,086 1,040,331 1,040,331 867,453 832,331 1.54 No
19,200 10.08 01/31/99 857,881 629,026 - - 907,641 744,000 1.43 No
- - - 602,393 530,860 - - 749,342 644,674 1.26 No
- -----------------------------------------------------------------------------------------------------------------------------------
14,725 41.09 12/31/14 1,106,952 1,106,952 - - 805,113 784,638 1.51 No
8,478 16.39 11/30/99 771,890 757,449 771,208 756,767 763,939 714,771 1.43 No
2,000 51.41 07/15/12 - - - - 1,207,729 1,157,145 2.53 No
95,944 100.00 09/30/04 805,338 805,338 786,732 786,732 786,732 681,194 1.29 No
21,350 22.72 05/31/99 678,603 678,603 694,531 636,603 838,759 759,184 1.44 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 655,996 491,694 704,390 671,390 769,837 724,737 1.54 No
19,500 12.80 08/30/02 376,347 353,008 379,698 379,698 746,215 652,162 1.35 No
80,000 47.17 10/31/02 863,264 863,264 863,264 863,264 748,390 669,414 1.45 No
- - - 436,048 436,048 458,448 458,448 568,796 557,048 1.32 No
- - - 487,317 414,366 580,338 580,338 695,096 598,272 1.42 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 803,727 803,727 - - 746,008 655,753 1.35 No
- - - 320,361 320,361 525,083 525,083 614,815 547,315 1.32 No
2,648 1.82 07/31/04 - - 823,920 823,920 721,451 650,301 1.52 No
5,670 9.22 05/31/03 578,734 438,247 604,902 582,808 628,971 573,708 1.36 No
- - - 636,103 592,450 674,583 611,278 686,669 626,779 1.58 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 490,326 463,815 - - 625,050 554,490 1.40 No
28,800 37.50 02/28/05 685,436 579,567 701,861 539,487 735,104 623,345 1.42 No
81,200 100.00 06/30/13 - - 538,000 538,000 488,034 479,914 1.31 No
20,227 47.13 08/31/06 395,516 329,700 678,524 678,524 565,380 506,314 1.27 No
- -----------------------------------------------------------------------------------------------------------------------------------
558,959 547,739 643,215 631,050 592,157 551,866 1.46 No
32,528 100.00 03/31/06 - No
17,401 53.85 03/31/06 - - - - - - - No
5,814 71.93 10/14/07 - - - - - - - No
8,000 22.62 12/31/06 232,235 232,235 - - 498,833 468,656 1.20 No
- -----------------------------------------------------------------------------------------------------------------------------------
28,572 36.76 11/30/03 551,039 551,039 665,816 665,816 618,870 515,673 1.26 No
9,360 19.77 10/31/03 770,597 770,597 631,195 568,519 589,790 545,379 1.36 No
3,964 9.06 09/30/12 477,626 421,514 539,042 482,740 499,312 457,283 1.28 No
24,500 53.85 03/01/02 - - 718,492 718,492 701,435 655,584 1.25 No
8,634 12.33 08/31/01 652,592 652,592 649,830 470,482 589,777 512,472 1.38 No
- -----------------------------------------------------------------------------------------------------------------------------------
42,537 100.00 08/31/18 - - - - 552,016 498,593 1.28 No
60,060 33.33 10/31/01 703,005 697,389 592,980 592,980 601,878 524,230 1.52 No
37,383 100.00 11/30/10 621,888 621,888 623,671 623,671 555,370 526,211 1.43 No
- - - 469,857 469,857 - - 465,950 451,550 1.30 No
- - - 534,848 534,848 759,398 745,278 693,284 589,155 1.55 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 614,657 614,657 - - 622,752 560,893 1.38 No
- - - 451,595 395,643 541,441 484,592 600,205 560,685 1.71 No
- - - 927,911 927,911 978,204 978,204 661,896 579,443 1.47 No
10,443 10.06 09/30/04 554,114 466,256 - - 578,368 505,383 1.51 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 741,592 741,592 731,131 731,131 630,289 600,289 1.80 No
131,500 100.00 02/28/05 399,257 237,836 562,749 546,847 528,245 469,004 1.36 No
28,742 57.71 07/01/99 507,294 507,294 591,266 591,266 520,468 472,526 1.38 Yes
- - - 514,585 476,322 - - 459,839 410,234 1.26 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - - - 665,322 665,322 505,938 473,438 1.49 No
- - - 764,015 671,237 576,141 549,357 589,467 524,051 1.39 No
- - - 509,422 307,883 511,758 415,681 496,522 450,597 1.50 No
5,886 7.20 05/31/00 565,794 487,794 631,689 631,689 532,902 468,066 1.48 No
- -----------------------------------------------------------------------------------------------------------------------------------
445,879 445,879 530,511 497,981 462,019 422,287 1.42 No
- - - - No
- - - - - - - - - - No
- - - - - - - - - - No
- - - - - - - - - - No
- -----------------------------------------------------------------------------------------------------------------------------------
49,725 100.00 12/31/17 - - 472,651 472,651 400,211 392,752 1.12 No
55,238 79.66 10/24/14 - - 655,341 655,341 455,933 428,842 1.43 No
67,332 79.40 10/24/14 407,837 382,897 406,372 381,432 431,066 408,094 1.42 No
47,188 79.73 03/31/18 - - - - 417,392 399,432 1.33 No
104,146 100.00 08/19/18 306,000 306,000 306,000 306,000 450,883 400,054 1.36 No
- -----------------------------------------------------------------------------------------------------------------------------------
498,391 349,280 434,185 394,685 1.24 No
- - - 240,705 225,596 - - 196,245 176,495 - No
1,560 2.36 01/01/02 257,686 123,684 - - 237,940 218,190 - No
65,000 100.00 08/31/08 503,500 503,500 503,500 503,500 452,800 429,757 1.46 No
10,246 9.99 12/31/00 627,392 627,392 734,084 687,932 519,241 463,224 1.60 No
- -----------------------------------------------------------------------------------------------------------------------------------
52,743 55.72 01/30/08 409,019 409,019 427,743 427,743 441,502 397,370 1.35 No
- - - 603,636 597,518 - - 432,831 399,581 1.25 No
5,500 24.14 09/30/05 364,847 364,847 - - 396,996 361,674 1.38 No
57,440 86.75 10/24/14 - - 403,619 403,619 362,233 346,520 1.32 No
14,979 75.56 09/01/18 112,647 112,647 - - 400,560 372,716 1.43 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 330,896 316,421 - - 368,395 348,395 1.28 No
- - - 346,452 327,860 435,086 107,014 439,071 399,071 1.60 No
- - - 313,312 237,073 396,028 348,457 386,264 367,864 1.32 No
- - - 365,585 365,585 624,884 624,884 534,350 465,317 1.65 No
22,981 100.00 12/31/13 450,300 444,570 459,716 453,986 510,013 471,589 1.37 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 831,544 747,928 395,320 345,132 553,117 476,604 1.49 No
- - - 662,281 662,281 783,506 783,506 671,375 599,609 2.03 No
14,227 25.19 10/31/10 342,342 342,342 382,367 382,367 368,668 323,666 1.31 No
- - - 307,156 307,156 324,912 324,912 324,410 307,810 1.32 No
154,800 72.34 11/30/02 362,571 362,571 390,371 390,371 410,429 346,343 1.41 No
- -----------------------------------------------------------------------------------------------------------------------------------
13,256 37.00 06/30/08 304,780 304,780 353,985 331,274 386,776 368,910 1.35 No
- - - 283,833 275,051 - - 335,539 323,810 1.26 No
- - - 1,009,924 1,009,924 976,827 976,827 875,924 798,041 2.86 No
- - - 209,351 209,351 - - 474,674 426,924 1.64 No
- - - 248,319 248,319 - - 320,067 305,915 1.32 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,675 19.42 11/30/03 498,237 498,237 481,380 481,380 468,227 441,142 1.92 No
- - - 451,280 451,280 402,108 402,108 381,948 374,002 1.56 No
2,000 16.75 10/31/01 327,637 291,161 400,406 365,994 377,428 352,235 1.39 No
30,106 100.00 11/30/02 144,919 144,919 368,472 368,472 355,971 324,344 1.37 No
- - - 219,422 210,609 220,524 213,808 313,540 289,540 1.27 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 341,118 291,158 370,290 316,146 377,493 336,418 1.60 No
7,816 23.99 06/14/00 292,594 66,427 215,389 118,615 308,299 296,049 1.38 No
63,513 44.49 05/31/05 414,514 361,081 412,212 372,843 366,291 305,690 1.31 No
31,500 33.69 01/31/09 84,981 84,981 - - 508,201 426,538 1.78 No
- - - 578,125 578,125 587,340 587,340 586,753 506,066 1.93 No
- -----------------------------------------------------------------------------------------------------------------------------------
15,771 39.73 09/01/07 274,509 274,509 364,810 364,810 365,097 327,876 1.36 No
108,016 100.00 09/30/08 317,333 317,333 320,506 320,506 294,444 289,044 1.24 No
- - - 551,886 551,886 525,883 525,883 469,457 411,505 1.64 No
- - - 387,366 366,094 357,151 328,639 368,516 334,212 1.67 No
83,953 96.92 12/31/98 377,611 337,636 382,596 382,596 373,998 261,635 1.30 No
- -----------------------------------------------------------------------------------------------------------------------------------
4,922 14.99 07/31/03 335,196 305,670 - - 289,787 263,625 1.32 No
- - - - - 68,574 68,574 311,260 303,544 1.41 No
- - - 422,420 411,259 - - 441,562 407,963 1.60 No
46,000 100.00 04/30/08 - - - - 292,969 277,789 1.38 No
- - - - - 288,939 86,089 346,834 321,584 1.79 No
- -----------------------------------------------------------------------------------------------------------------------------------
18,140 56.77 01/31/10 372,120 311,032 226,440 226,440 282,503 272,914 1.62 No
14,495 100.00 03/31/08 - - - - 267,388 254,692 1.34 No
7,822 24.55 08/31/01 370,656 370,656 401,616 401,616 349,041 312,204 1.34 No
- - - 392,563 392,563 - - 352,679 336,491 1.58 No
83,376 100.00 06/01/10 442,992 442,992 - - 307,912 281,815 1.37 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - - - 395,401 359,882 389,903 352,162 1.59 No
- - - 367,442 367,442 452,326 452,326 382,022 338,000 1.66 No
67,332 100.00 10/24/14 347,421 347,421 - - 319,238 276,874 1.50 No
- - - 242,289 193,576 271,380 271,380 293,160 279,660 1.35 No
- - - 408,664 402,517 - - 306,466 286,716 1.42 No
- -----------------------------------------------------------------------------------------------------------------------------------
22,100 64.81 08/31/07 108,849 108,849 295,499 295,499 267,845 247,809 1.34 No
- - - 343,586 259,658 365,556 356,743 370,959 318,001 1.58 No
- - - 263,136 260,550 - - 279,503 252,203 1.39 No
- - - 69,457 69,457 500,172 500,172 577,939 519,967 2.72 No
15,525 100.00 07/01/55 - - - - 230,428 228,218 1.32 No
- -----------------------------------------------------------------------------------------------------------------------------------
5,857 53.41 10/31/02 - - - - 261,941 238,493 1.40 No
- - - 763,198 763,198 691,265 691,265 540,462 473,612 2.20 No
11,034 65.44 11/03/06 - - - - 222,068 205,656 1.27 No
- - - - - 220,030 215,230 199,869 195,069 1.30 No
- - - 234,880 234,880 243,381 243,381 234,806 215,806 1.33 No
5,525 13.89 05/30/01 290,640 290,640 - - 274,352 237,291 1.26 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 76,643 76,643 - - 314,965 277,965 1.47 No
- - - 221,526 141,477 254,694 254,694 248,574 238,574 1.31 No
11,500 15.93 03/31/99 244,386 242,191 215,668 215,668 304,598 252,876 1.58 No
7,000 52.05 04/25/06 298,467 247,467 313,799 313,799 243,273 239,759 1.37 No
38,127 46.59 01/31/07 389,365 280,187 - - 469,118 392,112 2.21 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 298,467 298,467 333,632 333,632 353,523 325,273 1.87 No
- - - - - - - 252,649 232,399 1.35 No
17,500 50.00 05/30/10 -13,790 -2,487,940 -15,284 -15,284 255,378 238,858 1.46 No
- - - 279,492 279,492 351,187 351,187 342,324 318,048 1.88 No
5,900 42.60 06/30/99 269,877 269,877 261,417 261,417 259,508 245,456 1.55 No
- -----------------------------------------------------------------------------------------------------------------------------------
245,092 245,092 229,813 214,617 1.33 No
- - - - No
- - - - - - - - - - No
- - - - - - - - - - No
- - - - - - - - - - No
- -----------------------------------------------------------------------------------------------------------------------------------
5,154 11.75 03/04/03 208,445 208,445 249,970 249,970 314,007 277,771 1.53 No
5,330 10.70 03/01/03 249,183 242,167 296,444 294,844 258,916 221,736 1.17 No
- - - 392,356 392,356 406,200 406,200 294,709 272,709 1.56 No
- - - - - 254,738 244,988 245,526 235,776 1.70 No
6,000 27.98 01/01/04 158,439 158,439 167,496 167,496 210,245 196,520 1.35 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,581 28.88 10/08/02 - - - - 235,177 211,833 1.36 No
- - - 298,465 247,675 - - 263,891 238,540 1.47 No
- - - 211,405 211,405 245,032 245,032 207,371 200,371 1.49 No
23,830 67.28 01/31/02 157,813 157,813 181,099 181,099 237,766 199,864 1.32 No
5,000 13.77 11/01/00 212,765 187,957 - - 291,397 254,518 1.55 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 182,153 104,203 - - 215,762 196,782 1.30 No
- - - 358,488 358,488 380,950 380,950 281,845 247,737 1.73 No
11,282 100.00 06/07/18 - - - - 191,884 189,289 1.31 No
8,000 16.00 05/31/00 193,048 141,643 186,091 143,573 237,813 203,785 1.43 No
- - - - - - - 245,773 210,273 1.39 No
- -----------------------------------------------------------------------------------------------------------------------------------
20,695 100.00 04/30/13 - - - - 209,793 183,549 1.20 No
- - - 229,862 211,056 226,741 217,585 223,011 207,011 1.44 No
- - - 173,100 166,142 211,796 200,782 204,128 178,878 1.39 No
21,902 100.00 08/01/18 229,106 229,106 212,064 212,064 203,645 194,334 1.50 No
- - - 278,861 278,861 - - 261,136 240,136 1.45 No
- -----------------------------------------------------------------------------------------------------------------------------------
10,125 100.00 01/31/14 - - - - 162,000 159,975 1.06 No
- - - 117,792 117,792 - - 266,595 235,595 1.66 No
- - - 190,224 160,299 - - 255,900 195,900 1.37 No
10,125 100.00 01/31/19 - - - - 136,688 133,144 1.06 No
15,207 25.99 02/28/00 207,663 190,597 213,128 187,535 212,742 183,974 1.38 No
- -----------------------------------------------------------------------------------------------------------------------------------
11,440 60.61 03/11/05 - - 176,469 130,093 169,655 159,004 1.32 No
- - - 250,759 250,759 236,060 236,060 238,060 209,675 1.46 No
12,800 28.66 12/31/00 - - - - 204,142 190,197 1.51 No
- - - - - - - 203,895 187,895 1.57 No
- - - 283,797 275,739 - - 203,737 187,487 1.47 No
- -----------------------------------------------------------------------------------------------------------------------------------
11,961 42.37 03/31/02 62,225 62,225 97,607 97,607 219,620 188,979 1.22 No
- - - - - - - 221,648 201,524 1.60 No
6,555 70.07 11/30/07 - - - - 164,455 156,494 1.36 No
27,909 71.56 06/30/03 206,695 197,885 221,401 210,035 183,658 162,007 1.36 No
- - - - - 203,989 203,989 172,690 161,690 1.25 No
- - - - - 223,451 223,451 192,534 171,784 1.32 No
- -----------------------------------------------------------------------------------------------------------------------------------
19,647 43.66 06/30/00 218,965 218,965 189,604 189,604 198,655 162,776 1.50 No
- - - - - 166,014 166,014 174,456 164,102 1.58 No
16,464 100.00 05/31/08 205,856 205,856 205,526 205,526 164,836 148,557 1.32 No
10,125 100.00 01/31/13 - - - - 136,688 133,650 1.01 No
- -----------------------------------------------------------------------------------------------------------------------------------
2,100 6.27 12/31/98 195,484 195,484 - - 174,175 161,425 1.28 No
- - - 239,808 239,808 268,046 268,046 240,491 212,687 1.85 No
- - - - - 177,995 177,995 220,292 194,667 1.46 No
- - - 206,227 206,227 217,500 217,500 194,378 169,338 1.38 No
- -----------------------------------------------------------------------------------------------------------------------------------
280,516 217,416 245,516 245,516 237,952 203,952 1.99 No
- - - - No
- - - - - - - - - - No
- - - - - - - - - - No
- - - 131,519 126,764 - - 147,939 142,791 1.39 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 278,130 278,130 291,403 291,403 262,601 240,320 1.97 No
- - - 169,887 169,887 241,727 241,727 233,190 199,480 1.78 No
- - - 127,554 120,009 - - 156,502 151,502 1.53 No
6,240 16.51 10/31/01 167,243 163,655 161,991 161,991 133,031 122,792 1.26 No
- -----------------------------------------------------------------------------------------------------------------------------------
9,000 100.00 01/31/13 - - - - 126,000 123,300 1.01 No
17,500 100.00 09/01/12 158,060 158,060 157,808 157,808 156,162 141,392 1.42 No
- - - 347,583 347,583 - - 242,466 219,466 1.64 No
- - - 264,935 264,935 269,714 269,714 244,624 219,213 1.67 No
- - - 222,045 222,045 219,698 219,698 167,190 144,706 1.36 No
- -----------------------------------------------------------------------------------------------------------------------------------
24,000 100.00 12/31/03 - - 183,338 179,838 149,684 128,371 1.33 No
- - - 111,206 82,389 - - 142,500 126,500 1.47 No
3,000 16.22 04/30/00 161,693 153,408 - - 152,773 124,699 1.36 No
- - - 184,932 184,932 186,367 186,367 145,565 134,815 1.36 No
6,500 100.00 04/30/03 134,853 134,853 126,307 126,307 117,160 112,809 1.36 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,500 100.00 04/30/03 125,675 125,675 127,631 127,631 118,289 113,914 1.38 No
- - - 140,040 126,039 - - 126,664 119,414 1.25 No
6,225 100.00 06/30/03 122,642 122,642 125,253 125,253 121,888 117,551 1.46 No
- - - 166,073 166,073 - - 147,272 139,022 1.48 No
- - - 111,320 111,320 - - 131,783 121,783 1.33 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,500 100.00 04/30/03 119,807 119,807 121,848 121,848 112,847 108,570 1.37 No
- - - 182,954 182,954 - - 138,544 126,044 1.34 No
24,107 69.13 10/31/07 62,443 62,443 89,208 89,208 115,204 102,371 1.31 No
18,000 59.68 03/31/03 168,514 166,888 - - 169,000 129,581 1.34 No
- - - 177,879 177,879 - - 147,347 123,847 1.40 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - - - 139,101 124,847 157,420 148,396 1.64 No
- - - 143,299 120,765 - - 122,069 111,569 1.24 No
- - - 161,445 161,445 - - 142,758 133,008 1.31 No
- - - 134,907 134,907 - - 138,585 128,335 1.45 No
- - - 132,464 132,464 - - 117,157 110,157 1.25 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,500 100.00 12/31/01 112,941 112,941 121,302 121,302 112,356 108,087 1.45 No
6,500 53.01 12/19/04 198,596 198,596 - - 167,313 150,469 1.69 No
- - - 149,499 109,609 - - 134,095 120,595 1.30 No
- - - 159,409 159,409 - - 136,544 121,003 1.26 No
- - - 178,284 100,609 - - 140,655 127,655 1.43 No
9,314 57.49 12/20/12 118,411 118,411 127,836 127,836 127,163 115,722 1.52 No
- - - 140,812 140,812 - - 125,199 116,799 1.40 No
6,500 100.00 09/30/02 112,425 112,425 90,561 90,561 101,968 97,878 1.42 No
6,510 100.00 11/30/05 101,501 101,501 101,123 101,123 96,125 92,147 1.36 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 154,314 119,481 - - 130,279 110,179 1.38 No
- - - 127,269 127,269 - - 120,973 106,292 1.33 No
- - - - - - - 118,508 107,508 1.34 No
6,272 100.00 04/30/03 99,993 99,993 102,344 102,344 95,157 91,286 1.36 No
6,517 100.00 10/31/02 101,069 101,069 101,798 101,798 96,544 92,554 1.38 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 137,990 137,990 157,614 157,614 122,581 113,581 1.44 No
- - - 157,571 157,571 - - 128,314 119,314 1.44 No
- - - 124,257 124,257 - - 116,961 106,953 1.36 No
33,430 55.78 08/31/13 104,360 104,360 111,200 111,200 131,503 122,212 1.36 No
6,287 40.46 10/31/01 131,973 131,973 - - 133,390 101,014 1.32 No
- -----------------------------------------------------------------------------------------------------------------------------------
9,800 50.70 12/31/02 111,626 102,426 - - 109,929 96,922 1.31 No
- - - 118,652 118,652 - - 112,082 104,582 1.44 No
- - - 284,667 284,667 - - 223,168 196,010 2.20 No
- - - 174,200 174,200 - - 127,547 115,547 1.47 No
6,500 100.00 12/31/02 91,077 91,077 93,039 93,039 86,047 82,247 1.37 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,510 100.00 01/31/06 89,357 89,357 92,478 92,478 85,821 82,029 1.39 No
3,983 17.23 02/28/99 92,983 92,983 132,859 132,859 101,607 77,153 1.31 No
- - - 146,633 146,633 - - 114,513 104,513 1.53 No
- - - 191,055 191,055 - - 158,635 142,785 2.09 No
- - - 139,241 139,241 - - 103,932 93,642 1.31 No
- -----------------------------------------------------------------------------------------------------------------------------------
36,334 100.00 02/28/08 - - 100,000 100,000 90,675 83,743 1.20 No
- - - 100,761 100,761 105,476 105,476 98,055 92,658 1.40 No
- - - 131,775 128,449 - - 101,504 89,808 1.40 No
- - - 99,506 99,506 - - 90,979 86,407 1.31 No
- - - 184,894 148,750 - - 178,827 157,395 1.94 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 120,798 119,412 - - 98,224 89,224 1.41 No
2,500 100.00 03/31/09 - - - - 93,778 93,228 1.45 No
- - - 104,976 104,976 116,222 107,238 103,377 103,377 1.71 No
- - - 107,269 91,299 - - 104,098 93,898 1.48 No
- - - 163,611 99,761 - - 105,795 83,295 1.33 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 107,314 56,769 - - 93,294 83,574 1.29 No
- - - 100,059 100,059 - - 84,148 76,768 1.25 No
- - - 104,460 99,890 - - 89,938 82,438 1.40 No
- - - 135,231 135,231 - - 98,757 86,382 1.40 No
- - - 110,944 95,300 - - 107,872 98,372 1.61 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - - - 111,918 101,518 117,025 104,025 1.75 No
- - - 116,730 116,730 - - 136,234 121,984 1.98 No
- - - 87,066 87,066 - - 84,054 78,554 1.30 No
5,500 100.00 11/30/05 71,727 71,727 77,779 77,779 71,819 68,628 1.36 No
- - - 95,592 72,567 - - 89,117 78,117 1.30 No
- -----------------------------------------------------------------------------------------------------------------------------------
6,500 100.00 01/31/06 73,014 73,014 76,491 76,491 70,563 67,046 1.36 No
6,528 100.00 05/31/05 73,945 73,945 71,229 71,229 69,983 66,782 1.36 No
- - - 147,240 147,240 - - 92,805 85,301 1.52 No
- - - 95,544 95,544 - - 95,937 87,437 1.52 No
2,800 14.29 01/31/00 87,361 82,140 - - 90,256 78,260 1.45 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 88,277 88,277 - - 94,756 86,506 1.53 No
- - - 139,621 139,621 - - 100,499 92,625 1.65 No
2,091 11.27 09/30/98 - - - - 91,472 85,352 1.33 No
- - - 428,166 428,166 392,734 392,734 340,272 315,522 5.41 No
- - - 54,459 40,456 - - 72,664 66,664 1.21 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 101,490 100,372 - - 90,456 78,828 1.28 No
- - - 111,200 88,700 - - 98,693 92,159 1.66 No
- - - - - - - 92,267 84,767 1.27 No
1,600 5.97 10/31/01 160,647 152,072 - - 145,180 132,445 2.55 No
5,500 100.00 02/28/06 70,142 70,142 62,934 62,934 65,284 62,199 1.36 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 77,289 72,489 - - 75,882 70,382 1.32 No
- - - 87,458 83,818 - - 81,060 69,396 1.31 No
1,000 11.76 07/01/98 74,743 51,944 - - 83,795 78,795 1.57 No
- - - 87,617 87,617 - - 81,238 72,988 1.35 No
- - - 80,746 43,526 - - 71,119 65,071 1.31 No
- -----------------------------------------------------------------------------------------------------------------------------------
- - - 91,723 91,723 - - 83,055 70,555 1.36 No
- - - 103,850 103,850 - - 80,349 69,305 1.37 No
- - - 110,330 110,330 - - 83,125 73,758 1.38 No
- - - 72,385 66,042 - - 73,191 68,691 1.50 No
- - - 85,752 81,951 - - 89,537 82,912 1.65 No
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CROSS - COLLATERALIZED CROSS - COLLATERALIZED
FEE OR LEASEHOLD LTV RATIO U/W DSCR
- -----------------------------------------------------------------
<S> <C> <C>
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee
- - -
- - -
- - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Both Fee/Lease - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Both Fee/Lease - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee
- - -
- - -
- - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Leasehold - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee
- - -
- - -
- - -
- - -
- -----------------------------------------------------------------
Fee - -
Fee 67.14 1.41
Fee 74.62 1.41
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee
- - -
- - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee 74.62 1.41
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee 51.26 2.58
Fee 79.25 1.58
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee 67.14 1.41
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee 51.26 2.58
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee 79.25 1.58
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee
- - -
- - -
- - -
- - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee 38.03 2.52
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee 79.25 1.58
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee 69.64 1.37
- -----------------------------------------------------------------
Fee
- - -
- - -
- - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee 69.64 1.37
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee 79.25 1.58
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee 38.03 2.52
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
Fee - -
Fee - -
Fee - -
Fee - -
Fee - -
- -----------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONTROL PROPERTY PROPERTY CUT-OFF
NUMBER LOAN NUMBER PROPERTY NAME COUNTY ZIP CODE DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3 400029229 Granada Apartments Erie 16509 $18,745,566
11 924 Westminster Towers (1) Union 07201 9,939,997
12 400029303 Arbour Village Apartments Orange 32826 9,857,540
14 930 Meridian East Apartments Pima 85710 9,071,554
20 400029261 Evans Mill Place Apartments Dekalb 30058 8,094,812
- -----------------------------------------------------------------------------------------------------------------------------------
24 400031116 175 Beacon Street Middlesex 02143 7,965,441
27 400031126 Park Villa Townhomes Tulsa 74145 7,284,197
31 931 Fountain Springs Apartments Maricopa 85016 6,386,775
37 932 Hayden Place Apartments Maricopa 85281 5,889,662
40 400031127 Hilgard Apartments (1) Los Angeles 90024 5,383,436
- -----------------------------------------------------------------------------------------------------------------------------------
41 400031122 Falls of Point West Apartments Harris 77036 5,383,318
43 09-0001189 North Pointe Apartments Harris 77067 5,341,666
44 917 Irvington Arms Apartments Essex 07111 5,302,632
46 M0345 Lantern Square Apartments Shelby 38128 5,187,859
47 944 Fountain Ridge Apartments Maricopa 85015 5,054,448
- -----------------------------------------------------------------------------------------------------------------------------------
61 400030919 Foxwood Crossing Apartments Milwaukee 53228 4,436,350
64 M0536 Bluegrass Village Apartments Sumner 37075 4,289,960
70 911 Fountainhead Apartments Maricopa 85017 3,972,677
71 915 Cambridge Gardens Apartments Essex 07112 3,970,897
73 M0543 Perkins Woods Apartments Shelby 38118 3,920,824
- -----------------------------------------------------------------------------------------------------------------------------------
75 400031124 Sunshine Properties Portfolio 3,791,625
75 400031124A Brentwood Terrace Travis 78752 -
75 400031124B Circle Oaks I Apartments Travis 78752 -
75 400031124C Carmel Apartments Travis 78752 -
75 400031124D Vineyard Apartments Travis 78752 -
- -----------------------------------------------------------------------------------------------------------------------------------
81 582 Field & Stream/Woodridge Apts. 3,486,035
81 582A Field & Stream Apartments Fayette 40505 -
81 582B Woodridge Apartments Fayette 40504 -
85 639 89-07, 89-11 34th Avenue Apartments Queens 11372 3,297,582
89 935 Jones Street Terrace San Francisco 94109 3,194,371
- -----------------------------------------------------------------------------------------------------------------------------------
90 400031118 Rayo de Sol Apartments Dallas 76062 3,187,886
91 916 Bayfront Manor/Baypark Apartments Dade 33137 3,179,729
97 400031129 Bay View Apartments King 98003 2,993,287
100 636 Albion Terrace Apartments Marin 94903 2,979,417
102 M0433 Seven Courts Apartments Fulton 30311 2,916,266
- -----------------------------------------------------------------------------------------------------------------------------------
103 925 Bella Apartments Jackson 64112 2,887,944
108 400030918 Meadow Brook Apartments Butler 16001 2,772,352
109 M0553 Red Oaks Apartments Shelby 38116 2,743,579
110 610 Sutter House Apartments San Francisco 94109 2,741,484
117 400031119 Sunrise Apartments Wayne 48180 2,591,718
- -----------------------------------------------------------------------------------------------------------------------------------
123 400030971 Cielo Hills Apartments Bexar 78223 2,433,795
127 573 Twin Palms Apartments San Mateo 94403 2,374,931
132 937 Creekside Manor Apartments San Mateo 94303 2,302,195
133 621 114 - 05 170th Street Queens 11434 2,292,873
136 611 Pacifica Villas Apartments San Diego 92101 2,212,946
- -----------------------------------------------------------------------------------------------------------------------------------
142 400031131 Tuscany Apartments Los Angeles 90401 2,093,661
143 09-0001156 Gateway Apartments Dallas 75240 2,093,420
145 M0435 Peachcrest Gardens Apartments DeKalb 30032 2,064,125
146 938 O'Keefe Apartments San Mateo 94133 2,025,014
- -----------------------------------------------------------------------------------------------------------------------------------
148 591 16 Barrow Street New York 10014 1,991,433
150 900 Compass Pointe Apartments Jackson 39567 1,945,944
151 510 Sahara View Apartments Clark 89102 1,940,119
153 902 Carriage House Apartments Jackson 39553 1,906,015
- -----------------------------------------------------------------------------------------------------------------------------------
155 519 Joplin Portfolio 1,888,326
155 519A Airport Drive Apartments Jasper 64801 -
155 519B Cherry Street Jasper 64834 -
155 519C Park Lane Jasper 64834 -
155 519D Terrill Lane Apartments Jasper 64834 -
- -----------------------------------------------------------------------------------------------------------------------------------
159 400030949 Gardsman Apartments Marin 94901 1,795,911
162 606 Marquee Apartments Harris 77056 1,741,856
163 400031117 41 Belmont Street Apartments Middlesex 02143 1,717,548
166 627 Marine Plaza Apartments Dade 33138 1,668,317
170 527 Colonial Village - Regency Apartments Jackson 26164 1,637,348
- -----------------------------------------------------------------------------------------------------------------------------------
172 569 Versailles Apartments Weber 84201 1,617,205
173 09-0001174 Hunter's Crossing Apartments Potter 79106 1,596,702
175 594 72-82 Wadsworth Terrace Manhattan 10040 1,582,981
177 M0434 Harbour Vines Apartments Dekalb 30311 1,550,587
178 524 Windsor Square Apartments Polk 33801 1,544,857
- -----------------------------------------------------------------------------------------------------------------------------------
184 500 Stuyvesant Avenue Essex 07111 1,487,244
185 940 41 - 98 Forley Street Queens 11373 1,445,507
187 521 Maryland Green Apartments Maricopa 85014 1,424,594
190 585 Timpanogos Apartments Utah 84601 1,390,750
- -----------------------------------------------------------------------------------------------------------------------------------
191 504 101 Lincoln Road Kings 11225 1,384,504
193 M0406 Garden Trails Apartments Bibb 35184 1,356,840
196 614 Pinehill Plaza & Apartments Broward 33024 1,342,751
199 586 Dorian Court Delaware 19013 1,305,140
- -----------------------------------------------------------------------------------------------------------------------------------
200 09-0001187 Lufkin Apartment Portfolio 1,298,057
200 09-0001187A The Hidden Oaks Angelina 75904 -
200 09-0001187B Azalea Trails Angelina 75904 -
200 09-0001187C Kentwood Angelina 75901 -
- -----------------------------------------------------------------------------------------------------------------------------------
201 622 Ignacio Hills Apartments - XII Marin 94949 1,264,836
204 623 Ignacio Hills Apartments - XVI Marin 94596 1,223,007
208 515 Partridge Apartments Marion 97303 1,167,817
210 595 Renshaw Terrace Delaware 19013 1,135,771
212 09-0001131 Emery Park Apartments Dallas 75208 1,112,492
- -----------------------------------------------------------------------------------------------------------------------------------
214 933 112 Lincoln Street Essex 07107 1,069,075
217 535 Sycamores Apartments Utah 84606 1,043,908
219 605 Maple Place North Apartments Dekalb 30307 1,021,008
220 608 Quinnipiac Arms New Haven 06513 1,012,746
222 543 Centre Park Place Apartments Berks 19602 1,006,422
- -----------------------------------------------------------------------------------------------------------------------------------
225 602 Hamilton Park House New Haven 06702 994,860
226 511 Sedgley Gardens Philadelphia 19130 990,984
227 532 Helena Gardens Apartments San Bernardino 91763 990,764
228 536 3044 Kingsbridge Avenue Bronx 10462 980,977
229 558 Banyan Woods Broward 33060 969,343
- -----------------------------------------------------------------------------------------------------------------------------------
230 551 389 Massachusetts Avenue Middlesex 02174 965,254
233 592 Taos Apartments Brazos 77840 942,811
234 600 Rosslyn Heights Harris 77040 931,433
235 554 Cedar Village Apartments Volusia 32119 918,767
237 546 154 Rockaway Parkway Kings 11212 895,040
- -----------------------------------------------------------------------------------------------------------------------------------
240 601 Douglas Park Apartments Dallas 75219 856,305
241 609 Mayfair Garden Apartments Philadelphia 19135 855,998
242 501 Bradford Place Apartments Mecklenburg 28208 850,695
245 934 140 - 146 Chancellor Avenue Essex 07112 847,681
246 549 148 - 156 Chancellor Avenue Essex 07112 845,058
- -----------------------------------------------------------------------------------------------------------------------------------
247 528 Sherwood Court Apartments Guilford 27403 833,878
251 604 Harrison Avenue Apartments Essex 07018 796,086
252 508 Clearview Apartments Marion 97303 778,545
253 635 92 - 96 Waldo Avenue Hudson 07306 767,633
257 M0436 White Oak Arms Apartments Dekalb 30311 747,871
259 550 Randolph Park Apartments Cuyahoga 44122 745,407
261 616 Quail Lodge Apartments San Mateo 94303 736,502
262 945 9416 34th Road Queens 11372 727,738
- -----------------------------------------------------------------------------------------------------------------------------------
263 567 98 Strathmore Road Suffolk 02146 726,428
264 518 Southside Apartments Marion 97302 710,422
265 537 Huntington Apartments Los Angeles 91768 707,656
267 904 Churchill Townhomes Quachita 71203 681,425
268 634 354 East 21st Street Kings 11226 677,749
- -----------------------------------------------------------------------------------------------------------------------------------
269 542 Lawndale Apartments Harris 77023 671,280
270 509 Garden Walk Apartments Harris 77055 669,623
271 559 Windswept Apartments Northampton 18020 650,488
272 568 Northshore Manor Apartments Lorain 44074 647,407
273 538 Golden Eagle Apartments Hampden 01108 647,370
- -----------------------------------------------------------------------------------------------------------------------------------
274 534 Oakland Oaks Dallas 75060 646,539
275 939 Adobe House Apartments Duval 32211 646,185
276 541 Northern Pine Apartments Galveston 77539 645,384
277 641 259-61 & 269 West Walnut Lane Philadelphia 19144 638,850
279 588 Village at Deer Park Harris 77536 626,780
- -----------------------------------------------------------------------------------------------------------------------------------
282 565 Howard Warren Apartments Dade 33139 621,865
283 577 Holmesburg Station Apartments Philadelphia 19136 617,115
285 561 Wingate Apartments Philadelphia 19136 607,161
286 530 Prospect Square Essex 07111 606,615
287 525 506 South Broadway Westchester 10705 602,978
- -----------------------------------------------------------------------------------------------------------------------------------
289 615 The Blount Apartments Broward 33313 596,607
290 529 LaPetite Apartments Harris 77055 596,025
291 637 Avenue R Duplexes Collin 75074 590,909
292 514 Peppertree Apartments King 98155 583,909
293 612 Newport Apartments (1) Philadelphia 19102 580,168
- -----------------------------------------------------------------------------------------------------------------------------------
295 579 8th Street Apartments Dade 33139 570,701
296 596 Regency House Allen 46807 565,423
297 632 527 West 48th Street New York 10036 558,863
298 540 Whisperwoods Apartments Dallas 75042 556,226
299 522 Palomares Apartments Los Angeles 91766 549,874
- -----------------------------------------------------------------------------------------------------------------------------------
300 503 Richmond Apartments Dallas 75209 545,050
301 572 Fernwood Apartments Los Angeles 90028 535,015
302 936 2267 - 2269 Kennedy Boulevard Hudson 07304 518,899
303 570 Baycrest Apartments Virginia 23503 518,583
304 587 45 Church Street & 35 Railroad Avenue Suffolk 11772 517,423
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mortgage loan contains 1 unit occupied by the building superintendent
with no monthly rental income and is therefore left out of this schedule.
<PAGE>
<TABLE>
<CAPTION>
STUDIOS 1 BEDROOM 2 BEDROOM
CUT-OFF ------- --------- ---------
DATE BALANCE UTILITIES PAID WTD. AVG. WTD. AVG. WTD. AVG.
PER UNIT BY TENANT # UNITS RENT / MONTH # UNITS RENT / MONTH # UNITS RENT / MONTH
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$25,128 Electricity/Gas - - 598 $376 148 $480
48,966 No utilities 34 626 106 779 61 937
24,644 Electric only - - 237 456 163 553
28,983 Electric only - - 174 425 134 568
28,910 Electricity/Gas - - 19 523 229 574
- -----------------------------------------------------------------------------------------------------------------------
144,826 Electric only - - 1 1,200 54 1,844
28,124 All utilities - - 78 420 136 573
16,719 No utilities 152 342 171 427 59 578
36,133 Electric only 41 447 18 550 104 630
122,351 Electricity/Gas 8 951 13 1,258 18 1,597
- -----------------------------------------------------------------------------------------------------------------------
14,789 Electric only 36 340 144 382 184 498
17,806 Electricity/Gas - - 172 376 128 513
20,633 Electric only 94 418 127 561 36 666
22,955 All utilities - - 42 435 142 524
18,052 All utilities 128 349 144 449 8 580
- -----------------------------------------------------------------------------------------------------------------------
61,616 Electricity/Gas - - - - 72 888
28,223 Electricity/Gas - - 40 460 82 605
14,552 Electric only 56 282 160 353 57 444
30,545 Electric only - - 1 600 123 708
23,478 Electricity/Gas - - 84 435 83 485
- -----------------------------------------------------------------------------------------------------------------------
24,621
- Electric only - - 26 460 12 586
- Electric only 1 340 11 475 18 579
- Electric only 5 385 21 443 12 540
- Electric only 6 395 30 450 12 550
- -----------------------------------------------------------------------------------------------------------------------
21,387
- All utilities - - 60 346 19 354
- Electricity/Gas - - 16 339 63 413
24,794 Electric only - - 122 500 - -
39,930 Electric only 74 629 6 874 - -
- -----------------------------------------------------------------------------------------------------------------------
19,924 No utilities 2 350 88 454 60 559
34,562 Electricity/Gas 18 400 42 625 30 715
36,064 Electric only 2 445 44 471 37 608
74,485 Electric only 1 710 15 894 20 1,053
15,268 Electric only - - 47 390 144 447
- -----------------------------------------------------------------------------------------------------------------------
49,792 Electricity/Gas 6 585 2 690 49 850
23,103 Electricity/Gas - - 24 391 72 459
17,701 Electric only - - - - 77 485
55,949 Electricity/Gas 33 655 16 708 - -
20,248 Electric only - - 52 465 76 516
- -----------------------------------------------------------------------------------------------------------------------
24,097 No utilities - - 20 395 40 531
41,665 Electricity/Gas 3 620 42 759 12 980
42,633 Electricity/Gas 6 602 30 758 18 845
29,024 Electric only 11 500 33 650 29 750
22,129 Electric only - - 68 373 32 473
- -----------------------------------------------------------------------------------------------------------------------
87,236 Electric only 6 898 10 1,025 4 1,218
27,545 Electricity/Gas - - 16 450 36 575
13,947 Electricity/Gas - - 40 400 108 452
50,625 Electric only - - 16 795 24 958
- -----------------------------------------------------------------------------------------------------------------------
142,245 Electricity/Gas - - 7 482 7 482
17,221 Electric only 16 360 52 404 36 498
23,952 Electric only 56 425 24 475 1 500
18,686 Electric only - - - - 84 525
- -----------------------------------------------------------------------------------------------------------------------
32,557
- Electric only - - - - 32 404
- All utilities - - - - 12 380
- All utilities - - - - 6 380
- All utilities - - - - 8 395
- -----------------------------------------------------------------------------------------------------------------------
46,049 Electric only - - 12 750 9 1,025
17,246 No utilities - - 53 573 44 699
61,341 Electric only - - 14 884 14 970
25,666 Electricity/Gas 19 422 44 472 2 496
11,531 All utilities - - 8 276 24 321
- -----------------------------------------------------------------------------------------------------------------------
25,269 Electricity/Gas - - 22 415 41 507
15,809 Electricity/Gas - - 16 363 71 476
18,845 Electricity/Gas - - 42 532 42 619
12,505 Electricity/Gas - - 16 395 105 430
6,437 Electric only - - 142 311 97 380
- -----------------------------------------------------------------------------------------------------------------------
23,238 Electric only - - 46 555 18 633
22,239 Electric only 38 550 27 690 - -
18,264 No utilities - - 78 477 - -
31,608 Gas/Water - - 43 480 1 575
- -----------------------------------------------------------------------------------------------------------------------
16,482 Electric only - - 48 523 36 647
27,137 Electric only - - - - 47 394
31,227 Electricity/Gas 2 425 33 498 8 600
16,314 Electricity/Gas - - - - 80 412
- -----------------------------------------------------------------------------------------------------------------------
9,545
- Electric only 16 295 24 375 32 435
- Electric only - - 20 375 32 400
- Electric only - - 12 325 - -
- -----------------------------------------------------------------------------------------------------------------------
63,242 Electricity/Gas - - - - 20 956
61,150 Electric only - - - - 20 938
12,694 Electric only - - 8 364 84 443
14,750 Electric only 4 304 61 394 12 412
17,383 Electric only 12 350 37 450 15 550
- -----------------------------------------------------------------------------------------------------------------------
24,862 Electric only - - 33 545 10 675
35,997 Electric only - - 5 485 24 541
30,940 Electricity/Gas - - 24 518 9 669
25,319 Electricity/Gas - - 24 482 16 584
20,128 Water only - - 37 459 13 550
- -----------------------------------------------------------------------------------------------------------------------
10,584 No utilities 73 315 19 450 1 475
41,291 Electricity/Gas - - 16 800 8 789
23,590 Electricity/Gas - - - - 42 550
25,153 Electric only - - 15 520 23 605
23,643 Electricity/Gas - - 40 559 1 720
- -----------------------------------------------------------------------------------------------------------------------
34,473 Electric only 9 675 19 850 - -
17,459 Electric only - - 18 390 36 414
15,524 Electric only - - - - 60 486
17,669 All utilities 1 275 38 335 13 405
21,310 Electric only - - 34 473 7 619
- -----------------------------------------------------------------------------------------------------------------------
14,272 No utilities - - 36 460 24 560
16,151 Electric only 12 338 41 368 - -
19,334 Electric only - - - - 44 399
23,547 Electricity/Gas - - 34 575 2 625
23,474 Electric only - - 28 535 4 625
- -----------------------------------------------------------------------------------------------------------------------
23,163 All utilities - - - - 36 415
26,536 Electric only 3 450 24 690 3 827
8,110 Electric only - - 72 338 24 460
15,992 Electricity/Gas 28 433 19 523 1 600
18,697 Electricity/Gas - - - - 40 424
24,847 Water only - - - - 30 500
35,072 Electric only 5 596 16 663 - -
16,924 Electric only 2 380 18 480 13 590
- -----------------------------------------------------------------------------------------------------------------------
40,357 Electric only 8 525 1 800 6 1,000
11,100 Electric only - - - - 64 487
19,657 Electricity/Gas - - 32 427 4 550
21,295 Electric only - - 16 410 16 480
19,934 Electricity/Gas 5 571 20 574 7 700
- -----------------------------------------------------------------------------------------------------------------------
7,459 Electric only 1 275 50 299 39 339
16,741 Electric only - - 8 365 24 465
32,524 Electricity/Gas - - - - 20 535
21,580 Electric only - - 6 428 24 525
14,386 No utilities 1 325 20 442 24 492
- -----------------------------------------------------------------------------------------------------------------------
17,014 Electricity/Gas - - 22 413 16 500
12,427 Water/Electricity 8 280 40 315 4 425
11,323 No utilities - - 4 385 49 454
31,943 Electric only 1 475 10 576 9 749
14,245 Electric only - - 18 321 26 383
- -----------------------------------------------------------------------------------------------------------------------
22,209 Electric only 20 499 8 646 - -
18,150 Electric only - - 24 409 10 497
18,399 Electric only - - 27 410 6 495
19,568 Electricity/Gas - - 18 601 13 696
33,499 Electricity/Gas - - 2 525 6 742
- -----------------------------------------------------------------------------------------------------------------------
24,859 Electricity/Gas - - 12 447 12 523
16,556 Electricity/Gas - - 20 370 16 470
26,860 All utilities - - 1 450 21 598
19,464 Electricity/Gas - - 18 517 12 611
12,893 No utilities 11 483 18 756 15 851
- -----------------------------------------------------------------------------------------------------------------------
25,941 Electric only 14 500 7 700 - -
15,706 Electric only - - 33 343 3 423
27,943 Electric only 10 594 10 692 - -
16,855 All utilities 1 300 20 412 12 502
22,911 Electric only - - - - 24 550
- -----------------------------------------------------------------------------------------------------------------------
10,901 Electricity/Gas 6 290 34 351 9 498
12,159 No utilities 34 340 10 450 - -
17,893 Electricity/Gas - - 24 527 5 657
28,810 Electric only - - - - 18 493
20,697 Electric only 2 600 20 701 3 838
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
3 BEDROOM 4 BEDROOM
--------- ---------
WTD. AVG. WTD. AVG.
# UNITS RENT / MONTH # UNITS RENT / MONTH ELEVATOR(S)
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
- - - - No
1 - - - Yes
- - - - No
4 854 - - No
32 720 - - No
- -----------------------------------------------------------------
- - - - Yes
45 671 - - No
- - - - No
- - - - No
3 2,142 1 4,500 Yes
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
42 625 - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
30 770 - - No
- - - - No
6 767 - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
11 800 - - Yes
- - - - Yes
- -----------------------------------------------------------------
10 725 - - No
1 1,300 1 1,300 No
- - - - Yes
4 1,336 - - No
- - - - Yes
- -----------------------------------------------------------------
1 1,625 - - No
24 531 - - No
78 515 - - No
- - - - Yes
- - - - No
- -----------------------------------------------------------------
37 664 4 725 No
- - - - Yes
- - - - Yes
6 850 - - Yes
- - - - Yes
- -----------------------------------------------------------------
4 1,392 - - Yes
24 680 - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
9 625 - - No
- - - - No
18 635 - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
18 1,300 - - No
4 800 - - No
- - - - No
- - - - Yes
104 347 6 368 No
- -----------------------------------------------------------------
1 750 - - No
14 588 - - No
- - - - Yes
3 550 - - No
1 450 - - No
- -----------------------------------------------------------------
- - - - Yes
- - - - Yes
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - Yes
3 415 - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - Yes
- - - - No
- - - - No
- - - - No
- - - - Yes
- -----------------------------------------------------------------
1 600 - - Yes
- - - - No
- - - - No
1 433 - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
1 749 - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - Yes
4 735 - - Yes
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
- - - - No
- - - - No
- - - - No
10 770 - - Yes
- -----------------------------------------------------------------
3 1,200 - - No
- - - - No
- - - - No
- - - - No
2 541 - - No
- -----------------------------------------------------------------
- - - - No
8 495 - - No
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
4 575 - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
10 816 - - No
- -----------------------------------------------------------------
- - - - No
- - - - No
- - - - No
- - - - No
- - - - Yes
- -----------------------------------------------------------------
1 - - - No
- - - - Yes
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
1 500 - - No
- - - - Yes
- - - - No
- - - - No
- - - - No
- -----------------------------------------------------------------
</TABLE>
<PAGE>
DISTRIBUTION OF CUT-OFF DATE BALANCES
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE ------------------------------------------
BALANCES LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- --------------------------------- ----------- -------------- --------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 - 999,999 ......... 82 $ 60,172,426 6.76% $ 517,423 $ 996,925 $ 733,810
1,000,000 - 1,999,999(1) 76 111,643,664 12.54 1,006,422 1,995,878 1,468,996
2,000,000 - 2,999,999 ......... 51 128,032,363 14.38 2,025,014 2,994,261 2,510,438
3,000,000 - 3,999,999 ......... 29 102,601,264 11.52 3,019,935 3,986,221 3,537,975
4,000,000 - 4,999,999 ......... 19 86,392,906 9.70 4,091,986 4,994,333 4,546,995
5,000,000 - 5,999,999 ......... 15 83,039,184 9.32 5,054,448 5,988,920 5,535,946
6,000,000 - 6,999,999 ......... 5 32,794,403 3.68 6,171,013 6,969,977 6,558,881
7,000,000 - 7,999,999 ......... 7 54,225,944 6.09 7,284,197 7,989,091 7,746,563
8,000,000 - 8,999,999 ......... 6 50,791,123 5.70 8,094,812 8,970,384 8,465,187
9,000,000 - 9,999,999 ......... 4 38,196,381 4.29 9,071,554 9,939,997 9,549,095
10,000,000 - 11,999,999 ......... 6 67,788,843 7.61 10,359,122 11,886,833 11,298,140
17,000,000 - 19,999,999 ......... 3 54,900,048 6.16 17,274,576 18,879,907 18,300,016
20,000,000 - 24,999,999 ......... 1 20,007,359 2.25 20,007,359 20,007,359 20,007,359
-- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max ........................ 304 $890,585,907 100.00% $ 517,423 $20,007,359 $ 2,929,559
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF CUT-OFF DATE WEIGHTED MORTGAGE TERM TO DATE
BALANCES MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- --------------------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 - 999,999 ......... 1.20x 5.41x 1.48x 7.756% 128.3 68.57 %
1,000,000 - 1,999,999(1) 1.01 2.21 1.46 7.306 142.2 71.08
2,000,000 - 2,999,999 ......... 1.24 2.86 1.52 7.118 122.4 70.45
3,000,000 - 3,999,999 ......... 1.12 2.03 1.43 7.212 120.4 70.61
4,000,000 - 4,999,999 ......... 1.20 1.71 1.38 7.084 126.0 71.08
5,000,000 - 5,999,999 ......... 1.29 2.53 1.49 7.041 107.8 72.67
6,000,000 - 6,999,999 ......... 1.26 1.54 1.42 6.960 116.0 74.24
7,000,000 - 7,999,999 ......... 1.29 1.49 1.42 7.045 118.9 74.63
8,000,000 - 8,999,999 ......... 1.34 1.56 1.45 6.861 116.5 74.51
9,000,000 - 9,999,999 ......... 1.37 1.46 1.40 6.725 168.1 74.49
10,000,000 - 11,999,999 ......... 1.27 1.80 1.50 7.550 124.7 68.18
17,000,000 - 19,999,999 ......... 1.27 1.36 1.31 7.508 109.8 71.33
20,000,000 - 24,999,999 ......... 1.26 1.26 1.26 7.220 110.0 74.38
Total/Avg./Wtd. Avg./
Min/Max ........................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46%
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
A-13
<PAGE>
DISTRIBUTION OF PROPERTY TYPES
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
MORTGAGED CUT-OFF DATE CUT-OFF DATE ------------------------------------------
PROPERTY TYPE PROPERTIES BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ---------------------- ------------ -------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Multifamily .......... 144 $289,156,086 32.47 % $ 180,965 $18,745,566 $2,008,028
Retail(1) ............ 67 213,697,597 24.00 578,748 17,274,576 3,189,516
Office ............... 38 148,989,033 16.73 748,372 20,007,359 3,920,764
Lodging .............. 31 128,792,046 14.46 747,053 18,879,907 4,154,582
Industrial ........... 28 74,980,587 8.42 608,732 6,969,977 2,677,878
Healthcare ........... 7 29,648,648 3.33 598,989 11,379,636 4,235,521
Self-Storage ......... 2 5,321,909 0.60 2,486,308 2,835,602 2,660,955
--- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ............. 317 $890,585,907 100.00 % $ 180,965 $20,007,359 $2,809,419
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
PROPERTY TYPE MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ---------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Multifamily .......... 1.21x 2.55x 1.43x 7.209% 132.3 73.78 %
Retail(1) ............ 1.01 2.53 1.42 7.020 124.0 71.43
Office ............... 1.17 1.69 1.37 7.199 115.1 71.09
Lodging .............. 1.35 2.86 1.58 7.448 125.4 66.90
Industrial ........... 1.24 1.60 1.39 7.001 114.3 73.36
Healthcare ........... 1.45 5.41 1.72 7.952 115.5 66.75
Self-Storage ......... 1.41 1.56 1.49 7.031 126.7 66.53
Total/Avg./Wtd. Avg./
Min/Max ............. 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
DISTRIBUTION OF ANNUALIZED DEBT SERVICE COVERAGE RATIOS (NCF)
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF DEBT MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
SERVICE COVERAGE RATIOS LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1.00 - 1.10(1) .......... 4 $ 5,632,391 0.63 % $1,180,615 $ 1,561,882 $1,408,098
1.11 - 1.20 ............. 5 12,711,340 1.43 744,183 4,687,639 2,542,268
1.21 - 1.30 ............. 41 162,512,586 18.25 583,909 20,007,359 3,963,722
1.31 - 1.40 ............. 114 294,141,767 33.03 518,899 18,879,907 2,580,191
1.41 - 1.50 ............. 61 212,291,966 23.84 518,583 11,886,833 3,480,196
1.51 - 1.60 ............. 34 101,245,136 11.37 558,863 8,970,384 2,977,798
1.61 - 1.70 ............. 17 37,446,223 4.20 517,423 11,474,944 2,202,719
1.71 - 1.80 ............. 9 29,023,620 3.26 646,185 11,379,636 3,224,847
1.81 - 1.90 ............. 3 5,160,364 0.58 1,308,405 1,945,944 1,720,121
1.91 - 2.00 ............. 6 9,467,783 1.06 645,384 2,887,786 1,577,964
2.01 - 2.10 ............. 2 3,766,988 0.42 747,053 3,019,935 1,883,494
2.11 - 2.20 ............. 2 2,918,407 0.33 778,545 2,139,863 1,459,204
2.21 - 2.30 ............. 1 1,985,429 0.22 1,985,429 1,985,429 1,985,429
2.51 - 5.41 ............. 5 12,281,906 1.38 580,168 5,975,204 2,456,381
--- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................ 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF DEBT WEIGHTED MORTGAGE TERM TO DATE
SERVICE COVERAGE RATIOS MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1.00 - 1.10(1) .......... 1.01x 1.06x 1.04x 6.366% 189.9 90.82 %
1.11 - 1.20 ............. 1.12 1.20 1.17 7.087 146.3 68.97
1.21 - 1.30 ............. 1.21 1.30 1.27 7.317 121.9 74.24
1.31 - 1.40 ............. 1.31 1.40 1.36 7.212 126.6 71.98
1.41 - 1.50 ............. 1.41 1.50 1.45 7.150 115.3 71.95
1.51 - 1.60 ............. 1.51 1.60 1.55 7.041 127.7 70.64
1.61 - 1.70 ............. 1.61 1.70 1.66 7.281 129.7 65.37
1.71 - 1.80 ............. 1.71 1.80 1.78 7.452 121.6 73.46
1.81 - 1.90 ............. 1.85 1.88 1.87 7.385 245.4 71.12
1.91 - 2.00 ............. 1.92 1.99 1.94 7.292 124.3 63.27
2.01 - 2.10 ............. 2.03 2.09 2.04 8.447 117.6 64.99
2.11 - 2.20 ............. 2.20 2.20 2.20 7.830 132.1 43.80
2.21 - 2.30 ............. 2.21 2.21 2.21 7.500 113.0 43.07
2.51 - 5.41 ............. 2.53 5.41 2.78 6.632 117.1 47.50
Total/Avg./Wtd. Avg./
Min/Max ................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
A-14
<PAGE>
DISTRIBUTION OF MORTGAGE RATES
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
MORTGAGE RATES LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
5.7500 - 6.0000 ......... 4 $ 13,251,740 1.49 % $2,093,661 $ 5,975,204 $3,312,935
6.0001 - 6.2500 ......... 2 4,222,799 0.47 1,789,004 2,433,795 2,111,399
6.2501 - 6.5000(1) ...... 9 35,617,449 4.00 1,180,615 9,327,291 3,957,494
6.5001 - 6.7500 ......... 27 101,069,475 11.35 1,112,492 9,071,554 3,743,314
6.7501 - 7.0000 ......... 64 220,378,475 24.75 578,748 18,745,566 3,443,414
7.0001 - 7.2500 ......... 41 159,066,299 17.86 1,119,948 20,007,359 3,879,666
7.2501 - 7.5000 ......... 45 133,586,366 15.00 580,168 11,883,227 2,968,586
7.5001 - 7.7500 ......... 35 85,096,000 9.56 549,874 18,879,907 2,431,314
7.7501 - 8.0000 ......... 36 77,088,293 8.66 518,583 17,274,576 2,141,341
8.0001 - 8.2500 ......... 24 29,370,225 3.30 518,899 8,346,523 1,223,759
8.2501 - 8.5000 ......... 9 20,294,424 2.28 517,423 11,379,636 2,254,936
8.5001 - 8.7500 ......... 7 10,948,337 1.23 598,989 3,141,599 1,564,048
9.2501 - 9.5000 ......... 1 596,025 0.07 596,025 596,025 596,025
-- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................ 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF WEIGHTED MORTGAGE TERM TO DATE
MORTGAGE RATES MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
5.7500 - 6.0000 ......... 1.30x 2.53x 1.93x 5.830% 109.8 58.62 %
6.0001 - 6.2500 ......... 1.36 1.79 1.61 6.158 117.0 73.06
6.2501 - 6.5000(1) ...... 1.01 1.51 1.38 6.412 128.3 73.42
6.5001 - 6.7500 ......... 1.26 1.71 1.45 6.636 118.5 75.72
6.7501 - 7.0000 ......... 1.12 1.99 1.41 6.892 127.6 74.33
7.0001 - 7.2500 ......... 1.20 2.86 1.43 7.149 118.7 70.47
7.2501 - 7.5000 ......... 1.20 2.72 1.46 7.375 135.2 70.60
7.5001 - 7.7500 ......... 1.24 1.93 1.41 7.672 116.4 68.44
7.7501 - 8.0000 ......... 1.21 2.20 1.42 7.896 118.7 67.93
8.0001 - 8.2500 ......... 1.25 1.98 1.42 8.175 142.1 68.73
8.2501 - 8.5000 ......... 1.25 1.80 1.60 8.354 126.1 73.19
8.5001 - 8.7500 ......... 1.30 5.41 1.84 8.605 119.4 60.16
9.2501 - 9.5000 ......... 1.28 1.28 1.28 9.250 111.0 69.31
Total/Avg./Wtd. Avg./
Min/Max ................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
DISTRIBUTION OF AMORTIZATION TYPES
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
MORTGAGE CUT-OFF DATE CUT-OFF DATE ------------------------------------------
AMORTIZATION TYPE LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ----------------------------- ----------- -------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balloon ..................... 270 $827,155,616 92.88 % $ 517,423 $20,007,359 $3,063,539
Fully Amortizing(1) ......... 32 59,114,989 6.64 518,899 9,939,997 1,847,343
Hyperamortizing ............. 2 4,315,302 0.48 1,620,915 2,694,387 2,157,651
--- ------------ ----
Total/Avg./Wtd. Avg./
Min/Max .................... 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
AMORTIZATION TYPE MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ----------------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balloon ..................... 1.17x 5.41x 1.45x 7.199% 115.6 71.57 %
Fully Amortizing(1) ......... 1.01 2.20 1.41 7.243 247.4 70.70
Hyperamortizing ............. 1.20 1.78 1.56 7.320 117.6 60.42
Total/Avg./Wtd. Avg./
Min/Max .................... 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
A-15
<PAGE>
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
AMORTIZATION TERMS LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
151 - 170(1) months. 3 $ 7,129,922 0.80% $1,180,615 $ 4,600,573 $2,376,641
171 - 190(1) months. 9 11,370,432 1.28 583,909 3,160,322 1,263,381
191 - 210 months ......... 1 1,880,881 0.21 1,880,881 1,880,881 1,880,881
211 - 230 months ......... 2 2,980,109 0.33 602,978 2,377,132 1,490,055
231 - 250 months ......... 23 41,452,034 4.65 518,899 3,777,721 1,802,262
251 - 270 months ......... 5 25,657,537 2.88 2,365,665 11,886,833 5,131,507
271 - 290 months ......... 14 35,841,185 4.02 535,015 10,359,122 2,560,085
291 - 310 months ......... 132 301,415,775 33.84 517,423 18,879,907 2,283,453
331 - 360 months ......... 115 462,858,033 51.97 518,583 20,007,359 4,024,852
--- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max ................. 304 $890,585,907 100.00% $ 517,423 $20,007,359 $2,929,559
=== ============ ======
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF WEIGHTED MORTGAGE TERM TO DATE
AMORTIZATION TERMS MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- -------------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
151 - 170(1) months. 1.01x 1.25x 1.16x 6.995% 169.3 78.01 %
171 - 190(1) months. 1.06 2.20 1.45 7.098 169.4 62.06
191 - 210 months ......... 1.17 1.17 1.17 6.900 80.0 78.37
211 - 230 months ......... 1.33 1.34 1.34 7.201 215.6 71.72
231 - 250 months ......... 1.06 2.86 1.58 7.278 169.7 67.36
251 - 270 months ......... 1.38 1.59 1.45 7.929 110.7 62.65
271 - 290 months ......... 1.26 1.88 1.49 7.445 137.3 70.00
291 - 310 months ......... 1.21 5.41 1.49 7.392 120.4 69.10
331 - 360 months ......... 1.20 1.99 1.40 7.020 120.3 74.06
Total/Avg./Wtd. Avg./
Min/Max ................. 1.01x 5.41x 1.44x 7.202% 124.3 71.46%
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF ORIGINAL MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
TERMS TO MATURITY LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
0 - 83 months ........ 1 $ 5,926,346 0.67 % $5,926,346 $ 5,926,346 $5,926,346
84 - 120 months ........ 255 772,660,454 86.76 517,423 20,007,359 3,030,041
121 - 180 months(1) ..... 25 64,298,362 7.22 549,874 11,883,227 2,571,934
181 - 240 months(1) ..... 16 27,569,563 3.10 518,899 4,380,672 1,723,098
241 - 360 months ........ 7 20,131,183 2.26 681,425 9,939,997 2,875,883
--- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................ 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF ORIGINAL WEIGHTED MORTGAGE TERM TO DATE
TERMS TO MATURITY MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
0 - 83 months ........ 1.44x 1.44x 1.44x 7.420% 49.0 77.98 %
84 - 120 months ........ 1.17 5.41 1.44 7.199 113.2 71.37
121 - 180 months(1) ..... 1.01 2.86 1.43 7.152 156.1 71.38
181 - 240 months(1) ..... 1.06 1.97 1.40 7.341 230.6 72.72
241 - 360 months ........ 1.28 1.88 1.50 7.250 327.0 71.30
Total/Avg./Wtd. Avg./
Min/Max ................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
A-16
<PAGE>
DISTRIBUTION OF REMAINING TERMS TO MATURITY
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGES OF REMAINING MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
TERMS TO MATURITY LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
49 - 50 months .......... 1 $ 5,926,346 0.67 % $5,926,346 $ 5,926,346 $5,926,346
71 - 90 months .......... 11 40,011,713 4.49 994,967 9,857,540 3,637,428
91 - 110 months ......... 17 77,573,579 8.71 535,015 20,007,359 4,563,152
111 - 120 months ........ 229 660,149,530 74.13 517,423 18,879,907 2,882,749
131 - 150 months ........ 6 23,055,679 2.59 744,183 7,564,133 3,842,613
151 - 170 months(1) ..... 3 7,129,922 0.80 1,180,615 4,600,573 2,376,641
171 - 190 months(1) ..... 15 30,600,276 3.44 549,874 11,883,227 2,040,018
211 - 230 months ........ 2 2,980,109 0.33 602,978 2,377,132 1,490,055
231 - 250 months(1) ..... 13 23,027,571 2.59 518,899 4,380,672 1,771,352
271 - 353 months ........ 7 20,131,183 2.26 681,425 9,939,997 2,875,883
--- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................ 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGES OF REMAINING WEIGHTED MORTGAGE TERM TO DATE
TERMS TO MATURITY MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
49 - 50 months .......... 1.44x 1.44x 1.44x 7.420% 49.0 77.98 %
71 - 90 months .......... 1.17 1.92 1.40 6.923 79.0 74.51
91 - 110 months ......... 1.26 1.60 1.33 7.534 108.7 71.23
111 - 120 months ........ 1.20 5.41 1.47 7.179 115.8 71.05
131 - 150 months ........ 1.20 1.41 1.33 6.980 139.0 77.27
151 - 170 months(1) ..... 1.01 1.25 1.16 6.995 169.3 78.01
171 - 190 months(1) ..... 1.06 2.20 1.37 7.216 173.5 69.66
211 - 230 months ........ 1.33 1.34 1.34 7.201 215.6 71.72
231 - 250 months(1) ..... 1.06 1.97 1.43 7.426 236.0 71.70
271 - 353 months ........ 1.28 1.88 1.50 7.250 327.0 71.30
Total/Avg./Wtd. Avg./
Min/Max ................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE -----------------------------------------
LOAN-TO-VALUE RATIOS LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
15.1 - 30.0 ............. 1 $ 598,989 0.07 % $ 598,989 $ 598,989 $ 598,989
30.1 - 50.0 ............ 9 16,296,287 1.83 580,168 5,975,204 1,810,699
50.1 - 60.0 ............ 15 52,916,836 5.94 748,372 11,886,833 3,527,789
60.1 - 65.0 ............ 29 85,630,418 9.62 606,615 18,879,907 2,952,773
65.1 - 70.0 ............ 60 137,760,490 15.47 517,423 10,359,122 2,296,008
70.1 - 75.0 ............ 113 323,050,311 36.27 518,583 20,007,359 2,858,852
75.1 - 80.0 ............ 67 242,940,017 27.28 578,748 18,745,566 3,625,970
80.1 - 85.0(1) ......... 7 26,940,783 3.03 996,925 8,094,812 3,848,683
85.1 - 90.0(1) ......... 1 1,561,882 0.18 1,561,882 1,561,882 1,561,882
90.1 - 95.0(1) ......... 1 1,348,733 0.15 1,348,733 1,348,733 1,348,733
95.1 - 100.0(1) ......... 1 1,541,161 0.17 1,541,161 1,541,161 1,541,161
--- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................. 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF CUT-OFF DATE WEIGHTED MORTGAGE TERM TO DATE
LOAN-TO-VALUE RATIOS MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- -------------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
15.1 - 30.0 ............. 5.41x 5.41x 5.41x 8.570% 118.0 17.62 %
30.1 - 50.0 ............ 1.27 2.55 2.16 6.950 152.4 41.79
50.1 - 60.0 ............ 1.31 2.86 1.59 7.416 117.8 57.82
60.1 - 65.0 ............ 1.20 2.03 1.46 7.480 117.5 63.18
65.1 - 70.0 ............ 1.20 1.92 1.46 7.331 123.3 67.85
70.1 - 75.0 ............ 1.12 2.72 1.39 7.258 125.6 73.09
75.1 - 80.0 ............ 1.17 1.80 1.41 6.984 124.7 77.96
80.1 - 85.0(1) ......... 1.01 1.64 1.47 6.812 116.9 80.49
85.1 - 90.0(1) ......... 1.06 1.06 1.06 6.350 180.0 89.76
90.1 - 95.0(1) ......... 1.01 1.01 1.01 6.350 168.0 91.44
95.1 - 100.0(1) ......... 1.06 1.06 1.06 6.410 236.0 96.32
Total/Avg./Wtd. Avg./
Min/Max ................. 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
A-17
<PAGE>
DISTRIBUTION OF ORIGINATION YEARS
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
MORTGAGED CUT-OFF DATE CUT-OFF DATE ------------------------------------------
ORIGINATION YEAR LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- --------------------- ----------- -------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1998(1) ............. 303 $887,444,308 99.65 % $ 517,423 $20,007,359 $2,928,859
1997 ................ 1 3,141,599 0.35 3,141,599 3,141,599 3,141,599
--- ------------ ----
Total/Avg./Wtd. Avg./
Min/Max ............ 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
ORIGINATION YEAR MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- --------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
1998(1) ............. 1.01x 5.41x 1.44x 7.197% 124.4 71.50 %
1997 ................ 1.49 1.49 1.49 8.620 105.0 60.77
Total/Avg./Wtd. Avg./
Min/Max ............ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
DISTRIBUTION OF SEASONING
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE ------------------------------------------
SEASONING LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ----------- -------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
0 -- 6 months(1) ........ 235 $682,027,718 76.58 % $ 517,423 $18,879,907 $2,902,246
7 -- 12 months .......... 68 205,416,590 23.07 535,015 20,007,359 3,020,832
13 -- 18 months ......... 1 3,141,599 0.35 3,141,599 3,141,599 3,141,599
------------ -----
Total/Avg./Wtd. Avg./
min/max ................ 304 $890,585,907 100 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
RANGE OF WEIGHTED MORTGAGE TERM TO DATE
SEASONING MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
0 -- 6 months(1) ........ 1.01x 5.41 x 1.46x 7.126 % 120.7 71.78 %
7 -- 12 months .......... 1.20 2.55 1.39 7.434 136.6 70.56
13 -- 18 months ......... 1.49 1.49 1.49 8.620 105.0 60.77
Total/Avg./Wtd. Avg./
min/max ................ 1.01 x 5.41 x 1.44x 7.202 % 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
A-18
<PAGE>
DISTRIBUTION OF YEARS OF MATURITY
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CURRENT PRINCIPAL BALANCE
MORTGAGED CUT-OFF DATE CUT-OFF DATE -----------------------------------------
MATURITY YEAR LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- -------------------- ----------- -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
2003 ............... 1 $ 5,926,346 0.67% $5,926,346 $ 5,926,346 $ 5,926,346
2005 ............... 11 40,011,713 4.49 994,967 9,857,540 3,637,428
2007 ............... 2 20,416,175 2.29 3,141,599 17,274,576 10,208,087
2008 ............... 242 712,991,632 80.06 517,423 20,007,359 2,946,246
2010 ............... 6 23,055,679 2.59 744,183 7,564,133 3,842,613
2013(1) ............ 17 36,168,315 4.06 549,874 11,883,227 2,127,548
2014(1) ............ 1 1,561,882 0.18 1,561,882 1,561,882 1,561,882
2016 ............... 1 2,377,132 0.27 2,377,132 2,377,132 2,377,132
2018 ............... 15 25,251,464 2.84 518,899 4,380,672 1,683,431
2023 ............... 6 10,945,454 1.23 681,425 2,694,387 1,824,242
2028 ............... 2 11,880,116 1.33 1,940,119 9,939,997 5,940,058
--- ------------ -----
Total/Avg./Wtd. Avg/
Min/Max ........... 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $ 2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
MATURITY YEAR MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- -------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
2003 ............... 1.44 x 1.44 x 1.44 x 7.420% 49.0 77.98%
2005 ............... 1.17 1.92 1.40 6.923 79.0 74.51
2007 ............... 1.27 1.49 1.30 7.977 105.8 70.26
2008 ............... 1.20 5.41 1.46 7.194 115.3 71.15
2010 ............... 1.20 1.41 1.33 6.980 139.0 77.27
2013(1) ............ 1.01 2.20 1.34 7.210 172.4 70.43
2014(1) ............ 1.06 1.06 1.06 6.350 180.0 89.76
2016 ............... 1.34 1.34 1.34 6.840 212.0 72.92
2018 ............... 1.06 1.97 1.41 7.429 228.2 71.32
2023 ............... 1.28 1.88 1.70 7.532 247.7 63.01
2028 ............... 1.35 1.39 1.38 7.046 352.7 75.49
Total/Avg./Wtd. Avg/
Min/Max ........... 1.01 x 5.41 x 1.44 x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
A-19
<PAGE>
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
MORTGAGED CUT-OFF DATE CUT-OFF DATE -----------------------------------------
STATE PROPERTIES BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ------------------------- ------------ -------------- --------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Texas ................... 56 $115,832,720 13.01 % $ 432,686 $ 8,480,788 $2,068,441
California .............. 32 93,268,451 10.47 535,015 11,474,944 2,914,639
Florida ................. 21 70,095,478 7.87 570,701 11,883,227 3,337,880
New York ................ 23 64,964,839 7.29 517,423 11,379,636 2,824,558
Arizona ................. 13 57,330,008 6.44 996,925 9,071,554 4,410,001
Georgia ................. 12 46,625,164 5.24 608,732 17,274,576 3,885,430
Washington .............. 10 44,268,684 4.97 583,909 8,529,234 4,426,868
Massachusetts ........... 14 36,701,118 4.12 647,370 7,965,441 2,621,508
Illinois ................ 6 34,015,000 3.82 623,650 18,879,907 5,669,167
Maryland ................ 10 33,607,473 3.77 747,053 10,805,080 3,360,747
Pennsylvania(1) ......... 14 31,893,366 3.58 580,168 18,745,566 2,278,098
Tennessee ............... 6 30,991,018 3.48 2,743,579 10,359,122 5,165,170
New Jersey(1) ........... 14 30,435,474 3.42 518,899 9,939,997 2,173,962
Virginia ................ 4 24,458,888 2.75 518,583 20,007,359 6,114,722
Nevada .................. 9 21,853,511 2.45 848,165 6,969,977 2,428,168
Colorado ................ 7 19,128,161 2.15 1,007,819 6,585,712 2,732,594
Wisconsin ............... 4 18,014,985 2.02 947,949 6,680,925 4,503,746
Oklahoma ................ 5 15,096,519 1.70 832,227 7,284,197 3,019,304
Kentucky ................ 7 13,729,821 1.54 896,999 3,966,587 1,961,403
Ohio .................... 7 13,071,839 1.47 647,407 3,488,081 1,867,406
North Carolina .......... 4 10,921,114 1.23 833,878 7,989,091 2,730,279
Mississippi ............. 4 8,926,327 1.00 1,906,015 2,934,505 2,231,582
Missouri ................ 6 6,662,940 0.75 180,965 2,887,944 1,110,490
Oregon .................. 4 6,634,457 0.74 710,422 3,977,673 1,658,614
Idaho ................... 2 6,428,307 0.72 1,789,004 4,639,304 3,214,154
Connecticut ............. 3 6,291,702 0.71 994,860 4,284,096 2,097,234
Michigan ................ 3 4,993,127 0.56 758,359 2,591,718 1,664,376
Utah .................... 3 4,051,863 0.45 1,043,908 1,617,205 1,350,621
Maine ................... 1 3,477,937 0.39 3,477,937 3,477,937 3,477,937
Indiana ................. 4 2,795,597 0.31 565,423 858,143 698,899
South Carolina .......... 1 2,694,387 0.30 2,694,387 2,694,387 2,694,387
Louisiana ............... 2 2,345,985 0.26 681,425 1,664,560 1,172,992
New Mexico .............. 1 2,193,040 0.25 2,193,040 2,193,040 2,193,040
West Virginia ........... 1 1,637,348 0.18 1,637,348 1,637,348 1,637,348
Rhode Island ............ 1 1,364,770 0.15 1,364,770 1,364,770 1,364,770
Alabama ................. 1 1,356,840 0.15 1,356,840 1,356,840 1,356,840
Kansas .................. 1 1,307,700 0.15 1,307,700 1,307,700 1,307,700
Alaska .................. 1 1,119,948 0.13 1,119,948 1,119,948 1,119,948
-- ------------ -----
Total/Avg./Wtd. Avg./
Min/Max ................ 317 $890,585,907 100.00 % $ 180,965 $20,007,359 $2,809,419
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
STATE MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ------------------------- --------- --------- ---------- ----------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Texas ................... 1.20x 2.21x 1.47x 7.159% 116.6 73.03 %
California .............. 1.12 5.41 1.44 7.235 124.5 68.30
Florida ................. 1.21 1.75 1.37 7.268 126.2 71.75
New York ................ 1.25 2.53 1.58 7.497 124.9 69.13
Arizona ................. 1.26 1.67 1.42 7.002 114.1 74.62
Georgia ................. 1.17 1.66 1.44 7.458 128.5 73.52
Washington .............. 1.26 1.50 1.39 7.031 117.6 70.68
Massachusetts ........... 1.25 1.93 1.46 7.270 115.9 68.30
Illinois ................ 1.34 1.48 1.39 7.377 124.2 68.09
Maryland ................ 1.32 2.09 1.45 7.111 117.8 70.99
Pennsylvania(1) ......... 1.01 2.55 1.33 7.242 120.1 75.99
Tennessee ............... 1.45 1.71 1.54 6.761 117.0 75.41
New Jersey(1) ........... 1.01 1.65 1.40 7.053 207.8 72.15
Virginia ................ 1.26 1.50 1.27 7.175 111.1 74.03
Nevada .................. 1.32 1.69 1.38 7.106 134.8 71.37
Colorado ................ 1.36 1.50 1.41 6.960 116.3 70.96
Wisconsin ............... 1.29 1.54 1.39 7.120 108.8 73.79
Oklahoma ................ 1.24 1.38 1.30 7.152 120.2 76.59
Kentucky ................ 1.24 1.52 1.36 7.452 115.1 73.48
Ohio .................... 1.31 1.41 1.37 7.141 107.9 72.83
North Carolina .......... 1.34 1.78 1.50 7.425 116.8 70.27
Mississippi ............. 1.87 2.86 2.28 7.466 191.8 59.35
Missouri ................ 1.32 1.53 1.38 7.294 147.4 74.24
Oregon .................. 1.38 2.20 1.58 7.242 137.4 53.98
Idaho ................... 1.28 1.36 1.30 6.468 117.0 71.79
Connecticut ............. 1.33 1.47 1.44 7.520 116.0 68.12
Michigan ................ 1.37 1.67 1.55 7.050 116.8 67.20
Utah .................... 1.25 1.44 1.33 7.736 114.5 71.90
Maine ................... 1.35 1.35 1.35 6.940 115.0 72.46
Indiana ................. 1.31 1.39 1.36 7.116 116.6 76.61
South Carolina .......... 1.78 1.78 1.78 7.500 118.0 56.13
Louisiana ............... 1.71 1.73 1.72 7.187 167.0 73.14
New Mexico .............. 2.72 2.72 2.72 7.270 117.0 73.10
West Virginia ........... 1.39 1.39 1.39 7.875 112.0 71.19
Rhode Island ............ 1.50 1.50 1.50 6.280 117.0 68.24
Alabama ................. 1.58 1.58 1.58 6.570 117.0 79.81
Kansas .................. 1.46 1.46 1.46 8.100 234.0 74.30
Alaska .................. 1.33 1.33 1.33 7.120 116.0 74.66
Total/Avg./Wtd. Avg./
Min/Max ................ 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in this pool of which some are included
in this range.
A-20
<PAGE>
DISTRIBUTION OF PREPAYMENT PROVISIONS
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF AGGREGATE CUT-OFF DATE BALANCE
MORTGAGE CUT-OFF DATE CUT-OFF DATE ------------------------------------------
PREPAYMENT PROVISION LOANS BALANCE BALANCE MINIMUM MAXIMUM AVERAGE
- ----------------------- ----------- -------------- --------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance(1) 131 $501,235,736 56.28% $ 598,989 $20,007,359 $3,826,227
Lockout/Greater of
YM or 1%(2) .......... 171 385,227,366 43.26 517,423 18,745,566 2,252,792
Lockout/Declining Fee 1 3,179,729 0.36 3,179,729 3,179,729 3,179,729
Lockout/Open .......... 1 943,077 0.11 943,077 943,077 943,077
--- ------------ ------
Total/Avg./Wtd. Avg./
Min/Max .............. 304 $890,585,907 100.00 % $ 517,423 $20,007,359 $2,929,559
=== ============ =============
<CAPTION>
WEIGHTED WEIGHTED
DEBT SERVICE COVERAGE RATIO WEIGHTED AVERAGE AVERAGE
------------------------------ AVERAGE REMAINING CUT-OFF
WEIGHTED MORTGAGE TERM TO DATE
PREPAYMENT PROVISION MINIMUM MAXIMUM AVERAGE RATE MATURITY (MOS) LTV RATIO
- ----------------------- --------- --------- ---------- ---------- --------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance(1) 1.01x 5.41x 1.47x 7.275% 117.0 71.47%
Lockout/Greater of
YM or 1%(2) .......... 1.12 2.55 1.41 7.105 133.9 71.46
Lockout/Declining Fee 1.32 1.32 1.32 7.310 114.0 75.71
Lockout/Open .......... 1.69 1.69 1.69 8.125 112.0 52.39
Total/Avg./Wtd. Avg./
Min/Max .............. 1.01x 5.41x 1.44x 7.202% 124.3 71.46 %
</TABLE>
- -------
(1) There are four credit-tenant loans in the pool included in this range.
(2) Includes 1 loan with the provision "Defeasance or Greater of YM or 1%" and
3 loans with the provision "Greater of YM or Declining Fee."
A-21
<PAGE>
PREPAYMENT LOCK-OUT/PREPAYMENT PREMIUM/DEFEASANCE
PERCENTAGE OF MORTGAGE LOANS BY OUTSTANDING PRINCIPAL BALANCE
<TABLE>
<CAPTION>
JAN-99 JAN-00 JAN-01 JAN-02 JAN-03 JAN-04 JAN-05
------------ ------------ ----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out ............ 100.00% 100.00% 98.88% 38.73% 5.71% 3.56% 2.64%
Defeasance ............ 0.00 0.00 0.00 55.26 55.29 56.07 54.28
Yield Maintenance ..... 0.00 0.00 1.12 5.55 37.88 39.91 40.81
5.00 -- 5.99% ......... 0.00 0.00 0.00 0.36 0.35 0.36 0.00
4.00 -- 4.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.36
3.00 -- 3.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 -- 2.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 -- 1.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
0.01 -- 0.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No Penalty ............ 0.00 0.00 0.00 0.11 0.77 0.11 1.91
Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Aggregate Balance
($MM) ................. $ 890.59 $ 879.21 $ 867.15 $ 854.01 $ 839.87 $ 819.22 $ 803.12
<CAPTION>
JAN-06 JAN-07 JAN-08 JAN-09 JAN-10 JAN-11 JAN-12 JAN-13
---------- ---------- ---------- ---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked Out ............ 2.09% 2.04% 1.81% 7.89% 7.95% 10.92% 11.20% 11.55%
Defeasance ............ 54.49 54.49 44.09 31.97 31.39 33.81 32.84 12.61
Yield Maintenance ..... 42.93 42.98 30.55 49.35 40.78 39.56 32.55 27.92
5.00 -- 5.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 -- 4.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 -- 3.99% ......... 0.37 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 -- 2.99% ......... 0.00 0.37 0.00 0.00 0.00 0.00 0.00 0.00
1.00 -- 1.99% ......... 0.00 0.00 0.00 10.80 11.13 15.71 23.41 24.97
0.01 -- 0.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No Penalty ............ 0.11 0.11 23.54 0.00 8.75 0.00 0.00 22.96
Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Aggregate Balance
($MM) ................. $ 750.14 $ 732.18 $ 694.74 $ 78.12 $ 73.85 $ 50.86 $ 46.52 $ 41.86
</TABLE>
<TABLE>
<CAPTION>
JAN-14 JAN-15 JAN-16 JAN-17 JAN-18 JAN-19 JAN-20
---------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out ............ 9.64% 10.22% 11.01% 12.06% 13.50% 12.66% 13.31%
Defeasance ............ 14.92 14.27 13.40 12.11 9.17 8.97 8.29
Yield Maintenance ..... 35.42 33.36 30.56 26.90 19.63 5.64 5.34
5.00 -- 5.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 -- 4.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 -- 3.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 -- 2.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 -- 1.99% ......... 40.02 42.15 45.03 48.93 54.24 72.72 73.06
0.01 -- 0.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No Penalty ............ 0.00 0.00 0.00 0.00 3.46 0.00 0.00
Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Aggregate Balance
($MM) ................. $ 24.95 $ 22.49 $ 19.85 $ 17.08 $ 14.26 $ 9.72 $ 8.69
<CAPTION>
JAN-21 JAN-22 JAN-23 JAN-24 JAN-25 JAN-26 JAN-27 JAN-28
----------- ----------- ----------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Locked Out ............ 14.19% 15.46% 17.48% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance ............ 7.34 5.95 0.00 0.00 0.00 0.00 0.00 0.00
Yield Maintenance ..... 4.91 4.27 0.00 20.87 22.07 24.13 28.61 0.00
5.00 -- 5.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 -- 4.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 -- 3.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 -- 2.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 -- 1.99% ......... 73.56 74.32 69.61 79.13 77.93 75.87 71.39 0.00
0.01 -- 0.99% ......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
No Penalty ............ 0.00 0.00 12.91 0.00 0.00 0.00 0.00 100.00
Total ................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Aggregate Balance
($MM) ................. $ 7.58 $ 6.39 $ 5.10 $ 3.78 $ 3.07 $ 2.30 $ 1.48 $ 0.60
</TABLE>
A-22
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ANNEX B
REPRESENTATIONS AND WARRANTIES
Each Responsible Party will represent and warrant, with respect to each
Mortgage Loan for which it is acting as a Responsible Party, as of the date
specified below or, if no such date is specified, as of the Closing Date, that:
(i) Immediately prior to the transfer by it to the Seller (or, in the
case of ACLI with respect to the AMRESCO Loans previously sold by ACLI to
GSMC immediately prior to the transfer thereof to GSMC), it was the sole
owner and holder of such Mortgage Loan, free and clear of any and all
liens, encumbrances and, except for 1 Mortgage Loan, representing 0.3% of
the Initial Pool Balance, other interests on, in or to such Mortgage Loan
(other than, in certain cases, the right of the Master Servicer or a
sub-servicer to master service or primary service such Mortgage Loan).
(ii) It had full right and authority to sell, assign and transfer each
such Mortgage Loan referred to in clause (i) to the Seller (or, in the case
of ACLI with respect to the AMRESCO Loans previously sold by ACLI to GSMC,
to GSMC).
(iii) The information pertaining to such Mortgage Loan set forth in the
Mortgage Loan Schedule was true and correct in all material respects as of
the Cut-Off Date.
(iv) Each Mortgage Loan was not, as of the Cut-Off Date or at any time
during the twelve-month period prior thereto, more than 30 days delinquent
in respect of any Monthly Payment of principal and/or interest required
thereunder, without giving effect to any applicable grace period.
(v) In reliance upon the title insurance policy (or binding commitment
therefor) described in sub-paragraph (vi) below, each Mortgage securing
such Mortgage Loan constitutes a valid first lien upon the related
Mortgaged Property, including, without limitation, all buildings located
thereon and all fixtures attached thereto, subject only to (and such
Mortgaged Property is free and clear of all encumbrances and liens having
priority over the lien of such Mortgage, except for) (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, (C) the right of tenants (whether under ground
leases or space leases) at the Mortgaged Property to remain following a
foreclosure or similar proceeding (provided that such tenants are
performing under such leases), (D) exceptions and exclusions specifically
referred to in the lender's title insurance policy issued or, as evidenced
by a "marked-up" commitment, to be issued in respect of such Mortgage Loan
and other matters to which like properties are commonly subject, (E) if
such Mortgage Loan is cross-collateralized with any other Mortgage Loan,
the lien of the Mortgage for such other Mortgage Loan, and (F) with respect
to 1 Mortgage Loan, representing approximately 0.7% of the Initial Pool
Balance, a purchase option affecting all or a portion of the Mortgaged
Property that is not subordinate to the lien of the Mortgage (the
exceptions set forth in the foregoing clauses (A), (B), (C), (D), (E), and
(with respect to the Mortgage Loans referenced in such clause) (F)
collectively, "Permitted Encumbrances"). Such Permitted Encumbrances do not
materially interfere with the security intended to be provided by the
related Mortgage(s) (or, with respect to each Credit Lease Mortgage Loan,
the Credit Lease and Lease Policy), the current use or value of the related
Mortgaged Property, or the current ability of such Mortgaged Property to
generate net operating income sufficient to service the Mortgage Loan.
(vi) The lien of each related Mortgage is insured by an ALTA lender's
title insurance policy, or its equivalent as adopted in the applicable
jurisdiction, issued by a title insurance company qualified to do business
in the jurisdiction in which the related Mortgaged Property is located,
insuring the originator of the related Mortgage Loan, its successors and
assigns, as to the first priority lien of the Mortgage in the original
principal amount of the related Mortgage Loan after all advances of
principal, subject only to Permitted Encumbrances (or, if a title insurance
policy has not yet been issued in respect of any Mortgage Loan, a policy
meeting the foregoing description is evidenced by a commitment for title
insurance "marked-up" at the closing of such Mortgage Loan). Such title
policy (or, if it has yet to be issued, the coverage to be provided
thereby) is in full force and effect,
B-1
<PAGE>
all premiums thereon have been paid and, to the Responsible Party's
knowledge as of the Closing Date, no material claims have been made
thereunder and no claims have been paid thereunder (and the Responsible
Party has not received notice of any material claims having been made or
paid thereunder). No holder of the related Mortgage has done, by act or
omission, anything that would materially impair the coverage under such
title policy. Immediately following the transfer and assignment of the
related Mortgage Loan to the Trustee, such title policy (or, if it has yet
to be issued, the coverage to be provided thereby) will inure to the
benefit of the Trustee without the consent of or notice to the insurer.
(vii) The Responsible Party has not waived any material default, breach,
violation or event of acceleration existing under the related Mortgage or
Mortgage Note.
(viii) There is no valid offset, defense or counterclaim to such Mortgage
Loan (or, with respect to each Credit Lease Mortgage Loan, the Credit Lease
or Lease Policy).
(ix) (A) The Responsible Party has not received actual notice that there
is any proceeding pending or threatened for the total or partial
condemnation of the related Mortgaged Property and (B) except for 2
Mortgage Loans, representing 0.6% of the Initial Pool Balance, as of the
date of origination there was no, and as of the Closing Date, the
Responsible Party has not received actual notice of any material damage at
the related Mortgaged Property that materially and adversely affects the
value of such Mortgaged Property (except in such case where an escrow of
funds exists sufficient to effect the necessary repairs and maintenance).
(x) At origination, such Mortgage Loan complied in all material respects
with all requirements of federal, state and local laws, including, without
limitation, laws pertaining to usury, relating to the origination of such
Mortgage Loan.
(xi) The proceeds of such Mortgage Loan have been fully disbursed, and
there is no requirement for future advances thereunder. No Mortgage Loan
requires the originator or any affiliate of the originator to make any
capital contribution to the borrower after the date of origination of such
loan.
(xii) The Mortgage Note and Mortgage(s) for such Mortgage Loan (and, with
respect to each Credit Lease Mortgage Loan, the Credit Lease and Lease
Policy) and all other documents and instruments evidencing, guaranteeing,
insuring or otherwise securing such Mortgage Loan are each the legal, valid
and binding obligation of the maker thereof (subject to any non-recourse
provisions contained in any of the foregoing agreements and any applicable
state anti-deficiency legislation), enforceable in accordance with their
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, redemption, fraudulent conveyance,
receivership, moratorium or other laws relating to or affecting the rights
of creditors generally and by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at
law).
(xiii) The related Mortgaged Property is insured by a fire and extended
perils insurance policy, issued by an insurer meeting the requirements of
such Mortgage Loan in an amount not less than the lesser of (x) the
principal amount of the related Mortgage Loan or (y) the full replacement
cost of the Mortgaged Property, and in each case in an amount sufficient to
avoid the operation of any co-insurance provisions with respect to such
Mortgaged Property; such policies provide coverage on a full replacement
costs basis with no deduction for depreciation. Each Mortgaged Property is
also covered (except if such Mortgaged Property is operated as a mobile
home park), by business interruption or rental loss insurance in an amount
equal to the gross rentals less non-continuing expenses for at least a
12-month period. Each Mortgaged Property is covered by comprehensive
general liability insurance, and the related Mortgage Loan documents
require the borrower to maintain workers' compensation insurance, as
required by applicable law (or, in the alternative, requires the Borrower
to comply with all applicable laws generally) and, except with respect to
the ACLI Loans, during any construction, renovation or alteration of the
related Mortgaged Property. No such insurance policy provides that it may
be canceled, endorsed, altered or reissued to effect a change in coverage
unless such insurer shall have first given the mortgagee under such
Mortgage
B-2
<PAGE>
Loan ten days' prior written notice (or less if so required by applicable
law), and no notice has been received as of the date hereof; all premiums
required to be paid on such policy have been paid; the related Mortgage
obligates the borrower to maintain all such insurance and, at the
borrower's failure to do so, authorizes the mortgagee under such Mortgage
Loan to purchase such insurance at the borrower's cost and expense and to
seek reimbursement from such borrower. Except under circumstances that
would be reasonably acceptable to a prudent commercial mortgage lender or
that would not otherwise materially and adversely affect the security
intended to be provided by the related Mortgage, the Mortgage for each
Mortgage Loan provides that proceeds paid under any such casualty insurance
policy will (or, at the lender's option, will) be applied either to the
repair or restoration of the related Mortgaged Property or to the payment
of amounts due under such Mortgage Loan. In addition, all insurance
coverage required under the related Mortgage is in full force and effect
with respect to the related Mortgaged Property, and if the related
Mortgaged Property is located in a federally designated special flood
hazard area where mandatory flood insurance purchase requirements apply,
the related borrower is required to maintain flood insurance in respect of
all portions of the Mortgaged Property located in such area (exclusive of
any parking lot or unused or undeveloped portion thereof) meeting the
requirements of the then current guidelines of the Federal Insurance
Administration in effect with a generally acceptable insurance carrier, in
an amount representing coverage not less than the least of (1) the
outstanding principal balance of such Mortgage Loan, (2) the full insurable
value of such Mortgaged Property, and (3) the maximum amount of insurance
available under the National Flood Insurance Act of 1968, as amended.
(xiv) One or more environmental site assessments ("ESA") or, with respect
to 91 Mortgage Loans representing approximately 11.7% of the Initial Pool
Balances, environmental transaction screens ("ETS" and together with each
ESA, an "Environmental Report") were performed (or an update of a
previously conducted Environmental Report was performed) with respect to
the related Mortgaged Property (in no such case more than 18 months prior
to the Cut-Off Date) by an experienced professional in the industry, and
either (x) no such Environmental Report reveals any known circumstances or
conditions with respect to the related Mortgaged Property that rendered
such Mortgaged Property, at the date of such Environmental Report, in
violation of any applicable environmental laws, or (y) if any such
Environmental Report does reveal any such circumstances or conditions with
respect to the related Mortgaged Property, then either (i) the same have
been remediated in all material respects, or (ii) sufficient funds have
been escrowed for purposes of effecting such remediation, or (iii) the
related Borrower or other responsible entity is currently taking such
actions, if any, with respect to such circumstances or conditions as have
been recommended by the Environmental Report or required by the applicable
governmental regulatory authority (including implementation of an
operations and maintenance agreement). With respect to the Mortgage Loans
for which an ETS was conducted, the conducting of an ETS rather than an ESA
was consistent with prudent commercial lending practices under the
circumstances. Each ETS was conducted in a manner which exceeded current
American Society for Testing and Materials standards for an ETS. The
Responsible Party, having made no independent inquiry other than reviewing
the resulting Environmental Report(s) and/or employing an environmental
consultant to perform the ESA(s) or ETS(s) referenced herein, and, with
respect to each ETS, conducting any reasonable inquiry based upon such ETS,
has no knowledge of any material and adverse environmental condition or
circumstance affecting such Mortgaged Property that was not disclosed in
the related Environmental Report(s). Each Mortgage requires the related
Borrower to comply, and to cause the related Mortgaged Property to be in
compliance, with all applicable federal, state and local environmental laws
and regulations.
(xv) Except as indicated on the Mortgage Loan Schedule, such Mortgage
Loan is not cross-collateralized with other Mortgage Loans in the Mortgage
Pool. Such Mortgage Loan is not cross-collateralized with a mortgage loan
of equal or greater priority outside the Mortgage Pool. No single Mortgage
Loan, except for a group of Mortgage Loans having the same borrower or
affiliates, constitutes more than 5% of the Mortgage Pool, by Initial Pool
Balance.
B-3
<PAGE>
(xvi) The terms of the Mortgage Note and Mortgage(s) for such Mortgage
Loan (and, with respect to each Credit Lease Mortgage Loan, the Credit
Lease and Lease Policy) have not been impaired, waived, altered or modified
in any material respect, except for assumptions and modifications made in
accordance with the terms of such Mortgage Note and Mortgage(s) and
documentation regarding which modification is in the Mortgage File (or,
with respect to any Credit Lease Mortgage Loan, as described in any related
tenant estoppel).
(xvii) There are no delinquent taxes, ground rents, water charges, sewer
rents, or other similar outstanding charges affecting the related Mortgaged
Property that are not otherwise covered by an escrow of funds sufficient to
pay such charges.
(xviii) The interest of the borrower in the related Mortgaged Property
consists of a fee simple interest in real property and/or the lessee's
interest under a ground lease of real property and such other property as
set forth in the related Mortgage Loan documents.
(xix) Except for 1 Mortgage Loan, representing 0.3% of the Initial Pool
Balance, such Mortgage Loan is a whole loan and not a participation
interest.
(xx) The assignment of the related Mortgage to the Trustee constitutes
the legal, valid and binding assignment of such Mortgage from the relevant
assignor to the Trustee, and the assignment of the related Assignment of
Leases, if any, or of any other agreement executed in connection with such
Mortgage Loan to the Trustee constitutes the legal, valid and binding
assignment thereof from the relevant assignor to the Trustee.
(xxi) All escrow deposits (including capital improvements and
environmental remediation reserves) relating to such Mortgage Loan that
were required to be delivered to the mortgagee under the terms of the
related loan documents, have been received and, to the extent of any
remaining balances of such escrow deposits, are in the possession, or under
the control of the Responsible Party or its agents (which shall include the
Master Servicer), and all such payments have been delivered (or will be
delivered in accordance with the terms of the Pooling Agreement) to the
Master Servicer.
(xxii) As of the date of origination of such Mortgage Loan the related
Mortgaged Property was free and clear of any mechanics' and materialmen's
liens or liens in the nature thereof which create a lien prior to that
created by the related Mortgage(s), unless insured against under the
related title policy .
(xxiii) Except for 2 Mortgage Loans, representing 0.3% of the Initial
Pool Balance, unless insured against under the related title policy, no
improvement that was included for the purpose of determining the appraised
value of such Mortgaged Property at the time of origination of such
Mortgage Loan lies outside the boundaries and building restriction lines of
such property to any material extent; no improvements on adjoining
properties materially encroach upon such Mortgaged Property to any material
extent; and except for 1 Mortgage Loan, representing 0.6% of the Initial
Pool Balance, no improvement located on or forming part of such Mortgaged
Property is in material violation of any applicable zoning laws or
ordinances (except to the extent that they may constitute legal
non-conforming uses or structures, in which case the Responsible Party is
in possession of written assurances from the applicable municipality
received by itself or the originator of such Mortgage Loan to the effect
that, or it is the reasonable, good faith judgment of the Responsible Party
that, either: (A) such Mortgaged Property may be rebuilt and constitutes
adequate security for the Mortgage Loan; (B) the probability of such
Mortgaged Property being damaged to the extent that it could not be rebuilt
to its current state is remote; or (C) such Mortgaged Property is
adequately covered by "law or ordinance" insurance).
(xxiv) To the extent required under applicable law as of the Closing Date
and necessary for the enforceability or collectability of the Mortgage
Loan, the originator of such Mortgage Loan was authorized to do business in
the jurisdiction in which the related Mortgaged Property is located at all
times when it held the Mortgage Loan.
B-4
<PAGE>
(xxv) Such Mortgage Loan does not contain any equity participation by the
lender, provide for any contingent or additional interest in the form of
participation in the cash flow of the related Mortgaged Property or provide
for the negative amortization of interest, except that, in the case of an
ARD Loan, such Mortgage Loan provides that during the period commencing on
the Anticipated Repayment Date and continuing until such Mortgage Loan is
paid in full, (i) additional interest shall accrue and be added to the
principal balance of such Mortgage Loan and shall be payable only after the
outstanding principal of such Mortgage Loan is paid in full, and (ii) a
portion of the cash flow generated by such Mortgaged Property will be
applied each month to the principal balance thereof in addition to the
principal portion of the related Monthly Payment.
(xxvi) No holder of such Mortgage Loan has, to the Responsible Party's
knowledge, advanced funds or induced, solicited or knowingly received any
advance of funds from a party other than the owner of the related Mortgaged
Property (or other than amounts paid by the tenant as specifically provided
under the related lease), directly or indirectly, for the payment of any
amount required by the Mortgage Loan, except for interest accruing from the
date of origination of such Mortgage Loan or the date of disbursement of
the Mortgage Loan proceeds, whichever is later, to the date which preceded
by 30 days the first Due Date under the related Mortgage Note.
(xxvii) To the Responsible Party's knowledge based on due diligence
customary in the industry, as of the date of origination of such Mortgage
Loan, (A) except for 6 Mortgage Loans, representing 1.37% of the Initial
Pool Balance, in the case of each Mortgage Loan, the related borrower was
in possession of all material licenses, permits and authorizations required
by applicable laws for the ownership of the related Mortgaged Property, (B)
in the case of each Mortgage Loan secured by a lodging or health care
facility, the related borrower or operator, as applicable, was in
possession of all material licenses, permits and authorizations required by
applicable laws for the operation of the related Mortgaged Property as it
was then operated, and (C) all such licenses, permits and authorizations
were valid and in full force and effect.
(xxviii) The related Mortgage(s) or Mortgage Note (and, with respect to
each Credit Lease Mortgage Loan, the Credit Lease and Lease Policy),
together with applicable state law, contain customary and enforceable
provisions (subject to the exceptions set forth in sub-paragraphs (v) and
(xii) above) such as to render the rights and remedies of the holders
thereof (and with respect to each Credit Lease, the lessor) adequate for
the practical realization against the related Mortgaged Property of the
principal benefits of the security intended to be provided thereby.
(xxix) Such Mortgage Loan is a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code.
(xxx) No fraud with respect to such Mortgage Loan has taken place on the
part of the Responsible Party in connection with the origination of such
Mortgage Loan.
(xxxi) The origination, servicing and collection practices used with
respect to such Mortgage Loan have been in all material respects legal and
have met generally accepted servicing standards for similar commercial and
multifamily mortgage loans.
(xxxii) Any related Assignment of Leases (either as a separate instrument
or incorporated into the related Mortgage) creates in favor of the holder,
a valid, perfected and enforceable lien of the same priority as the related
Mortgage, in the property and rights described therein; provided that the
enforceability of such lien is subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws affecting the
enforcement of creditors' rights generally, and by the application of the
rules of equity. The Responsible Party has the full right to assign to the
Trustee such Assignment of Leases and the lien created thereby as described
in the immediately preceding sentence. No Person other than the borrower
owns any interest in any payments due under the related leases. The related
Mortgage or such Assignment of Leases provides for the appointment of a
receiver for rents or allows the mortgagee to enter into possession to
collect rent or provides for rents to be paid directly to the mortgagee in
the event of a default.
B-5
<PAGE>
(xxxiii) If the related Mortgaged Property securing such Mortgage Loan is
encumbered by secured subordinated debt, then (A) the subordinate debt
constitutes a "cash flow" mortgage loan (that is, payments are required to
be made thereon only to the extent that certain net cash flow from the
related Mortgaged Property (calculated in accordance with the related loan
documents) is sufficient after payments on such Mortgage Loan have been
made and certain expenses have been paid) and (B) the holder of the
subordinate debt has agreed not to foreclose on the related Mortgaged
Property so long as such Mortgage Loan is outstanding and the Special
Servicer on behalf of the Trust is not pursuing a foreclosure action.
(xxxiv) The Mortgage contains a "due on sale" clause, which provides for
the acceleration of the payment of the unpaid principal balance of the
Mortgage Loan if, without the prior written consent of the holder of the
Mortgage, the property subject to the Mortgage, or any interest therein, is
directly or indirectly transferred or sold, subject to those exceptions set
forth in the related Mortgage Loan which are consistent with prudent
lending standards. Such Mortgage Loan does not permit the related Mortgaged
Property to be encumbered subsequent to the Closing Date by any lien junior
to or of equal priority with the lien of the related Mortgage without the
prior written consent of the holder thereof.
(xxxv) Each Mortgage and/or Mortgage Note provides that the related
borrower shall be fully and personally liable for all liabilities, costs,
losses, damages, expenses or claims suffered or incurred by the mortgagee
by reason of or in connection with and only to the extent of at least the
following acts (i) any material fraud or intentional and material
misrepresentation by the related borrower in connection with such Mortgage
Loan, (ii) violations of applicable environmental laws by the borrower,
(iii) misapplication or misappropriation of rents after an event of default
under the Mortgage Loan, insurance proceeds or condemnation awards, or (iv)
any physical waste resulting from borrower actions constituting gross
negligence or intentional misconduct.
(xxxvi) The related borrower is not, to the Responsible Party's best
knowledge, a debtor in any state or federal bankruptcy or insolvency
proceeding.
(xxxvii) If such Mortgage Loan is secured by the interest of the related
borrower under a ground lease, then, such ground lease is in full force and
effect and, to the Responsible Party's actual knowledge, no material
default exists under such ground lease, nor, to the Responsible Party's
actual knowledge is there any existing condition, which, but for the
passage of time or the giving of notice would result in a default under the
ground lease.
(xxxviii) The Responsible Party has no actual knowledge of any pending
litigation or other legal proceedings involving the related borrower or the
related Mortgaged Property that can reasonably be expected to materially
interfere with the security intended to be provided by the related
Mortgage, the current use of the related Mortgaged Property, or the current
ability of the Mortgaged Property to generate net operating income
sufficient to service the Mortgage Loan.
(xxxix) Except in cases where the related Mortgage Note or the related
Mortgage provides for (A) a release of a portion of the related Mortgaged
Property, which portion was not considered material for purposes of
underwriting the Mortgage Loan, (B) a release of a portion of the related
Mortgaged Property conditioned upon the satisfaction of certain
underwriting and legal requirements and/or the payment of a release price,
or (C) a defeasance effected in accordance with the Mortgage Loan
documents, neither the related Mortgage Note nor the related Mortgage
requires the mortgagee to release all or any material portion of the
related Mortgaged Property from the lien of the related Mortgage except
upon payment in full of all amounts due under the related Mortgage Loan.
(xl) With respect to any Mortgage Loan that is a Defeasance Loan, the
related Mortgage Note or the Mortgage provides that (A) the Defeasance
Option is exercisable (i) no earlier than a date that is at least two years
following the Closing Date and (ii) only with substitute collateral
constituting "government securities" within the meaning of Treasury
Regulations Section 1.860G-2(a)(8)(i), (B) the borrower will not be liable
for any shortfalls from the Defeasance Loan except to the extent
B-6
<PAGE>
so liable prior to defeasance, and (C) except for 2 Mortgage Loans,
representing 0.4% of the Initial Pool Balance, counsel must provide an
opinion that the trustee will have a perfected security interest in the
substituted collateral prior to any other claim or interest, and, further,
contains no provision that would result in a new borrower on the Defeasance
Loan without the consent of the related mortgagee (unless such new borrower
is acquiring the Mortgaged Property that was the initial security for the
Defeasance Loan).
(xli) If the Mortgage in respect of any Mortgage Loan is a deed of trust,
(A) a trustee, duly qualified under applicable law to serve as such, is
properly designated and serving under such Mortgage, and (B) except in
connection with a trustee's sale after default by the related borrower, no
fees or expenses are payable to such trustee by the Responsible Party or
any subsequent mortgagee.
(xlii) The related Mortgage Note is not secured by any collateral that is
not included in the Trust Fund.
(xliii) If such Mortgage Loan is secured by the interest of the related
borrower as a lessee under a ground lease covering all or any material
portion of the related Mortgaged Property, but not by the related fee
interest in such Mortgaged Property or portion thereof:
(A) Either (1) the related ground lessor has subordinated its interest
in the related Mortgaged Property to the interest of the holder of the
Mortgage Loan or (2) the related ground lessor has granted the holder of
the Mortgage Loan the right to cure any default or breach by the ground
lessee (including time to gain possession of the property). Upon the
foreclosure of such Mortgage Loan (or acceptance of a deed in lieu
thereof), the related ground lease is assignable to the mortgagee under
such Mortgage Loan and its assigns without the consent of the ground
lessor thereunder (or such consent, if required, cannot be unreasonably
withheld);
(B) Such ground lease or a memorandum thereof has been or will be duly
recorded, such ground lease permits the interest of the lessee
thereunder to be encumbered by the related Mortgage; and there has been
no material change in the terms of such ground lease since its
recordation, with the exception of written instruments which are a part
of the related Mortgage File;
(C) Such ground lease is not subject to any liens or encumbrances
superior to, or of equal priority with, the related Mortgage, other than
the related fee interest and Permitted Encumbrances, and such ground
lease is prior to any mortgage or other lien upon the related fee
interest and does not provide by its terms that it shall be subordinate
to any other lien;
(D) Such ground lease requires the lessor thereunder to give notice of
any default by the lessee to the mortgagee under such Mortgage Loan
(provided that such mortgagee has provided the lessor with notice of its
lien in accordance with the provisions of such ground lease), and such
ground lease, or an estoppel letter received by such mortgagee from the
lessor, further provides that no notice of termination given under such
ground lease is effective against the mortgagee unless a copy has been
delivered to such mortgagee in the manner described in such ground
lease;
(E) Such ground lease requires the lessor to enter into a new lease
with the mortgagee under such Mortgage Loan upon termination of such
ground lease for any reason, including rejection of such ground lease in
a bankruptcy proceeding;
(F) Under the terms of such ground lease and the related Mortgage,
taken together, require any related insurance proceeds (other than in
respect of a total or substantially total loss or taking) will be
applied either (1) to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee or a trustee appointed by
it having the right to hold and disburse such proceeds as the repair or
restoration progresses (except in such cases where a provision entitling
another party to hold and disburse such proceeds would not be viewed as
commercially unreasonable by a prudent commercial mortgage lender), or
(2) to the payment of the outstanding principal balance of such Mortgage
Loan together with any accrued interest thereon;
B-7
<PAGE>
(G) Such ground lease does not impose any restrictions on subletting
which would be viewed as commercially unreasonable by a prudent
commercial mortgage lender and the lessor thereunder is not permitted to
disturb the possession, interest or quiet enjoyment or any sub-tenants
of the lessee in the relevant portion of the Mortgaged Property subject
to such ground lease for any reason (other than default under the ground
lease), or in any manner, which would materially and adversely affect
the security provided by the related Mortgage;
(H) Such ground lease has an original term (or an original term plus
one or more optional renewal terms, which, under all circumstances, may
be exercised, at the borrower's option, and will be enforceable, by the
mortgagee if it takes possession of such leasehold interest) that
extends not less than 10 years beyond the stated maturity of the related
Mortgage Loan; and
(I) The lessor under such ground lease has agreed in such ground lease
(or in another writing included in the related Mortgage File) that such
ground lease may not be amended, modified, canceled or terminated in a
material manner without the prior written consent of the mortgagee.
(xliv) Neither the related Mortgage Note nor the related Mortgage
contains provisions limiting the right or ability of the Responsible Party
to assign, transfer and convey such documents.
(xlv) In addition, with respect to each Credit Lease Mortgage Loan:
(A) Each Lease Policy is assignable by the Loan Seller and will inure
to the benefit of the Trustee and its successors and assigns without the
consent of or notice to the issuer thereof. Any subleases entered into
by the Tenant will be subject and subordinate to the Credit Lease and
will not relieve the Tenant of its obligations under the Credit Lease.
(B) To the best of the Responsible Party's knowledge (i) each Credit
Lease is in full force and effect, and no default by the borrower or the
Tenant has occurred under such Credit Lease, and (ii) there is no
existing condition which, but for the passage of time or the giving of
notice, or both, would result in a default under the terms of such
Credit Lease.
(C) The payments of Basic Rent under the Credit Lease are equal to or
greater than the payments due under the Mortgage Loan documents (except
if the Credit Lease Mortgage Loan provides for a balloon payment, in
which case a Lease Policy is in effect), and are payable without notice
or demand, and without setoff, counterclaim, recoupment, abatement,
reduction or defense.
(D) The obligations of each tenant under a Credit Lease (a "Tenant"),
including, but not limited to, the obligation of the Tenant to pay fixed
and additional rent, are not affected by reason of any prohibition,
limitation, interruption, cessation, restriction, prevention or
interference of the Tenant's use, occupancy or enjoyment of the
Mortgaged Property, other than by reason of damage to or destruction of
any portion of the Mortgaged Property, any taking of the Mortgaged
Property or any part thereof by condemnation or otherwise to the extent
that such Mortgaged Property is covered by an insurance policy issued by
Chubb Custom Insurance which, by its terms, would cover the payment of
any such obligations of the Tenant under such circumstances.
(E) The related borrower does not have any material monetary
obligations under the Credit Lease.
(F) Every obligation associated with managing, owning, developing and
operating the Mortgaged Property (other than structural repairs),
including, but not limited to, the costs associated with utilities,
taxes, insurance, capital improvements and maintenance is an obligation
of the Tenant.
(G) The related borrower does not have any nonmonetary obligations
(other than exclusivity, parking maintenance or structural repair
obligations) under the Credit Lease, the breach of which would result in
the abatement of rent, a right of setoff or termination of the Credit
Lease.
B-8
<PAGE>
(H) The related Tenant cannot terminate the Credit Lease for any
reason (except for a default by the related borrower under the Credit
Lease) prior to the payment in full of: (A) the outstanding principal
balance of the Credit Lease Mortgage Loan; (B) all accrued and unpaid
interest on the Credit Lease Mortgage Loan; and (C) any other sums due
and payable under the Credit Lease Mortgage Loan, as of the termination
date, which date is a rent payment date; provided, however, that the
related Tenant can terminate the Credit Lease by reason of damage to or
destruction of any portion of the Mortgaged Property, any taking of the
Mortgaged Property or any part thereof by condemnation or otherwise to
the extent that such Mortgaged Property is covered by an insurance
policy issued by Chubb Custom Insurance which, by its terms, would cover
the payment of any of the Tenant's remaining obligations, including the
payment of rent, under such circumstances.
(I) In the event the related Tenant assigns or sublets the Mortgaged
Property, the Tenant remains primarily obligated under the Credit Lease.
(J) The Tenant has agreed to indemnify the related borrower from any
claims of any nature relating to the Credit Lease and the Mortgaged
Property arising from any act done or omission or negligence by the
Tenant, except to the extent that such claims arise from the negligence
or tortious act or omission of the borrower.
(K) The Tenant has agreed to indemnify the related borrower from any
claims of any nature arising as a result of any environmental problem
affecting the Mortgaged Property caused by the Tenant.
(L) Any obligation or liability imposed by any easement or reciprocal
easement agreement is an obligation of the Tenant, and is without
recourse or liability to the related borrower.
(M) The Tenant is obligated to make payments directly to the
mortgagee, which payments are made into a lockbox account over which the
related borrower has no withdrawal or transfer rights.
(N) The terms of the related Mortgage Loan documents prohibit material
modifications of the terms of the Credit Lease without the consent of
the related mortgagee.
(O) The mortgagee is entitled to notice of any event of default from
the Tenant under the Credit Lease which would give the Tenant the right
to cancel or terminate such Credit Lease and the mortgagee shall have
the opportunity to cure any such default.
(P) Each Credit Lease that is guaranteed is guaranteed by a guarantor
(a "Guarantor") pursuant to a guaranty (a "Guaranty"). Each Guaranty
represents by its terms the unconditional obligation of the Guarantor,
without any right of offset, counterclaim or defense, and is a guarantee
of payment, not merely collection. The rejection of the Credit Lease in
a bankruptcy or insolvency of the Tenant shall not affect the
Guarantor's obligations under the Guaranty and the Guarantor shall be
obligated to pay the Tenant's obligations, subject to limitation as to
amount in the event of the Guarantor's bankruptcy, under the Credit
Lease notwithstanding such rejection. The Guaranty is binding on the
Guarantor, its successors and assigns and may not be amended or released
without the mortgagee's consent.
(Q) The Credit Lease Assignment creates a valid first priority
security interest in favor of the Seller in rights including the right
to Basic Rent and, to the extent payable under each Credit Lease,
additional rent due under the related Credit Lease, subject only to
license granted to the borrower to exercise certain rights and to
perform certain obligations of the lessor under the Credit Lease,
including the right to operate the related Mortgaged Property, and no
Person other than the borrower owns any interest in any payments due
under such Credit Lease.
(R) The Tenant has delivered an estoppel letter with respect to the
Credit Lease, verifying, among other things, the rents and terms of the
Credit Lease and acknowledging that no rent has been paid in advance.
B-9
<PAGE>
(S) The Mortgaged Property is not subject to any lease other than the
Credit Lease, no person has any possessory interest in, or right to
occupy the property except under and pursuant to the Credit Lease and
the Tenant under the Credit Lease is in occupancy of the Mortgaged
Property and the Mortgaged Property is not under construction or
substantial rehabilitation.
(T) Each Lease Policy, if any, (i) designates as loss payee, the
Trustee and all claims proceeds are payable to the loss payee; (ii) has
been paid in full as of the effective date and the Lease Policy cannot
be terminated prior to its termination date; (iii) has an effective date
prior to the Closing Date; (iv) has a termination date of the date upon
which the outstanding principal balance of the balance of the related
Mortgage Loan is reduced to zero; (v) requires the provider to pay the
loss amount up to the insured amount to the loss payee upon notification
of a claim which is equal to or greater than the outstanding principal
balance of the related Mortgage Loan at the time the claim is made; and
(vi) cannot be amended without prior written consent of the Trustee.
(xlvi) There is no material default, breach, violation or event of
acceleration under the Mortgage Note, Mortgage or Assignment of Leases and
to the actual knowledge of the Responsible Party, no event which, with the
passage of time or the giving of notice, or both, would constitute a
material default or event of acceleration, nor has the Responsible Party
waived any such default; no foreclosure action or other form of enforcement
is being threatened or has been commenced with respect to any Mortgage.
(xlvii) The Responsible Party has inspected or caused to be inspected
each related Mortgaged Property within the last 18 months.
(xlviii) Except for 1 Mortgage Loan, representing 0.3% of the Initial
Pool Balance, each Mortgaged Property constitutes one or more complete
separate tax lots (or will constitute separate tax lots when the next tax
maps are issued).
(xlix) With respect to any Mortgage Loan which is secured by a senior
housing, nursing home, or other healthcare-related facility ("Healthcare
Facility"), to the best of the Responsible Party's knowledge and:
(A) Based upon representations by the borrower and each Healthcare
Facility operator or manager (each a "Healthcare Operator"), each
borrower and each Healthcare Facility substantially complies with all
applicable federal, state, commonwealth and local laws, regulations,
quality and safety standards of the applicable state or commonwealth
Department of Health ("DOH") or any similar regulatory agency and all
other federal, state, commonwealth or local governmental authorities
having jurisdiction over such Healthcare Facility.
(B) Based on representations by the borrower and each Healthcare
Operator and, where applicable, certificates of government officials,
all governmental licenses, permits, regulatory agreements or other
approvals or agreements necessary for the use and operation of each
Healthcare Facility as intended are held by the applicable borrower or
Healthcare Operator and are in full force and effect, including, without
limitation, a valid certificate of need ("CON") or similar certificate,
license, or approval issued by the DOH for the requisite number of beds,
and approved provider status in any approved provider payment program
(collectively, the "Licenses").
(C) Based upon representations and covenants in the related Mortgage
and, where applicable, certificates of government officials, the
Licenses, including, without limitation, the CON:
(1) May not be, without the consent of the mortgagee, and have not
been, transferred to any location other than the Healthcare Facility;
(2) Have not been pledged as collateral security for any loan or
indebtedness other than the Mortgage; and
B-10
<PAGE>
(3) Are held free from restrictions or known conflicts which would
materially impair the use or operation of the Healthcare Facility as
intended, and are not provisional, probationary or restricted in any
way.
(D) Except for 4 Mortgage Loans, representing 2.0% of the Initial Pool
Balance, so long as the Mortgage remains outstanding, no borrower or
Healthcare Operator is permitted pursuant to the terms of the Mortgage
without the consent of the holder of the Mortgage to:
(1) Rescind, withdraw, revoke, amend, modify, supplement, or
otherwise alter the nature, tenor or scope of the Licenses for any
Healthcare Facility (other than the addition of services or other
matters expanding or improving the scope of such License);
(2) Amend or otherwise change any Healthcare Facility's authorized
bed capacity and/or the number of beds approved by the DOH; or
(3) Replace or transfer all or any part of any Healthcare
Facility's beds to another site or location.
(E) Based upon representations and covenants in the related Mortgage,
each Healthcare Facility substantially complies with all requirements
for participation in Medicare and Medicaid; and, each Healthcare
Facility is in conformance in all material respects with all insurance,
reimbursement and cost reporting requirements, and, if required, has a
current provider agreement which is in full force and effect under
Medicare and/or Medicaid.
(F) Based on representations by the borrower, there was no threatened
or pending revocation, suspension, termination, probation, restriction,
limitation, or nonrenewal affecting any borrower or Healthcare Facility
or any participation or provider agreement with any third-party payor,
including Medicare and Medicaid and any other private commercial
insurance managed care and employee assistance program (the "Third-Party
Payors' Programs") to which any borrower presently is subject.
(G) Based on representations by each borrower in the related Mortgage,
no borrower, Healthcare Operator or Healthcare Facility was then the
subject of any proceeding by any governmental agency, and no notice of
any violation has been received from a governmental agency that would,
directly or indirectly, or with the passage of time:
(1) Have a material adverse impact on any borrower's ability to
accept and/or retain patients or result in the imposition of a fine,
a sanction, a lower rate certification or a lower reimbursement rate
for services rendered to eligible patients;
(2) Modify, limit or annul or result in the transfer, suspension,
revocation or imposition of probationary use of any borrower's
Licenses; or
(3) Affect any borrower's continued participation in the Medicaid
or Medicare programs or any other of the Third-Party Payors'
Programs, or any successor programs thereto, at current rate
certifications.
(H) Based upon representations and covenants in the Mortgage and,
where available, certificates of government officials, each Healthcare
Facility and the use thereof complies in all material respects with all
applicable local, state and federal building codes, fire codes,
healthcare, nursing facility and other similar regulatory requirements
(the "Physical Plant Standards") and no material waivers of Physical
Plant Standards exist at any of the Healthcare Facilities.
(I) Based upon representations by each borrower and/or in the related
Mortgage and, where available, certificates of government officials,
except for 3 Mortgage Loans, representing 1.8% of the Initial Pool
Balance, no Healthcare Facility has received a "Substandard Quality of
Care" (or equivalent) violation, and no statement of charges or material
deficiencies has been made or penalty enforcement action has been
undertaken against any Healthcare Facility, Healthcare Operator or
borrower, or against any officer, director or stockholder of any
B-11
<PAGE>
Healthcare Operator or borrower by any governmental agency that is
currently pending or, to the Responsible Party's knowledge received
during the last three calendar years, and, to the Responsible Party's
knowledge, there have been no violations over the past three years which
have materially threatened any Healthcare Facility's, any Healthcare
Operator's or any borrower's certification for participation in Medicare
or Medicaid or the other Third-Party Payors' Programs.
(J) Based on representations by each borrower in the related Mortgage,
there were no pending or outstanding Medicaid, Medicare or Third-Party
Payors' Programs reimbursement audits or appeals pending at any of the
Healthcare Facilities concerning allegations of fraud or that might have
a material adverse effect on the operations of the Healthcare Facility.
(K) Based on representations by each borrower in the related Mortgage,
there were no pending Medicaid, Medicare or Third-Party Payors' Programs
proceedings, suits or investigations at any of the Healthcare Facilities
that might have a material adverse effect on the operations of the
Healthcare Facility.
(L) Based on representations by each borrower in the related Mortgage,
no borrower had pledged its receivables as collateral security for any
loan or indebtedness other than the related Mortgage which is not
subject to a subordination agreement in connection with the Mortgage
Loan.
(M) Based on representations by each borrower in the related Mortgage,
there are no patient or resident care agreements with patients or
residents or with any other persons which deviate in any material
adverse respect from the standard form customarily used at the
Healthcare Facilities.
(N) Except for 2 Mortgage Loans, representing 0.3% of the Initial Pool
Balance, if applicable, the borrower has represented in the related
Mortgage that all patient or resident records at each Healthcare
Facility, including patient or resident trust fund accounts, if any, are
true and correct in all material respects.
(O) If applicable, the borrower has represented in the related
Mortgage that any existing agreement relating to the management or
operation of any Healthcare Facility with respect to any Healthcare
Facility was in full force and effect and is not in default by any party
thereto.
(P) Except for 4 Mortgage Loans, representing 2.0% of the Initial Pool
Balance, the terms of each Mortgage require that the Healthcare
Facility, Healthcare Operator or borrower shall take no action which
will result in a reduction, suspension, recoupment or elimination of
reimbursement for services from any Medicare, Medicaid or Third Party
Payors' Programs.
(l) Each Mortgage Loan was originated by the Originator shown on the
Mortgage Loan Schedule or by an affiliate of such Originator.
(li) The related borrower for each Mortgage Loan is an entity organized
under the laws of a state or territory of the United States.
(lii) Each Mortgaged Property is located on or adjacent to a dedicated
road or street, or has an irrevocable easement permitting ingress and
egress. Each Mortgaged Property is served by public or private electric
utility service and by public or private water and sewer service or
non-public wells and septic systems.
The following terms have the following definitions for purposes of the
above representations and warranties:
"Assignment of Leases" means, with respect to any Mortgage Loan, an
assignment to the mortgagee of all of the borrower's rights to receive rental
payments from the related tenant pursuant to the related lease, which
assignment may be contained in the related Mortgage or in one or more separate
documents duly executed by the borrower in connection with the Mortgage Loan.
In the case of any Mortgage Loan secured by more than one Mortgaged Property,
the term "Assignment of Leases" shall refer to each Assignment of Leases
relating to each such Mortgaged Property and such Mortgage Loan.
B-12
<PAGE>
"Basic Rent" means, with respect to any Credit Lease, a portion (which may
be 100%) of the rent payable thereunder which is identified in the documents in
the related Mortgage File as "basic rent" or "base rent", which is an amount
sufficient to pay all principal on the related Credit Lease Mortgage Loan, plus
interest thereon at the applicable Mortgage Rate, and to fund related reserves
in the amount required to be funded under the documents in the related Mortgage
File.
"Credit Lease" means, with respect to any Mortgage Loan, any net lease
obligation entered into with respect to the related Mortgaged Property.
"Credit Lease Assignment" means, with respect to any Mortgaged Property,
any Credit Lease assignment or similar agreement executed by the mortgagor, as
assignor thereunder, assigning to the Loan Seller, as assignee thereunder, all
of the income, rents and profits derived from the ownership, operation, leasing
or disposition of all or a portion of such Mortgaged Property, in the form
which was duly executed, acknowledged and delivered by the Mortgagor, as
amended, modified, renewed or extended through the date hereof and from time to
time hereafter.
"Credit Lease Mortgage Loan" means a Mortgage Loan whose related Mortgage
Property is subject to a Credit Lease.
"Lease Policy" means a non-cancelable insurance policy obtained to cover
certain lease termination and rent abatement events arising out of a
condemnation of a Mortgaged Property subject to a Credit Lease.
"Mortgage File" means, with respect to each Mortgage Loan, the mortgage
loan documents and any other documents relating to such Mortgage Loan, in each
case to the extent they are delivered to the Trustee.
"Mortgage Loan Schedule" means a schedule of Mortgage Loans delivered to
the Trustee.
"Person" means any individual, partnership, corporation, limited liability
company, joint venture, trust or other entity.
B-13
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. Lasalle Street Suite 1740
Chicago, IL 60603
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
WAC:
WAMM:
Number of Pages
---------------
Table of Contents
TOTAL PAGES INCLUDED IN THIS PACKAGE
Specially Serviced Loan Detail Appendix A
Modified Loan Detail Appendix B
Realized Loss Detail Appendix C
INFORMATION IS AVAILABLE FOR THIS ISSUE FROM THE FOLLOWING SOURCES
LaSalle Web Site www.Inbabs.com
LaSalle Bulletin Board (714) 282-3990
LaSalle ASAP Fax System (312) 904-2200
ASAP #:
Monthly Data File Name:
C-1
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. Lasalle Street Suite 1740
Chicago, IL 60603
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
WAC:
WAMM:
<TABLE>
<CAPTION>
ORIGINAL OPENING PRINCIPAL PRINCIPAL NEGATIVE CLOSING INTEREST INTEREST PASS-THROUGH
CLASS FACE VALUE(1) BALANCE PAYMENT ADJ. OR LOSS AMORTIZATION BALANCE PAYMENT ADJUSTMENT RATE(2)
CUSIP PER $1,000 PER $1,000 PER $1,000 PER $1,000 PER $1,000 PER $1,000 PER $1,000 PER $1,000 NEXT RATE(3)
- ----- --------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----- --------- ---------- ----------- ---------- ---------- ---------- ---------- ---------- -------------
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
==== ==== ==== ==== ==== ==== ==== ==== ====
TOTAL P&I PAYMENT 0.00
====
</TABLE>
Notes: (1) N denotes notional balance not included in total (2) Interest
Paid minus Interest Adjustment minus Deferred Interest equals Accrual
(3) Estimated
C-2
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. Lasalle Street Suite 1625
Chicago, IL 60674-4107
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
WAC:
WAMM:
OTHER RELATED INFORMATION
SERVICER / POOL INFORMATION
<TABLE>
<CAPTION>
BEGINNING SCHEDULED UNSCHEDULED REALIZED ENDING SCHEDULED PREPAYMENT INTEREST
BALANCE PRINCIPAL PRINCIPAL LOSSES BALANCE INTEREST SHORTFALL EXCESS
- ------- --------- --------- ------ ------- -------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BEGINNING ENDING GROSS W/AVG MONTHS PREPAYMENT DISPOSITION
LOAN COUNT LOAN COUNT SERVICING FEES TO MATURITY PENALTIES FEES
---------- ---------- -------------- ----------- --------- ----
CURRENT CUMULATIVE
UNPAID UNPAID
CLASS INTEREST INTEREST
----- -------- --------
TOTAL
-----
</TABLE>
C-3
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1625
Chicago, IL 60674-4107
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
OTHER RELATED INFORMATION
<TABLE>
<CAPTION>
BEGINNING CURRENT ENDING
P&I ADVANCES MADE BY: UNREIMBURSED PERIOD REIMBURSED UNREIMBURSED
--------------------- ------------ ------ ---------- ------------
<S> <C> <C> <C> <C>
Servicer
Trustee
Fiscal Agent
Total P&I Advances
SUMMARY OF EXPENSES:
Current Period Servicing Fees
Current Period Trustee Fees
Current Period Special Servicing Fees
Principal Recovery Fees
Other Servicing Compensation--Interest on Advances
Total
Net Aggregate PPIS Allocable to the Bonds
Trust Fund Expenses
Current Realized Losses on Mortgage Loans
Cumulative Realized Losses on Mortgage Loans
</TABLE>
C-4
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1625
Chicago, IL 60674-4107
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
OTHER RELATED INFORMATION
<TABLE>
<CAPTION>
REO PROPERTY SOLD OF DISPOSED OF DURING THE RELATED COLLECTION PERIOD
PORTION FINAL
REALIZED INCLUDED IN RECOVERY
LOAN LOSS SALE OTHER AVAILABLE DETERMINATION
NUMBER ATTRIBUTABLE PROCEEDS PROCEEDS FUNDS DATE
- -------- -------------- ---------- ---------- ------------- --------------
<S> <C> <C> <C> <C> <C>
1
2
3
Totals
</TABLE>
<TABLE>
<CAPTION>
REO PROPERTY INCLUDED IN THE TRUST
MOST AGGREGATE AGGREGATE PORTION
RECENT AMOUNT AMOUNT INCLUDED IN
LOAN APPRAISAL OF NET OF OTHER AVAILABLE
NUMBER VALUATION INCOME REVENUES FUNDS
- -------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
1
2
3
Totals
</TABLE>
C-5
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1625
Chicago, IL 60674-4107
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
OTHER RELATED INFORMATION
<TABLE>
<CAPTION>
MORTGAGED PROPERTIES THAT BECAME REO DURING THE PRECEDING CALENDAR MONTH
UNPAID
DEBT PRINCIPAL
SERVICE STATED BALANCE
LOAN PROPERTY COVERAGE PRINCIPAL AS OF REO
NUMBER CITY STATE TYPE RATIO BALANCE DATE
- -------- ------ ------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
APPRAISAL REDUCTION AMOUNTS
<TABLE>
<CAPTION>
CURRENT TOTAL
LOAN NUMBER PERIOD REDUCTION
- ------------- --------- ----------
<S> <C> <C>
1
2
3
Totals 0.00
</TABLE>
C-6
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
<TABLE>
<CAPTION>
DELINQ 1 MONTH DELINQ 2 MONTHS DELINQ 3+ MONTHS FORECLOSURE/BANKRUPTCY REO
DISTRIBUTION -------------- --------------- ---------------- ---------------------- --------------
DATE # BALANCE # BALANCE # BALANCE # BALANCE # BALANCE
- -------------- --- -------- --- ------- --- -------- --- -------- --- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
11/18/98 0 0 0 0 0 0 0 0 0 0
0.00% 0.000% 0.00% 0.000% 0.00% 0.000% 0.00% 0.000% 0.00% 0.000%
</TABLE>
CURR WEIGHTED
MODIFICATIONS PREPAYMENTS AVG.
DISTRIBUTION ------------- ----------- --------------
DATE # BALANCE # BALANCE COUPON REMIT
- -------------- --- ------- --- ------- ------ -----
11/18/98 0 0 0 0
0.00% 0.000% 0.00% 0.000%
Note: Foreclosure and REO Totals are Included in the Appropriate Delinquency
Aging Category
C-7
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
DELINQUENT LOAN DETAIL
<TABLE>
<CAPTION>
PAID OUTSTANDING OUT. PROPERTY SPECIAL
DISCLOSURE DOC THRU CURRENT P&I P&I PROTECTION ADVANCE SERVICER FORECLOSURE BANKRUPTCY REO
CONTROL # DATE ADVANCE ADVANCES** ADVANCES DESCRIPTION(1) TRANSFER DATE DATE DATE DATE
- -------------- ---- ----------- ----------- --------------- -------------- ------------- ----------- ---------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A. P&I ADVANCE--LOAN IN GRACE PERIOD 1. P&I ADVANCE--LOAN DELINQUENT 1 MONTH 3. P&I ADVANCE--LOAN DELINQUENT 3 MONTHS OR MORE
B. P&I ADVANCE--LATE PAYMENT BUT 2. P&I ADVANCE--LOAN DELINQUENT 2 MONTHS 4. MATURED BALLOON/ASSUMED SCHEDULED PAYMENT
LESS THAN ONE MONTH DELINQ
</TABLE>
** Outstanding P&I Advances include the current period P&I Advance
C-8
<PAGE>
ABN AMRO
LASALLE NATIONAL BANK
Administrator:
Carissa Pogue (800)-246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
Statement Date: 02/18/99
Payment Date: 02/18/99
Prior Payment: N/A
Record Date: 01/31/99
POOL TOTAL
<TABLE>
<CAPTION>
DISTRIBUTION OF PRINCIPAL BALANCES DISTRIBUTION OF PROPERTY TYPES
- -------------------------------------------------------------- --------------------------------------------------
(2) CURRENT SCHEDULED NUMBER (2) SCHEDULED BASED ON NUMBER (2) SCHEDULED BASED ON
BALANCES OF LOANS BALANCE BALANCE PROPERTY TYPES OF LOANS BALANCE BALANCE
- ---------------------------- -------- ------------- -------- ---------------- -------- ------------- --------
<S> <C> <C> <S> <C> <C> <C>
$0 TO $ 500,000
$500,000 TO $ 1,000,000
$1,000,000 TO $ 1,500,000
$1,500,000 TO $ 2,000,000
$2,000,000 TO $ 2,500,000
$2,500,000 TO $ 3,000,000
$3,000,000 TO $ 3,500,000
$3,500,000 TO $ 4,000,000
$4,000,000 TO $ 5,000,000
$5,000,000 TO $ 6,000,000
$6,000,000 TO $ 7,000,000
$7,000,000 TO $ 8,000,000
$8,000,000 TO $ 9,000,000 TOTAL 0 0 0.00%
$9,000,000 TO $10,000,000 ---------------- -------- ------------- --------
$10,000,000 TO $11,000,000
$11,000,000 TO $12,000,000
$12,000,000 TO $13,000,000 DISTRIBUTION OF MORTGAGE INTEREST RATES
$13,000,000 TO $14,000,000 --------------------------------------------------
$14,000,000 TO $15,000,000 CURRENT MORTGAGE NUMBER (2) SCHEDULED BASED ON
$15,000,000 & ABOVE INTEREST RATE OF LOANS BALANCE BALANCE
- ----------- -- ----------- ----------------- -------- ------------- --------
TOTAL 0 0 0.00 % <S> <C> <C> <C>
- ---------------------------- -------- ------------- -------- 7.000% OR LESS
AVERAGE SCHEDULED BALANCE IS 0 7.000% TO 7.125%
MAXIMUM SCHEDULED BALANCE IS 0 7.125% TO 7.375%
MINIMUM SCHEDULED BALANCE IS 0 7.375% TO 7.625%
7.625% TO 7.875%
7.875% TO 8.125%
8.125% TO 8.375%
8.375% TO 8.625%
8.625% TO 8.875%
8.875% TO 9.125%
9.125% TO 9.375%
9.375% TO 9.625%
9.625% TO 9.875%
9.875% TO 10.125%
10.125% & ABOVE
----------------- -------- ------------- --------
TOTAL 0 0 0.00%
----------------- -------- ------------- --------
W/AVG MORTGAGE INTEREST RATE IS 0.0000%
MINIMUM MORTGAGE INTEREST RATE IS 0.0000%
MAXIMUM MORTGAGE INTEREST RATE IS 0.0000%
</TABLE>
GEOGRAPHIC DISTRIBUTION
---------------------------------------------------
NUMBER (2)SCHEDULED BASED ON
GEOGRAPHIC LOCATION OF LOANS BALANCE BALANCE
-------------------- -------- --------- --------
-------------------- -------- --------- --------
TOTAL 0 0 0.00%
C-9
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
ABN AMRO Statement Date: 02/18/99
LA SALLE NATIONAL BANK Payment Date: 02/18/99
Prior Payment: N/A
Administrator: Record Date: 01/31/99
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
POOL TOTAL
LOAN SEASONING
<TABLE>
<CAPTION>
NUMBER (2) SCHEDULED BASED ON
NUMBER OF YEARS OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
Weighted Average Seasoning is 0.0
DISTRIBUTION OF REMAINING TERM
FULLY AMORTIZING
<CAPTION>
FULLY AMORTIZING NUMBER (2) SCHEDULED BASED ON
MORTGAGE LOANS OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
60 months or less
61 to 120 months
121 to 180 months
181 to 240 months
241 to 360 months
Total 0 0 0.00%
Weighted Average Months to Maturity is 0
</TABLE>
<PAGE>
DISTRIBUTION OF DSCR
<TABLE>
<CAPTION>
DEBT SERVICE
COVERAGE RATIO NUMBER (2) SCHEDULED BASED ON
(1) OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
0.500 or less
0.500 to 0.625
0.625 to 0.750
0.750 to 0.875
0.875 to 1.000
1.000 to 1.125
1.125 to 1.250
1.250 to 1.375
1.375 to 1.500
1.500 to 1.625
1.625 to 1.750
1.750 to 1.875
1.875 to 2.000
2.000 to 2.125
2.125 & above
Unknown
Total 0 0 0.00%
Weighted Average Debt Service Coverage Ratio is 0.000
</TABLE>
DISTRIBUTION OF AMORTIZATION TYPE
<TABLE>
<CAPTION>
NUMBER (2) SCHEDULED BASED ON
AMORTIZATION TYPE OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
Total 0 0 0.00%
</TABLE>
DISTRIBUTION OF REMAINING TERM
BALLOON LOANS
<TABLE>
<CAPTION>
BALLOON NUMBER (2) SCHEDULED BASED ON
MORTGAGE LOANS OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
12 months or less
13 to 24 months
25 to 36 months
37 to 48 months
49 to 60 months
61 to 120 months
121 to 180 months
181 to 240 months
Total 0 0 0.00%
Weighted Average Months to Maturity is 0
</TABLE>
<PAGE>
NOI AGING
<TABLE>
<CAPTION>
NUMBER (2) SCHEDULED BASED ON
NOI DATE OF LOANS BALANCE BALANCE
<S> <C> <C> <C>
1 year or less
1 to 2 years
2 Years or More
Unknown
Total 0 0 0.00%
</TABLE>
- ------------
(1) Debt Service Coverage Ratios are calculated as described in the
prospectus, values are updated periodically as new NOI figures became
available from borrowers on an asset level. Neither the Trustee,
Servicer, Special Servicer or Underwriter makes any representation as to
the accuracy of the data provided by the borrower for this calculation.
C-10
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
ABN AMRO Statement Date: 02/18/99
LA SALLE NATIONAL BANK Payment Date: 02/18/99
Prior Payment: N/A
Administrator: Record Date: 01/31/99
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
ABN AMRO ACCT: 99-9999-99-9
SPECIALLY SERVICED LOAN DETAIL
<TABLE>
<CAPTION>
BEGINNING SPECIALLY
DISCLOSURE SCHEDULED INTEREST MATURITY PROPERTY SERVICED
CONTROL # BALANCE RATE DATE TYPE STATUS CODE (1) COMMENTS
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
(1) Legend:
<TABLE>
<CAPTION>
<S> <C> <C>
1) Request for waiver of Prepayment Penalty 4) Loan with Borrower Bankruptcy 7) Loans Paid Off
2) Payment default 5) Loan in Process of Foreclosure 8) Loans Returned to Master Servicer
3) Request for Loan Modification or Workout 6) Loan now REO Property
</TABLE>
APPENDIX A
C-11
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
ABN AMRO Statement Date: 02/18/99
LA SALLE NATIONAL BANK Payment Date: 02/18/99
Prior Payment: N/A
Administrator: Record Date: 01/31/99
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
ABN AMRO ACCT: 99-9999-99-9
MODIFIED LOAN DETAIL
<TABLE>
<CAPTION>
DISCLOSURE MODIFICATION MODIFICATION
CONTROL # DATE DESCRIPTION
<S> <C> <C>
</TABLE>
APPENDIX B
C-12
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
GMAC COMMERCIAL MORTGAGE CORP., AS MASTER SERVICER
LENNAR PARTNERS, INC., AS SPECIAL SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
ABN AMRO Statement Date: 02/18/99
LA SALLE NATIONAL BANK Payment Date: 02/18/99
Prior Payment: N/A
Administrator: Record Date: 01/31/99
Carissa Pogue (800) 246-5761
135 S. LaSalle Street Suite 1740
Chicago, IL 60603
ABN AMRO ACCT: 99-9999-99-9
REALIZED LOSS DETAIL
<TABLE>
<CAPTION>
BEGINNING GROSS PROCEEDS AGGREGATE NET NET PROCEEDS
DIST. DISCLOSURE APPRAISAL APPRAISAL SCHEDULED GROSS AS A % OF LIQUIDATION LIQUIDATION AS A % OF REALIZED
DATE CONTROL # DATE VALUE BALANCE PROCEEDS SCHED PRINCIPAL EXPENSES* PROCEEDS SCHED. BALANCE LOSS
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT
TOTAL 0.00 0.00 0.00 0.00 0.00
CUMULATIVE 0.00 0.00 0.00 0.00 0.00
</TABLE>
APPENDIX C
* Aggregate liquidation expenses also include outstanding P&I advances and
unpaid servicing fees, unpaid trustee fees, etc.
C-13
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
$779,262,000 (APPROXIMATE) DECEMBER 22, 1998
GS MORTGAGE SECURITIES CORPORATION II
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-C1
APPROXIMATE SECURITIES STRUCTURE:
EXPECTED EXPECTED
APPROXIMATE CREDIT WEIGHTED EXPECTED
EXPECTED FACE/NOTIONASUPPORT AVERAGE PAYMENT
CLASS RATING AMOUNT (% OF UPB) LIFE WINDOW(A)
(A) (S&P/MOODY'S) (MM) (YEARS) (B)
- ---------------------------------------------------------------
PUBLICLY OFFERED CLASSES
X AAAr/Aaa $890.6(c) 9.205 02/99-06/28
A1 AAA /Aaa 165.7 30.25 % 5.014 02/99-06/07
A2 AAA /Aaa 455.5 30.25 9.466 06/07-10/08
B AA/Aa2 42.3 25.50 9.744 10/08-10/08
C A /A2 44.5 20.50 9.744 10/08-10/08
D BBB/Baa2 57.9 14.00 9.819 10/08-11/08
E BBB-/Baa3 13.4 12.50 9.828 11/08-11/08
PRIVATELY OFFERED CLASSES (D)
- ---------------------------------------------------------------
F BB/Ba2 $ 46.8 7.25% 10.223 11/08-08/10
G B/B2 28.9 4.00 12.659 08/10-04/13
H B-/B3 7.8 3.13 14.425 04/13-09/13
J UR 27.8 N/A 19.843 09/13-06/28
TOTAL SECURITIES: $890.6
- ---------------------------------------------------------------
(a) All publicly offered classes except A1 subject to a cap equal to the
weighted average Net Mortgage Rate, determined without regard to any
modification of the mortgage loans, in effect from time to time on the
mortgage loans.
(b) Calculated at 0% CPR, no balloon extension and Hyperamortization Loans
pay in full on Anticipated Repayment Dates.
(c) Notional amount on interest only class.
(d) Not offered hereby.
KEY FEATURES:
Lead Manager: Goldman, Sachs & Co.
Co-Manager: Norwest Investment Services, Inc.
Mortgage Loan Sellers: Goldman Sachs Mortgage Company
(GSMC):
Archon Financial, L.P. ($168MM)
Central Park Capital, L.P. ($56MM)
Amresco Capital, L.P. ($363MM) (a)
Daiwa Finance Corp. ($168MM)
Daiwa Real Estate Finance Corp.
($137MM)
Master Servicer: GMAC Commercial Mortgage Corp.
Special Servicer: Lennar Partners, Inc.
Trustee: LaSalle National Bank
Launch: Early January
Pricing: Early January
Closing: Mid January
Cut-Off Date: January 10, 1999
Distribution Date: 18th of each month, or following
business day (commencing February
1999)
Payment Delay: 17 days
ERISA Eligible: Classes A1, A2, and X are expected
to be ERISA eligible subject to
certain conditions for eligibility
SMMEA Eligible: No Classes
Structure: Sequential pay
Day Count: 30/360
Tax Treatment: REMIC
Rated Final Distribution November 18, 2030
Date:
Clean up Call: 1.0%
Minimum Denominations: Publicly Offered Classes except
Class X: $10,000 & $1
Class X: $5,000,000 Notional Amount
& $1
Delivery: DTC for publicly traded certificates
(a) Amresco Capital Limited, Inc., will act as direct seller instead of
GSMC for 5 loans with a balance of approximately $20.6 million.
<PAGE>
COLLATERAL FACTS:
INITIAL POOL BALANCE: $890,585,907
NUMBER OF MORTGAGE LOANS: 304
NUMBER OF MORTGAGED PROPERTIES: 317
AVERAGE CUT-OFF DATE BALANCE: $2,929,559
WEIGHTED AVERAGE CURRENT MORTGAGE RATE: 7.20%
WEIGHTED AVERAGE U/W DSCR: 1.44x
WEIGHTED AVERAGE CUT-OFF DATE LTV RATIO: 71.5%
WEIGHTED AVERAGE REMAINING TERM TO MATURITY
(MONTHS): 124.3
WEIGHTED AVERAGE REMAINING AMORTIZATION TERM
(MONTHS): 319.6
WEIGHTED AVERAGE SEASONING (MONTHS): 5
BALLOON LOANS AS % OF TOTAL: 92.9%
TEN LARGEST LOANS AS % OF TOTAL: 16.0%
- ---------------------------------------------------------------
TEN LARGEST LOANS:
LOAN BALANCE % BY UPB DSCR PROPERTY TYPE
- ----------------------------------------------------------------
The Torpedo Factory $ 20,007,359 2.25% 1.26x Office
Whitehall Hotel 18,879,907 2.12 1.36 Lodging
Granada Apartments 18,745,566 2.10 1.30 Multifamily
Roswell Town Center 17,274,576 1.94 1.27 Retail
Salter Nursing
Portfolio 11,886,833 1.33 1.45 Nursing Home
Goodings
International Plaza 11,883,227 1.33 1.27 Retail
The Atrium Hotel 11,474,944 1.29 1.67 Lodging
Bruckner Nursing
Home 11,379,636 1.28 1.80 Nursing Home
The Phillips 10,805,080 1.21 1.35 Office
Building
Holiday Inn Select 10,359,122 1.16 1.45 Lodging
------------- ------ ------ ---------
TOTAL/WEIGHTED
AVERAGE $142,696,249 16.02% 1.39X
- ---------------------------------------------------------------
SELECTED LOAN DATA:
CUT-OFF DATE BALANCE
NUMBER OF (AS OF JAN 10, 1999)
GEOGRAPHIC MORTGAGED -----------------------------------
DISTRIBUTION PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
- -------------------------------------------------------------------
TEXAS 56 $ 115.8 13.01% 1.47x
CALIFORNIA 32 93.3 10.47 1.44
FLORIDA 21 70.1 7.87 1.37
NEW YORK 23 65.0 7.29 1.58
ARIZONA 13 57.3 6.44 1.42
OTHER 172 489.1 54.92 1.43
--- ------ -------
TOTAL/WTD. AVG. 317 $890.6 100.00 % 1.44X
- -------------------------------------------------------------------
PROPERTY TYPE PROPERTIES (MM) % BY UPB WTD. AVG. DSCR
- -------------------------------------------------------------------
MULTIFAMILY 144 $ 289.2 32.47% 1.43x
RETAIL 67 213.7 24.00 1.42
OFFICE 38 149.0 16.73 1.37
LODGING 31 128.8 14.46 1.58
INDUSTRIAL 28 75.0 8.42 1.39
HEALTHCARE 7 29.6 3.33 1.72
SELF-STORAGE 2 5.3 0.60 1.49
------ -------- --------
TOTAL/WTD. AVG. 317 $890.6 100.00 % 1.44X
- -----------------------------------------------------------------
PREPAYMENT RESTRICTIONS (MM) % BY UPB WTD. AVG. DSCR
- -----------------------------------------------------------------
LOCKOUT/DEFEASANCE $501.2 56.28% 1.47 x
LOCKOUT/GREATER OF YM OR
1% (A) 385.2 43.26 1.41
LOCKOUT/DECLINING FEE 3.2 0.36 1.32
LOCKOUT/OPEN 0.9 0.11 1.69
-------- --------
TOTAL/WTD. AVG. $890.6 100.00 % 1.44X
- -----------------------------------------------------------------
(a) Includes 1 loan with the provision "Defeasance or Greater of YM or 1%"
and 3 loans with the provision "Greater of YM or Declining Fee."
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
o For purposes of calculating principal distributions of the
Certificates:
o Available principal will be allocated sequentially to A1, A2,
B, C, D, E, F, G, H, J certificates.
o In case the principal balance of J, H, G, F, E, D, C, B, in
that order, have been reduced to zero due to the allocation of
principal losses, then A1 and A2 will be allocated principal
pro rata.
o Class X will be entitled to receive payments of interest only and will
not receive any payments of principal. Class X will be entitled to
payments of interest pro rata (based on interest entitlements) with the
Class A1 and A2 Certificates each month.
o Each class will be subordinate to the Class A1, A2, and X and to each
class with an earlier alphabetic designation than such class. Each of
the Class A1, A2, and X Certificates will be of equal priority.
o All classes will pay interest on a 30/360 basis.
o Principal Losses will be allocated in reverse alphabetical order to
Class J, H, G, F, E, D, C, B, and then pro rata to Class A1 and A2.
o The Master Servicer will cover net prepayment interest shortfalls, for
any month up to the portion of the Master Servicing Fee equal to 4
basis points per annum on the principal balance of the loans. Net
prepayment interest shortfalls (after application of prepayment
interest excesses and other Servicer coverage from the Master Servicing
Fee) will be allocated pro-rata (based on interest entitlements) to all
regular Certificates.
o Shortfalls resulting from Master Servicer and Special Servicer
modifications, Special Servicer compensation or other extraordinary
trust fund expenses will be allocated in reverse alphabetical order to
classes of outstanding regular Certificates other than to the Class X.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
ALLOCATION OF PREPAYMENT PREMIUMS (A)
- -------------------------------------------------------------------------------
ALLOCATION OF PREPAYMENT PREMIUMS:
Prepayment premiums and yield maintenance amounts with respect to all loans will
be allocated between the related Certificates then entitled to principal
distributions and the Class X Certificates as follows:
o A percentage of all prepayment premiums (either fixed prepayment
premiums or yield maintenance amounts) with respect to all loans will
be allocated to each class of the Certificates then entitled to
principal distributions, which percentage will be equal to the product
of (a) the percentage of the total principal distribution that such
Class receives, and (b) a percentage (which can be no greater than
100%), the numerator of which is the excess of the Pass-Through Rate of
the Class of the Certificates currently receiving principal over the
relevant Discount Rate, and the denominator of which is the excess of
the Mortgage Rate of the related Mortgage Loan over the Discount Rate.
-----------------------------------------------------------------
Prepayment (Pass-Through Rate - Discount Rate)
Premium Allocation = ---------------------------------
Percentage (Mortgage Rate - Discount Rate)
-----------------------------------------------------------------
o The remaining percentage of such prepayment premiums and yield
maintenance amounts will be allocated to the Class X Certificates.
o In general, this formula provides for an increase in the allocation of
prepayment premiums and yield maintenance premiums to the Certificates
then entitled to principal distributions relative to the Class X
Certificates as Discount Rates decrease and a decrease in the
allocation to such Classes as Discount Rates rise.
Allocation of Prepayment Premiums Example
Discount Rate Fraction Methodology:
Mortgage Rate = 8%
Bond Class Rate = 6%
Treasury Rate = 5%
% of Principal Distributed to Class = 100%
BOND CLASS ALLOCATION CLASS X ALLOCATION
------------------------------------------------------------------------
6% - 5% x 100% = 33 1/3% Receives excess premiums = 66 2/3% thereof
-------
8% - 5%
(a) For further information regarding the allocation of prepayment
premiums, refer to the Prospectus Supplement.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT PROVISIONS
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT LOCK-OUT/ PREPAYMENT PREMIUM ANALYSIS / DEFEASANCE
PERCENTAGE OF MORTGAGE POOL BY PREPAYMENT RESTRICTION ASSUMING NO PREPAYMENT OF PRINCIPAL (A)(B)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
RESTRICTIONS 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Locked Out 100.00% 100.00% 98.88% 38.73% 5.71% 3.56% 2.64% 2.09% 2.04% 1.81% 7.89%
Defeasance 0.00 0.00 0.00 55.26 55.29 56.07 54.28 54.49 54.49 44.09 31.97
Yield Maintenance 0.00 0.00 1.12 5.55 37.88 39.91 40.81 42.93 42.98 30.55 49.35
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL 100.00% 100.00% 100.00% 99.54% 98.88% 99.54% 97.73% 99.51% 99.51% 76.45% 89.21%
% Premiums
5.00 - 5.99% 0.00 0.00 0.00 0.36 0.35 0.36 0.00 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.36 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.37 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.37 0.00 0.00
1.00 - 1.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 10.80
Open 0.00% 0.00% 0.00% 0.11% 0.77% 0.11% 1.91% 0.11% 0.11% 23.54% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 890.59 879.21 867.15 854.01 839.87 819.22 803.12 750.14 732.18 694.74 78.12
% of UPB 100.00% 98.72% 97.37% 95.89% 94.30% 91.99% 90.18% 84.23% 82.21% 78.01% 8.77%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
RESTRICTIONS 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
- -----------------------------------------------------------------------------------------------------------------------------------
Locked Out 7.95% 10.92% 11.20% 11.55% 9.64% 10.22% 11.01% 12.06% 13.50% 12.66% 13.31%
Defeasance 31.39 33.81 32.84 12.61 14.92 14.27 13.40 12.11 9.17 8.97 8.29
Yield Maintenance 40.78 39.56 32.55 27.92 35.42 33.36 30.56 26.90 19.63 5.64 5.34
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL 80.12% 84.29% 76.59% 52.08% 59.98% 57.85% 54.97% 51.07% 42.30% 27.27% 26.94%
% Premiums
5.00 - 5.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 11.13 15.71 23.41 24.97 40.02 42.15 45.03 48.93 54.24 72.72 73.06
Open 8.75% 0.00% 0.00% 22.96 0.00% 0.00% 0.00% 0.00% 3.46% 0.00% 0.00%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 73.85 50.86 46.52 41.86 24.95 22.49 19.85 17.08 14.26 9.72 8.69
% of UPB 8.29% 5.71% 5.22% 4.70% 2.80% 2.53% 2.23% 1.92% 1.60% 1.09% 0.98%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY JANUARY
RESTRICTIONS 2021 2022 2023 2024 2025 2026 2027 2028
- -----------------------------------------------------------------------------------------------------------------------------------
Locked Out 14.19% 15.46% 17.48% 0.00% 0.00% 0.00% 0.00% 0.00%
Defeasance 7.34 5.95 0.00 0.00 0.00 0.00 0.00 0.00
Yield Maintenance 4.91 4.27 0.00 20.87 22.07 24.13 28.61 0.00
- -----------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL 26.44% 25.68% 17.48% 20.87% 22.07% 24.13% 28.61% 0.00%
% Premiums
5.00 - 5.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
4.00 - 4.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
3.00 - 3.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
2.00 - 2.99% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1.00 - 1.99% 73.56 74.32 69.61 79.13 77.93 75.87 71.39 0.00
Open 0.00% 0.00% 12.91 0.00% 0.00% 0.00% 0.00% 100.00%
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
UPB ($MM) 7.58 6.39 5.10 3.78 3.07 2.30 1.48 0.60
% of UPB 0.85% 0.72% 0.57% 0.42% 0.34% 0.26% 0.17% 0.07%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Table calculated using modeling assumptions.
(b) Differences in totals may exist due to rounding.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
- -------------------------------------------------------------------------------
AVERAGE LIFE TABLE (IN YEARS)
(PREPAYMENTS LOCKED OUT THROUGH LOCK OUT PERIOD, DEFEASANCE, YIELD MAINTENANCE
AND PENALTY PERIOD, THEN RUN AT THE INDICATED CPRS)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
PREPAYMENT ASSUMPTIONS (CPR)
0% CPR 25% CPR 50% CPR 75% CPR 100% PP*
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
X 9.20 9.18 9.14 9.10 8.87
A1 5.01 4.99 4.97 4.95 4.88
A2 9.47 9.42 9.37 9.30 9.02
B 9.74 9.74 9.74 9.74 9.37
C 9.74 9.74 9.74 9.74 9.49
D 9.82 9.81 9.79 9.77 9.54
E 9.83 9.83 9.83 9.83 9.58
F 10.22 10.21 10.20 10.18 10.00
G 12.66 12.64 12.61 12.57 12.37
H 14.42 14.40 14.38 14.34 14.02
J 19.84 19.84 19.83 19.82 19.74
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*"PP" means 100% of each loan prepays when it becomes freely prepayable.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE BALANCES
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE AGGREGATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
BALANCES LOANS BALANCE CUT-OFF BALANCE DSCR RATE (MOS) RATIO
DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 500,000 - 999,999 82 $ 60,172,426 6.76% $ 733,810 1.48x 7.76% 128.3 68.57%
1,000,000 - 1,999,999 76 111,643,664 12.54 1,468,996 1.46 7.31 142.2 71.08
2,000,000 - 2,999,999 51 128,032,363 14.38 2,510,438 1.52 7.12 122.4 70.45
3,000,000 - 3,999,999 29 102,601,264 11.52 3,537,975 1.43 7.21 120.4 70.61
4,000,000 - 4,999,999 19 86,392,906 9.70 4,546,995 1.38 7.08 126.0 71.08
5,000,000 - 5,999,999 15 83,039,184 9.32 5,535,946 1.49 7.04 107.8 72.67
6,000,000 - 6,999,999 5 32,794,403 3.68 6,558,881 1.42 6.96 116.0 74.24
7,000,000 - 7,999,999 7 54,225,944 6.09 7,746,563 1.42 7.04 118.9 74.63
8,000,000 - 8,999,999 6 50,791,123 5.70 8,465,187 1.45 6.86 116.5 74.51
9,000,000 - 9,999,999 4 38,196,381 4.29 9,549,095 1.40 6.73 168.1 74.49
10,000,000 - 11,999,999 6 67,788,843 7.61 11,298,140 1.50 7.55 124.7 68.18
17,000,000 - 19,999,999 3 54,900,048 6.16 18,300,016 1.31 7.51 109.8 71.33
20,000,000 - 24,999,999 1 20,007,359 2.25 20,007,359 1.26 7.22 110.0 74.38
----- ------------- ---------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $ 2,929,559 1.44X 7.20% 124.3
=== ============ ====== =
71.46
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGED PROPERTIES BY STATE
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
MORTGAGED CUT-OFF DATE CUT-OFF DATE CUT-OFF UNDERWRITTEN MORTGAGE MATURITY DATE LTV
STATE PROPERTIES BALANCE BALANCE DATE BALANCE DSCR RATE (MOS) RATIO
- --------------------- ------------ ---------------- -------------- ------------- -------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Texas 56 $115,832,720 13.01% $2,068,441 1.47x 7.16% 116.6 73.03%
California 32 93,268,451 10.47 2,914,639 1.44 7.24 124.5 68.30
Florida 21 70,095,478 7.87 3,337,880 1.37 7.27 126.2 71.75
New York 23 64,964,839 7.29 2,824,558 1.58 7.50 124.9 69.13
Arizona 13 57,330,008 6.44 4,410,001 1.42 7.00 114.1 74.62
Georgia 12 46,625,164 5.24 3,885,430 1.44 7.46 128.5 73.52
Washington 10 44,268,684 4.97 4,426,868 1.39 7.03 117.6 70.68
Massachusetts 14 36,701,118 4.12 2,621,508 1.46 7.27 115.9 68.30
Illinois 6 34,015,000 3.82 5,669,167 1.39 7.38 124.2 68.09
Maryland 10 33,607,473 3.77 3,360,747 1.45 7.11 117.8 70.99
Pennsylvania 14 31,893,366 3.58 2,278,098 1.33 7.24 120.1 75.99
Tennessee 6 30,991,018 3.48 5,165,170 1.54 6.76 117.0 75.41
New Jersey 14 30,435,474 3.42 2,173,962 1.40 7.05 207.8 72.15
Virginia 4 24,458,888 2.75 6,114,722 1.27 7.18 111.1 74.03
Nevada 9 21,853,511 2.45 2,428,168 1.38 7.11 134.8 71.37
Colorado 7 19,128,161 2.15 2,732,594 1.41 6.96 116.3 70.96
Wisconsin 4 18,014,985 2.02 4,503,746 1.39 7.12 108.8 73.79
Oklahoma 5 15,096,519 1.70 3,019,304 1.30 7.15 120.2 76.59
Kentucky 7 13,729,821 1.54 1,961,403 1.36 7.45 115.1 73.48
Ohio 7 13,071,839 1.47 1,867,406 1.37 7.14 107.9 72.83
North Carolina 4 10,921,114 1.23 2,730,279 1.50 7.42 116.8 70.27
Mississippi 4 8,926,327 1.00 2,231,582 2.28 7.47 191.8 59.35
Missouri 6 6,662,940 0.75 1,110,490 1.38 7.29 147.4 74.24
Oregon 4 6,634,457 0.74 1,658,614 1.58 7.24 137.4 53.98
Idaho 2 6,428,307 0.72 3,214,154 1.30 6.47 117.0 71.79
Connecticut 3 6,291,702 0.71 2,097,234 1.44 7.52 116.0 68.12
Michigan 3 4,993,127 0.56 1,664,376 1.55 7.05 116.8 67.20
Utah 3 4,051,863 0.45 1,350,621 1.33 7.74 114.5 71.90
Maine 1 3,477,937 0.39 3,477,937 1.35 6.94 115.0 72.46
Indiana 4 2,795,597 0.31 698,899 1.36 7.12 116.6 76.61
South Carolina 1 2,694,387 0.30 2,694,387 1.78 7.50 118.0 56.13
Louisiana 2 2,345,985 0.26 1,172,992 1.72 7.19 167.0 73.14
New Mexico 1 2,193,040 0.25 2,193,040 2.72 7.27 117.0 73.10
West Virginia 1 1,637,348 0.18 1,637,348 1.39 7.88 112.0 71.19
Rhode Island 1 1,364,770 0.15 1,364,770 1.50 6.28 117.0 68.24
Alabama 1 1,356,840 0.15 1,356,840 1.58 6.57 117.0 79.81
Kansas 1 1,307,700 0.15 1,307,700 1.46 8.10 234.0 74.30
Alaska 1 1,119,948 0.13 1,119,948 1.33 7.12 116.0 74.66
------ -------------- --------
TOTAL/WTD. AVG. 317 $890,585,907 100.00% $2,809,419 1.44X 7.20% 124.3 71.46%
=== ============ =========
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
STRUCTURAL AND COLLATERAL TERM SHEET
MAP
WA OR ID NV
4.97% 0.74% 0.72% 2.45%
CA UT CO AZ
10.47% 0.45 2.15% 6.44%
NM KS OK TX
0.25% 0.15% 1.70% 13.01%
AK MO LA WI
0.13% 0.75% 0.26% 2.02%
IL MS MI IN
3.82% 1.00% 0.56% 0.31%
KY TN AL OH
1.54% 3.48% 0.15% 1.47%
WV GA FL PA
0.18% 5.24% 7.87% 3.58%
VA NC SC NY
2.75% 1.23% 0.30% 7.29%
ME MA RI CT
0.39% 4.12% 0.15% 0.71%
NJ MD
3.42% 3.77%
PIE CHART
ARIZONA GEORGIA WASHINGTON NEW YORK
6.44% 5.24% 4.97% 7.29%
FLORIDA CALIFORNIA TEXAS OTHER
7.87% 10.47% 13.01% 44.71%
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
DISTRIBUTION PROPERTY TYPES
Healthcare 3.33%
Self Storage 0.60%
Multifamily 32.47%
Retail 24.00%
Office 16.73%
Lodging 14.46%
Industrial 8.42%
<TABLE>
<CAPTION>
WEIGHTED WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED AVERAGE AVERAGE
NUMBER OF OF AGGREGATE AVERAGE AVERAGE REMAINING CUT-OFF
MORTGAGED CUT-OFF DATE CUT-OFF DATE AVERAGE UNDERWRITTEN MORTGAGE TERM TO DATE LTV
PROPERTY TYPE PROPERTIES BALANCE BALANCE CUT-OFF DATE DSCR RATE MATURITY RATIO
BALANCE (MOS)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily 144 $289,156,086 32.47% $2,008,028 1.43x 7.21% 132.3 73.78%
Retail 67 213,697,597 24.00 3,189,516 1.42 7.02 124.0 71.42
Office 38 148,989,033 16.73 3,920,764 1.37 7.20 115.1 71.09
Lodging 31 128,792,046 14.46 4,154,582 1.58 7.45 125.4 66.90
Industrial 28 74,980,587 8.42 2,677,878 1.39 7.00 114.3 73.36
Healthcare 7 29,648,648 3.33 4,235,521 1.72 7.95 115.5 66.75
Self-Storage 2 5,321,909 0.60 2,660,955 1.49 7.03 126.7 66.53
--- ------------ -------
TOTAL/WTD. AVG. 317 $890,585,907 100.00% $2,809,419 1.44x 7.20% 124.3 71.46%
=== ============ =======
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF ANNUALIZED DEBT SERVICE COVERAGE RATIOS (NCF)
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE
WEIGHTED REMAINING WEIGHTED
RANGE OF DEBT NUMBER OF PERCENTAGE OF AVERAGE WEIGHTED TERM TO AVERAGE
SERVICE COVERAGE MORTGAGE CUT-OFF DATE AGGREGATE AVERAGE CUT-OFF UNDERWRITTEN AVERAGE MATURITY CUT-OFF DATE
RATIOS LOANS BALANCE CUT-OFF DATE DATE BALANCE DSCR MORTGAGE RATE (MOS) LTV
BALANCE RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1.00 - 1.10x (a) 4 $ 5,632,391 0.63% $1,408,098 1.04x 6.37% 189.9 90.82%
1.11 - 1.20 5 12,711,340 1.43 2,542,268 1.17 7.09 146.3 68.97
1.21 - 1.30 41 162,512,586 18.25 3,963,722 1.27 7.32 121.9 74.24
1.31 - 1.40 114 294,141,767 33.03 2,580,191 1.36 7.21 126.6 71.98
1.41 - 1.50 61 212,291,966 23.84 3,480,196 1.45 7.15 115.3 71.95
1.51 - 1.60 34 101,245,136 11.37 2,977,798 1.55 7.04 127.7 70.64
1.61 - 1.70 17 37,446,223 4.20 2,202,719 1.66 7.28 129.7 65.37
1.71 - 1.80 9 29,023,620 3.26 3,224,847 1.78 7.45 121.6 73.46
1.81 - 1.90 3 5,160,364 0.58 1,720,121 1.87 7.39 245.4 71.12
1.91 - 2.00 6 9,467,783 1.06 1,577,964 1.94 7.29 124.3 63.27
2.01 - 2.10 2 3,766,988 0.42 1,883,494 2.04 8.45 117.6 64.99
2.11 - 2.20 2 2,918,407 0.33 1,459,204 2.20 7.83 132.1 43.80
2.21 - 2.30 1 1,985,429 0.22 1,985,429 2.21 7.50 113.0 43.07
2.51 - 5.41 5 12,281,906 1.38 2,456,381 2.78 6.63 117.1 47.50
------ ------------- ------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) There are four credit-tenant loans in the pool included in this range.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF CUT-OFF DATE LOAN TO VALUE AT ORIGINATION RATIOS
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AGGREGATE AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF CUT-OFF DATE MORTGAGE CUT-OFF DATE CUT-OFF DATE AVERAGE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
LOAN TO VALUE RATIOS LOANS BALANCE BALANCE CUT-OFF DATE DSCR RATE (MOS) RATIO
BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
15.1 - 30.0 1 $ 598,989 0.07% $ 598,989 5.41x 8.57% 118.0 17.62%
30.1 - 50.0 9 16,296,287 1.83 1,810,699 2.16 6.95 152.4 41.79
50.1 - 60.0 15 52,916,836 5.94 3,527,789 1.59 7.42 117.8 57.82
60.1 - 65.0 29 85,630,418 9.62 2,952,773 1.46 7.48 117.5 63.18
65.1 - 70.0 60 137,760,490 15.47 2,296,008 1.46 7.33 123.3 67.85
70.1 - 75.0 113 323,050,311 36.27 2,858,852 1.39 7.26 125.6 73.09
75.1 - 80.0 67 242,940,017 27.28 3,625,970 1.41 6.98 124.7 77.96
80.1 - 85.0 (a) 7 26,940,783 3.03 3,848,683 1.47 6.81 116.9 80.49
85.1 - 90.0 (a) 1 1,561,882 0.18 1,561,882 1.06 6.35 180.0 89.76
90.1 - 95.0 (a) 1 1,348,733 0.15 1,348,733 1.01 6.35 168.0 91.44
95.1 - 100.0 (a) 1 1,541,161 0.17 1,541,161 1.06 6.41 236.0 96.32
------ -------------- ---------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) There are four credit-tenant loans in this pool of which some are included
in this range.
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF MORTGAGE INTEREST RATES
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE
PERCENTAGE OF WEIGHTED WEIGHTED REMAINING WEIGHTED
NUMBER OF AGGREGATE AVERAGE AVERAGE AVERAGE TERM TO AVERAGE
RANGE OF MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY CUT-OFF
MORTGAGE RATES LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) DATE LTV
RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
5.7500 - 6.0000% 4 $ 13,251,740 1.49% $3,312,935 1.93x 5.83% 109.8 58.62%
6.0001 - 6.2500 2 4,222,799 0.47 2,111,399 1.61 6.16 117.0 73.06
6.2501 - 6.5000 9 35,617,449 4.00 3,957,494 1.38 6.41 128.3 73.42
6.5001 - 6.7500 27 101,069,475 11.35 3,743,314 1.45 6.64 118.5 75.72
6.7501 - 7.0000 64 220,378,475 24.75 3,443,414 1.41 6.89 127.6 74.33
7.0001 - 7.2500 41 159,066,299 17.86 3,879,666 1.43 7.15 118.7 70.47
7.2501 - 7.5000 45 133,586,366 15.00 2,968,586 1.46 7.38 135.2 70.60
7.5001 - 7.7500 35 85,096,000 9.56 2,431,314 1.41 7.67 116.4 68.44
7.7501 - 8.0000 36 77,088,293 8.66 2,141,341 1.42 7.90 118.7 67.93
8.0001 - 8.2500 24 29,370,225 3.30 1,223,759 1.42 8.18 142.1 68.73
8.2501 - 8.5000 9 20,294,424 2.28 2,254,936 1.60 8.35 126.1 73.19
8.5001 - 8.7500 7 10,948,337 1.23 1,564,048 1.84 8.60 119.4 60.16
9.2501 - 9.5000 1 596,025 0.07 596,025 1.28 9.25 111.0 69.31
------ --------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING AMORTIZATION TERMS
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF PERCENTAGE OF AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF MORTGAGE CUT-OFF DATE AGGREGATE AVERAGE UNDERWRITTEN MORTGAGE RATE MATURITY DATE LTV
AMORTIZATION TERMS LOANS BALANCE CUT-OFF DATE CUT-OFF DATE DSCR (MOS) RATIO
BALANCE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
151 - 170 months 3 $ 7,129,922 0.80% $2,376,641 1.16x 7.00% 169.3 78.01
171 - 190 months 9 11,370,432 1.28 1,263,381 1.45 7.10 169.4 62.06
191 - 210 months 1 1,880,881 0.21 1,880,881 1.17 6.90 80.0 78.37
211 - 230 months 2 2,980,109 0.33 1,490,055 1.34 7.20 215.6 71.72
231 - 250 months 23 41,452,034 4.65 1,802,262 1.58 7.28 169.7 67.36
251 - 270 months 5 25,657,537 2.88 5,131,507 1.45 7.93 110.7 62.65
271 - 290 months 14 35,841,185 4.02 2,560,085 1.49 7.45 137.3 70.00
291 - 310 months 132 301,415,775 33.84 2,283,453 1.49 7.39 120.4 69.10
331 - 360 months 115 462,858,033 51.97 4,024,852 1.40 7.02 120.3 74.06
---- ------------ -------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF ORIGINAL TERMS TO MATURITY
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF ORIGINAL TERMS MORTGAGE CUT-OFF DATE AGGREGATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
TO MATURITY LOANS BALANCE CUT-OFF BALANCE DSCR RATE (MOS) RATIO
DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
60 - 83 months 1 $ 5,926,346 0.67% $5,926,346 1.44x 7.42% 49.0 77.98
84 - 120 months 255 772,660,454 86.76 3,030,041 1.44 7.20 113.2 71.37
121 - 180 months 25 64,298,362 7.22 2,571,934 1.43 7.15 156.1 71.38
181 - 240 months 16 27,569,563 3.10 1,723,098 1.40 7.34 230.6 72.72
241 - 360 months 7 20,131,183 2.26 2,875,883 1.50 7.25 327.0 71.30
------ ------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00 % $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF REMAINING TERMS TO MATURITY
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
RANGE OF REMAINING TERMS MORTGAGE CUT-OFF DATE AGGREGATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
TO MATURITY LOANS BALANCE CUT-OFF BALANCE DSCR RATE (MOS) RATIO
DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
49 - 50 months 1 $ 5,926,346 0.67 % $5,926,346 1.44x 7.42% 49.0 77.98
71 - 90 months 11 40,011,713 4.49 3,637,428 1.40 6.92 79.0 74.51
91 - 110 months 17 77,573,579 8.71 4,563,152 1.33 7.53 108.7 71.23
111 - 120 months 229 660,149,530 74.13 2,882,749 1.47 7.18 115.8 71.05
131 - 150 months 6 23,055,679 2.59 3,842,613 1.33 6.98 139.0 77.27
151 - 170 months 3 7,129,922 0.80 2,376,641 1.16 7.00 169.3 78.01
171 - 190 months 15 30,600,276 3.44 2,040,018 1.37 7.22 173.5 69.66
211 - 230 months 2 2,980,109 0.33 1,490,055 1.34 7.20 215.6 71.72
231 - 250 months 13 23,027,571 2.59 1,771,352 1.43 7.43 236.0 71.70
271 - 353 months 7 20,131,183 2.26 2,875,883 1.50 7.25 327.0 71.30
------ ------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00 % $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
ALL INFORMATION IN THIS TERM SHEET, WHETHER REGARDING THE ASSETS BACKING ANY
SECURITIES DISCUSSED HEREIN OR OTHERWISE, WILL BE SUPERSEDED BY THE INFORMATION
CONTAINED IN ANY FINAL PROSPECTUS FOR ANY SECURITIES ACTUALLY SOLD TO YOU.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF AMORTIZATION TYPES
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE AGGREGATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
AMORTIZATION TYPE LOANS BALANCE CUT-OFF BALANCE DSCR RATE (MOS) RATIO
DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balloon 270 $827,155,616 92.88% $3,063,539 1.45x 7.20% 115.6 71.57%
Fully Amortizing 32 59,114,989 6.64 1,847,343 1.41 7.24 247.4 70.70
Hyperamortizing 2 4,315,302 0.48 2,157,651 1.56 7.32 117.6 60.42
------ -------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF PREPAYMENT PROVISIONS
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE OF WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF AGGREGATE AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE CUT-OFF DATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
PREPAYMENT PROVISION LOANS BALANCE BALANCE BALANCE DSCR RATE (MOS) RATIO
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lockout/Defeasance 131 $501,235,736 56.28% $3,826,227 1.47x 7.28% 117.0 71.47%
Lockout/Greater of YM or 171 385,227,366 43.26 2,252,792 1.41 7.11 133.9 71.46
1% (a)
Lockout/Declining Fee 1 3,179,729 0.36 3,179,729 1.32 7.31 114.0 75.71
Lockout/Open 1 943,077 0.11 943,077 1.69 8.13 112.0 52.39
------ --------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20 124.3 71.46%
=== ============ ======
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) Includes 1 loan with the provision "Defeasance or Greater or YM or 1%"
and 3 loans with the provision "Greater of YM or Declining Fee."
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION OF ORIGINATION YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
WEIGHTED
AVERAGE WEIGHTED
PERCENTAGE WEIGHTED WEIGHTED REMAINING AVERAGE
NUMBER OF OF AVERAGE AVERAGE AVERAGE TERM TO CUT-OFF
MORTGAGE CUT-OFF DATE AGGREGATE CUT-OFF DATE UNDERWRITTEN MORTGAGE MATURITY DATE LTV
ORIGINATION YEAR LOANS BALANCE CUT-OFF BALANCE DSCR RATE (MOS) RATIO
DATE BALANCE
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1998 303 $887,444,308 99.65% $2,928,859 1.44x 7.20% 124.4 71.50%
1997 1 3,141,599 0.35 3,141,599 1.49 8.62 105.0 60.77
------ -------------- --------
TOTAL/WTD. AVG. 304 $890,585,907 100.00% $2,929,559 1.44X 7.20% 124.3 71.46%
=== ============ ======
</TABLE>
This material is for your private information and we are not soliciting any
action based upon it. This material is not to be construed as an offer to sell
or the solicitation of any offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This material is based on
information that we consider reliable, but we do not represent that it is
accurate or complete and it should not be relied upon as such. By accepting this
material the recipient agrees that it will not distribute or provide the
material to any other person. The information contained in this material may be
based on assumptions regarding market conditions and other matters as reflected
therein. We make no representations regarding the reasonableness of such
assumptions or the likelihood that any of such assumptions will coincide with
actual market conditions or events, and this material should not be relied upon
for such purposes. We and our affiliates, officers, directors, partners and
employees, including persons involved in the preparation or issuance of this
material may, from time to time, have long or short positions in, and buy and
sell, the securities mentioned therein or derivatives thereof (including
options). This material may be filed with the Securities and Exchange Commission
(the "SEC") and incorporated by reference into an effective registration
statement previously filed with the SEC under Rule 415 of the Securities Act of
1933, including in cases where the material does not pertain to securities that
are ultimately offered for sale pursuant to such registration statement.
Information contained in this material is current as of the date appearing on
this material only. Information in this material regarding any assets backing
any securities discussed herein supersedes all prior information regarding such
assets. All information in this Term Sheet, whether regarding the assets backing
any securities discussed herein or otherwise, will be superseded by the
information contained in any final prospectus for any securities actually sold
to you.
This material is furnished to you by Goldman, Sachs & Co. and not by the issuer
of the securities. Goldman, Sachs & Co. is acting as the sole lead underwriter
and not acting as agent for the issuer or its affiliates in connection with the
proposed transaction. The issuer has not prepared or taken part in the
preparation of these materials.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C1
IMPORTANT NOTICE TO ALL POTENTIAL INVESTORS
-------------------------------------------
The file on this diskette contains the `Certain Characteristics of the
Mortgage Loans' and `Multifamily' Schedule in Microsoft Excel Version 5.0
format. The information contained in this diskette appears elsewhere in
paper form in this Prospectus Supplement and must be considered part of, and
together with, the information contained elsewhere in the Prospectus
Supplement and the Prospectus. Defined terms used in this diskette but not
otherwise defined therein shall have the respective meanings assigned to
them in the paper portion of the Prospectus Supplement and Prospectus. All
of the information contained in this diskette is subject to the same
limitations and qualifications contained elsewhere in this Prospectus and
Prospectus Supplement. Prospective investors are strongly urged to read the
paper portion of this Prospectus Supplement and the Prospectus in its
entirety prior to accessing this diskette. The information contained in this
diskette has been filed by the Seller with the Securities and Exchange
Commission as part of a Current Report on Form 8-K, which is incorporated by
reference in this Prospectus Supplement, and is also available through the
public reference branch of the Securities and Exchange Commission. IF THIS
DISKETTE WAS NOT RECEIVED IN A SEALED PACKAGE, THERE CAN BE NO ASSURANCES
THAT IT REMAINS IN ITS ORIGINAL FORMAT AND SHOULD NOT BE RELIED UPON FOR ANY
PURPOSE. PROSPECTIVE INVESTORS MAY CONTACT ROLF EDWARDS OF GOLDMAN, SACHS &
CO. AT (212) 902-5637 TO RECEIVE AN ADDITIONAL COPY OF THE DISKETTE.
<PAGE>
This diskette contains a spreadsheet file that can be put on a
user-specified hard drive or network drive. The file is "GSMSCII.xls". The file
"GSMSCII.xls" is a Microsoft Excel(1), Version 5.0 spreadsheet. The file
provides, in electronic format, certain loan level information shown in ANNEX A
of the Preliminary Prospectus Supplement.
Open the file as you would normally open any spreadsheet in Microsoft
Excel. After the file is opened, a screen will appear requesting a password.
Please "click" the "read only" option. At that point a securities law legend
will be displayed. READ THE LEGEND CAREFULLY. To view the ANNEX A data, "click"
on the worksheet labeled "Characteristics." To view the multifamily schedule
data, "click" on the worksheet labeled "Multifamily Schedule."
- ----------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE>
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus and
prospectus supplement. You must not rely on any unauthorized information or
representations. This prospectus and prospectus supplement is an offer to sell
only the certificates offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus and prospectus supplement is current only as of its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
------
<S> <C>
Summary of Prospectus Supplement ...................... S-7
Risk Factors .......................................... S-18
Description of the Mortgage Pool ...................... S-35
Description of the Offered Certificates ............... S-42
Yield, Prepayment and Maturity Considerations ......... S-58
The Pooling Agreement ................................. S-71
Use of Proceeds ....................................... S-92
Certain Legal Aspects of the Mortgage Loans ........... S-92
Federal Income Tax Consequences ....................... S-94
State Tax Considerations .............................. S-96
ERISA Considerations .................................. S-96
Legal Investment ...................................... S-97
Underwriting .......................................... S-98
Legal Matters ......................................... S-98
Ratings ............................................... S-99
Index of Significant Definitions ...................... S-100
Annex A--Certain Characteristics of the Mortgage
Loans ............................................... A-1
Annex B--Representations and Warranties ............... B-1
Annex C--Form of Statement to Certificateholders ...... C-1
Annex D--Structural and Collateral Term Sheet ......... D-1
PROSPECTUS
Table of Contents ..................................... 2
Risk Factors .......................................... 3
The Prospectus Supplement ............................. 5
The Seller ............................................ 7
Use of Proceeds ....................................... 7
Description of the Certificates ....................... 8
The Mortgage Pools .................................... 16
Servicing of the Mortgage Loans ....................... 20
Credit Enhancement .................................... 26
Swap Agreement ........................................ 29
Yield Considerations .................................. 29
Certain Legal Aspects of the Mortgage Loans ........... 31
Federal Income Tax Consequences ....................... 47
State Tax Considerations .............................. 73
ERISA Considerations .................................. 74
Legal Investment ...................................... 75
Plan of Distribution .................................. 78
Incorporation of Certain Information by Reference ..... 79
Legal Matters ......................................... 80
Index of Defined Terms ................................ 81
</TABLE>
Until , 1999, all dealers effecting transactions in the Offered
Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus Supplement and Prospectus. This is in addition
to the dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to an unsold allotment or subscription.
$779,262,000
(Approximate)
GS MORTGAGE
SECURITIES CORPORATION II
(AS SELLER)
Commercial Mortgage Pass-Through
Certificates Series 1999-C1
<TABLE>
<S> <C>
Class A-1 Certificates ......... $165,650,000
Class A-2 Certificates ......... $455,533,000
Class X Certificates ........... $890,585,907
Class B Certificates ........... $ 42,303,000
Class C Certificates ........... $ 44,529,000
Class D Certificates ........... $ 57,888,000
Class E Certificates ........... $ 13,359,000
</TABLE>
-----------------------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------------------
GOLDMAN, SACHS & CO.
NORWEST INVESTMENT
SERVICES, INC.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
GS MORTGAGE SECURITIES CORPORATION II
SELLER
COMMERCIAL MORTGAGE PASS-THROUGH
CERTIFICATES (ISSUABLE IN SERIES)
GS Mortgage Securities Corporation II from time to time will offer Commercial
Mortgage Pass-Through Certificates in separate series. We will offer the
certificates through this prospectus and a separate prospectus supplement for
each series. If specified in the related prospectus supplement, we may not
offer all of the classes of certificates in a particular series. For each
series, we will establish a trust fund consisting primarily of (i) mortgage
loans secured by first, second or third liens on commercial real estate,
multifamily and/or mixed residential/commercial properties or (ii) certain
financial leases and similar arrangements equivalent to such mortgage loans and
other assets as described in this prospectus and to be specified in the related
prospectus supplement. The certificates of a series will evidence beneficial
ownership interests in the trust fund. The certificates of a series may be
divided into two or more classes which may have different interest rates and
which may receive principal payments in differing proportions and at different
times. In addition, the rights of certain holders of classes may be subordinate
to the rights of holders of other classes to receive principal and interest.
The certificates of any series are not obligations of GS Mortgage Securities
Corporation II or any of its affiliates, and neither the certificates nor the
underlying mortgage loans are insured or guaranteed by any governmental agency.
---------------------
The Securities and Exchange Commission and state securities regulators have not
approved or disapproved of the offered certificates or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------------
No secondary market will exist for a series of certificates prior its offering.
We cannot assure you that a secondary market will develop for the certificates
of any series or, if it does develop, that it will continue.
---------------------
INVESTING IN THE OFFERED CERTIFICATES INVOLVES RISKS. SEE "RISK FACTORS "
BEGINNING ON PAGE 3 OF THIS PROSPECTUS. FOR EACH SERIES, SEE "RISK FACTORS " IN
THE RELATED PROSPECTUS SUPPLEMENT.
---------------------
The certificates may be offered through one or more different methods,
including offerings through underwriters, as more fully described under "PLAN
OF DISTRIBUTION" on page 79 of this prospectus and in the related prospectus
supplement. Our affiliates may from time to time act as agents or underwriters
in connection with the sale of the offered certificates. Offerings of certain
classes of the certificates, as specified in the related prospectus supplement,
may be made in one or more transactions exempt from the registration
requirements of the Securities Act of 1933, as amended. Such offerings are not
being made pursuant to this prospectus or the related registration statement.
---------------------
This prospectus may not be used to consummate sales of the offered certificates
unless accompanied by a prospectus supplement.
---------------------
December 22, 1998
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS
PROSPECTUS AND EACH ACCOMPANYING PROSPECTUS SUPPLEMENT
Information about the offered certificates is contained in two separate
documents that progressively provide more detail: (a) this prospectus, which
provides general information, some of which may not apply to the offered
certificates; and (b) the accompanying prospectus supplement for each series,
which describes the specific terms of the offered certificates. IF THE TERMS OF
THE OFFERED CERTIFICATES VARY BETWEEN THIS PROSPECTUS AND THE ACCOMPANYING
PROSPECTUS SUPPLEMENT, YOU SHOULD RELY ON THE INFORMATION IN THE PROSPECTUS
SUPPLEMENT.
You should rely only on the information contained in this prospectus and
the accompanying prospectus supplement. We have not authorized anyone to
provide you with information that is different from that contained in this
prospectus and the prospectus supplement. The information in this prospectus is
accurate only as of the date of this prospectus.
Certain capitalized terms are defined and used in this prospectus to
assist you in understanding the terms of the offered certificates and this
offering. The capitalized terms used in this prospectus are defined on the
pages indicated under the caption "INDEX OF DEFINED TERMS" beginning on page 82
in this prospectus.
In this prospectus, the terms "Seller," "we," "us" and "our" refer to GS
Mortgage Securities Corporation II.
---------------------
If you require additional information, the mailing address of our
principal executive offices is GS Mortgage Securities Corporation II, 85 Broad
Street, New York, NY 10004 and the telephone number is (212) 902-1000. For
other means of acquiring additional information about us or a series of
certificates, see "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE" beginning
on page 76 of this prospectus.
---------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk Factors ............................ 3
The Prospectus Supplement ............... 5
The Seller .............................. 7
Use of Proceeds ......................... 7
Description of the Certificates ......... 8
The Mortgage Pools ...................... 16
Servicing of the Mortgage Loans ......... 20
Credit Enhancement ...................... 26
Swap Agreement .......................... 29
Yield Considerations .................... 29
Certain Legal Aspects of the
Mortgage Loans ......................... 31
Federal Income Tax Consequences ......... 47
State Tax Considerations ................ 73
ERISA Considerations .................... 74
Legal Investment ........................ 75
Plan of Distribution .................... 78
Incorporation of Certain Information
by Reference ........................... 79
Legal Matters ........................... 80
Index of Defined Terms .................. 81
</TABLE>
2
<PAGE>
RISK FACTORS
You should carefully consider the following risks and the risks described
under "RISK FACTORS" in the prospectus supplement for the applicable series of
certificates before making an investment decision. In particular, distribution
on your certificates will depend on payments received on and other recoveries
with respect to the mortgage loans. Therefore, you should carefully consider
the risk factors relating to the mortgage loans and the mortgaged properties.
Your investment could be materially and adversely affected if any of the
following risks are realized.
RISKS OF COMMERCIAL AND MULTIFAMILY LENDING GENERALLY.
Commercial and multifamily lending generally exposes the lender to a
greater risk of loss than one- to four-family residential lending. Commercial
and multifamily lending typically involves larger loans to single borrowers or
groups of related borrowers than residential one- to four-family mortgage
loans. Further, the repayment of loans secured by income producing properties
is typically dependent upon the successful operation of the related real estate
project. If the cash flow from the project is reduced (for example, if leases
are not obtained or renewed), the borrower's ability to repay the loan may be
impaired. Commercial and multifamily real estate can be affected significantly
by the supply and demand in the market for the type of property securing the
loan and, therefore, may be subject to adverse economic conditions. Market
values may vary as a result of economic events or governmental regulations
outside the control of the borrower or lender that impact the cash flow of the
property. For example, some laws may require modifications to properties such
as the Americans with Disabilities Act, and rent control laws may limit rent
collections in the case of multifamily properties. See "CERTAIN LEGAL ASPECTS
OF THE MORTGAGE LOANS " "-- Certain Laws and Regulations," "-- Type of
Mortgaged Property" and "-- Americans With Disabilities Act" in this
prospectus.
It is unlikely that we will obtain new appraisals of the mortgaged
properties or assign new valuations to the mortgage loans in connection with
the offering of the offered certificates. The market values of the underlying
mortgaged properties could have declined since the origination of the related
mortgage loans.
YOUR CERTIFICATES ARE NOT OBLIGATIONS OF ANY OTHER PERSON OR ENTITY.
Your certificates will represent beneficial ownership interests solely in
the assets of the related trust fund and will not represent an interest in or
obligation of us, the originator, the trustee, the master servicer, the special
servicer or any other person. We or another entity may have a limited
obligation to repurchase certain mortgage loans under certain circumstances as
described in the agreement relating to a particular series. Distributions on
any class of certificates will depend solely on the amount and timing of
payments and other collections in respect of the related mortgage loans. We
cannot assure you that these amounts, together with other payments and
collections in respect of the related mortgage loans, will be sufficient to
make full and timely distributions on any offered certificates. The offered
certificates and the mortgage loans will be insured or guaranteed, in whole or
in part, by the United States or any governmental entity or by any private
mortgage or other insurer only to the extent the prospectus supplement so
provides.
LIMITED LIQUIDITY.
There will have been no secondary market for any series of your
certificates prior to the related offering. We cannot assure you that such a
market will develop or, if it does develop, that it will provide you with
liquidity of investment or continue for the life of your certificates.
VARIABILITY IN AVERAGE LIFE OF OFFERED CERTIFICATES.
The payment experience on the related mortgage loans will affect the
actual payment experience on and the weighted average lives of the offered
certificates and, accordingly, may affect the yield on the offered
certificates. Prepayments on the mortgage loans will be influenced by:
o the prepayment provisions of the related mortgage notes;
3
<PAGE>
o a variety of economic, geographic and other factors, including
prevailing mortgage rates and the cost and availability of refinancing for
commercial mortgage loans.
In general, if prevailing interest rates fall significantly below the
interest rates on the mortgage loans, you should expect the rate of prepayment
on the mortgage loans to increase. Conversely, if prevailing interest rates
rise significantly above the interest rates on the mortgage loans, you should
expect the rate of prepayment to decrease.
Certain of the mortgage loans may provide for a prepayment premium if
prepaid, and certain of the mortgage loans may prohibit prepayments of
principal in whole or in part during a specified period. See "DESCRIPTION OF
THE MORTGAGE POOL" in the related prospectus supplement for a description of
the prepayment premiums and lockout periods, if any, for the mortgage loans
underlying a series of certificates. Such prepayment premiums and lockout
periods can, but do not necessarily, reduce the likelihood of prepayments.
However, in certain jurisdictions, the enforceability of provisions in mortgage
loans prohibiting prepayment or requiring prepayment premiums has been
questioned as described under "CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS --
Enforceability of Certain Provisions -- Prepayment Provisions." We cannot
assure you as to the effect of such prepayment premiums or lockout periods on
the rate of mortgage loan prepayment.
The extent to which the master servicer or special servicer, if any,
forecloses upon, takes title to and disposes of any mortgaged property related
to a mortgage loan will affect the weighted average lives of your certificates.
If the master servicer or special servicer, if any, forecloses upon a
significant number of the related mortgage loans, and depending upon the amount
and timing of recoveries from the related mortgaged properties, your
certificates may have a shorter weighted average life.
Delays in liquidations of defaulted mortgage loans and modifications
extending the maturity of mortgage loans will tend to delay the payment of
principal on the mortgage loans. The ability of the related borrower to make
any required balloon payment typically will depend upon its ability either to
refinance the mortgage loan or to sell the related mortgaged property. If a
significant number of the mortgage loans underlying a particular series require
balloon payments at maturity, there is a risk that a number of such mortgage
loans may default at maturity, or that the master servicer or special servicer,
if any, may extend the maturity of a number of such mortgage loans in
connection with workouts. We cannot assure you as to the borrowers' abilities
to make mortgage loan payments on a full and timely basis, including any
balloon payments at maturity. Bankruptcy of the borrower or adverse conditions
in the market where the mortgaged property is located may, among other things,
delay the recovery of proceeds in the case of defaults. Losses on the mortgage
loans due to uninsured risks or insufficient hazard insurance proceeds may
create shortfalls in distributions to certificateholders. Any required
indemnification of the master servicer or special servicer in connection with
legal actions relating to the trust, the related agreements or the certificates
may also result in such shortfalls.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS.
The laws of the jurisdictions in which the mortgaged properties are
located (which laws may vary substantially) govern many of the legal aspects of
the mortgage loans. These laws may affect the ability to foreclose on, and the
value of, the mortgaged properties securing the mortgage loans. For example,
state law determines:
o what proceedings are required for foreclosure;
o whether the borrower and any foreclosed junior lienors may redeem the
property;
o whether and to what extent recourse to the borrower is permitted; and
o what rights junior mortgagees have and whether the amount of fees and
interest that lenders may charge is limited.
In addition, the laws of some jurisdictions may render certain provisions
of the mortgage loans unenforceable, such as prepayment provisions, due-on-sale
and acceleration provisions. Installment contracts and financial leases also
may be subject to similar legal requirements. See "CERTAIN LEGAL
4
<PAGE>
ASPECTS OF THE MORTGAGE LOANS" in this prospectus. Delays in liquidations of
defaulted mortgage loans and shortfalls in amounts realized upon liquidation as
a result of the application of such laws may create delays and shortfalls in
payments to certificateholders.
ENVIRONMENTAL LAW CONSIDERATIONS.
Before the trustee, special servicer or the master servicer, as
applicable, acquires title to a property on behalf of the trust or assumes
operation of the property, it will be required to obtain an environmental
assessment of the mortgaged property. This requirement will decrease the
likelihood that the trust will become liable under any environmental law.
However, this requirement may effectively preclude foreclosure until a
satisfactory environmental assessment is obtained (or until any required
remedial action is taken). Moreover, this requirement may not necessarily
insulate the trust from potential liability under environmental laws.
Under the laws of certain states, failure to remediate environmental
conditions as required by the state may give rise to a lien on a mortgaged
property or a restriction on the right of the owner to transfer the mortgaged
property to ensure the reimbursement of remediation expenses incurred by the
state. Although the costs of remedial action could be substantial, the law in
certain of these jurisdictions is presently unclear as to whether and under
what circumstances such costs or the requirement to remediate would be imposed
on a secured lender such as the trust fund. However, under the laws of some
states and under applicable federal law, a lender may be liable for such costs
in certain circumstances as the "owner" or "operator" of the Mortgaged
Property. See "CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS -- Environmental
Risks."
RISK OF EARLY TERMINATION.
The trust for a series of certificates may be subject to optional
termination under certain circumstances by certain persons named in the
prospectus supplement for your certificates. In the event of such termination,
you might receive some principal payments earlier than otherwise expected,
which could adversely affect your anticipated yield to maturity.
THE PROSPECTUS SUPPLEMENT
The prospectus supplement for each series of offered certificates will,
among other things, describe to the extent applicable:
o any structural features, such as multiple levels of trusts or the use
of special finance vehicles to hold the mortgage pool, used in
structuring the transaction;
o whether the trust will be treated for federal income tax purposes as
one or more grantor trusts, FASITs or REMICs;
o the identity of each class within such series;
o the initial aggregate principal amount, the interest rate (or the
method for determining such rate) and the authorized denominations of
each class of offered certificates;
o certain information concerning the mortgage loans relating to such
series, including the principal amount, type and characteristics of such
mortgage loans on the cut-off date, and, if applicable, the amount of
any reserve fund;
o the identity of the master servicer;
o the identity of the special servicer, if any, and the characteristics
of any specially serviced mortgage loans;
o the method of selection and powers of any representative of a class of
certificates permitted to direct or approve actions of the special
servicer;
o the circumstances, if any, under which the offered certificates are
subject to redemption prior to maturity;
5
<PAGE>
o the final scheduled distribution date of each class of offered
certificates;
o the method used to calculate the aggregate amount of principal
available and required to be applied to the offered certificates on each
distribution date;
o the order of the application of principal and interest payments to each
class of offered certificates and the allocation of principal to be so
applied;
o the extent of subordination of any subordinate certificates;
o for each class of offered certificates, the principal amount that would
be outstanding on specified distribution dates if the mortgage loans
relating to such series were prepaid at various assumed rates;
o the distribution dates for each class of offered certificates;
o the representations and warranties to be made by us or another entity
relating to the mortgage loans;
o information with respect to the terms of the subordinate certificates
or residual certificates, if any;
o additional information with respect to any credit enhancement or cash
flow agreement and, if the certificateholders will be materially
dependent upon any provider of credit enhancement or cash flow agreement
counterparty for timely payment of interest and/or principal,
information (including financial statements) regarding such provider or
counterparty;
o additional information with respect to the plan of distribution;
o whether the offered certificates will be available in definitive form
or through the book-entry facilities of The Depository Trust Company
(the "Depository") or another depository;
o if a trust fund contains a concentration of mortgage loans having a
single borrower or that are cross-collateralized and/or cross-defaulted
with each other, or mortgage loans secured by mortgaged properties
leased to a single lessee, including affiliates, representing 20% or
more of the aggregate principal balance of the mortgage loans in such
trust fund, financial statements for such mortgaged properties as well
as specific information with respect to such mortgage loans, mortgaged
properties and, to the extent material, leases and additional
information concerning any common ownership, common management or common
control of, or cross-default, cross-collateralization or similar
provisions relating to, such mortgaged properties and the concentration
of credit risk thereon;
o if a trust fund contains a concentration of mortgage loans having a
single borrower or that are cross-collateralized and/or cross-defaulted
with each other, or mortgage loans secured by mortgaged properties
leased to a single lessee, including affiliates thereof, representing
10% or more, but less than 20%, of the aggregate principal balance of
the mortgage loans in such trust fund, selected financial information
with respect to such mortgaged properties as well as, to the extent
material, specific information with respect to any common ownership,
common management or common control of, or cross-default, cross-
collateralization or similar provisions relating to, such mortgaged
properties and the concentration of credit risk thereon;
o if applicable, additional information concerning any known concerns
regarding unique economic or other factors where there is a material
concentration of any of the mortgage loans in a specific geographic
region;
o if applicable, additional financial and other information concerning
individual mortgaged properties when there is a substantial
concentration of one or a few mortgage loans in a jurisdiction or region
thereof experiencing economic difficulties which may have a material
effect on such mortgaged properties;
o if a trust fund contains a substantial concentration of one or a few
mortgage loans in a single jurisdiction, a description of material
differences, if any, between the legal aspects of mortgage loans in such
jurisdiction and the summary of general legal aspects of mortgage loans
set forth under "CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS" in this
prospectus;
o the rating assigned to each class of offered certificates by the
applicable nationally recognized statistical rating organization or
organizations; and
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o whether any class of offered certificates qualifies as "mortgage
related securities" under the Secondary Mortgage Market Enhancement Act
of 1984, as amended, as described under "LEGAL INVESTMENT" in this
prospectus.
THE SELLER
GS Mortgage Securities Corporation II (the "Seller") was incorporated in
the State of Delaware on November 16, 1995, for the purpose of engaging in the
business, among other things, of acquiring and depositing mortgage assets in
trusts in exchange for certificates evidencing interests in such trusts and
selling or otherwise distributing such certificates. The principal executive
offices of the Seller are located at 85 Broad Street, New York, New York 10004.
Its telephone number is (212) 902-1000. The Seller will not have any material
assets other than the trust funds.
Neither the Seller, nor any of its affiliates will insure or guarantee
distributions on the certificates of any series offered by means of this
prospectus and any related prospectus supplement. The Agreement (as defined
below) for each series will provide that the Holders of the certificates for
such series will have no rights or remedies against the Seller or any of its
affiliates for any losses or other claims in connection with the certificates
or the mortgage loans other than the repurchase of the mortgage loans by the
Seller, if specifically set forth in such Agreement.
The Certificate of Incorporation, as amended, of the Seller provides that
a director of the corporation shall not be liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent that such exemption from liability or limitation thereof
is not permitted under the Delaware General Corporation Law as currently in
effect or as may be amended. In addition, the Bylaws of the Seller provide that
the Seller shall indemnify to the full extent permitted by law any person made
or threatened to be made a party to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that
such person or such person's testator or intestate is or was a director,
officer or employee of the Seller or serves or served, at the request of the
Seller, any other enterprise as a director, officer or employee. Insofar as
indemnification for liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), may be permitted to directors, officers and
controlling persons of the Seller pursuant to the foregoing provisions, or
otherwise, the Seller has been advised that, in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
USE OF PROCEEDS
The Seller intends to apply all or substantially all of the net proceeds
from the sale of each series offered hereby and by the related prospectus
supplement to acquire the mortgage loans relating to such series, to establish
any reserve funds, for the series, to obtain other credit enhancement, if any,
for the series, to pay costs incurred in connection with structuring and
issuing the certificates and for general corporate purposes. Certificates may
be exchanged by the Seller for mortgage loans.
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DESCRIPTION OF THE CERTIFICATES*
The certificates of each series will be issued pursuant to a separate
Pooling and Servicing Agreement (the "Agreement")** to be entered into among
the Seller, the Master Servicer, the Special Servicer, if any, and the Trustee
for that series and any other parties described in the related prospectus
supplement, substantially in the form filed as an exhibit to the Registration
Statement of which this prospectus is a part or in such other form as may be
described in the related prospectus supplement. The following summaries
describe certain provisions expected to be common to each series and the
Agreement with respect to the underlying Trust Fund. However, the prospectus
supplement for each series will describe more fully additional characteristics
of the certificates offered thereby and any additional provisions of the
related Agreement.
At the time of issuance, it is anticipated that the offered certificates
of each series will be rated "investment grade," typically one of the four
highest generic rating categories, by at least one nationally recognized
statistical rating organization at the request of the Seller. Each of such
rating organizations specified in the related prospectus supplement as rating
the offered certificates of the related series at the request of the Seller is
hereinafter referred to as a "Rating Agency." A security rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time by the assigning Rating Agency. There can be no
assurance as to whether any rating agency not requested to rate the offered
certificates will nonetheless issue a rating and, if so, what such rating would
be. A rating assigned to the offered certificates by a rating agency that has
not been requested by the Seller to do so may be lower than the rating assigned
by a rating agency pursuant to the Seller's request.
GENERAL
The certificates of each series will be issued in registered or book-entry
form and will represent beneficial ownership interests in a trust created
pursuant to the Agreement for such series. The assets in the trust
(collectively, the "Trust Fund") for each series will consist of the following,
to the extent provided in the Agreement:
(i) the pool of mortgage loans conveyed to the Trustee pursuant to the
Agreement;
(ii) all payments on or collections in respect of the mortgage loans due
on or after the date specified in the related prospectus supplement;
(iii) all property acquired by foreclosure or deed in lieu of
foreclosure with respect to the mortgage loans; and
(iv) such other assets or rights, such as a Funding Note, as are
described in the related prospectus supplement.
In addition, the Trust Fund for a series may include various forms of
credit enhancement, such as, but not limited to, insurance policies on the
mortgage loans, letters of credit, certificate guarantee insurance policies,
the right to make draws upon one or more reserve funds or other arrangements
acceptable to each Rating Agency rating the offered certificates. See "CREDIT
ENHANCEMENT " in this prospectus. Such other assets, if any, will be described
more fully in the related prospectus supplement.
- ----------
* Whenever in this Prospectus the terms "certificates," "trust fund" and
"mortgage pool" are used, such terms will be deemed to apply, unless the
context indicates otherwise, to a specific series of certificates, the
trust fund underlying the related series and the related mortgage pool.
** In the case of a Funding Note (as described below), some or all of the
provisions described herein as being part of the Agreement may be found
in other contractual documents connected with such Funding Note, such as
a collateral indenture or a separate servicing agreement, and the term
"Agreement" as used in this Prospectus will include such other
contractual documents. The Prospectus Supplement for a series in which a
Funding Note is used will describe such other contractual documents and
will indicate in which documents various provisions mentioned in this
Prospectus are to be found and any modifications to such provisions.
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The prospectus supplement for any series will describe any specific
features of the transaction established in connection with the holding of the
underlying mortgage pool. For example, if so indicated in the prospectus
supplement, at the time the mortgage loans are to be acquired from a third
party and conveyed to the Trust Fund, the third party may establish a
bankruptcy-remote special-purpose entity or a trust, to which the mortgage
loans will be conveyed and which in turn will issue to the Trustee a debt
instrument collateralized by, having recourse only to, and paying through
payments (which may be net of servicing fees and any retained yield) from, the
mortgage pool (a "Funding Note"), and such debt instrument may be conveyed to
the Trust Fund as the medium for holding the mortgage pool.
If specified in the related prospectus supplement, certificates of a given
series may be issued in a single class or two or more classes which may pay
interest at different rates, may represent different allocations of the right
to receive principal and interest payments, and certain of which may be
subordinated to other classes in the event of shortfalls in available cash flow
from the underlying mortgage loans or realized losses on the underlying
mortgage loans. Alternatively, or in addition, if so specified in the related
prospectus supplement, classes may be structured to receive principal payments
in sequence. The related prospectus supplement may provide that each class in a
group of classes structured to receive sequential payments of principal will be
entitled to be paid in full before the next class in the group is entitled to
receive any principal payments, or may provide for partially concurrent
principal payments among one or more of such classes. If so specified in the
related prospectus supplement, a class of offered certificates may also provide
for payments of principal only or interest only or for disproportionate
payments of principal and interest. Subordinate Certificates of a given series
of offered certificates may be offered in the same prospectus supplement as the
Senior Certificates of such series or may be offered in a separate prospectus
supplement or may be offered in one or more transactions exempt from the
registration requirements of the Securities Act. Each class of offered
certificates of a series will be issued in the minimum denominations specified
in the related prospectus supplement.
The prospectus supplement for any series including types of classes
similar to any of those described above will contain a description of their
characteristics and risk factors, including, as applicable:
(i) mortgage principal prepayment effects on the weighted average lives
of such classes;
(ii) the risk that interest only, or disproportionately interest
weighted, classes purchased at a premium may not return their purchase
prices under rapid prepayment scenarios; and
(iii) the degree to which an investor's yield is sensitive to principal
prepayments.
The offered certificates of each series will be freely transferable and
exchangeable at the office specified in the related Agreement and prospectus
supplement; provided, however, that certain classes of offered certificates may
be subject to transfer restrictions described in the related prospectus
supplement.
If specified in the related prospectus supplement, the offered
certificates may be transferable only in book-entry form through the facilities
of the Depository or another depository identified in such prospectus
supplement.
If the certificates of a class are transferable only on the books of the
Depository, no person acquiring such a certificate that is in book-entry form
(each, a "beneficial owner") will be entitled to receive a physical certificate
representing such certificate except in the limited circumstances described in
the related prospectus supplement. Instead, such certificates will be
registered in the name of a nominee of the Depository, and beneficial interests
therein will be held by investors through the book-entry facilities of the
Depository, as described herein. The Seller has been informed by the Depository
that its nominee will be Cede & Co. Accordingly, Cede & Co. is expected to be
the holder of record of any such certificates that are in book-entry form.
If the certificates of a class are transferable only on the books of the
Depository, each beneficial owner's ownership of such a certificate will be
recorded on the records of the brokerage firm, bank, thrift
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institution or other financial intermediary (each, a "Financial Intermediary")
that maintains the beneficial owner's account for such purpose. In turn, the
Financial Intermediary's ownership of such certificate will be recorded on the
records of the Depository (or of a participating firm that acts as agent for
the Financial Intermediary, whose interest will in turn be recorded on the
records of the Depository, if the beneficial owner's Financial Intermediary is
not a Depository participant). Beneficial ownership of a book-entry certificate
may only be transferred in compliance with the procedures of such Financial
Intermediaries and Depository participants. Because the Depository can act only
on behalf of participants, who in turn act on behalf of indirect participants
and certain banks, the ability of a beneficial owner to pledge book-entry
certificates to persons or entities that do not participate in the Depository
system, or to otherwise act with respect to such book-entry certificates, may
be limited due to the lack of a physical certificate for such book-entry
certificates.
The Depository, which is a New York-chartered limited purpose trust
company, performs services for its participants, some of whom (and/or their
representatives) own the Depository. In accordance with its normal procedure,
the Depository is expected to record the positions held by each Depository
participant in the book-entry certificates, whether held for its own account or
as a nominee for another person. In general, beneficial ownership of
certificates will be subject to the rules, regulations and procedures governing
the Depository and Depository participants as are in effect from time to time.
If the offered certificates are transferable on the books of the
Depository, the Depository, or its nominee as record holder of the offered
certificates, will be recognized by the Seller and the Trustee as the owner of
such certificates for all purposes, including notices and consents. In the
event of any solicitation of consents from or voting by Certificateholders
pursuant to the Agreement, the Trustee may establish a reasonable record date
and give notice of such record date to the Depository. In turn, the Depository
will solicit votes from the beneficial owners in accordance with its normal
procedures, and the beneficial owners will be required to comply with such
procedures in order to exercise their voting rights through the Depository.
Distributions of principal of and interest on the book-entry certificates
will be made on each Distribution Date to the Depository or its nominee. The
Depository will be responsible for crediting the amount of such payments to the
accounts of the applicable Depository participants in accordance with the
Depository's normal procedures. Each Depository participant will be responsible
for disbursing such payments to the beneficial owners for which it is holding
book-entry certificates and to each Financial Intermediary for which it acts as
agent. Each such Financial Intermediary will be responsible for disbursing
funds to the beneficial owners of the book-entry certificates that it
represents.
The information herein concerning the Depository and its book-entry system
has been obtained from sources believed to be reliable, but the Seller takes no
responsibility for the accuracy or completeness thereof.
In the event a depository other than the Depository is identified in a
prospectus supplement, information similar to that set forth above will be
provided with respect to such depository and its book-entry facilities in such
prospectus supplement.
DISTRIBUTIONS ON CERTIFICATES
Distributions of principal and interest on the certificates of each series
will be made to the registered holders thereof ("Certificateholders" or
"Holders") by the Trustee (or such other paying agent as may be identified in
the related prospectus supplement) on the day (the "Distribution Date")
specified in the related prospectus supplement, beginning in the period
specified in the related prospectus supplement following the establishment of
the related Trust Fund. Distributions for each series will be made by check
mailed to the address of the person entitled thereto as it appears on the
certificate register for such series maintained by the Trustee, by wire
transfer or by such other method as is specified in the related prospectus
supplement. The final distribution in retirement of the certificates of each
series will be made upon presentation and surrender of the certificates at the
office or agency specified in the notice to the
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Certificateholders of such final distribution, or in such other manner
specified in the related prospectus supplement. In addition, the prospectus
supplement relating to each series will set forth the applicable due period,
prepayment period, record date, Cut-Off Date and determination date in respect
of each series of certificates.
With respect to each series of certificates on each Distribution Date, the
Trustee (or such other paying agent as may be identified in the related
prospectus supplement) will distribute to the Certificateholders the amounts of
principal and/or interest, calculated as described in the related prospectus
supplement, that are due to be paid on such Distribution Date. In general, such
amounts will include previously undistributed payments of principal (including
principal prepayments, if any) and interest on the mortgage loans (or amounts
in respect thereof) received by the Trustee after a date specified in the
related prospectus supplement (the "Cut-Off Date") and prior to the day
preceding each Distribution Date specified in the related prospectus
supplement.
The related prospectus supplement for any series of certificates will
specify, for any Distribution Date on which the principal balance of the
mortgage loans is reduced due to losses, the priority and manner in which such
losses will be allocated. As more fully described in the related prospectus
supplement, losses on mortgage loans generally will be allocated after all
proceeds of defaulted mortgage loans have been received by reducing the
outstanding principal amount of the most subordinate outstanding class of
certificates. If specified in the related prospectus supplement, losses may be
estimated on the basis of a qualified appraisal of the Mortgaged Property and
allocated prior to the final liquidation of the Mortgaged Property. The related
prospectus supplement for any series of certificates also will specify the
manner in which principal prepayments, negative amortization and interest
shortfalls will be allocated among the classes of certificates.
ACCOUNTS
It is expected that the Agreement for each series of certificates will
provide that the Trustee establish an account (the "Distribution Account") into
which the Master Servicer will deposit amounts held in the Collection Account
and from which account distributions will be made with respect to a given
Distribution Date. On each Distribution Date, the Trustee will apply amounts on
deposit in the Distribution Account generally to make distributions of interest
and principal to the Certificateholders in the manner described in the related
prospectus supplement.
It is also expected that the Agreement for each series of certificates
will provide that the Master Servicer establish and maintain a special trust
account (the "Collection Account") in the name of the Trustee for the benefit
of Certificateholders. As more fully described in the related prospectus
supplement, the Master Servicer will deposit into the Collection Account (other
than in respect of principal of, or interest on, the mortgage loans due on or
before the Cut-Off Date):
(1) all payments on account of principal, including principal
prepayments, on the mortgage loans;
(2) all payments on account of interest on the mortgage loans and all
Prepayment Premiums;
(3) all proceeds from any insurance policy relating to a mortgage loan
("Insurance Proceeds") other than proceeds applied to restoration of the
related Mortgaged Property or otherwise applied in accordance with the
terms of the related mortgage loans;
(4) all proceeds from the liquidation of a mortgage loan ("Liquidation
Proceeds"), including the sale of any Mortgaged Property acquired on behalf
of the Trust Fund through foreclosure or deed in lieu of foreclosure ("REO
Property");
(5) all proceeds received in connection with the taking of a Mortgaged
Property by eminent domain;
(6) any amounts required to be deposited in connection with the
application of co-insurance clauses, flood damage to REO Properties and
blanket policy deductibles;
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(7) any amounts required to be deposited from income with respect to any
REO Property and deposited in the REO Account (to the extent the funds in
the REO Account exceed the expenses of operating and maintaining REO
Properties and reserves established therefor); and
(8) any amounts received from borrowers which represent recoveries of
Property Protection Expenses to the extent not retained by the Master
Servicer to reimburse it for such expenses.
The Special Servicer, if any, will be required to remit immediately to the
Master Servicer or the Trustee any amounts of the types described above that it
receives in respect of the Specially Serviced Mortgage Loans. "Prepayment
Premium" means any premium or yield maintenance charge paid or payable by the
related borrower in connection with any principal prepayment on any mortgage
loan. "Property Protection Expenses" comprise certain costs and expenses
incurred in connection with defaulted mortgage loans, acquiring title or
management of REO Property or the sale of defaulted mortgage loans or REO
Properties, as more fully described in the related Agreement.
As set forth in the Agreement for each series, the Master Servicer will be
entitled to make from time to time certain withdrawals from the Collection
Account to, among other things:
(i) remit certain amounts for the related Distribution Date into the
Distribution Account;
(ii) to the extent specified in the related prospectus supplement,
reimburse Property Protection Expenses and pay taxes, assessments and
insurance premiums and certain third-party expenses in accordance with the
Agreement;
(iii) pay accrued and unpaid servicing fees to the Master Servicer out
of all mortgage loan collections; and
(iv) reimburse the Master Servicer, the Special Servicer, if any, the
Trustee and the Seller for certain expenses and provide indemnification to
the Seller, the Master Servicer, the Trustee and, if applicable, the
Special Servicer, as described in the Agreement.
The amounts at any time credited to the Collection Account may be invested
in Permitted Investments that are payable on demand or in general mature or are
subject to withdrawal or redemption on or before the business day preceding the
next succeeding Master Servicer Remittance Date. The Master Servicer will be
required to remit amounts required for distribution to Certificateholders to
the Distribution Account on the business day preceding the related Distribution
Date that is specified in the related prospectus supplement (the "Master
Servicer Remittance Date"). The income from the investment of funds in the
Collection Account in Permitted Investments either will constitute additional
servicing compensation for the Master Servicer, and the risk of loss of funds
in the Collection Account resulting from such investments will be borne by the
Master Servicer, or will be remitted to the Certificateholders or other persons
specified in the related prospectus supplement. The amount of any such loss
will be required to be deposited by the Master Servicer in the Collection
Account immediately as realized.
It is expected that the Agreement for each series of certificates will
provide that a special trust account (the "REO Account") will be established
and maintained in order to be used in connection with each REO Property and, if
specified in the related prospectus supplement, certain other Mortgaged
Properties. To the extent set forth in the Agreement, certain withdrawals from
the REO Account will be made to, among other things:
(i) make remittances to the Collection Account as required by the
Agreement;
(ii) pay taxes, assessments, insurance premiums, other amounts necessary
for the proper operation, management and maintenance of the REO Properties
and such other Mortgaged Properties and certain third-party expenses in
accordance with the Agreement (including expenses relating to any
appraisal, property inspection and environmental assessment reports
required by the Agreement); and
(iii) provide for the reimbursement of certain expenses in respect of
the REO Properties and such Mortgaged Properties.
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The amount at any time credited to each REO Account will be fully insured
to the maximum coverage possible or will be invested in Permitted Investments
that mature, or are subject to withdrawal or redemption, on or before the
business day on which such amounts are required to be remitted to the Master
Servicer for deposit in the Collection Account. The income from the investment
of funds in the REO Account in Permitted Investments shall be deposited in the
REO Account for remittance to the Collection Account, and the risk of loss of
funds in the REO Account resulting from such investments will be borne by the
Trust Fund or by the person described in the prospectus supplement.
"Permitted Investments" will consist of certain high quality debt
obligations consistent with the ratings criteria of, or otherwise satisfactory
to, the Rating Agencies.
As described in the related prospectus supplement for a series of
certificates where the underlying mortgage loans are held through a Funding
Note, some of the accounts described above may be held by the issuer or
collateral trustee of such Funding Note.
AMENDMENT
The Agreement for each series will provide that it may be amended by the
parties thereto without the consent of any of the Certificateholders:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision therein that may be
inconsistent with any other provision therein;
(iii) to make other provisions with respect to matters or questions
arising under the Agreement which are not materially inconsistent with the
provisions of the Agreement; or
(iv) for such other reasons specified in the related prospectus
supplement.
To the extent specified in the Agreement, each Agreement also will provide
that it may be amended by the parties thereto with the consent of the Holders
of certificates representing an aggregate outstanding principal amount of not
less than 66 2/3% (or such other percentage as may be specified in the related
prospectus supplement) of each class of certificates affected by the proposed
amendment for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of the Agreement or modifying in any
manner the rights of Certificateholders; provided, however, that no such
amendment may, among other things:
o reduce in any manner the amount of, or delay the timing of, payments
received on mortgage loans which are required to be distributed on any
certificate without the consent of each affected Certificateholder;
o reduce the aforesaid percentage of certificates the Holders of which
are required to consent to any such amendment, without the consent of
the Holders of all certificates then outstanding;
o alter the servicing standard set forth in the related Agreement.
Further, the Agreement for each series may provide that the parties
thereto, at any time and from time to time, without the consent of the
Certificateholders, may amend the Agreement to modify, eliminate or add to any
of its provisions to such extent as shall be necessary to maintain the
qualification of the Trust Fund as a "real estate mortgage investment conduit"
(a "REMIC"), a "financial asset securitization investment trust" (a "FASIT") or
grantor trust, as the case may be, or to prevent the imposition of any
additional state or local taxes, at all times that any of the certificates are
outstanding; provided, however, that such action, as evidenced by an opinion of
counsel acceptable to the Trustee, is necessary or helpful to maintain such
qualification or to prevent the imposition of any such taxes, and would not
adversely affect in any material respect the interest of any Certificateholder.
The Agreement relating to each series may provide that no amendment to
such Agreement will be made unless there has been delivered in accordance with
such Agreement an opinion of counsel to the effect that such amendment will not
cause such series to fail to qualify as a REMIC, FASIT or grantor trust at any
time that any of the certificates are outstanding or cause a tax to be imposed
on the Trust Fund under the provisions of the Code.
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The prospectus supplement for a series may describe other or different
provisions concerning the amendment of the related Agreement.
TERMINATION
As may be more fully described in the related prospectus supplement, the
obligations of the parties to the Agreement for each series will terminate
upon:
(i) the purchase of all of the assets of the related Trust Fund, as
described in the related prospectus supplement;
(ii) the later of (a) the distribution to Certificateholders of that
series of final payment with respect to the last outstanding mortgage loan
or (b) the disposition of all property acquired upon foreclosure or deed in
lieu of foreclosure with respect to the last outstanding mortgage loan and
the remittance to the Certificateholders of all funds due under the
Agreement;
(iii) the sale of the assets of the related Trust Fund after the
principal amounts of all certificates have been reduced to zero under
certain circumstances set forth in the Agreement; or
(iv) mutual consent of the parties and all Certificateholders.
With respect to each series, the Trustee will give or cause to be given
written notice of termination of the Agreement in the manner described in the
related Agreement to each Certificateholder and the final distribution will be
made only upon surrender and cancellation of the related certificates in the
manner described in the Agreement.
REPORTS TO CERTIFICATEHOLDERS
Concurrently with each distribution for each series, the Trustee (or such
other paying agent as may be identified in the related prospectus supplement)
will make available to each Certificateholder several monthly reports setting
forth such information as is specified in the Agreement and described in the
related prospectus supplement, which may include the following information, if
applicable:
(i) information as to principal and interest distributions, principal
amounts, Advances and scheduled principal balances of the mortgage loans;
(ii) updated information regarding the mortgage loans and a loan-by-loan
listing showing certain information which may include loan name, property
type, location, unpaid principal balance, interest rate, paid through date
and maturity date, which loan-by-loan listing may be made available
electronically;
(iii) financial information relating to the underlying Mortgaged
Properties;
(iv) information with respect to delinquent mortgage loans;
(v) information on mortgage loans which have been modified; and
(vi) information with respect to REO Properties.
The Master Servicer or the Trustee will be required to mail to Holders of
offered certificates of each series periodic unaudited reports concerning the
related Trust Fund. Unless and until definitive certificates are issued, such
reports may be sent on behalf of the related Trust Fund to Cede & Co., as
nominee of the Depository and other registered Holders of the offered
certificates, pursuant to the applicable Agreement. If so specified in the
related prospectus supplement, such reports may be sent to beneficial owners
identified to the Master Servicer or the Trustee. Such reports may also be
available to holders of interests in the certificates upon request to their
respective Depository participants. See "DESCRIPTION OF THE CERTIFICATES --
Reports to Certificateholders" in this prospectus. We will file or cause to be
filed with the Securities and Exchange Commission (the "Commission") such
periodic reports with respect to each Trust Fund as are required under the
Securities and Exchange Act of 1934,
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as amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder. Reports that we have filed with the Commission pursuant
to the Exchange Act will be filed by means of the Electronic Data Gathering,
Analysis and Retrieval ("EDGAR") system and, therefore, should be available at
the Commission's site on the World Wide Web.
THE TRUSTEE
The Seller will select a bank or trust company to act as trustee (the
"Trustee") under the Agreement for each series and the Trustee will be
identified in the related prospectus supplement. The commercial bank or trust
company serving as Trustee may have normal banking relationships with the
Seller, the Master Servicer, the Special Servicer, if any, and their respective
affiliates.
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THE MORTGAGE POOLS
GENERAL
Each mortgage pool will consist of one or more mortgage loans secured by
first, second or more junior mortgages, deeds of trust or similar security
instruments ("Mortgages") on, or installment contracts ("Installment
Contracts") for the sale of or financial leases and other similar arrangements
equivalent to such mortgage loans on, fee simple or leasehold interests in
commercial real property, multifamily residential property, mixed
residential/commercial property, and related property and interests (each such
interest or property, as the case may be, a "Mortgaged Property"). Each such
mortgage loan, lease or Installment Contract is herein referred to as a
mortgage loan.
Mortgage loans will be of one or more of the following types:
1. mortgage loans with fixed interest rates;
2. mortgage loans with adjustable interest rates;
3. mortgage loans with principal balances that fully amortize over their
remaining terms to maturity;
4. mortgage loans whose principal balances do not fully amortize but
instead provide for a substantial principal payment at the stated maturity of
the loan;
5. mortgage loans that provide for recourse against only the Mortgaged
Properties;
6. mortgage loans that provide for recourse against the other assets of
the related borrowers; and
7. any other types of mortgage loans described in the related prospectus
supplement.
Certain mortgage loans ("Simple Interest Loans") may provide that
scheduled interest and principal payments thereon are applied first to interest
accrued from the last date to which interest has been paid to the date such
payment is received and the balance thereof is applied to principal, and other
mortgage loans may provide for payment of interest in advance rather than in
arrears.
Mortgage loans may also be secured by one or more assignments of leases
and rents, management agreements, security agreements, or rents, fixtures and
personalty or operating agreements relating to the Mortgaged Property and in
some cases by certain letters of credit, personal guarantees or both. Pursuant
to an assignment of leases and rents, the obligor on the related promissory
note assigns its right, title and interest as landlord under each lease and the
income derived therefrom to the related lender, while retaining a right, or in
some cases a license, to collect the rents for so long as there is no default.
If the borrower defaults, the license terminates and the related lender is
entitled to collect the rents from tenants to be applied to the monetary
obligations of the borrower. State law may limit or restrict the enforcement of
the assignment of leases and rents by a lender until the lender takes
possession of the related Mortgaged Property and a receiver is appointed. See
"CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS -- Leases and Rents" in this
prospectus.
Certain mortgage loans may provide for "equity participations" which, as
specified in the related prospectus supplement, may or may not be assigned to
the Trust Fund. If so specified in the related prospectus supplement, the
mortgage loans may provide for holdbacks of certain of the proceeds of such
loans. In such event, the amount of such holdback may be deposited by the
Seller into an escrow account held by the Trustee as provided in the related
prospectus supplement.
The mortgage loans generally will not be insured or guaranteed by the
United States, any governmental agency or any private mortgage insurer. Any
such insurance or guarantee, if any, will be specifically described in the
related prospectus supplement.
The prospectus supplement relating to each series will generally provide
specific information regarding the characteristics of the mortgage loans, as of
the Cut-Off Date, including, among other things:
(i) the aggregate principal balance of the mortgage loans and the largest,
smallest and average principal balance of the mortgage loans;
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(ii) the types of properties securing the mortgage loans and the aggregate
principal balance of the mortgage loans secured by each type of property;
(iii) the interest rate or range of interest rates of the mortgage loans
and the weighted average Mortgage Interest Rate of the mortgage loans;
(iv) the original and remaining terms to stated maturity of the mortgage
loans and the seasoning of the mortgage loans;
(v) the earliest and latest origination date and maturity date and the
weighted average original and remaining terms to stated maturity of the
mortgage loans;
(vi) the loan-to-valuation ratios at origination and current loan
balance-to-original valuation ratios of the mortgage loans;
(vii) the geographic distribution of the Mortgaged Properties underlying
the mortgage loans;
(viii) the minimum interest rates, margins, adjustment caps, adjustment
frequencies, indices and other similar information applicable to adjustable
rate mortgage loans;
(ix) the debt service coverage ratios relating to the mortgage loans;
(x) information with respect to the prepayment provisions, if any, of the
mortgage loans;
(xi) information as to the payment characteristics of the mortgage loans,
including, without limitation, balloon payment and other amortization
provisions; and
(xii) payment delinquencies, if any, relating to the mortgage loans. If
specified in the related prospectus supplement, the Seller may segregate the
mortgage loans in a mortgage pool into separate mortgage loan groups (as
described in the related prospectus supplement) as part of the structure of the
payments of principal and interest on the certificates of a series. In such
case, the Seller may disclose the above-specified information by mortgage loan
group.
In the event that the mortgage loans consist of financial leases or
Installment Contracts, the related prospectus supplement will provide
appropriate specific information analogous to that described above.
In the event detailed information regarding the mortgage loans is not
provided in the prospectus supplement or the composition of the mortgage loans
changes in any material respect from that described in the related prospectus
supplement, the Seller will file a current report on Form 8-K (the "Form 8-K")
with the Securities and Exchange Commission within 15 days after the initial
issuance of each series of certificates (each, a "Closing Date"), as specified
in the related prospectus supplement, which will set forth information with
respect to the mortgage loans included in the Trust Fund for a series as of the
related Closing Date. The Form 8-K will be available to the Certificateholders
of the related series promptly after its filing.
UNDERWRITING AND INTERIM SERVICING STANDARDS APPLICABLE TO THE MORTGAGE LOANS
The mortgage loans underlying the certificates of a series will be
newly-originated or seasoned mortgage loans and will be purchased or otherwise
acquired from third parties, which third parties may or may not be originators
of such mortgage loans and may or may not be affiliates of the Seller. The
origination standards and procedures applicable to such mortgage loans may
differ from series to series or among the mortgage loans in a given mortgage
pool, depending on the identity of the originator or originators. In the case
of seasoned mortgage loans, the procedures by which such mortgage loans have
been serviced from their origination to the time of their inclusion in the
related mortgage pool may also differ from series to series or among the
mortgage loans in a given mortgage pool.
The related prospectus supplement for each series will provide information
as to the origination standards and procedures applicable to the mortgage loans
in the related mortgage pool and, to the extent applicable and material, will
provide information as to the servicing of such mortgage loans prior to their
inclusion in the mortgage pool.
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ASSIGNMENT OF MORTGAGE LOANS
At the time of issuance of the certificates of each series, the Seller
will cause the mortgage loans (or, in the case of a structure using a Funding
Note, the Funding Note) to be assigned to the Trustee, together with, as more
fully specified in the related prospectus supplement, all payments due on or
with respect to such mortgage loans (or Funding Note), other than principal and
interest due on or before the Cut-Off Date and principal prepayments received
on or before the Cut-Off Date. The Trustee, concurrently with such assignment,
will execute and deliver certificates evidencing the beneficial ownership
interests in the related Trust Fund to the Seller in exchange for the mortgage
loans. Each mortgage loan will be identified in a schedule appearing as an
exhibit to the Agreement for the related series (the "Mortgage Loan Schedule").
The Mortgage Loan Schedule will include, among other things, as to each
mortgage loan, information as to its outstanding principal balance as of the
close of business on the Cut-Off Date, as well as information respecting the
interest rate, the scheduled monthly (or other periodic) payment of principal
and interest as of the Cut-Off Date and the maturity date of each mortgage
loan.
In addition, the Seller will, as to each mortgage loan, deliver to the
Trustee, to the extent required by the Agreement:
(i) the mortgage note, endorsed to the order of the Trustee without
recourse;
(ii) the Mortgage and an executed assignment thereof in favor of the
Trustee or otherwise as required by the Agreement;
(iii) any assumption, modification or substitution agreements relating
to the mortgage loan;
(iv) a lender's title insurance policy (or owner's policy in the case of
a financial lease or an Installment Contract), together with its
endorsements, or, in the case of mortgage loans that are not covered by
title insurance, an attorney's opinion of title issued as of the date of
origination of the mortgage loan;
(v) if the assignment of leases, rents and profits is separate from the
Mortgage, an executed re-assignment of assignment of leases, rents and
profits to the Trustee;
(vi) a copy of any recorded UCC-1 financing statements and related
continuation statements, together with (in the case of such UCC-1 financing
statements which are in effect as of the Closing Date) an original executed
UCC-2 or UCC-3 statement, in a form suitable for filing, disclosing the
assignment to the Trustee of a security interest in any personal property
constituting security for the repayment of the Mortgage; and
(vii) such other documents as may be described in the Agreement (such
documents, collectively, the "Mortgage Loan File").
Unless otherwise expressly permitted by the Agreement, all documents
included in the Mortgage Loan File are to be original executed documents;
provided, however, that in instances where the original recorded mortgage,
mortgage assignment or any document necessary to assign the Seller's interest
in financial leases or Installment Contracts to the Trustee, as described in
the Agreement, has been retained by the applicable jurisdiction or has not yet
been returned from recordation, the Seller may deliver a photocopy thereof
certified to be the true and complete copy of the original thereof submitted
for recording, and the Master Servicer will cause the original of each such
document which is unavailable because it is being or has been submitted for
recordation and has not yet been returned, to be delivered to the Trustee as
soon as available.
The Trustee will hold the Mortgage Loan File for each mortgage loan in
trust for the benefit of all Certificateholders. Pursuant to the Agreement, the
Trustee is obligated to review the Mortgage Loan File for each mortgage loan
within a specified number of days after the execution and delivery of the
Agreement. If any document in the Mortgage Loan File is found to be defective
in any material respect, the Trustee will promptly notify the Seller, the
originator of the related mortgage loan or such other party as is designated in
the related Agreement (the "Responsible Party") and the Master Servicer. To the
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extent described in the related prospectus supplement, if the Responsible Party
cannot cure such defect within the time period specified in the related
prospectus supplement, the Responsible Party will be obligated to either
substitute the affected mortgage loan with a Substitute Mortgage Loan or Loans,
or to repurchase the related mortgage loan from the Trustee within the time
period specified in such prospectus supplement at a price specified therein,
expected to be generally equal to the principal balance thereof as of the date
of purchase or, in the case of a series as to which an election has been made
to treat the related Trust Fund as a REMIC, at such other price as may be
necessary to avoid a tax on a prohibited transaction, as described in Section
860F(a) of the Code, in each case together with accrued interest at the
applicable Mortgage Interest Rate to the first day of the month following such
repurchase, plus the amount of any unreimbursed advances made by the Master
Servicer (or such other party as specified in the related Agreement) in respect
of such mortgage loan (the "Repurchase Price"). This substitution or purchase
obligation will constitute the sole remedy available to the Holders of
certificates or the Trustee for a material defect in a constituent document.
The related prospectus supplement will describe procedures for the review
and holding of mortgage loans in the case of a structure using a Funding Note.
REPRESENTATIONS AND WARRANTIES
To the extent specified in the related prospectus supplement, the
Responsible Party with respect to each mortgage loan will have made certain
representations and warranties in respect of such mortgage loan and such
representations and warranties will have been assigned to the Trustee and/or
the Seller will have made certain representations and warranties in respect of
the mortgage loans directly to the Trustee. Such representations and warranties
will be set forth in an annex to the related prospectus supplement. Upon the
discovery of the breach of any such representation or warranty in respect of a
mortgage loan that materially and adversely affects the interests of the
Certificateholders of the related series, the Responsible Party or the Seller,
as the case may be, will be obligated either to cure such breach in all
material respects within the time period specified in such prospectus
supplement, to replace the affected mortgage loan with a Substitute Mortgage
Loan or Loans or to repurchase such mortgage loan at a price specified therein,
expected to be generally equal to the Repurchase Price. The Master Servicer,
the Special Servicer or the Trustee will be required to enforce such obligation
of the Responsible Party or the Seller for the benefit of the Trustee and the
Certificateholders, following the practices it would employ in its good faith
business judgment were it the owner of such mortgage loan. Subject to the
ability of the Responsible Party or the Seller to cure such breach in all
material respects or deliver Substitute Mortgage Loans for certain mortgage
loans as described below, such repurchase obligation will constitute the sole
remedy available to the Certificateholders of such series for a breach of a
representation or warranty by the Responsible Party or the Seller.
The proceeds of any repurchase of a mortgage loan will be deposited,
subject to certain limitations set forth in the related Agreement, into the
Collection Account.
If permitted by the related Agreement for a series, within the period of
time specified in the related prospectus supplement, following the date of
issuance of a series of certificates, the Responsible Party or the Seller, as
the case may be, may deliver to the Trustee mortgage loans ("Substitute
Mortgage Loans") in substitution for any one or more of the mortgage loans
("Defective Mortgage Loans") initially included in the Trust Fund (or in the
mortgage pool underlying a Funding Note) but which do not conform in one or
more respects to the description thereof contained in the related prospectus
supplement, as to which a breach of a representation or warranty is discovered,
which breach materially and adversely affects the interests of the
Certificateholders, or as to which a document in the related Mortgage Loan File
is defective in any material respect. The required characteristics of any
Substitute Mortgage Loan will generally include, among other things, that such
Substitute Mortgage Loan on the date of substitution, will:
(i) have an outstanding principal balance, after deduction of all
scheduled payments due in the month of substitution, not in excess of the
outstanding principal balance of the Defective Mortgage Loan (the amount of
any shortfall to be distributed to Certificateholders in the month of
substitution);
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(ii) have a Mortgage Interest Rate not less than (and not more than 1%
greater than) the Mortgage Interest Rate of the Defective Mortgage Loan;
(iii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Defective Mortgage Loan; and
(iv) comply with all of the representations and warranties set forth in
the Agreement as of the date of substitution.
If so specified in the related prospectus supplement, other entities may
also make representations and warranties with respect to the mortgage loans
included in a mortgage pool. Such other entity will generally have the same
obligations with respect to such representations and warranties as the
Responsible Party or the Seller as more fully described in the prospectus
supplement.
SERVICING OF THE MORTGAGE LOANS
GENERAL
The prospectus supplement related to a series will identify the master
servicer (the "Master Servicer") to service and administer the mortgage loans
as described below, and will set forth certain information concerning the
Master Servicer. The Master Servicer will be responsible for servicing the
mortgage loans pursuant to the Agreement for the related series. The Master
Servicer may have other business relationships with the Seller and its
affiliates.
If so specified in the related prospectus supplement, the servicing of
certain mortgage loans that are in default or otherwise require special
servicing (the "Specially Serviced Mortgage Loans") will be performed by a
special servicer (the "Special Servicer"). Certain information concerning the
Special Servicer and the standards for determining which mortgage loans will
become Specially Serviced Mortgage Loans will be set forth in such prospectus
supplement. Subject to the terms of the related Agreement, the Special Servicer
(and not the Master Servicer) will then be responsible for:
(a) negotiating modifications, waivers, amendments and other forbearance
arrangements with the borrower of any Specially Serviced Mortgage Loan, subject
to the limitations described under "--Modifications, Waivers and Amendments"
below;
(b) foreclosing on such Specially Serviced Mortgage Loan if no suitable
arrangements can be made to cure the default in the manner specified in the
related prospectus supplement; and
(c) supervising the management and operation of the related Mortgaged
Property if acquired through foreclosure or a deed in lieu of foreclosure.
The Special Servicer may have other business relationships with the Seller
and its affiliates.
If specified in the prospectus supplement for a series of certificates,
certain of the duties specified in this prospectus supplement as Master
Servicer duties may be performed by the Special Servicer.
The Master Servicer and the Special Servicer, if any, may subcontract the
servicing of all or a portion of the mortgage loans to one or more
sub-servicers, in accordance with the terms of the related Agreement. Such
sub-servicers may have other business relationships with the Seller and its
affiliates.
SERVICING STANDARDS
The Master Servicer and, except when acting at the direction of any
Operating Advisor, the Special Servicer, if any, will be required to service
and administer the mortgage loans in accordance with the servicing standards
described in the related Agreement. The servicing standards are generally
expected to provide that the mortgage loans are serviced and administered
solely in the best interests of and for the benefit of the Certificateholders
(as determined by the Master Servicer or the Special Servicer, if any, as the
case may be, in its reasonable judgment without taking into account differing
payment priorities among the classes of the related series of certificates and
any conflicts of interest involving it), in accordance with the terms of the
Agreement and the mortgage loans and, to the extent consistent with
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such terms, in the same manner in which, and with the same care, skill,
prudence and diligence with which, it services and administers similar mortgage
loans in other portfolios, giving due consideration to the customary and usual
standards of practice of prudent institutional commercial mortgage lenders and
loan servicers. If so specified in the related prospectus supplement, the
Master Servicer and Special Servicer, if any, may also be required to service
and administer the mortgage loans in the best interest of an insurer or
guarantor or in accordance with the provisions of a related Funding Note.
OPERATING ADVISOR
If so specified in the related prospectus supplement, an advisor (the
"Operating Advisor") may be selected to advise, direct and approve
recommendations of the Special Servicer with respect to certain decisions
relating to the servicing of the Specially Serviced Mortgage Loans. The related
prospectus supplement will provide specific information with respect to the
following matters: (i) the duration of the term of the Operating Advisor; (ii)
the method of selection of the Operating Advisor; (iii) certain decisions as to
which the Operating Advisor will have the power to direct and approve actions
of the Special Servicer (for example, foreclosure of a Mortgaged Property
securing a Specially Serviced Mortgage Loan, modification of a Specially
Serviced Mortgage Loan, extension of the maturity of a Specially Serviced
Mortgage Loan beyond a specified term and methods of compliance with
environmental laws) and (iv) the information, recommendations and reports to be
provided to the Operating Advisor by the Special Servicer.
COLLECTIONS AND OTHER SERVICING PROCEDURES
The Master Servicer and, with respect to any Specially Serviced Mortgage
Loans, the Special Servicer, if any, will make efforts to collect all payments
called for under the mortgage loans and will, consistent with the related
Agreement, follow such collection procedures as it deems necessary or
desirable. Consistent with the above, the Master Servicer or Special Servicer,
if any, may have the discretion under the Agreement for the related series to
waive any late payment or assumption charge or penalty interest in connection
with any late payment or assumption of a mortgage loan and to extend the due
dates for payments due on a mortgage note.
It is expected that the Agreement for each series will provide that the
Master Servicer establish and maintain an escrow account in which the Master
Servicer will be required to deposit amounts received from each borrower, if
required by the terms of the mortgage loan, for the payment of taxes,
assessments, certain mortgage and hazard insurance premiums and other
comparable items. The Special Servicer, if any, will be required to remit
amounts received for such purposes on mortgage loans serviced by it for deposit
in the escrow account and will be entitled to direct the Master Servicer to
make withdrawals from the escrow account as may be required for the servicing
of such mortgage loans. Withdrawals from the escrow account may be made to
effect timely payment of taxes, assessments, mortgage and hazard insurance
premiums and comparable items, to refund to borrowers amounts determined to be
overages, to remove amounts deposited therein in error, to pay interest to
borrowers on balances in the escrow account, if required, to repair or
otherwise protect the Mortgaged Properties and to clear and terminate such
account. The Master Servicer, or such other person as may be specified in the
related prospectus supplement, will be entitled to all income on the funds in
the escrow account invested in Permitted Investments not required to be paid to
borrowers under applicable law. The Master Servicer will be responsible for the
administration of the escrow account. If amounts on deposit in the escrow
account are insufficient to pay any tax, insurance premium or other similar
item when due, such item will be payable from amounts on deposit in the
Collection Account or otherwise in the manner set forth in the prospectus
supplement and the Agreement for the related series.
INSURANCE
The Agreement for each series will require that the Master Servicer
maintain or require each borrower to maintain insurance in accordance with the
related Mortgage, which generally will include a standard fire and hazard
insurance policy with extended coverage. To the extent required by the related
Mortgage, the coverage of each such standard hazard insurance policy will be in
an amount that is not
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less than the lesser of 90% of the replacement cost of the improvements
securing such mortgage loan or the outstanding principal balance owing on such
mortgage loan. The related Agreement may require that if a Mortgaged Property
is located in a federally designated special flood hazard area, the Master
Servicer must maintain or require the related borrower to maintain, in
accordance with the related Mortgage, flood insurance in an amount equal to the
lesser of the unpaid principal balance of the related mortgage loan and the
maximum amount obtainable with respect to the Mortgaged Property. To the extent
set forth in the related prospectus supplement, the cost of any such insurance
maintained by the Master Servicer will be an expense of the Trust Fund payable
out of the Collection Account.
The Master Servicer or, if so specified in the related prospectus
supplement, the Special Servicer, if any, will cause to be maintained fire and
hazard insurance with extended coverage on each REO Property in an amount
expected to generally be equal to the greater of (i) an amount necessary to
avoid the application of any coinsurance clause contained in the related
insurance policy and (ii) 90% of the replacement cost of the improvements which
are a part of such property. The cost of any such insurance with respect to an
REO Property will be an expense of the Trust Fund payable out of amounts on
deposit in the related REO Account or, if such amounts are insufficient, from
the Collection Account. The related Agreement may also require the Master
Servicer or, if so specified in the related prospectus supplement, the Special
Servicer, if any, to maintain flood insurance providing substantially the same
coverage as described above on any REO Property which is located in a federally
designated special flood hazard area.
The related Agreement may provide that the Master Servicer or the Special
Servicer, if any, as the case may be, may satisfy its obligation to cause
hazard policies to be maintained by maintaining a master, or single interest,
insurance policy insuring against losses on the mortgage loans or REO
Properties, as the case may be. The incremental cost of such insurance
allocable to any particular mortgage loan, if not borne by the related
borrower, may be an expense of the Trust Fund. Alternatively, if permitted in
the related Agreement, the Master Servicer may satisfy its obligation by
maintaining, at its expense, a blanket policy (i.e., not a single interest or
master policy) insuring against losses on the mortgage loans or REO Properties,
as the case may be. If such a blanket policy contains a deductible clause, the
Master Servicer or the Special Servicer, if any, as the case may be, will be
obligated to deposit in the Collection Account all sums which would have been
deposited therein but for such clause.
In general, the standard form of fire and hazard extended coverage policy
will cover physical damage to, or destruction of, the improvements on the
Mortgaged Property caused by fire, lightning, explosion, smoke, windstorm,
hail, riot, strike and civil commotion, subject to the conditions and
exclusions particularized in each policy. Since the standard hazard insurance
policies relating to the mortgage loans generally will be underwritten by
different insurers and will cover Mortgaged Properties located in various
jurisdictions, such policies will not contain identical terms and conditions.
The most significant terms thereof, however, generally will be determined by
state law and conditions. Most such policies typically will not cover any
physical damage resulting from war, revolution, governmental actions, floods
and other water-related causes, earth movement (including earthquakes,
landslides and mudflows), nuclear reaction, wet or dry rot, vermin, rodents,
insects or domestic animals, theft and, in certain cases, vandalism. The
foregoing list is merely indicative of certain kinds of uninsured risks and is
not intended to be all-inclusive. Any losses incurred with respect to mortgage
loans due to uninsured risks (including earthquakes, mudflows and floods) or
insufficient hazard insurance proceeds could affect distributions to the
Certificateholders.
The standard hazard insurance policies typically will contain a
"coinsurance" clause which, in effect, will require the insured at all times to
carry insurance of a specified percentage (generally 80% to 90%) of the full
replacement value of the dwellings, structures and other improvements on the
Mortgaged Property in order to recover the full amount of any partial loss. If
the insured's coverage falls below this specified percentage, such clause will
typically provide that the insurer's liability in the event of partial loss
will not exceed the greater of (i) the actual cash value (the replacement cost
less physical depreciation) of the structures and other improvements damaged or
destroyed and (ii) such proportion of the loss, without deduction for
depreciation, as the amount of insurance carried bears to the specified
percentage of the full replacement cost of such dwellings, structures and other
improvements.
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In addition, to the extent required by the related Mortgage, the Master
Servicer or Special Servicer, if any, may require the borrower to maintain
other forms of insurance including, but not limited to, loss of rent
endorsements, business interruption insurance and comprehensive public
liability insurance, and the related Agreement may require the Master Servicer
or Special Servicer, if any, to maintain public liability insurance with
respect to any REO Properties. Any cost incurred by the Master Servicer or
Special Servicer, if any, in maintaining any such insurance policy will be
added to the amount owing under the mortgage loan where the terms of the
mortgage loan so permit; provided, however, that the addition of such cost will
not be taken into account for purposes of calculating the distribution to be
made to Certificateholders. Such costs may be recovered by the Master Servicer
and the Special Servicer, if any, from the Collection Account, with interest
thereon, as provided by the Agreement.
Other forms of insurance, such as a pool insurance policy, special hazard
insurance policy, bankruptcy bond, repurchase bond or guarantee insurance, may
be maintained with respect to the mortgage loans to the extent provided in the
related prospectus supplement.
FIDELITY BONDS AND ERRORS AND OMISSIONS INSURANCE
The Agreement for each series may require that the Master Servicer and the
Special Servicer, if any, obtain and maintain in effect a fidelity bond or
similar form of insurance coverage (which may provide blanket coverage) or a
combination thereof insuring against loss occasioned by fraud, theft or other
intentional misconduct of the officers, employees and agents of the Master
Servicer or the Special Servicer, as the case may be. The related Agreement may
allow the Master Servicer and the Special Servicer, if any, to self-insure
against loss occasioned by the errors and omissions of the officers, employees
and agents of the Master Servicer or Special Servicer, as the case may be, so
long as certain criteria set forth in the Agreement are met.
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
The Master Servicer's principal compensation for its activities under the
Agreement for each series will come from the payment to it or retention by it,
with respect to each payment of interest on a mortgage loan, of a "Servicing
Fee" (as defined in the related prospectus supplement). The exact amount or
method of calculating such Servicing Fee will be established in the prospectus
supplement and Agreement for the related series. Since the aggregate unpaid
principal balance of the mortgage loans will generally decline over time, the
Master Servicer's servicing compensation will ordinarily decrease as the
mortgage loans amortize.
In addition, the Agreement for a series may provide that the Master
Servicer will be entitled to receive, as additional compensation, certain other
fees and amounts, including but not limited to (i) late fees and certain other
fees collected from borrowers and (ii) any interest or other income earned on
funds deposited in the Collection Account (as described under "DESCRIPTION OF
THE CERTIFICATES -- Accounts" in this prospectus) and, except to the extent
such income is required to be paid to the related borrowers, the escrow
account.
If specified in the related prospectus supplement, the Master Servicer may
be obligated to pay the fees and expenses of the Trustee.
The exact amount or method of calculating the servicing fee of the Special
Servicer, if any, and the source from which such fee will be paid will be
described in the prospectus supplement for the related series.
In addition to the compensation described above, the Master Servicer and
the Special Servicer, if any (or any other party specified in the related
prospectus supplement), may retain, or be entitled to the reimbursement of,
such other amounts and expenses as are described in the related prospectus
supplement.
ADVANCES
The related prospectus supplement will set forth the obligations, if any,
of the Master Servicer to make any advances ("Advances") with respect to
delinquent payments on mortgage loans, payments of
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taxes, insurance and property protection expenses or otherwise. Any such
Advances will be made in the form and manner described in the prospectus
supplement and Agreement for the related series. The Master Servicer will be
obligated to make such an Advance only to the extent that the Master Servicer
has determined that such Advance will be recoverable. Any funds thus advanced,
including Advances previously made, that the Master Servicer determines are not
ultimately recoverable, will be reimbursable to the Master Servicer, with
interest, from amounts in the Collection Account to the extent and in the
manner described in the related prospectus supplement.
If a borrower makes a principal payment between scheduled payment dates,
the borrower may be required to pay interest on the prepayment amount only to
the date of prepayment. If and to the extent described in the related
prospectus supplement, the Master Servicer's Servicing Fee may be reduced or
the Master Servicer may be otherwise obligated to advance funds to the extent
necessary to remit interest on any such full or partial prepayment received
from the date of receipt thereof to the next succeeding scheduled payment date.
MODIFICATIONS, WAIVERS AND AMENDMENTS
If so specified in the related prospectus supplement, the Agreement for
each series will provide that the Master Servicer may have the discretion,
subject to certain conditions set forth therein, to modify, waive or amend
certain of the terms of any mortgage loan without the consent of the Trustee or
any Certificateholder. The extent to which the Master Servicer may modify,
waive or amend any terms of the mortgage loans without such consent will be
specified in the related prospectus supplement.
Subject to the terms and conditions set forth in the Agreement, the
Special Servicer, if any, may modify, waive or amend the terms of any Specially
Serviced Mortgage Loan if the Special Servicer determines that a material
default has occurred or a payment default has occurred or is reasonably
foreseeable. The Special Servicer, if any, may extend the maturity date of such
mortgage loan to a date not later than the date described in the related
prospectus supplement. The ability of the Special Servicer to modify, waive or
amend the terms of any mortgage loan may be subject to such additional
limitations, including approval requirements, as are set forth in the related
prospectus supplement.
Subject to the terms and conditions set forth in the Agreement, the
Special Servicer, if any, will not agree to any modification, waiver or
amendment of the payment terms of a mortgage loan unless the Special Servicer
has determined that such modification, waiver or amendment is reasonably likely
to produce a greater recovery on a present value basis than liquidation of the
mortgage loan or has made such other determination described in the related
prospectus supplement. Prior to agreeing to any such modification, waiver or
amendment of the payment terms of a mortgage loan, the Special Servicer, if
any, will give notice thereof in the manner set forth in the prospectus
supplement and Agreement for the related series.
The prospectus supplement for a series may describe other or different
provisions concerning the modification, waiver or amendment of the terms of the
related mortgage loans, including, without limitation, requirements for the
approval of an Operating Advisor.
EVIDENCE OF COMPLIANCE
The Agreement for each series will provide that the Master Servicer and
the Special Servicer, if any, at their own expense, each will cause a firm of
independent public accountants to furnish to the Trustee, annually on or before
a date specified in the Agreement, a statement as to compliance with the
Agreement by the Master Servicer or Special Servicer, as the case may be.
In addition, the Agreement will provide that the Master Servicer and the
Special Servicer, if any, each will deliver to the Trustee, annually on or
before a date specified in the Agreement, a statement signed by an officer to
the effect that, based on a review of its activities during the preceding
calendar year, to the best of such officer's knowledge, the Master Servicer or
Special Servicer, as the case may be, has fulfilled its obligations under the
Agreement throughout such year or, if there has been a default in the
fulfillment of any such obligation, specifying each such default and the nature
and status thereof, and,
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in the case of a series of certificates as to which a REMIC or FASIT election
has been made, whether the Master Servicer or the Special Servicer, as the case
may be, has received a challenge from the Internal Revenue Service as to the
status of the Trust Fund as a REMIC or FASIT.
CERTAIN MATTERS WITH RESPECT TO THE MASTER SERVICER, THE SPECIAL SERVICER AND
THE TRUSTEE
The Agreement for each series will provide that neither the Master
Servicer nor the Special Servicer, if any, nor any of their directors,
officers, employees or agents will be under any liability to the Trust Fund or
the Certificateholders for any action taken, or for refraining from the taking
of any action, in good faith pursuant to the Agreement, or for errors in
judgment; provided, however, that neither the Master Servicer nor the Special
Servicer, if any, nor any such person will be protected against any breach of
representations or warranties made by the Master Servicer or the Special
Servicer, as the case may be, in the Agreement, against any specific liability
imposed on the Master Servicer or the Special Servicer, as the case may be,
pursuant to the Agreement, or any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith, or negligence in the performance of
its duties or by reason of reckless disregard of its obligations and duties
thereunder. The Agreement will further provide that the Master Servicer, the
Special Servicer, if any, and any of their directors, officers, employees or
agents will be entitled to indemnification by the Trust Fund and will be held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to the Agreement or the certificates, other than any
loss, liability or expense incurred (i) by reason of willful misfeasance, bad
faith or negligence in the performance of their duties or by reason of reckless
disregard of their obligations and duties thereunder or (ii) in certain other
circumstances specified in the Agreement. Any loss resulting from such
indemnification will reduce amounts distributable to Certificateholders and
will be borne by Certificateholders in the manner described in the related
prospectus supplement.
Neither the Master Servicer nor the Special Servicer, if any, may resign
from its obligations and duties under the Agreement except upon a determination
that its performance of its duties thereunder is no longer permissible under
applicable law or for other reasons described in the prospectus supplement. No
such resignation of the Master Servicer will become effective until the Trustee
or a successor Master Servicer has assumed the Master Servicer's obligations
and duties under the Agreement. No such resignation of a Special Servicer will
become effective until the Trustee, the Master Servicer or a successor Special
Servicer has assumed the Special Servicer's obligations and duties under the
Agreement.
The Trustee may resign from its obligations under the Agreement pursuant
to the terms of the Agreement at any time, in which event a successor Trustee
will be appointed. In addition, the Seller may remove the Trustee if the
Trustee ceases to be eligible to act as Trustee under the Agreement or if the
Trustee becomes insolvent, at which time the Seller will become obligated to
appoint a successor Trustee. The Trustee also may be removed at any time by the
Holders of certificates evidencing the Voting Rights specified in the related
prospectus supplement. Any resignation and removal of the Trustee, and the
appointment of a successor Trustee, will not become effective until acceptance
of such appointment by the successor Trustee.
EVENTS OF DEFAULT
Events of default (each, an "Event of Default") with respect to the Master
Servicer and the Special Servicer, if any, under the Agreement for each series
may include, among other things:
(i) with respect to the Master Servicer, any failure by the Master
Servicer to deposit in the Collection Account or remit to the Trustee for
deposit in the Distribution Account for distribution to Certificateholders
any payment required to be made by the Master Servicer under the terms of
the Agreement on the day required pursuant to the terms of the Agreement;
(ii) with respect to the Special Servicer, if any, any failure by the
Special Servicer to remit to the Master Servicer for deposit in the
Collection Account on the day required any amounts received by it in
respect of a Specially Serviced Mortgage Loan and required to be so
remitted;
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(iii) with respect to the Master Servicer and the Special Servicer,
if any, any failure on the part of the Master Servicer or the Special
Servicer, as the case may be, duly to observe or perform in any material
respect any other of the covenants or agreements on the part of the Master
Servicer or the Special Servicer, as the case may be, which failure
continues unremedied for a period of days specified in the related
Agreement after written notice of such failure has been given to the
applicable party;
(iv) with respect to the Master Servicer or the Special Servicer, if
any, the entering against the Master Servicer or the Special Servicer, as
the case may be, of a decree or order of a court, agency or supervisory
authority for the appointment of a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshaling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, provided that any such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days;
(v) with respect to the Master Servicer or the Special Servicer, if any,
the consent by the Master Servicer or the Special Servicer, as the case may
be, to the appointment of a conservator or receiver or liquidator or
liquidating committee in any insolvency, readjustment of debt, marshaling
of assets and liabilities, voluntary liquidation or similar proceedings of
or relating to it or of or relating to all or substantially all of its
property; and
(vi) with respect to the Master Servicer or the Special Servicer, if
any, the admission by the Master Servicer or Special Servicer, as the case
may be, in writing of its inability to pay its debts generally as they
become due, the filing by the Master Servicer or the Special Servicer, as
the case may be, of a petition to take advantage of any applicable
insolvency or reorganization statute or the making of an assignment for the
benefit of its creditors or the voluntary suspension of the payment of its
obligations.
As long as an Event of Default remains unremedied, the Trustee may, and
as long as an Event of Default remains unremedied or under certain other
circumstances, if any, described in the related prospectus supplement at the
written direction of the Holders of certificates holding at least the
percentage specified in the prospectus supplement of all of the Voting Rights
of the class or classes specified therein shall, by written notice to the
Master Servicer or Special Servicer, as the case may be, terminate all of the
rights and obligations of the Master Servicer or the Special Servicer, as the
case may be, whereupon the Trustee or another successor Master Servicer or
Special Servicer appointed by the Trustee will succeed to all authority and
power of the Master Servicer or Special Servicer under the Agreement and will
be entitled to similar compensation arrangements. "Voting Rights" means the
portion of the voting rights of all certificates that is allocated to any
certificate in accordance with the terms of the Agreement.
CREDIT ENHANCEMENT
GENERAL
If specified in the related prospectus supplement for any series, credit
enhancement may be provided with respect to one or more classes thereof or the
related mortgage loans. Credit enhancement may be in the form of the
subordination of one or more classes of the certificates of such series, the
establishment of one or more reserve funds, overcollateralization, a letter of
credit, certificate guarantee insurance policies, the use of cross-support
features or another method of credit enhancement described in the related
prospectus supplement, or any combination of the foregoing.
Any credit enhancement will provide protection against risks of loss and
will guarantee repayment of the principal balance of the certificates and
interest thereon only to the extent described in the related prospectus
supplement. If losses occur which exceed the amount covered by credit
enhancement or which are not covered by the credit enhancement,
Certificateholders will bear their allocable share of deficiencies.
If credit enhancement is provided with respect to a series, or the related
mortgage loans, the related prospectus supplement will include a description of
(a) the amount payable under such credit
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enhancement, (b) any conditions to payment thereunder not otherwise described
herein, (c) the conditions (if any) under which the amount payable under such
credit enhancement may be reduced and under which such credit enhancement may
be terminated or replaced and (d) the material provisions of any agreement
relating to such credit enhancement. Additionally, the related prospectus
supplement will set forth certain information with respect to the issuer of any
third-party credit enhancement, including (i) a brief description of its
principal business activities, (ii) its principal place of business, place of
incorporation and the jurisdiction under which it is chartered or licensed to
do business, (iii) if applicable, the identity of regulatory agencies which
exercise primary jurisdiction over the conduct of its business and (iv) its
total assets, and its stockholders' or policyholders' surplus, if applicable,
as of the date specified in such prospectus supplement. In addition, if the
Certificateholders of such series will be materially dependent upon any
provider of credit enhancement for timely payment of interest and/or principal
on their certificates, the related prospectus supplement will include audited
financial statements on a comparative basis for at least the prior two years
and any other appropriate financial information regarding such provider.
SUBORDINATE CERTIFICATES
If so specified in the related prospectus supplement, one or more classes
of a series may be subordinate certificates. If so specified in the related
prospectus supplement, the rights of the Holders of subordinate certificates
(the "Subordinate Certificates") to receive distributions of principal and
interest on any Distribution Date will be subordinated to such rights of the
Holders of senior certificates (the "Senior Certificates") to the extent
specified in the related prospectus supplement. The Agreement may require a
trustee that is not the Trustee to be appointed to act on behalf of Holders of
Subordinate Certificates.
A series may include one or more classes of Senior Certificates entitled
to receive cash flows remaining after distributions are made to all other
Senior Certificates of such series. Such right to receive payments will
effectively be subordinate to the rights of other Holders of Senior
Certificates. A series also may include one or more classes of Subordinate
Certificates entitled to receive cash flows remaining after distributions are
made to other Subordinate Certificates of such series. If so specified in the
related prospectus supplement, the subordination of a class may apply only in
the event of (or may be limited to) certain types of losses not covered by
insurance policies or other credit support, such as losses arising from damage
to property securing a mortgage loan not covered by standard hazard insurance
policies.
The related prospectus supplement will set forth information concerning
the amount of subordination of a class or classes of Subordinate Certificates
in a series, the circumstances in which such subordination will be applicable,
the manner, if any, in which the amount of subordination will decrease over
time, the manner of funding any related reserve fund and the conditions under
which amounts in any applicable reserve fund will be used to make distributions
to Holders of Senior Certificates and/or to Holders of Subordinate Certificates
or be released from the applicable Trust Fund.
CROSS-SUPPORT FEATURES
If the mortgage loans for a series are divided into separate mortgage loan
groups, each backing a separate class or classes of a series, credit support
may be provided by a cross-support feature which requires that distributions be
made on Senior Certificates backed by one mortgage loan group prior to
distributions on Subordinate Certificates backed by another mortgage loan group
within the Trust Fund. The related prospectus supplement for a series which
includes a cross-support feature will describe the manner and conditions for
applying such cross-support feature.
LETTER OF CREDIT
If specified in the related prospectus supplement, a letter of credit with
respect to a series of certificates will be issued by the bank or financial
institution specified in such prospectus supplement (the "Letter of Credit
Bank"). Under the letter of credit, the Letter of Credit Bank will be obligated
to honor
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drawings thereunder in an aggregate fixed dollar amount, net of unreimbursed
payments thereunder, equal to the percentage specified in the related
prospectus supplement of the aggregate principal balance of the mortgage loans
on the applicable Cut-Off Date or of one or more classes of certificates (the
"Letter of Credit Percentage"). If so specified in the related prospectus
supplement, the letter of credit may permit drawings in the event of losses not
covered by insurance policies or other credit support, such as losses arising
from damage not covered by standard hazard insurance policies. The amount
available under the letter of credit will, in all cases, be reduced to the
extent of the unreimbursed payments thereunder. The obligations of the Letter
of Credit Bank under the letter of credit for any series of certificates will
expire at the earlier of the date specified in the related prospectus
supplement or the termination of the Trust Fund. A copy of the letter of credit
for a series, if any, will be filed with the Commission as an exhibit to a
current report on Form 8-K to be filed within 15 days of issuance of the
certificates of the applicable series.
CERTIFICATE GUARANTEE INSURANCE
If so specified in the related prospectus supplement, certificate
guarantee insurance, if any, with respect to a series of certificates will be
provided by one or more insurance companies. Such certificate guarantee
insurance will guarantee, with respect to one or more classes of certificates
of the applicable series, timely distributions of interest and principal to the
extent set forth in or determined in the manner specified in the related
prospectus supplement. If so specified in the related prospectus supplement,
the certificate guarantee insurance will also guarantee against any payment
made to a Certificateholder which is subsequently covered as a "voidable
preference" payment under the Bankruptcy Code. A copy of the certificate
guarantee insurance policy for a series, if any, will be filed with the
Commission as an exhibit to a current report on Form 8-K to be filed with the
Commission within 15 days of issuance of the certificates of the applicable
series.
RESERVE FUNDS
If specified in the related prospectus supplement, one or more reserve
funds may be established with respect to a series, in which cash, a letter of
credit, Permitted Investments or a combination thereof, in the amounts, if any,
specified in the related prospectus supplement will be deposited. The reserve
funds for a series may also be funded over time by depositing therein a
specified amount of the distributions received on the applicable mortgage loans
if specified in the related prospectus supplement. The Seller may pledge the
reserve funds to a separate collateral agent specified in the related
prospectus supplement.
Amounts on deposit in any reserve fund for a series, together with the
reinvestment income thereon, if any, will be applied by the Trustee for the
purposes, in the manner, and to the extent specified in the related prospectus
supplement. A reserve fund may be provided to increase the likelihood of timely
payments of principal of, and interest on, the certificates, if required as a
condition to the rating of such series by each Rating Agency. If so specified
in the related prospectus supplement, reserve funds may be established to
provide limited protection, in an amount satisfactory to each Rating Agency,
against certain types of losses not covered by insurance policies or other
credit support, such as losses arising from damage not covered by standard
hazard insurance policies. Reserve funds also may be established for other
purposes and in such amounts as will be specified in the related prospectus
supplement. Following each Distribution Date amounts in any reserve fund in
excess of any amount required to be maintained therein may be released from the
reserve fund under the conditions and to the extent specified in the related
prospectus supplement and will not be available for further application by the
Trustee.
Moneys deposited in any reserve fund will be invested in Permitted
Investments at the direction of the Seller or such other person specified in
the related prospectus supplement. Any reinvestment income or other gain from
such investments will be credited to the related reserve fund for such series,
and any loss resulting from such investments will be charged to such reserve
fund in accordance with the terms of the related Agreement. If specified in the
related prospectus supplement, such income or other gain may be payable to the
Master Servicer as additional servicing compensation, and any loss resulting
from
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such investment will be borne by the Master Servicer. The right of the Trustee
to make draws on the reserve fund, if any, will be an asset of the Trust Fund,
but the reserve fund itself will only be a part of the Trust Fund if so
provided in the related prospectus supplement.
Additional information concerning any reserve fund will be set forth in
the related prospectus supplement, including the initial balance of such
reserve fund, the balance required to be maintained in the reserve fund, the
manner in which such required balance will decrease over time, the manner of
funding such reserve fund, the purpose for which funds in the reserve fund may
be applied to make distributions to Certificateholders and use of investment
earnings from the reserve fund, if any.
SWAP AGREEMENT
If so specified in the prospectus supplement relating to a series of
certificates, the Trust Fund will enter into or obtain an assignment of a swap
agreement pursuant to which the Trust Fund will have the right to receive, and
may have the obligation to make, certain payments of interest (or other
payments) as set forth or determined as described therein. The prospectus
supplement relating to a series of certificates having the benefit of an
interest rate swap agreement will describe the material terms of such agreement
and the particular risks associated with the interest rate swap feature,
including market and credit risk, the effect of counterparty defaults and other
risks, if any. The prospectus supplement relating to such series of
certificates also will set forth certain information relating to the corporate
status, ownership and credit quality of the counterparty or counterparties to
such swap agreement. In addition, if the Certificateholders of such series will
be materially dependent upon any counterparty for timely payment of interest
and/or principal on their certificates, the related prospectus supplement will
include audited financial statements on a comparative basis for at least the
prior two years and any other appropriate financial information regarding such
counterparty. A swap agreement may include one or more of the following types
of arrangements, or another arrangement described in the related prospectus
supplement.
Interest Rate Swap. In an interest rate swap, the Trust Fund will exchange
the stream of interest payments on the mortgage loans for another stream of
interest payments based on a notional amount, which may be equal to the
principal amount of the mortgage loans as it declines over time.
Interest Rate Caps. In an interest rate cap, the Trust Fund or the swap
counterparty, in exchange for a fee, will agree to compensate the other if a
particular interest rate index rises above a rate specified in the swap
agreement. The fee for the cap may be a single up-front payment to or from the
Trust Fund, or a series of payments over time.
Interest Rate Floors. In an interest rate floor, the Trust Fund or the
swap counterparty, in exchange for a fee, will agree to compensate the other if
a particular interest rate index falls below a rate or level specified in the
swap agreement. As with interest rate caps, the fee may be a single up-front
payment or it may be paid periodically.
Interest Rate Collars. An interest rate collar is a combination of an
interest rate cap and an interest rate floor. One party agrees to compensate
the other if a particular interest rate index rises above the cap and, in
exchange, will be compensated if the interest rate index falls below the floor.
YIELD CONSIDERATIONS
GENERAL
The yield to maturity on any class of offered certificates will depend
upon, among other things, the price at which such certificates are purchased,
the amount and timing of any delinquencies and losses incurred by such class,
the rate and timing of payments of principal on the mortgage loans, and the
amount and timing of recoveries and Insurance Proceeds from REO mortgage loans
and related REO Properties, which, in turn, will be affected by the
amortization schedules of the mortgage loans, the timing of principal payments
(particularly Balloon Payments) on the related mortgage loans (including delay
in such payments resulting from modifications and extensions), the rate of
principal prepayments, including
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prepayments by borrowers and prepayments resulting from defaults, repurchases
arising in connection with certain breaches of the representations and
warranties made in the Agreement and the exercise of the right of optional
termination of the Trust Fund. Generally, prepayments on the mortgage loans
will tend to shorten the weighted average lives of each class of certificates,
whereas delays in liquidations of defaulted mortgage loans and modifications
extending the maturity of mortgage loans will tend to lengthen the weighted
average lives of each class of certificates. See "CERTAIN LEGAL ASPECTS OF THE
MORTGAGE LOANS -- Enforceability of Certain Provisions" in this prospectus for
a description of certain provisions of each Agreement and statutory, regulatory
and judicial developments that may affect the prepayment experience and
maturity assumptions on the mortgage loans.
PREPAYMENT AND MATURITY ASSUMPTIONS
The related prospectus supplement may indicate that the related mortgage
loans may be prepaid in full or in part at any time, generally without
prepayment premium. Alternatively, a Trust Fund may include mortgage loans that
have significant restrictions on the ability of a borrower to prepay without
incurring a prepayment premium or to prepay at all. As described above, the
prepayment experience of the mortgage loans will affect the weighted average
life of the offered certificates. A number of factors may influence prepayments
on multifamily and commercial loans, including enforceability of due-on-sale
clauses, prevailing mortgage market interest rates and the availability of
mortgage funds, changes in tax laws (including depreciation benefits for
income-producing properties), changes in borrowers' net equity in the Mortgaged
Properties, servicing decisions, prevailing general economic conditions and the
relative economic vitality of the areas in which the Mortgaged Properties are
located, the terms of the mortgage loans (for example, the existence of
due-on-sale clauses), the quality of management of any income-producing
Mortgaged Properties and, in the case of Mortgaged Properties held for
investment, the availability of other opportunities for investment. A number of
factors may discourage prepayments on multifamily loans and commercial loans,
including the existence of any lockout or prepayment premium provisions in the
underlying mortgage note. A lockout provision prevents prepayment within a
certain time period after origination. A prepayment premium imposes an
additional charge on a borrower who wishes to prepay. Some of the mortgage
loans may have substantial principal balances due at their stated maturities
("Balloon Payments"). Balloon Payments involve a greater degree of risk than
fully amortizing loans because the ability of the borrower to make a Balloon
Payment typically will depend upon its ability either to refinance the loan or
to sell the related Mortgaged Property. The ability of a borrower to accomplish
either of these goals will be affected by a number of factors, including the
level of available mortgage rates at the time of the attempted sale or
refinancing, the borrower's equity in the related Mortgaged Property, the
financial condition of the borrower and operating history of the related
Mortgaged Property, tax laws, prevailing economic conditions and the
availability of credit for commercial real estate projects generally. See
"CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS -- Enforceability of Certain
Provisions" in this prospectus.
If the purchaser of a certificate offered at a discount calculates its
anticipated yield to maturity based on an assumed rate of distributions of
principal that is faster than that actually experienced on the mortgage loans,
the actual yield to maturity will be lower than that so calculated. Conversely,
if the purchaser of a certificate offered at a premium calculates its
anticipated yield to maturity based on an assumed rate of distributions of
principal that is slower than that actually experienced on the mortgage loans,
the actual yield to maturity will be lower than that so calculated. In either
case, the effect of voluntary and involuntary prepayments of the mortgage loans
on the yield on one or more classes of the certificates of such series in the
related Trust Fund may be mitigated or exacerbated by any provisions for
sequential or selective distribution of principal to such classes.
The timing of changes in the rate of principal payments on the mortgage
loans may significantly affect an investor's actual yield to maturity, even if
the average rate of distributions of principal is consistent with an investor's
expectation. In general, the earlier a principal payment is received on the
mortgage loans and distributed on a certificate, the greater the effect on such
investor's yield to maturity. The effect of an investor's yield of principal
payments occurring at a rate higher (or lower) than the rate anticipated by the
investor during a given period may not be offset by a subsequent like decrease
(or increase) in the rate of principal payments.
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The weighted average life of a certificate refers to the average amount of
time that will elapse from the date of issuance of the certificate until each
dollar of principal is repaid to the Certificateholders. The weighted average
life of the offered certificates will be influenced by the rate at which
principal on the mortgage loans is paid, which may be in the form of scheduled
amortization or prepayments. Prepayments on mortgage loans are commonly
measured relative to a prepayment standard or model. As more fully described in
the related prospectus supplement, the model generally represents an assumed
constant rate of prepayment each month relative to the then outstanding
principal balance of a pool of new mortgage loans.
There can be no assurance that the mortgage loans will prepay at any rate
mentioned in any prospectus supplement. In general, if prevailing interest
rates fall below the Mortgage Interest Rates on the mortgage loans, the rate of
prepayment can be expected to increase.
CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS
The following discussion contains summaries of certain legal aspects of
mortgage loans which are general in nature. Because many of the legal aspects
of mortgage loans are governed by the laws of the jurisdictions where the
related mortgaged properties are located (which laws may vary substantially),
the following summaries do not purport to be complete, to reflect the laws of
any particular jurisdiction, to reflect all the laws applicable to any
particular mortgage loan or to encompass the laws of all jurisdictions in which
the properties securing the mortgage loans are situated. In the event that the
Trust Fund for a given series includes mortgage loans having material
characteristics other than as described below, the related prospectus
supplement will set forth additional legal aspects relating thereto.
MORTGAGES AND DEEDS OF TRUST GENERALLY
The mortgage loans (other than financial leases and Installment Contracts)
for a series will consist of loans secured by either mortgages or deeds of
trust or other similar security instruments. There are two parties to a
mortgage, the mortgagor, who is the borrower and owner of the mortgaged
property, and the mortgagee, who is the lender. In a mortgage transaction, the
mortgagor delivers to the mortgagee a note, bond or other written evidence of
indebtedness and a mortgage. A mortgage creates a lien upon the real property
encumbered by the mortgage as security for the obligation evidenced by the
note, bond or other evidence of indebtedness. Although a deed of trust is
similar to a mortgage, a deed of trust has three parties, the borrower-property
owner called the trustor (similar to a mortgagor), a lender called the
beneficiary (similar to a mortgagee), and a third-party grantee called the
trustee. Under a deed of trust, the borrower irrevocably grants the property to
the trustee, until the debt is paid, in trust for the benefit of the
beneficiary to secure payment of the obligation generally with a power of sale.
The trustee's authority under a deed of trust and the mortgagee's authority
under a mortgage are governed by applicable law, the express provisions of the
deed of trust or mortgage, and, in some cases, in deed of trust transactions,
the directions of the beneficiary.
The real property covered by a mortgage is most often the fee estate in
land and improvements. However, a mortgage may encumber other interests in real
property such as a tenant's interest in a lease of land or improvements, or
both, and the leasehold estate created by such lease. A mortgage covering an
interest in real property other than the fee estate requires special provisions
in the instrument creating such interest or in the mortgage to protect the
mortgagee against termination of such interest before the mortgage is paid.
Certain representations and warranties in the related Agreement will be made
with respect to the mortgage loans which are secured by an interest in a
leasehold estate.
Priority of the lien on mortgaged property created by mortgages and deeds
of trust depends on their terms and, generally, on the order of filing with a
state, county or municipal office, although such priority may in some states be
altered by the existence of leases in place with respect to the mortgaged
property and by the mortgagee's or beneficiary's knowledge of unrecorded liens
or encumbrances against the mortgaged property. However, filing or recording
does not establish priority over certain mechanic's liens or governmental
claims for real estate taxes and assessments or, in some states, for
reimbursement of remediation costs of certain environmental conditions. See
"-- Environmental Risks" below. In addition, the Code provides priority to
certain tax liens over the lien of the mortgage.
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INSTALLMENT CONTRACTS
The mortgage loans for a series may also consist of Installment Contracts.
Under an Installment Contract the seller (hereinafter referred to in this
Section as the "lender") retains legal title to the property and enters into an
agreement with the purchaser (hereinafter referred to in this Section as the
"borrower") for the payment of the purchase price, plus interest, over the term
of such contract. Only after full performance by the borrower of the contract
is the lender obligated to convey title to the real estate to the purchaser. As
with mortgage or deed of trust financing, during the effective period of the
Installment Contract, the borrower generally is responsible for maintaining the
property in good condition and for paying real estate taxes, assessments and
hazard insurance premiums associated with the property.
The method of enforcing the rights of the lender under an Installment
Contract varies on a state-by-state basis depending upon the extent to which
state courts are willing, or able pursuant to state statute, to enforce the
contract strictly according to its terms. The terms of Installment Contracts
generally provide that upon a default by the borrower, the borrower loses his
or her right to occupy the property, the entire indebtedness is accelerated,
and the buyer's equitable interest in the property is forfeited. The lender in
such a situation does not have to foreclose in order to obtain title to the
property, although in some cases a quiet title action is in order if the
borrower has filed the Installment Contract in local land records and an
ejectment action may be necessary to recover possession. In a few states,
particularly in cases of borrower default during the early years of an
Installment Contract, the courts will permit ejectment of the buyer and a
forfeiture of his or her interest in the property. However, most state
legislatures have enacted provisions by analogy to mortgage law protecting
borrowers under Installment Contracts from the harsh consequences of
forfeiture. Under such statutes, a judicial or nonjudicial foreclosure may be
required, the lender may be required to give notice of default and the borrower
may be granted some grace period during which the contract may be reinstated
upon full payment of the default amount and the borrower may have a
post-foreclosure statutory redemption right. In other states, courts in equity
may permit a borrower with significant investment in the property under an
Installment Contract for the sale of real estate to share in the proceeds of
sale of the property after the indebtedness is repaid or may otherwise refuse
to enforce the forfeiture clause. Nevertheless, generally speaking, the
lender's procedures for obtaining possession and clear title under an
Installment Contract for the sale of real estate in a given state are simpler
and less time-consuming and costly than are the procedures for foreclosing and
obtaining clear title to a mortgaged property.
FINANCIAL LEASES
The mortgage loans for a series also may consist of financial leases.
Under a financial lease on real property, the lessor retains legal title to the
leased property and enters into an agreement with the lessee (hereinafter
referred to in this Section as the "lessee") under which the lessee makes lease
payments approximately equal to the principal and interest payments that would
be required on a mortgage note for a loan covering the same property. Title to
the real estate typically is conveyed to the lessee at the end of the lease
term for a price approximately equal to the remaining unfinanced equity,
determined by reference to the unpaid principal amount, market value, or
another method specified in the related Agreement. As with Installment
Contracts, the lessee generally is responsible for maintaining the property in
good condition and for paying real estate taxes, assessments and hazard
insurance premiums associated with the property during the lease term. The
related prospectus supplement will describe the specific legal incidents of any
financial leases that are included in the mortgage loan pool for a series.
RIGHTS OF MORTGAGEES OR BENEFICIARIES
The form of the mortgage or deed of trust used by many institutional
lenders confers on the mortgagee or beneficiary the right both to receive all
proceeds collected under any hazard insurance policy and all awards made in
connection with any condemnation proceedings, and to apply such proceeds and
awards to any indebtedness secured by the mortgage or deed of trust, in such
order as the mortgagee or beneficiary may determine. Thus, in the event
improvements on the property are
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damaged or destroyed by fire or other casualty, or in the event the property is
taken by condemnation, the mortgagee or beneficiary under the senior mortgage
or deed of trust will have the prior right to collect any insurance proceeds
payable under a hazard insurance policy and any award of damages in connection
with the condemnation and to apply the same to the indebtedness secured by the
senior mortgage or deed of trust. Proceeds in excess of the amount of senior
mortgage indebtedness will, in most cases, be applied to the indebtedness of a
junior mortgage or trust deed, if any. The laws of certain states may limit the
ability of mortgagees or beneficiaries to apply the proceeds of hazard
insurance and partial condemnation awards to the secured indebtedness. In such
states, the mortgagor or trustor must be allowed to use the proceeds of hazard
insurance to repair the damage unless the security of the mortgagee or
beneficiary has been impaired. Similarly, in certain states, the mortgagee or
beneficiary is entitled to the award for a partial condemnation of the real
property security only to the extent that its security is impaired.
The form of mortgage or deed of trust used by many institutional lenders
typically contains a "future advance" clause, which provides, in essence, that
additional amounts advanced to or on behalf of the mortgagor or trustor by the
mortgagee or beneficiary are to be secured by the mortgage or deed of trust.
While such a clause is valid under the laws of most states, the priority of any
advance made under the clause depends, in some states, on whether the advance
was an "obligatory" or "optional" advance. If the mortgagee or beneficiary is
obligated to advance the additional amounts, the advance may be entitled to
receive the same priority as amounts initially made under the mortgage or deed
of trust, notwithstanding that there may be intervening junior mortgages or
deeds of trust and other liens between the date of recording of the mortgage or
deed of trust and the date of the future advance, and notwithstanding that the
mortgagee or beneficiary had actual knowledge of such intervening junior
mortgages or deeds of trust and other liens at the time of the advance. Where
the mortgagee or beneficiary is not obligated to advance the additional amounts
and has actual knowledge of the intervening junior mortgages or deeds of trust
and other liens, the advance may be subordinate to such intervening junior
mortgages or deeds of trust and other liens. Priority of advances under a
"future advance" clause rests, in many other states, on state law giving
priority to all advances made under the related loan agreement up to a "credit
limit" amount stated in the recorded mortgage.
Another provision typically found in the form of the mortgage or deed of
trust used by many institutional lenders obligates the mortgagor or trustor to
pay before delinquency all taxes and assessments on the property and, when due,
all encumbrances, charges and liens on the property which appear prior to the
mortgage or deed of trust, to provide and maintain fire insurance on the
property, to maintain and repair the property and not to commit or permit any
waste thereof, and to appear in and defend any action or proceeding purporting
to affect the property or the rights of the mortgagee or beneficiary under the
mortgage or deed of trust. Upon a failure of the mortgagor or trustor to
perform any of these obligations, the mortgagee or beneficiary is given the
right under the mortgage or deed of trust to perform the obligation itself, at
its election, with the mortgagor or trustor agreeing to reimburse the mortgagee
or beneficiary for any sums expended by the mortgagee or beneficiary on behalf
of the trustor. All sums so expended by the mortgagee or beneficiary become
part of the indebtedness secured by the mortgage or deed of trust.
The form of mortgage or deed of trust used by many institutional lenders
typically requires the mortgagor or trustor to obtain the consent of the
mortgagee or beneficiary in respect of actions affecting the mortgaged
property, including, without limitation, leasing activities (including new
leases and termination or modification of existing leases), alterations and
improvements to buildings forming a part of the mortgaged property, and
management and leasing agreements for the mortgaged property. Tenants will
often refuse to execute a lease unless the mortgagee or beneficiary executes a
written agreement with the tenant not to disturb the tenant's possession of its
premises in the event of a foreclosure. A senior mortgagee or beneficiary may
refuse to consent to matters approved by a junior mortgagee or beneficiary with
the result that the value of the security for the junior mortgage or deed of
trust is diminished. For example, a senior mortgagee or beneficiary may decide
not to approve a lease or to refuse to grant to a tenant a non-disturbance
agreement. If, as a result, the lease is not executed, the value of the
mortgaged property may be diminished.
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FORECLOSURE
Foreclosure of a mortgage is generally accomplished by judicial action
initiated by the service of legal pleadings upon all necessary parties having
an interest in the real property. Delays in completion of foreclosure may
occasionally result from difficulties in locating such necessary parties. When
the mortgagee's right to foreclose is contested, the legal proceedings
necessary to resolve the issue can be time consuming. A judicial foreclosure
may be subject to most of the delays and expenses of other litigation,
sometimes requiring up to several years to complete. At the completion of the
judicial foreclosure proceedings, if the mortgagee prevails, the court
ordinarily issues a judgment of foreclosure and appoints a referee or other
designated official to conduct the sale of the property. Such sales are made in
accordance with procedures which vary from state to state. The purchaser at
such sale acquires the estate or interest in real property covered by the
mortgage. If the mortgage covered the tenant's interest in a lease and
leasehold estate, the purchaser will acquire such tenant's interest subject to
the tenant's obligations under the lease to pay rent and perform other
covenants contained therein.
In a majority of cases, foreclosure of a deed of trust is accomplished by
a non-judicial trustee's sale under a specific provision in the deed of trust
and /or applicable statutory requirements which authorizes the trustee,
generally following a request from the beneficiary/lender, to sell the property
at public sale upon any default by the borrower under the terms of the note or
deed of trust. A number of states may also require that a lender provide notice
of acceleration of a note to the borrower. Notice requirements under a
trustee's sale vary from state to state. In some states, prior to the trustee's
sale the trustee must record a notice of default and send a copy to the
borrower-trustor, to any person who has recorded a request for a copy of a
notice of default and notice of sale and to any successor in interest to the
trustor. In addition, the trustee must provide notice in some states to any
other person having an interest in the real property, including any junior
lienholders, and to certain other persons connected with the deed of trust. In
some states, the borrower, or any other person having a junior encumbrance on
the real estate, may, during a reinstatement period, cure the default by paying
the entire amount in arrears plus the costs and expenses (in some states,
limited to reasonable costs and expenses) incurred in enforcing the obligation.
Generally, state law controls the amount of foreclosure expenses and costs,
including attorneys' fees, which may be recovered by a lender. If the deed of
trust is not reinstated, a notice of sale must be posted in a public place and,
in most states, published for a specific period of time in one or more
newspapers. In addition, some state laws require that a copy of the notice of
sale be posted on the property and sent to all parties having an interest in
the real property.
In case of foreclosure under either a mortgage or a deed of trust, the
sale by the referee or other designated official or by the trustee is often a
public sale. However, because of the difficulty a potential buyer at the sale
might have in determining the exact status of title to the property subject to
the lien of the mortgage or deed of trust and the redemption rights that may
exist (see "-- Rights of Redemption" below), and because the physical condition
and financial performance of the property may have deteriorated during the
foreclosure proceedings and/or for a variety of other reasons, a third party
may be unwilling to purchase the property at the foreclosure sale. Some states
require that the lender disclose to potential bidders at a trustee's sale all
known facts materially affecting the value of the property. Such disclosure may
have an adverse effect on the trustee's ability to sell the property or the
sale price thereof. Potential buyers may further question the prudence of
purchasing property at a foreclosure sale as a result of the 1980 decision of
the United States Court of Appeals for the Fifth Circuit in Durrett v.
Washington National Insurance Company and other decisions that have followed
the reasoning of Durrett with respect to fraudulent conveyances under
applicable bankruptcy law. In Durrett and its progeny, the Fifth Circuit and
other courts held that the transfer of real property pursuant to a
non-collusive, regularly conducted foreclosure sale was subject to the
fraudulent transfer provisions of the applicable bankruptcy laws, including the
requirement that the price paid for the property constitute "fair
consideration." The reasoning and result of Durrett and its progeny in respect
of the federal bankruptcy code, as amended from time to time (11 U.S.C.) (the
"Bankruptcy Code") was rejected, however, by the United States Supreme Court in
May 1994. The case could nonetheless be persuasive to a court applying a state
fraudulent conveyance law which has provisions similar to those construed in
Durrett.
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For these and other reasons, it is common for the lender to purchase the
property from the trustee, referee or other designated official for an amount
equal to the lesser of the fair market value of such property and the
outstanding principal amount of the indebtedness secured by the mortgage or
deed of trust, together with accrued and unpaid interest and the expenses of
foreclosure, in which event, if the amount bid by the lender equals the full
amount of such debt, interest and expenses, the mortgagee's debt will be
extinguished. Thereafter, subject to the mortgagor's right in some states to
remain in possession during a redemption period, if applicable, the lender will
assume the burdens of ownership, including paying operating expenses and real
estate taxes and making repairs. The lender is then obligated as an owner until
it can arrange a sale of the property to a third party. Frequently, the lender
employs a third party management company to manage and operate the property.
The costs of operating and maintaining commercial property may be significant
and may be greater than the income derived from that property. The costs of
management and operation of those mortgaged properties which are hotels, motels
or nursing or convalescent homes or hospitals may be particularly significant
because of the expertise, knowledge and, especially with respect to nursing or
convalescent homes or hospitals, regulatory compliance, required to run such
operations and the effect which foreclosure and a change in ownership may have
on the public's and the industry's (including franchisor's) perception of the
quality of such operations. The lender will commonly obtain the services of a
real estate broker and pay the broker's commission in connection with the sale
of the property. Depending upon market conditions, the ultimate proceeds of the
sale of the property may not equal the lender's investment in the property.
Moreover, a lender commonly incurs substantial legal fees and court costs in
acquiring a mortgaged property through contested foreclosure and/or bankruptcy
proceedings. Furthermore, an increasing number of states require that any
environmental hazards be eliminated before a property may be resold. In
addition, a lender may be responsible under federal or state law for the cost
of cleaning up a mortgaged property that is environmentally contaminated. See
"-- Environmental Risks" below. As a result, a lender could realize an overall
loss on a mortgage loan even if the related mortgaged property is sold at
foreclosure or resold after it is acquired through foreclosure for an amount
equal to the full outstanding principal amount of the mortgage loan, plus
accrued interest.
In foreclosure proceedings, some courts have applied general equitable
principles. These equitable principles are generally designed to relieve the
borrower from the legal effect of the borrower's defaults under the loan
documents. Examples of judicial remedies that have been fashioned include
judicial requirements that the lender undertake affirmative and expensive
actions to determine the causes of the borrower's default and the likelihood
that the borrower will be able to reinstate the loan. In some cases, courts
have substituted their judgment for the lender's judgment and have required
that lenders reinstate loans or recast payment schedules in order to
accommodate borrowers who are suffering from temporary financial disability. In
other cases, courts have limited the right of the lender to foreclose if the
default under the mortgage instrument is not monetary, such as the borrower's
failing to maintain adequately the property or the borrower's executing a
second mortgage or deed of trust affecting the property. Finally, some courts
have been faced with the issue of whether or not federal or state
constitutional provisions reflecting due process concerns for adequate notice
require that borrowers under deeds of trust or mortgages receive notices in
addition to the statutorily-prescribed minimum notice. For the most part, these
cases have upheld the notice provisions as being reasonable or have found that
the sale by a trustee under a deed of trust, or under a mortgage having a power
of sale, does not involve sufficient state action to afford constitutional
protections to the borrower. There may, however, be state transfer taxes due
and payable upon obtaining such properties at foreclosure. Such taxes could be
substantial.
Under the REMIC provisions of the Code (if applicable) and the related
Agreement, the Master Servicer or Special Servicer, if any, may be required to
hire an independent contractor to operate any REO Property. The costs of such
operation may be significantly greater than the costs of direct operation by
the Master Servicer or Special Servicer, if any. Under Section 856(e)(3) of the
Code, property acquired by foreclosure generally must not be held beyond the
close of the third taxable year after the taxable year in which the acquisition
occurs. With respect to a series of certificates for which an election is made
to qualify the Trust Fund or a part thereof as a REMIC, the Agreement will
permit foreclosed
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property to be held for more than the time period permitted by Section
856(e)(3) of the Code if the Trustee receives (i) an extension from the
Internal Revenue Service or (ii) an opinion of counsel to the effect that
holding such property for such period is permissible under the applicable REMIC
provisions.
STATE LAW LIMITATIONS ON LENDERS
In some states, after sale pursuant to a deed of trust or foreclosure of a
mortgage, the borrower and foreclosed junior lienors are given a statutory
period in which to redeem the property from the foreclosure sale. In some
states, redemption may occur only upon payment of the entire principal balance
of the loan, accrued interest and expenses of foreclosure. In some states,
redemption may be authorized even if the former borrower pays only a portion of
the sums due. The effect of these types of statutory rights of redemption is to
diminish the ability of the lender to sell the foreclosed property. Such rights
of redemption would defeat the title of any purchaser from the lender
subsequent to foreclosure or sale under a deed of trust. Consequently, the
practical effect of the redemption right is to force the lender to retain the
property and pay the expenses of ownership until the redemption period has run.
See "-- Rights of Redemption" below.
Certain states have imposed statutory prohibitions against or limitations
on recourse to the borrower. For example, some state statutes limit the right
of the beneficiary or mortgagee to obtain a deficiency judgment against the
borrower following foreclosure or sale under a deed of trust. A deficiency
judgment is a personal judgment against the former borrower equal in most cases
to the difference between the net amount realized upon the public sale of the
real property and the amount due to the lender. Other statutes require the
beneficiary or mortgagee to exhaust the security afforded under a deed of trust
or mortgage by foreclosure in an attempt to satisfy the full debt before
bringing a personal action against the borrower on the debt without first
exhausting such security. In some states, the lender, if it first pursues
judgment through a personal action against the borrower on the debt, may be
deemed to have elected a remedy and may thereafter be precluded from exercising
remedies with respect to the security. Consequently, the practical effect of
the election requirement, when applicable, is that lenders will usually proceed
first against the security rather than bringing personal action against the
borrower. Other statutory provisions limit any deficiency judgment against the
former borrower following a judicial sale to the excess of the outstanding debt
over the fair market value of the property at the time of the public sale. The
purpose of these statutes is generally to prevent a beneficiary or a mortgagee
from obtaining a large deficiency judgment against the former borrower as
a result of low bids or the absence of bids at the judicial sale. See
"-- Anti-Deficiency Legislation; Bankruptcy Laws" below.
ENVIRONMENTAL RISKS
Real property pledged as security to a lender may be subject to potential
environmental risks. Of particular concern may be those mortgaged properties
which are, or have been, the site of manufacturing, industrial or disposal
activity. Such environmental risks may give rise to a diminution in value of
property securing any mortgage loan or, in certain circumstances as more fully
described below, liability for cleanup costs or other remedial actions, which
liability could exceed the value of such property or the principal balance of
the related mortgage loan. In certain circumstances, a lender may choose not to
foreclose on contaminated property rather than risk incurring liability for
remedial actions.
Under the laws of certain states, failure to perform any remedial action
required or demanded by the state of any condition or circumstance that (i) may
pose an imminent or substantial endangerment to the public health or welfare or
the environment, (ii) may result in a release or threatened release of any
hazardous material, or (iii) may give rise to any environmental claim or demand
(each such condition or circumstance, an "Environmental Condition") may, in
certain circumstances, give rise to a lien on the property to ensure the
reimbursement of remedial costs incurred by the state. In several states, such
lien has priority over the lien of an existing mortgage against such property.
In any case, the value of a Mortgaged Property as collateral for a mortgage
loan could be adversely affected by the existence of an Environmental
Condition.
The state of the law is currently unclear as to whether and under what
circumstances cleanup costs, or the obligation to take remedial actions, can be
imposed on a secured lender such as the Trust Fund
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with respect to each series. Under the laws of some states and under the
federal Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended ("CERCLA"), a lender may be liable as an "owner or
operator" for costs of addressing releases or threatened releases of hazardous
substances on a mortgaged property if such lender or its agents or employees
have participated in the management of the operations of the borrower, even
though the environmental damage or threat was caused by a prior owner or other
third party. Excluded from CERCLA's definition of "owner or operator," however,
is a person "who without participating in the management of a ... facility,
holds indicia of ownership primarily to protect his security interest" (the
"secured creditor exemption").
Notwithstanding the secured creditor exemption, a lender may be held
liable under CERCLA as an owner or operator, if such lender or its employees or
agents participate in management of the property. The Asset Conservation,
Lender Liability, and Deposit Insurance Protection Act of 1996 (the "Lender
Liability Act") defines the term "participating in management" to impose
liability on a secured lender who exercises actual control over operational
aspects of the facility; however, the terms and conditions of the Lender
Liability Act have not been clarified by the courts. A number of
environmentally related activities before the loan is made and during its
pendency, as well as "workout" steps to protect a security interest, are
identified as permissible to protect a security interest without triggering
liability. The Lender Liability Act also identifies the circumstances in which
foreclosure and post-foreclosure activities will not trigger CERCLA liability.
The Lender Liability Act also amends the federal Solid Waste Disposal Act
to limit the liability of lenders holding a security interest for costs of
cleaning up contamination for underground storage tanks. However, the Lender
Liability Act has no effect on other federal or state environmental laws
similar to CERCLA that may impose liability on lenders and other persons, and
not all of those laws provide for a secured creditor exemption. Liability under
many of these laws may exist even if the lender did not cause or contribute to
the contamination and regardless of whether the lender has actually taken
possession of the property through foreclosure, deed in lieu of foreclosure,
or otherwise. Moreover, such liability is not limited to the original or
unamortized principal balance of a loan or to the value of a property securing
a loan.
At the time the mortgage loans were originated, it is possible that no
environmental assessment or a very limited environmental assessment of the
Mortgaged Properties was conducted.
The related Agreement will provide that the Master Servicer or the Special
Servicer, if any, acting on behalf of the Trust Fund, may not acquire title to,
or possession of, a Mortgaged Property underlying a mortgage loan, take over
its operation or take any other action that might subject a given Trust Fund to
liability under CERCLA or comparable laws unless the Master Servicer or Special
Servicer, if any, has previously determined, based upon a Phase I assessment
(as described below) or other specified environmental assessment prepared by a
person who regularly conducts such environmental assessments, that the
Mortgaged Property is in compliance with applicable environmental laws and that
there are no circumstances relating to use, management or disposal of any
hazardous materials for which investigation, monitoring, containment, clean-up
or remediation could be required under applicable environmental laws, or that
it would be in the best economic interest of a given Trust Fund to take such
actions as are necessary to bring the Mortgaged Property into compliance
therewith or as may be required under such laws. A Phase I assessment generally
involves identification of recognized environmental conditions based on records
review, site reconnaissance and interviews, but does not involve a more
intrusive investigation such as sampling or testing of materials. This
requirement effectively precludes enforcement of the security for the related
mortgage loan until a satisfactory environmental assessment is obtained or any
required remedial action is taken, reducing the likelihood that a given Trust
Fund will become liable for any Environmental Condition affecting a Mortgaged
Property, but making it more difficult to realize on the security for the
mortgage loan. However, there can be no assurance that any environmental
assessment obtained by the Master Servicer will detect all possible
Environmental Conditions or that the other requirements of the Agreement, even
if fully observed by the Master Servicer and the Special Servicer, if any, will
in fact insulate a given Trust Fund from liability for Environmental
Conditions.
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If a lender is or becomes liable for clean-up costs, it may bring an
action for contribution against the current owners or operators, the owners or
operators at the time of on-site disposal activity or certain other parties who
may have contributed to the environmental hazard, but such persons or entities
may be bankrupt or otherwise judgment proof. Furthermore, such action against
the borrower may be adversely affected by the limitations on recourse in the
loan documents. Similarly, in some states anti-deficiency legislation and other
statutes requiring the lender to exhaust its security before bringing a
personal action against the borrower-trustor (see "-- Anti-Deficiency
Legislation; Bankruptcy Laws" below) may curtail the lender's ability to
recover from its borrower the environmental clean-up and other related costs
and liabilities incurred by the lender. Shortfalls occurring as the result of
imposition of any clean-up costs will be addressed in the prospectus supplement
and Agreement for the related series.
RIGHTS OF REDEMPTION
In some states, after foreclosure sale pursuant to a deed of trust or a
mortgage, the borrower and certain foreclosed junior lienors are given a
specified period in which to redeem the property from the foreclosure sale. In
some states, redemption may occur only upon payment of the entire principal
balance of the loan, accrued interest and expenses of foreclosure. In other
states, redemption may be authorized if the former borrower pays only a portion
of the sums due. The effect of a right of redemption is to diminish the ability
of the lender to sell the foreclosed property. The right of redemption may
defeat the title of any purchaser at a foreclosure sale or any purchaser from
the lender subsequent to a foreclosure sale or sale under a deed of trust.
Certain states permit a lender to avoid a post-sale redemption by waiving its
right to a deficiency judgment. Consequently, the practical effect of the
post-foreclosure redemption right is often to force the lender to retain the
property and pay the expenses of ownership until the redemption period has run.
Whether the lender has any rights to recover these expenses from a borrower who
redeems the property depends on the applicable state statute. The related
prospectus supplement will contain a description of any statutes that prohibit
recovery of such expenses from a borrower in states where a substantial number
of the Mortgaged Properties for a particular series are located. In some
states, there is no right to redeem property after a trustee's sale under a
deed of trust.
Borrowers under Installment Contracts generally do not have the benefits
of redemption periods such as may exist in the same jurisdiction for mortgage
loans. Where redemption statutes do exist under state laws for Installment
Contracts, the redemption period is usually far shorter than for mortgages.
JUNIOR MORTGAGES; RIGHTS OF SENIOR MORTGAGEES
The mortgage loans for a series may include mortgage loans secured by
mortgages or deeds of trust some of which are junior to other mortgages or
deeds of trust, some of which may be held by other lenders or institutional
investors. The rights of the Trust Fund (and therefore the Certificateholders),
as mortgagee under a junior mortgage or beneficiary under a junior deed of
trust, are subordinate to those of the mortgagee under the senior mortgage or
beneficiary under the senior deed of trust, including the prior rights of the
senior mortgagee to receive hazard insurance and condemnation proceeds and to
cause the property securing the mortgage loan to be sold upon default of the
borrower or trustor, thereby extinguishing the junior mortgagee's or junior
beneficiary's lien unless the junior mortgagee or junior beneficiary asserts
its subordinate interest in the property in foreclosure litigation and,
possibly, satisfies the defaulted senior mortgage or deed of trust. As
discussed more fully below, a junior mortgagee or junior beneficiary may
satisfy a defaulted senior loan in full and, in some states, may cure such
default and loan. In most states, no notice of default is required to be given
to a junior mortgagee or junior beneficiary, and junior mortgagees or junior
beneficiaries are seldom given notice of defaults on senior mortgages. However,
in order for a foreclosure action in some states to be effective against a
junior mortgagee or junior beneficiary, the junior mortgagee or junior
beneficiary must be named in any foreclosure action, thus giving notice to
junior lienors.
ANTI-DEFICIENCY LEGISLATION; BANKRUPTCY LAWS
Some of the mortgage loans for a series will be nonrecourse loans as to
which, in the event of default by a borrower, recourse may be had only against
the specific property pledged to secure the
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related mortgage loan and not against the borrower's other assets. Even if
recourse is available pursuant to the terms of the mortgage loan against the
borrower's assets in addition to the Mortgaged Property, certain states have
imposed statutory prohibitions which impose prohibitions against or limitations
on such recourse. For example, some state statutes limit the right of the
beneficiary or mortgagee to obtain a deficiency judgment against the borrower
following foreclosure or sale under a deed of trust. A deficiency judgment is a
personal judgment against the former borrower equal in most cases to the
difference between the net amount realized upon the public sale of the real
property and the amount due to the lender. Other statutes require the
beneficiary or mortgagee to exhaust the security afforded under a deed of trust
or mortgage by foreclosure in an attempt to satisfy the full debt before
bringing a personal action against the borrower. In certain states, the lender
has the option of bringing a personal action against the borrower on the debt
without first exhausting such security; however, in some of these states, the
lender, following judgment on such personal action, may be deemed to have
elected a remedy and may be precluded from exercising remedies with respect to
the security. Consequently, the practical effect of the election requirement,
when applicable, is that lenders will usually proceed first against the
security rather than bringing a personal action against the borrower. Other
statutory provisions limit any deficiency judgment against the former borrower
following a judicial sale to the excess of the outstanding debt over the fair
market value of the property at the time of the public sale. The purpose of
these statutes is generally to prevent a beneficiary or a mortgagee from
obtaining a large deficiency judgment against the former borrower as a result
of low bids or the absence of bids at the judicial sale.
The Bankruptcy Code and related state laws may interfere with or affect
the ability of a lender to realize upon collateral and/or to enforce a
deficiency judgment. For example, under the Bankruptcy Code, virtually all
actions (including foreclosure actions and deficiency judgment proceedings) are
automatically stayed upon the filing of the bankruptcy petition, and, usually,
no interest or principal payments are made during the course of the bankruptcy
case. The delay and the consequences thereof caused by such automatic stay can
be significant. Also, under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a junior lienor may stay the senior lender from
taking action to foreclose out such junior lien.
Under the Bankruptcy Code, provided certain substantive and procedural
safeguards for the lender are met, the amount and terms of a mortgage secured
by property of the debtor may be modified under certain circumstances. In many
jurisdictions, the outstanding amount of the loan secured by the real property
may be reduced to the then-current value of the property (with a corresponding
partial reduction of the amount of lender's security interest) pursuant to a
confirmed plan or lien avoidance proceeding, thus leaving the lender a general
unsecured creditor for the difference between such value and the outstanding
balance of the loan. Other modifications may include the reduction in the
amount of each scheduled payment, which reduction may result from a reduction
in the rate of interest and/or the alteration of the repayment schedule (with
or without affecting the unpaid principal balance of the loan), and/or an
extension (or reduction) of the final maturity date. Some courts with federal
bankruptcy jurisdiction have approved plans, based on the particular facts of
the reorganization case, that effected the curing of a mortgage loan default by
paying arrearages over a number of years. Also, under federal bankruptcy law, a
bankruptcy court may permit a debtor through its rehabilitative plan to
de-accelerate a secured loan and to reinstate the loan even though the lender
accelerated the mortgage loan and final judgment of foreclosure had been
entered in state court (provided no sale of the property had yet occurred)
prior to the filing of the debtor's petition. This may be done even if the full
amount due under the original loan is never repaid.
The Bankruptcy Code has been amended to provide that a lender's perfected
pre-petition security interest in leases, rents and hotel revenues continues in
the post-petition leases, rents and hotel revenues, unless a bankruptcy court
orders to the contrary "based on the equities of the case." Thus, unless a
court orders otherwise, revenues from a Mortgaged Property generated after the
date the bankruptcy petition is filed will constitute "cash collateral" under
the Bankruptcy Code. Debtors may only use cash collateral upon obtaining the
lender's consent or a prior court order finding that the lender's interest in
the Mortgaged Properties and the cash collateral is "adequately protected" as
such term is defined and interpreted under the Bankruptcy Code. It should be
noted, however, that the court may find
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that the lender has no security interest in either pre-petition or
post-petition revenues if the court finds that the loan documents do not
contain language covering accounts, room rents, or other forms of personalty
necessary for a security interest to attach to hotel revenues.
Federal bankruptcy law provides generally that rights and obligation under
an unexpired lease of the debtor/lessee may not be terminated or modified at
any time after the commencement of a case under the Bankruptcy Code solely on
the basis of a provision in the lease to such effect or because of certain
other similar events. This prohibition on so-called "ipso facto clauses" could
limit the ability of the Trustee for a series of certificates to exercise
certain contractual remedies with respect to any leases. In addition, Section
362 of the Bankruptcy Code operates as an automatic stay of, among other
things, any act to obtain possession of property from a debtor's estate, which
may delay a Trustee's exercise of such remedies for a related series of
certificates in the event that a related lessee or a related mortgagor becomes
the subject of a proceeding under the Bankruptcy Code. For example, a mortgagee
would be stayed from enforcing a lease assignment by a mortgagor related to a
Mortgaged Property if the related mortgagor was in a bankruptcy proceeding. The
legal proceedings necessary to resolve the issues could be time-consuming and
might result in significant delays in the receipt of the assigned rents.
Similarly, the filing of a petition in bankruptcy by or on behalf of a lessee
of a Mortgaged Property would result in a stay against the commencement or
continuation of any state court proceeding for past due rent, for accelerated
rent, for damages or for a summary eviction order with respect to a default
under the lease that occurred prior to the filing of the lessee's petition.
Rents and other proceeds of a mortgage loan may also escape an assignment
thereof if the assignment is not fully perfected under state law prior to
commencement of the bankruptcy proceeding. See "-- Leases and Rents."
In addition, the Bankruptcy Code generally provides that a trustee or
debtor-in-possession may, subject to approval of the court, (a) assume the
lease and retain it or assign it to a third party or (b) reject the lease. If
the lease is assumed, the trustee in bankruptcy on behalf of the lessee, or the
lessee as debtor-in-possession, or the assignee, if applicable, must cure any
defaults under the lease, compensate the lessor for its losses and provide the
lessor with "adequate assurance" of future performance. Such remedies may be
insufficient, however, as the lessor may be forced to continue under the lease
with a lessee that is a poor credit risk or an unfamiliar tenant if the lease
was assigned, and any assurances provided to the lessor may, in fact, be
inadequate. If the lease is rejected, such rejection generally constitutes a
breach of the executory contract or unexpired lease immediately before the date
of filing the petition. As a consequence, the other party or parties to such
lease, such as the mortgagor, as lessor under a lease, would have only an
unsecured claim against the debtor for damages resulting from such breach,
which could adversely affect the security for the related mortgage loan. In
addition, pursuant to Section 502(b)(6) of the Bankruptcy Code, a lessor's
damages for lease rejection in respect of future rent installments are limited
to the rent reserved by the lease, without acceleration, for the greater of one
year or 15%, not to exceed three years, of the remaining term of the lease.
If a trustee in bankruptcy on behalf of a lessor, or a lessor as
debtor-in-possession, rejects an unexpired lease of real property, the lessee
may treat such lease as terminated by such rejection or, in the alternative,
the lessee may remain in possession of the leasehold for the balance of such
term and for any renewal or extension of such term that is enforceable by the
lessee under applicable nonbankruptcy law. The Bankruptcy Code provides that if
a lessee elects to remain in possession after such a rejection of a lease, the
lessee may offset against rents reserved under the lease for the balance of the
term after the date of rejection of the lease, and any such renewal or
extension thereof, any damages occurring after such date caused by the
nonperformance of any obligation of the lessor under the lease after such date.
To the extent provided in the related prospectus supplement, the lessee will
agree under certain leases to pay all amounts owing thereunder to the Master
Servicer without offset. To the extent that such a contractual obligation
remains enforceable against the lessee, the lessee would not be able to avail
itself of the rights of offset generally afforded to lessees of real property
under the Bankruptcy Code.
In a bankruptcy or similar proceeding of a mortgagor, action may be taken
seeking the recovery, as a preferential transfer or on other grounds, of any
payments made by the mortgagor, or made directly by the related lessee, under
the related mortgage loan to the Trustee for the benefit of Certificateholders.
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Payments on long-term debt may be protected from recovery as preferences if
they are payments in the ordinary course of business made on debts incurred in
the ordinary course of business. Whether any particular payment would be
protected depends upon the facts specific to a particular transaction.
A trustee in bankruptcy, in some cases, may be entitled to collect its
costs and expenses in preserving or selling the mortgaged property ahead of
payment to the lender. In certain circumstances, a debtor in bankruptcy may
have the power to grant liens senior to the lien of a mortgage, and analogous
state statutes and general principles of equity may also provide a mortgagor
with means to halt a foreclosure proceeding or sale and to force a
restructuring of a mortgage loan on terms a lender would not otherwise accept.
Moreover, the laws of certain states also give priority to certain tax liens
over the lien of a mortgage or deed of trust. Under the Bankruptcy Code, if the
court finds that actions of the mortgagee have been unreasonable, the lien of
the related mortgage may be subordinated to the claims of unsecured creditors.
Certain of the mortgagors may be partnerships. The laws governing limited
partnerships in certain states provide that the commencement of a case under
the Bankruptcy Code with respect to a general partner will cause a person to
cease to be a general partner of the limited partnership, unless otherwise
provided in writing in the limited partnership agreement. This provision may be
construed as an "ipso facto" clause and, in the event of the general partner's
bankruptcy, may not be enforceable. Certain limited partnership agreements of
the mortgagors may provide that the commencement of a case under the Bankruptcy
Code with respect to the related general partner constitutes an event of
withdrawal (assuming the enforceability of the clause is not challenged in
bankruptcy proceedings or, if challenged, is upheld) that might trigger the
dissolution of the limited partnership, the winding up of its affairs and the
payment of its assets, unless (i) at the time there was at least one other
general partner and the written provisions of the limited partnership permit
the business of the limited partnership to be carried on by the remaining
general partner and that general partner does so or (ii) the written provisions
of the limited partnership agreement permit the limited partners to agree
within a specified time frame (often 60 days) after such withdrawal to continue
the business of the limited partnership and to the appointment of one or more
general partners and the limited partners do so. In addition, the laws
governing general partnerships in certain states provide that the commencement
of a case under the Bankruptcy Code or state bankruptcy laws with respect to a
general partner of such partnerships triggers the dissolution of such
partnership, the winding up of its affairs and the distribution of its assets.
Such state laws, however, may not be enforceable or effective in a bankruptcy
case. The dissolution of a mortgagor, the winding up of its affairs and the
distribution of its assets could result in an acceleration of its payment
obligation under a related mortgage loan, which may reduce the yield on the
related series of certificates in the same manner as a principal prepayment.
In addition, the bankruptcy of the general or limited partner of a
mortgagor that is a partnership, or the bankruptcy of a member of a mortgagor
that is a limited liability company or the bankruptcy of a shareholder of a
mortgagor that is a corporation may provide the opportunity in the bankruptcy
case of such partner, member or shareholder to obtain an order from a court
consolidating the assets and liabilities of the partner, member or shareholder
with those of the mortgagor pursuant to the doctrines of substantive
consolidation or piercing the corporate veil. In such a case, the respective
Mortgaged Property, for example, would become property of the estate of such
bankrupt partner, member or shareholder. Not only would the Mortgaged Property
be available to satisfy the claims of creditors of such partner, member or
shareholder, but an automatic stay would apply to any attempt by the Trustee to
exercise remedies with respect to such Mortgaged Property. However, such an
occurrence should not affect the Trustee's status as a secured creditor with
respect to the mortgagor or its security interest in the Mortgaged Property.
STATUTORY LIABILITIES
The Internal Revenue Code of 1986, as amended, provides priority to
certain tax liens over the lien of the mortgage. In addition, substantive
requirements are imposed upon mortgage lenders in
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connection with the origination and the servicing of mortgage loans by numerous
federal and some state consumer protection laws. These laws may impose specific
statutory liabilities upon lenders who originate mortgage loans and who fail to
comply with the provisions of the law. In some cases, this liability may affect
assignees of the mortgage loans.
ENFORCEABILITY OF CERTAIN PROVISIONS
Prepayment Provisions
Courts generally enforce claims requiring prepayment fees unless
enforcement would be unconscionable. However, the laws of certain states may
render prepayment fees unenforceable after a mortgage loan has been outstanding
for a certain number of years, or may limit the amount of any prepayment fee to
a specified percentage of the original principal amount of the mortgage loan,
to a specified percentage of the outstanding principal balance of a mortgage
loan, or to a fixed number of months' interest on the prepaid amount. In
certain states, prepayment fees payable on default or other involuntary
acceleration of a mortgage loan may not be enforceable against the mortgagor.
Some state statutory provisions may also treat certain prepayment fees as
usurious if in excess of statutory limits. See "-- Applicability of Usury Laws"
below. Some of the mortgage loans for a series may not require the payment of
specified fees as a condition to prepayment or such requirements have expired,
and to the extent some mortgage loans do require such fees, such fees may not
necessarily deter borrowers from prepaying their mortgage loans.
Due-on-Sale Provisions
The enforceability of due-on-sale clauses has been the subject of
legislation or litigation in many states, and in some cases, typically
involving single family residential mortgage transactions, their enforceability
has been limited or denied. In any event, in situations relating primarily to
residential properties, the Garn-St Germain Depository Institutions Act of 1982
(the "Garn-St Germain Act") preempts state constitutional, statutory and case
law that prohibits the enforcement of due-on-sale clauses and permits lenders
to enforce these clauses in accordance with their terms, subject to certain
exceptions. As a result, due-on-sale clauses have become generally enforceable
except in those states whose legislatures exercised their authority to regulate
the enforceability of such clauses with respect to mortgage loans that were (i)
originated or assumed during the "window period" under the Garn-St Germain Act,
which ended in all cases not later than October 15, 1982, and (ii) originated
by lenders other than national banks, federal savings institutions and federal
credit unions. Also, the Garn-St Germain Act does "encourage" lenders to permit
assumption of loans at the original rate of interest or at some other rate less
than the average of the original rate and the market rates.
The Agreement for each series will provide that if any mortgage loan
contains a provision in the nature of a "due-on-sale" clause, which by its
terms provides that: (i) such mortgage loan shall (or may at the mortgagee's
option) become due and payable upon the sale or other transfer of an interest
in the related Mortgaged Property; or (ii) such mortgage loan may not be
assumed without the consent of the related mortgagee in connection with any
such sale or other transfer, then, for so long as such mortgage loan is
included in the Trust Fund, the Master Servicer, on behalf of the Trustee,
shall take such actions as it deems to be in the best interest of the
Certificateholders in accordance with the servicing standard set forth in the
Agreement, and may waive or enforce any due-on-sale clause contained in the
related mortgage loan.
In addition, under federal bankruptcy law, due-on-sale clauses may not be
enforceable in bankruptcy proceedings and may, under certain circumstances, be
eliminated in any modified mortgage resulting from such bankruptcy proceeding.
Acceleration on Default
Some of the mortgage loans for a series will include a "debt acceleration"
clause, which permits the lender to accelerate the full debt upon a monetary or
nonmonetary default of the borrower. State courts generally will enforce
clauses providing for acceleration in the event of a material payment default
after giving effect to any appropriate notices. The equity courts of any state,
however, may refuse to foreclose
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a mortgage or deed of trust when an acceleration of the indebtedness would be
inequitable or unjust or the circumstances would render the acceleration
unconscionable. Furthermore, in some states, the borrower may avoid foreclosure
and reinstate an accelerated loan by paying only the defaulted amounts and the
costs and attorneys' fees incurred by the lender in collecting such defaulted
payments.
Forms of notes, mortgages and deeds of trust used by lenders may contain
provisions obligating the borrower to pay a late charge if payments are not
timely made. In certain states, there are or may be specific limitations upon
the late charges which a lender may collect from a borrower for delinquent
payments.
Upon foreclosure, courts have applied general equitable principles. These
equitable principles are generally designed to relieve the borrower from the
legal effect of his defaults under the loan documents. Examples of judicial
remedies that have been fashioned include judicial requirements that the lender
undertake affirmative and expensive actions to determine the causes of the
borrower's default and the likelihood that the borrower will be able to
reinstate the loan. In some cases, courts have substituted their judgment for
the lender's judgment and have required that lenders reinstate loans or recast
payment schedules in order to accommodate borrowers who are suffering from
temporary financial disability. In other cases, courts have limited the right
of the lender to foreclose if the default under the mortgage instrument is not
monetary, such as the borrower's failing to maintain adequately the property or
the borrower's executing a second mortgage or deed of trust affecting the
property. Finally, some courts have been faced with the issue of whether or not
federal or state constitutional provisions reflecting due process concerns for
adequate notice require that borrowers under deeds of trust or mortgages
receive notices in addition to the statutorily-prescribed minimum. For the most
part, these cases have upheld the notice provisions as being reasonable or have
found that the sale by a trustee under a deed of trust, or by a mortgagee under
a mortgage having a power of sale, does not involve sufficient state action to
afford constitutional protections to the borrower.
State courts also are known to apply various legal and equitable
principles to avoid enforcement of the forfeiture provisions of Installment
Contracts. For example, a lender's practice of accepting late payments from the
borrower may be deemed a waiver of the forfeiture clause. State courts also may
impose equitable grace periods for payment of arrearages or otherwise permit
reinstatement of the contract following a default. Not infrequently, if a
borrower under an Installment Contract has significant equity in the property,
equitable principles will be applied to reform or reinstate the contract or to
permit the borrower to share the proceeds upon a foreclosure sale of the
property if the sale price exceeds the debt.
Soldiers' and Sailors' Relief Act
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"), an individual borrower who enters military service
after the origination of such borrower's mortgage loan (including a borrower
who is in reserve status at the time of the origination of the mortgage loan
and is later called to active duty) may not be charged interest (including fees
and charges) above an annual rate of 6% during the period of such borrower's
active duty status, unless a court orders otherwise upon application of the
lender. Any shortfall in interest collections resulting from the application
of the Relief Act, to the extent not covered by any applicable credit
enhancements, could result in losses to the Holders of the certificates. The
Relief Act applies to mortgagors who are members of the Army, Navy, Air Force,
Marines, National Guard, Reserves, Coast Guard and officers of the U.S. Public
Health Service assigned to duty with the military. Because the Relief Act
applies to mortgagors who enter military service (including reservists who are
later called to active duty) after origination of the related mortgage loan, no
information can be provided as to the number of mortgage loans that may be
affected by the Relief Act. Some of the Mortgaged Properties relating to
mortgage loans for a series may be owned by borrowers who are individuals
currently in the military. In addition, the Relief Act imposes limitations
which would impair the ability of the Master Servicer to foreclose on an
affected mortgage loan during the borrower's period of active duty status and,
under certain circumstances, during an additional three months thereafter.
Thus, in the event that such a mortgage loan goes into default, there may be
delays and losses occasioned by the inability to realize upon the Mortgaged
Property in a timely fashion.
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Forfeitures in Drug and RICO Proceedings
Federal law permits the government to seize real property that has been
purchased with the proceeds of certain crimes (including drug trafficking,
racketeering, money laundering, and fraud affecting financial institutions),
and real property that has been used to facilitate certain crimes (including
drug trafficking and money laundering). Forfeitures of real property usually
are accomplished through criminal or civil judicial proceedings. In a criminal
proceeding, forfeiture is imposed as a form of punishment following conviction
of the property owner. Under certain circumstances, the government may even
seize the defendant's real property before a conviction. In a civil forfeiture,
the government brings an action against the real property, rather than the
wrongdoer, based on the legal fiction that the property itself has been tainted
by crime.
The government must publish notice of the forfeiture proceeding and may
give direct notice to all parties known to have an alleged interest in the
property, including holders of mortgage loans. A mortgage lender may avoid
forfeiture of its interest in the property if it can establish that: (i) its
mortgage was executed and recorded before commission of the crime upon which
the forfeiture is based, or (ii) the lender did not know of or consent to the
underlying unlawful conduct. The U.S. Department of Justice has adopted an
expedited settlement policy designed to resolve the claims of lienholders
holding mortgages against properties that are subject to forfeiture.
APPLICABILITY OF USURY LAWS
State and federal usury laws limit the interest that lenders are entitled
to receive on a mortgage loan. In determining whether a given transaction is
usurious, courts may include charges in the form of "points" and "fees" as
"interest," but may exclude payments in the form of "reimbursement of
foreclosure expenses" or other charges found to be distinct from "interest."
If, however, the amount charged for the use of the money loaned is found to
exceed a statutorily established maximum rate, the loan is generally found
usurious regardless of the form employed or the degree of overcharge. Title V
of the Depository Institutions Deregulation and Monetary Control Act of 1980,
enacted in March 1980 ("Title V"), provides that state usury limitations shall
not apply to certain types of residential (including multifamily but not other
commercial) first mortgage loans originated by certain lenders after March 31,
1980. A similar federal statute was in effect with respect to mortgage loans
made during the first three months of 1980. The statute authorized any state to
reimpose interest rate limits by adopting, before April 1, 1983, a law or
constitutional provision that expressly rejects application of the federal law.
In addition, even where Title V is not so rejected, any state is authorized by
the law to adopt a provision limiting discount points or other charges on
mortgage loans covered by Title V. Certain states have taken action to reimpose
interest rate limits and/or to limit discount points or other charges.
In any state in which application of Title V has been expressly rejected
or a provision limiting discount points or other charges is adopted, no
mortgage loan originated after the date of such state action will be eligible
for inclusion as part of the Trust Fund unless (i) such mortgage loan provides
for such interest rate, discount points and charges as are permitted in such
state or (ii) such mortgage loan provides that the terms thereof shall be
construed in accordance with the laws of another state under which such
interest rate, discount points and charges would not be usurious and the
mortgagor's counsel has rendered an opinion that such choice of law provision
would be given effect.
Statutes differ in their provisions as to the consequences of a usurious
loan. One group of statutes requires the lender to forfeit the interest due
above the applicable limit or imposes a specified penalty. Under this statutory
scheme, the borrower may cancel the recorded mortgage or deed of trust upon
paying its debt with lawful interest, and the lender may foreclose, but only
for the debt plus lawful interest. A second group of statutes is more severe. A
violation of this type of usury law results in the invalidation of the
transaction, thereby permitting the borrower to cancel the recorded mortgage or
deed of trust without any payment or prohibiting the lender from foreclosing.
ALTERNATIVE MORTGAGE INSTRUMENTS
Alternative mortgage instruments, including adjustable rate mortgage
loans, originated by non-federally chartered lenders have historically been
subjected to a variety of restrictions. Such restrictions
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differed from state to state, resulting in difficulties in determining whether
a particular alternative mortgage instrument originated by a state-chartered
lender was in compliance with applicable law. These difficulties were
alleviated substantially as a result of the enactment of Title VIII of the
Garn-St Germain Act ("Title VIII"). Title VIII provides that, notwithstanding
any state law to the contrary, state-chartered banks may originate alternative
mortgage instruments in accordance with regulations promulgated by the
Comptroller of the Currency with respect to origination of alternative mortgage
instruments by national banks, state-chartered credit unions may originate
alternative mortgage instruments in accordance with regulations promulgated by
the National Credit Union Administration (the "NCUA") with respect to
origination of alternative mortgage instruments by federal credit unions, and
all other non-federally chartered housing creditors, including state-chartered
savings and loan associations, state-chartered savings banks and mortgage
banking companies, may originate alternative mortgage instruments in accordance
with the regulations promulgated by the Federal Home Loan Bank Board (now the
Office of Thrift Supervision) with respect to origination of alternative
mortgage instruments by federal savings and loan associations. Title VIII
provides that any state may reject applicability of the provision of Title VIII
by adopting, prior to October 15, 1985, a law or constitutional provision
expressly rejecting the applicability of such provisions. Certain states have
taken such action.
LEASES AND RENTS
Some of the mortgage loans for a series may be secured by an assignment of
leases and rents, either through a separate document of assignment or as
incorporated in the related mortgage. Under such assignments, the borrower
under the mortgage loan typically assigns its right, title and interest as
landlord under each lease and the income derived therefrom to the lender, while
retaining a license to collect the rents for so long as there is no default
under the mortgage loan. In the event the borrower defaults, the license
terminates and the lender may be entitled to collect rents. The manner of
perfecting the lender's interest in rents may depend on whether the borrower's
assignment was absolute or one granted as security for the loan. Failure to
properly perfect the lender's interest in rents may result in the loss of a
substantial pool of funds which could otherwise serve as a source of repayment
for the loan. Some state laws may require that to perfect its interest in
rents, the lender must take possession of the property and/or obtain judicial
appointment of a receiver before becoming entitled to collect the rents.
Lenders that actually take possession of the property, however, may incur
potentially substantial risks attendant to being a mortgagee in possession.
Such risks include liability for environmental clean-up costs and other risks
inherent to property ownership. In addition, if bankruptcy or similar
proceedings are commenced by or in respect of the borrower, the lender's
ability to collect the rents may be adversely affected. In the event of
borrower default, the amount of rent the lender is able to collect from the
tenants can significantly affect the value of the lender's security interest.
SECONDARY FINANCING; DUE-ON-ENCUMBRANCE PROVISIONS
Some of the mortgage loans for a series may not restrict secondary
financing, thereby permitting the borrower to use the Mortgaged Property as
security for one or more additional loans. Some of the mortgage loans may
preclude secondary financing (often by permitting the first lender to
accelerate the maturity of its loan if the borrower further encumbers the
Mortgaged Property) or may require the consent of the senior lender to any
junior or substitute financing; however, such provisions may be unenforceable
in certain jurisdictions under certain circumstances. The Agreement for each
series will provide that if any mortgage loan contains a provision in the
nature of a "due-on-encumbrance" clause, which by its terms: (i) provides that
such mortgage loan shall (or may at the mortgagee's option) become due and
payable upon the creation of any lien or other encumbrance on the related
Mortgaged Property; or (ii) requires the consent of the related mortgagee to
the creation of any such lien or other encumbrance on the related Mortgaged
Property, then for so long as such mortgage loan is included in a given Trust
Fund, the Master Servicer or, if such mortgage loan is a Specially Serviced
Mortgage Loan, the Special Servicer (or such other party as indicated in the
Agreement), on behalf of such Trust Fund, shall exercise (or decline to
exercise) any right it may have as the mortgagee of record with respect to such
mortgage loan (x) to accelerate the payments thereon, or (y) to withhold its
consent to the creation of any such lien or other encumbrance, in a manner
consistent with the servicing standard set forth in the Agreement.
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Where the borrower encumbers the Mortgaged Property with one or more
junior liens, the senior lender is subjected to additional risk. First, the
borrower may have difficulty servicing and repaying multiple loans. Second,
acts of the senior lender which prejudice the junior lender or impair the
junior lender's security may create a superior equity in favor of the junior
lender. For example, if the borrower and the senior lender agree to an increase
in the principal amount of or the interest rate payable on the senior loan, the
senior lender may lose its priority to the extent an existing junior lender is
prejudiced or the borrower is additionally burdened. Third, if the borrower
defaults on the senior loan and/or any junior loan or loans, the existence of
junior loans and actions taken by junior lenders can impair the security
available to the senior lender and can interfere with, delay and in certain
circumstances even prevent the taking of action by the senior lender. Fourth,
the bankruptcy of a junior lender may operate to stay foreclosure or similar
proceedings by the senior lender.
CERTAIN LAWS AND REGULATIONS
The Mortgaged Properties will be subject to compliance with various
federal, state and local statutes and regulations. Failure to comply (together
with an inability to remedy any such failure) could result in material
diminution in the value of a Mortgaged Property which could, together with the
possibility of limited alternative uses for a particular Mortgaged Property
(e.g., a nursing or convalescent home or hospital), result in a failure to
realize the full principal amount of the related mortgage loan.
TYPE OF MORTGAGED PROPERTY
The lender may be subject to additional risk depending upon the type and
use of the Mortgaged Property in question. For instance, Mortgaged Properties
which are hospitals, nursing homes or convalescent homes may present special
risks to lenders in large part due to significant governmental regulation of
the operation, maintenance, control and financing of health care institutions.
Mortgages on Mortgaged Properties which are owned by the borrower under a
condominium form of ownership are subject to the declaration, by-laws and other
rules and regulations of the condominium association. Mortgaged Properties
which are hotels or motels may present additional risk to the lender in that:
(i) hotels and motels are typically operated pursuant to franchise, management
and operating agreements which may be terminable by the franchisor, manager or
operator; and (ii) the transferability of the hotel's operating, liquor and
other licenses to the entity acquiring the hotel either through purchase or
foreclosure is subject to the vagaries of local law requirements. In addition,
Mortgaged Properties which are multifamily residential properties or
cooperatively owned multifamily properties may be subject to rent control laws,
which could impact the future cash flows of such properties.
AMERICANS WITH DISABILITIES ACT
Under Title III of the Americans with Disabilities Act of 1990 and rules
promulgated thereunder (collectively, the "ADA"), in order to protect
individuals with disabilities, public accommodations (such as hotels,
restaurants, shopping centers, hospitals, schools and social service center
establishments) must remove architectural and communication barriers which are
structural in nature from existing places of public accommodation to the extent
"readily achievable." In addition, under the ADA, alterations to a place of
public accommodation or a commercial facility are to be made so that, to the
maximum extent feasible, such altered portions are readily accessible to and
usable by disabled individuals. The "readily achievable" standard takes into
account, among other factors, the financial resources of the affected site,
owner, landlord or other applicable person. In addition to imposing a possible
financial burden on the borrower in its capacity as owner or landlord, the ADA
may also impose such requirements on a foreclosing lender who succeeds to the
interest of the borrower as owner or landlord. Furthermore, since the "readily
achievable" standard may vary depending on the financial condition of the owner
or landlord, a foreclosing lender who is financially more capable than the
borrower of complying with the requirements of the ADA may be subject to more
stringent requirements than those to which the borrower is subject.
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FEDERAL INCOME TAX CONSEQUENCES
The following represents the opinion of Cadwalader, Wickersham & Taft,
special counsel to the Seller, as to the matters discussed herein. The
following is a general discussion of the anticipated material federal income
tax consequences of the purchase, ownership and disposition of certificates.
The discussion below does not purport to address all federal income tax
consequences that may be applicable to particular categories of investors, some
of which may be subject to special rules. The authorities on which this
discussion is based are subject to change or differing interpretations, and any
such change or interpretation could apply retroactively. This discussion
reflects the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), as well as regulations (the "REMIC Regulations")
promulgated by the U.S. Department of Treasury (the "Treasury") on December 23,
1992. Investors should consult their own tax advisors in determining the
federal, state, local and other tax consequences to them of the purchase,
ownership and disposition of certificates.
For purposes of this discussion, where the applicable prospectus
supplement provides for a retention of a portion of the interest payments on
the mortgage loans underlying a series of certificates, references to the
Mortgage will be deemed to refer to that portion of the mortgage loans held by
the Trust Fund which does not include the retained interest payments.
References to a "holder" or "Certificateholder" in this discussion generally
mean the beneficial owner of a certificate.
This discussion addresses the federal income tax consequences of the
treatment of the Trust Fund as a REMIC under "-- Federal Income Tax
Consequences for REMIC Certificates" and as a grantor trust under "-- Federal
Income Tax Consequences for Certificates as to which No REMIC Election is
Made." If an election is made instead to treat a Trust Fund as a FASIT, the
applicable federal income tax consequences will be discussed in the related
prospectus supplement.
FEDERAL INCOME TAX CONSEQUENCES FOR REMIC CERTIFICATES
GENERAL
With respect to a particular series of certificates, an election may be
made to treat the Trust Fund or one or more segregated pools of assets therein
as one or more REMICs within the meaning of Code Section 860D. A Trust Fund or
a portion thereof as to which a REMIC election will be made will be referred to
as a "REMIC Pool." For purposes of this discussion, certificates of a series as
to which one or more REMIC elections are made are referred to as "REMIC
Certificates" and will consist of one or more classes of "Regular Certificates"
and one class of "Residual Certificates" in the case of each REMIC Pool.
Qualification as a REMIC requires ongoing compliance with certain conditions.
With respect to each series of REMIC Certificates, Cadwalader, Wickersham &
Taft has advised the Seller that in the firm's opinion, assuming (i) the making
of such an election, (ii) compliance with the applicable Agreement and (iii)
compliance with any changes in the law, including any amendments to the Code or
applicable Treasury regulations thereunder, each REMIC Pool will qualify as a
REMIC. This opinion will be filed as an Exhibit to the Form 8-K filed with the
Commission relating to such series of certificates. In such case, the Regular
Certificates will be considered to be "regular interests" in the REMIC Pool and
generally will be treated for federal income tax purposes as if they were newly
originated debt instruments, and the Residual Certificates will be considered
to be "residual interests" in the REMIC Pool. The prospectus supplement for
each series of certificates will indicate whether one or more REMIC elections
with respect to the related Trust Fund will be made, in which event references
to "REMIC" or "REMIC Pool" herein shall be deemed to refer to each such REMIC
Pool. If so specified in the applicable prospectus supplement, the portion of a
Trust Fund as to which a REMIC election is not made may be treated as a grantor
trust for federal income tax purposes. See "-- Federal Income Tax Consequences
for Certificates as to Which No REMIC Election Is Made" below. For purposes of
this discussion, unless otherwise specified, the term "mortgage loans" will be
used to refer to mortgage loans and Installment Contracts.
STATUS OF REMIC CERTIFICATES
REMIC Certificates held by a domestic building and loan association will
constitute "a regular or residual interest in a REMIC" within the meaning of
Code Section 7701(a)(19)(C)(xi) but only in the same
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proportion that the assets of the REMIC Pool would be treated as "loans . . .
secured by an interest in real property which is . . . residential real
property" or "loans secured by an interest in . . . health . . . institutions
or facilities, including structures designed or used previously for residential
purposes for . . . persons under care" (such as single family or multifamily
properties or health-care properties, but not other commercial properties)
within the meaning of Code Section 7701(a)(19)(C), and otherwise will not
qualify for such treatment. REMIC Certificates held by a real estate investment
trust will constitute "real estate assets" within the meaning of Code Section
856(c)(4)(A), and interest on the Regular Certificates and income with respect
to Residual Certificates will be considered "interest on obligations secured by
mortgages on real property or on interests in real property" within the meaning
of Code Section 856(c)(3)(B) in the same proportion that, for both purposes,
the assets of the REMIC Pool would be so treated. If at all times 95% or more
of the assets of the REMIC Pool qualify for each of the foregoing respective
treatments, the REMIC Certificates will qualify for the corresponding status in
their entirety. For purposes of Code Section 856(c)(4)(A), payments of
principal and interest on the mortgage loans that are reinvested pending
distribution to holders of REMIC Certificates qualify for such treatment. Where
two REMIC Pools are a part of a tiered structure they will be treated as one
REMIC for purposes of the tests described above respecting asset ownership of
more or less than 95%. Regular Certificates will represent "qualified
mortgages," within the meaning of Code Section 860G(a)(3), for other REMICs and
"permitted assets," within the meaning of Code Section 860L(c), for financial
asset securitization investment trusts. REMIC Certificates held by a regulated
investment company will not constitute "Government securities" within the
meaning of Code Section 851(b)(3)(A)(i). REMIC Certificates held by certain
financial institutions will constitute an "evidence of indebtedness" within the
meaning of Code Section 582(c)(1). The Small Business Job Protection Act of
1996 (the "SBJPA of 1996") repealed the reserve method for bad debts of
domestic building and loan associations and mutual savings banks, and thus has
eliminated the asset category of "qualifying real property loans" in former
Code Section 593(d) for taxable years beginning after December 31, 1995. The
requirement in the SBJPA of 1996 that such institutions must "recapture" a
portion of their existing bad debt reserves is suspended if a certain portion
of their assets are maintained in "residential loans" under Code Section
7701(a)(19)(C)(v), but only if such loans were made to acquire, construct or
improve the related real property and not for the purpose of refinancing.
However, no effort will be made to identify the portion of the mortgage loans
of any series meeting this requirement, and no representation is made in this
regard.
QUALIFICATION AS A REMIC
In order for the REMIC Pool to qualify as a REMIC, there must be ongoing
compliance on the part of the REMIC Pool with the requirements set forth in the
Code. The REMIC Pool must fulfill an asset test, which requires that no more
than a de minimis portion of the assets of the REMIC Pool, as of the close of
the third calendar month beginning after the "Startup Day" (which for purposes
of this discussion is the date of issuance of the REMIC Certificates) and at
all times thereafter, may consist of assets other than "qualified mortgages"
and "permitted investments." The REMIC Regulations provide a safe harbor
pursuant to which the de minimis requirement is met if at all times the
aggregate adjusted basis of the nonqualified assets is less than 1% of the
aggregate adjusted basis of all the REMIC Pool's assets. An entity that fails
to meet the safe harbor may nevertheless demonstrate that it holds no more than
a de minimis amount of nonqualified assets. A REMIC also must provide
"reasonable arrangements" to prevent its residual interest from being held by
"disqualified organizations" and must furnish applicable tax information to
transferors or agents that violate this requirement. See "-- Taxation of
Residual Certificates -- Tax-Related Restrictions on Transfer of Residual
Certificates -- Disqualified Organizations" below.
A qualified mortgage is any obligation that is principally secured by an
interest in real property and that is either transferred to the REMIC Pool on
the Startup Day or is purchased by the REMIC Pool within a three-month period
thereafter pursuant to a fixed price contract in effect on the Startup Day.
Qualified mortgages include whole mortgage loans, such as the mortgage loans,
certificates of beneficial interest in a grantor trust that holds mortgage
loans, regular interests in another REMIC, such as certificates in a trust as
to which a REMIC election has been made, loans secured by timeshare interests
and loans secured by shares held by a tenant stockholder in a cooperative
housing corporation, provided, in
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general, (i) the fair market value of the real property security (including
buildings and structural components thereof) is at least 80% of the principal
balance of the related mortgage loan either at origination or as of the Startup
Day (an original loan-to-value ratio of not more than 125% with respect to the
real property security) or (ii) substantially all the proceeds of the mortgage
loan or the underlying mortgage loan were used to acquire, improve or protect
an interest in real property that, at the origination date, was the only
security for the mortgage loan or underlying mortgage loan. If the mortgage
loan has been substantially modified other than in connection with a default or
reasonably foreseeable default, it must meet the loan-to-value test in (i) of
the preceding sentence as of the date of the last such modification. A
qualified mortgage includes a qualified replacement mortgage, which is any
property that would have been treated as a qualified mortgage if it were
transferred to the REMIC Pool on the Startup Day and that is received either
(i) in exchange for any qualified mortgage within a three-month period
thereafter or (ii) in exchange for a "defective obligation" within a two-year
period thereafter. A "defective obligation" includes (i) a mortgage in default
or as to which default is reasonably foreseeable, (ii) a mortgage as to which a
customary representation or warranty made at the time of transfer to the REMIC
Pool has been breached, (iii) a mortgage that was fraudulently procured by the
mortgagor, and (iv) a mortgage that was not in fact principally secured by real
property (but only if such mortgage is disposed of within 90 days of
discovery). A mortgage loan that is "defective" as described in clause (iv)
that is not sold or, if within two years of the Startup Day, exchanged within
90 days of discovery, ceases to be a qualified mortgage after such 90-day
period.
Permitted investments include cash flow investments, qualified reserve
assets, and foreclosure property. A cash flow investment is an investment,
earning a return in the nature of interest, of amounts received on or with
respect to qualified mortgages for a temporary period, not exceeding 13 months,
until the next scheduled distribution to holders of interests in the REMIC
Pool. A qualified reserve asset is any intangible property held for investment
that is part of any reasonably required reserve maintained by the REMIC Pool to
provide for payments of expenses of the REMIC Pool or amounts due on the
regular or residual interests in the event of defaults (including
delinquencies) on the qualified mortgages, lower than expected reinvestment
returns, prepayment interest shortfalls and certain other contingencies. The
reserve fund will be disqualified if more than 30% of the gross income from the
assets in such fund for the year is derived from the sale or other disposition
of property held for less than three months, unless required to prevent a
default on the regular interests caused by a default on one or more qualified
mortgages. A reserve fund must be reduced "promptly and appropriately" as
payments on the mortgage loans are received. Foreclosure property is real
property acquired by the REMIC Pool in connection with the default or imminent
default of a qualified mortgage and generally not held beyond the close of the
third calendar year beginning after the year in which such property is acquired
with an extension that may be granted by the Internal Revenue Service (the
"Service").
In addition to the foregoing requirements, the various interests in a
REMIC Pool also must meet certain requirements. All of the interests in a REMIC
Pool must be either of the following: (i) one or more classes of regular
interests or (ii) a single class of residual interests on which distributions,
if any, are made pro rata. A regular interest is an interest in a REMIC Pool
that is issued on the Startup Day with fixed terms, is designated as a regular
interest, and unconditionally entitles the holder to receive a specified
principal amount (or other similar amount), and provides that interest payments
(or other similar amounts), if any, at or before maturity either are payable
based on a fixed rate or a qualified variable rate, or consist of a specified,
nonvarying portion of the interest payments on qualified mortgages. Such a
specified portion may consist of a fixed number of basis points, a fixed
percentage of the total interest, or a fixed or qualified variable or inverse
variable rate on some or all of the qualified mortgages minus a different fixed
or qualified variable rate. The specified principal amount of a regular
interest that provides for interest payments consisting of a specified,
nonvarying portion of interest payments on qualified mortgages may be zero. A
residual interest is an interest in a REMIC Pool other than a regular interest
that is issued on the Startup Day and that is designated as a residual
interest. An interest in a REMIC Pool may be treated as a regular interest even
if payments of principal with respect to such interest are subordinated to
payments on other regular interests or the residual interest in the REMIC Pool,
and are dependent on the absence of defaults or delinquencies on qualified
mortgages or permitted investments, lower than reasonably expected returns on
permitted investments, unanticipated
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expenses incurred by the REMIC Pool or prepayment interest shortfalls.
Accordingly, the Regular Certificates of a series will constitute one or more
classes of regular interests, and the Residual Certificates with respect to
that series will constitute a single class of residual interests on which
distributions are made pro rata.
If an entity, such as the REMIC Pool, fails to comply with one or more of
the ongoing requirements of the Code for REMIC status during any taxable year,
the Code provides that the entity will not be treated as a REMIC for such year
and thereafter. In this event, an entity with multiple classes of ownership
interests may be treated as a separate association taxable as a corporation
under Treasury regulations, and the Regular Certificates may be treated as
equity interests therein. The Code, however, authorizes the Treasury Department
to issue regulations that address situations where failure to meet one or more
of the requirements for REMIC status occurs inadvertently and in good faith,
and disqualification of the REMIC Pool would occur absent regulatory relief.
Investors should be aware, however, that the Conference Committee Report to the
Tax Reform Act of 1986 (the "1986 Act") indicates that the relief may be
accompanied by sanctions, such as the imposition of a corporate tax on all or a
portion of the REMIC Pool's income for the period of time in which the
requirements for REMIC status are not satisfied.
TAXATION OF REGULAR CERTIFICATES
General
In general, interest and original issue discount on a Regular Certificate
will be treated as ordinary income to a holder of the Regular Certificate (the
"Regular Certificateholder") as they accrue, and principal payments on a
Regular Certificate will be treated as a return of capital to the extent of the
Regular Certificateholder's basis in the Regular Certificate allocable thereto
(other than accrued market discount not yet reported as income). Regular
Certificateholders must use the accrual method of accounting with regard to
Regular Certificates, regardless of the method of accounting otherwise used by
such Regular Certificateholders.
Original Issue Discount
Certificates on which accrued interest is capitalized and deferred will
be, and other classes of Regular Certificates may be, issued with "original
issue discount" within the meaning of Code Section 1273(a). Holders of any
class of Regular Certificates having original issue discount generally must
include original issue discount in ordinary income for federal income tax
purposes as it accrues, in accordance with the constant yield method that takes
into account the compounding of interest, in advance of receipt of the cash
attributable to such income. The following discussion is based in part on
temporary and final Treasury regulations issued on February 2, 1994 (the "OID
Regulations"), as amended on June 14, 1996, under Code Sections 1271 through
1273 and 1275 and in part on the provisions of the 1986 Act. Regular
Certificateholders should be aware, however, that the OID Regulations do not
adequately address certain issues relevant to prepayable securities, such as
the Regular Certificates. To the extent such issues are not addressed in such
regulations, it is anticipated that the Trustee will apply the methodology
described in the Conference Committee Report to the 1986 Act. No assurance can
be provided that the Service will not take a different position as to those
matters not currently addressed by the OID Regulations. Moreover, the OID
Regulations include an anti-abuse rule allowing the Service to apply or depart
from the OID Regulations where necessary or appropriate to ensure a reasonable
tax result in light of the applicable statutory provisions. A tax result will
not be considered unreasonable under the anti-abuse rule in the absence of a
substantial effect on the present value of a taxpayer's tax liability.
Investors are advised to consult their own tax advisors as to the discussion
herein and the appropriate method for reporting interest and original issue
discount with respect to the Regular Certificates.
Each Regular Certificate (except to the extent described below with
respect to a Regular Certificate on which principal is distributed by random
lot ("Random Lot Certificates")) will be treated as a single installment
obligation for purposes of determining the original issue discount includible
in a Regular
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Certificateholder's income. The total amount of original issue discount on a
Regular Certificate is the excess of the "stated redemption price at maturity"
of the Regular Certificate over its "issue price". The issue price of a class
of Regular Certificates offered pursuant to this prospectus generally is the
first price at which a substantial amount of Regular Certificates of that class
is sold to the public (excluding bond houses, brokers and underwriters).
Although unclear under the OID Regulations, the Seller intends to treat the
issue price of a class as to which there is no sale of a substantial amount as
of the issue date or that is retained by the Seller as the fair market value of
that class as of the issue date. The issue price of a Regular Certificate also
includes the amount paid by an initial Regular Certificateholder for accrued
interest that relates to a period prior to the issue date of the Regular
Certificate, unless the Regular Certificateholder elects on its federal income
tax return to exclude such amount from the issue price and to recover it on the
first Distribution Date. The stated redemption price at maturity of a Regular
Certificate always includes the original principal amount of the Regular
Certificate, but generally will not include distributions of stated interest if
such interest distributions constitute "qualified stated interest". Under the
OID Regulations, qualified stated interest generally means interest payable at
a single fixed rate or a qualified variable rate (as described below) provided
that such interest payments are unconditionally payable at intervals of one
year or less during the entire term of the Regular Certificate. Because there
is no penalty or default remedy in the case of nonpayment of interest with
respect to a Regular Certificate, it is possible that no interest on any class
of Regular Certificates will be treated as qualified stated interest. However,
except as provided in the following three sentences or in the applicable
prospectus supplement, because the underlying mortgage loans provide for
remedies in the event of default, it is anticipated that the Trustee will treat
interest with respect to the Regular Certificates as qualified stated interest.
Distributions of interest on an Accrual Certificate, or on other Regular
Certificates with respect to which deferred interest will accrue, will not
constitute qualified stated interest, in which case the stated redemption price
at maturity of such Regular Certificates includes all distributions of interest
as well as principal thereon. Likewise, the Seller intends to treat an
"interest only" class, or a class on which interest is substantially
disproportionate to its principal amount (a so-called "super-premium" class) as
having no qualified stated interest. Where the interval between the issue date
and the first Distribution Date on a Regular Certificate is shorter than the
interval between subsequent Distribution Dates, the interest attributable to
the additional days will be included in the stated redemption price at
maturity.
Under a de minimis rule, original issue discount on a Regular Certificate
will be considered to be zero if such original issue discount is less than
0.25% of the stated redemption price at maturity of the Regular Certificate
multiplied by the weighted average maturity of the Regular Certificate. For
this purpose, the weighted average maturity of the Regular Certificate is
computed as the sum of the amounts determined by multiplying the number of full
years (i.e., rounding down partial years) from the issue date until each
distribution is scheduled to be made by a fraction, the numerator of which is
the amount of each distribution included in the stated redemption price at
maturity of the Regular Certificate and the denominator of which is the stated
redemption price at maturity of the Regular Certificate. The Conference
Committee Report to the 1986 Act provides that the schedule of such
distributions should be determined in accordance with the assumed rate of
prepayment of the mortgage loans (the "Prepayment Assumption") and the
anticipated reinvestment rate, if any, relating to the Regular Certificates.
The Prepayment Assumption with respect to a series of Regular Certificates will
be set forth in the related prospectus supplement. Holders generally must
report de minimis OID pro rata as principal payments are received, and such
income will be capital gain if the Regular Certificate is held as a capital
asset. However, under the OID Regulations, Regular Certificateholders may elect
to accrue all de minimis original issue discount as well as market discount and
market premium under the constant yield method. See "--Election to Treat All
Interest Under the Constant Yield Method" below.
A Regular Certificateholder generally must include in gross income for any
taxable year the sum of the "daily portions," as defined below, of the original
issue discount on the Regular Certificate accrued during an accrual period for
each day on which it holds the Regular Certificate, including the date of
purchase but excluding the date of disposition. It is anticipated that the
Trustee will treat the monthly period ending on the day before each
Distribution Date as the accrual period. With respect to each Regular
Certificate, a calculation will be made of the original issue discount that
accrues during each
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successive full accrual period (or shorter period from the date of original
issue) that ends on the day before the related Distribution Date on the Regular
Certificate. The Conference Committee Report to the 1986 Act states that the
rate of accrual of original issue discount is intended to be based on the
Prepayment Assumption. Other than as discussed below with respect to a Random
Lot Certificate, the original issue discount accruing in a full accrual period
would be the excess, if any, of (i) the sum of (a) the present value of all of
the remaining distributions to be made on the Regular Certificate as of the end
of that accrual period and (b) the distributions made on the Regular
Certificate during the accrual period that are included in the Regular
Certificate's stated redemption price at maturity, over (ii) the adjusted issue
price of the Regular Certificate at the beginning of the accrual period. The
present value of the remaining distributions referred to in the preceding
sentence is calculated based on (i) the yield to maturity of the Regular
Certificate at the issue date, (ii) events (including actual prepayments) that
have occurred prior to the end of the accrual period and (iii) the Prepayment
Assumption. For these purposes, the adjusted issue price of a Regular
Certificate at the beginning of any accrual period equals the issue price of
the Regular Certificate, increased by the aggregate amount of original issue
discount with respect to the Regular Certificate that accrued in all prior
accrual periods and reduced by the amount of distributions included in the
Regular Certificate's stated redemption price at maturity that were made on the
Regular Certificate in such prior periods. The original issue discount accruing
during any accrual period (as determined in this paragraph) will then be
divided by the number of days in the period to determine the daily portion of
original issue discount for each day in the period. With respect to an initial
accrual period shorter than a full accrual period, the daily portions of
original issue discount must be determined according to an appropriate
allocation under any reasonable method.
Under the method described above, the daily portions of original issue
discount required to be included in income by a Regular Certificateholder
generally will increase to take into account prepayments on the Regular
Certificates as a result of prepayments on the mortgage loans that exceed the
Prepayment Assumption, and generally will decrease (but not below zero for any
period) if the prepayments are slower than the Prepayment Assumption. However,
in the case of certain classes of Regular Certificates of a series, an increase
in prepayments on the mortgage loans can result in both a change in the
priority of principal payments with respect to such classes and either an
increase or decrease in the daily portions of original issue discount with
respect to such classes.
In the case of a Random Lot Certificate, it is anticipated that the
Trustee will determine the yield to maturity of such certificate based upon the
anticipated payment characteristics of the class as a whole under the
Prepayment Assumption. In general, the original issue discount accruing on each
Random Lot Certificate in a full accrual period would be its allocable share of
the original issue discount with respect to the entire class, as determined in
accordance with the preceding paragraph. However, in the case of a distribution
in retirement of the entire unpaid principal balance of any Random Lot
Certificate (or portion of such unpaid principal balance), (a) the remaining
unaccrued original issue discount allocable to such certificate (or to such
portion) will accrue at the time of such distribution, and (b) the accrual of
original issue discount allocable to each remaining certificate of such class
(or the remaining unpaid principal balance of a partially redeemed Random Lot
Certificate after a distribution of principal has been received) will be
adjusted by reducing the present value of the remaining payments on such class
and by reducing the adjusted issue price of such class to the extent of the
portion of the adjusted issue price attributable to the portion of the unpaid
principal balance of such class that was distributed. The Seller believes that
the foregoing treatment is consistent with the "pro rata prepayment" rules of
the OID Regulations, but with the rate of accrual of original issue discount
determined based on the Prepayment Assumption for the class as a whole.
Investors are advised to consult their tax advisors as to this treatment.
Acquisition Premium
A purchaser of a Regular Certificate at a price greater than its adjusted
issue price but less than its stated redemption price at maturity will be
required to include in gross income the daily portions of the original issue
discount on the Regular Certificate reduced pro rata by a fraction, the
numerator of which is the excess of its purchase price over such adjusted issue
price and the denominator of which is the excess of the remaining stated
redemption price at maturity over the adjusted issue price. Alternatively,
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such a subsequent purchaser may elect to treat all such acquisition premium
under the constant yield method, as described below under the heading "--
Election to Treat All Interest Under the Constant Yield Method " below.
Variable Rate Regular Certificates
Regular Certificates may provide for interest based on a variable rate.
Under the OID Regulations, interest is treated as payable at a variable rate
if, generally, (i) the issue price does not exceed the original principal
balance by more than a specified amount and (ii) the interest compounds or is
payable at least annually at current values of (a) one or more "qualified
floating rates", (b) a single fixed rate and one or more qualified floating
rates, (c) a single "objective rate", or (d) a single fixed rate and a single
objective rate that is a "qualified inverse floating rate". A floating rate is
a qualified floating rate if variations in the rate can reasonably be expected
to measure contemporaneous variations in the cost of newly borrowed funds,
where such rate is subject to a fixed multiple that is greater than 0.65 but
not more than 1.35. Such rate may also be increased or decreased by a fixed
spread or subject to a fixed cap or floor, or a cap or floor that is not
reasonably expected as of the issue date to affect the yield of the instrument
significantly. An objective rate is any rate (other than a qualified floating
rate) that is determined using a single fixed formula and that is based on
objective financial or economic information, provided that such information is
not (i) within the control of the issuer or a related party or (ii) unique to
the circumstances of the issuer or a related party. A qualified inverse
floating rate is a rate equal to a fixed rate minus a qualified floating rate
that inversely reflects contemporaneous variations in the cost of newly
borrowed funds; an inverse floating rate that is not a qualified inverse
floating rate may nevertheless be an objective rate. A class of Regular
Certificates may be issued under this prospectus that provides for interest
that is not a fixed rate and also does not have a variable rate under the
foregoing rules, for example, a class that bears different rates at different
times during the period it is outstanding such that it is considered
significantly "front-loaded" or "back-loaded" within the meaning of the OID
Regulations. It is possible that such a class may be considered to bear
"contingent interest" within the meaning of the OID Regulations. The OID
Regulations, as they relate to the treatment of contingent interest, are by
their terms not applicable to Regular Certificates. However, if final
regulations dealing with contingent interest with respect to Regular
Certificates apply the same principles as existing contingent rules, such
regulations may lead to different timing of income inclusion that would be the
case under the OID Regulations. Furthermore, application of such principles
could lead to the characterization of gain on the sale of contingent interest
Regular Certificates as ordinary income. Investors should consult their tax
advisors regarding the appropriate treatment of any Regular Certificate that
does not pay interest at a fixed rate or variable rate as described in this
paragraph.
Under the REMIC Regulations, a Regular Certificate (i) bearing a rate that
is tied to current values of a rate that qualifies as a variable rate under the
OID Regulations (or the highest, lowest or average of two or more such variable
rates, including a rate based on the average cost of funds of one or more
financial institutions), or a positive or negative multiple of such a rate
(plus or minus a specified number of basis points), or that represents a
weighted average of rates on some or all of the mortgage loans, including such
a rate that is subject to one or more caps or floors, or (ii) bearing one or
more such variable rates for one or more periods or one or more fixed rates for
one or more periods, and a different variable rate or fixed rate for other
periods, qualifies as a regular interest in a REMIC. It is anticipated that the
Trustee will treat Regular Certificates that qualify as regular interests under
this rule in the same manner as obligations bearing a variable rate for
original issue discount reporting purposes.
The amount of original issue discount with respect to a Regular
Certificate bearing a variable rate of interest will accrue in the manner
described above under "Original Issue Discount" with the yield to maturity and
future payments on such Regular Certificate generally to be determined by
assuming that interest will be payable for the life of the Regular Certificate
based on the initial rate (or, if different, the value of the applicable
variable rate as of the pricing date) for the relevant class. It is anticipated
that the Trustee will treat such variable interest as qualified stated
interest, other than variable interest on an interest-only or super-premium
class, which will be treated as non-qualified stated interest includible in the
stated redemption price at maturity. Ordinary income reportable for any period
will be adjusted based on subsequent changes in the applicable interest rate
index.
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Although unclear under the OID Regulations, it is anticipated that the
Trustee will treat Regular Certificates bearing an interest rate that is a
weighted average of the net interest rates on mortgage loans which themselves
have fixed or qualified variable rates, as having qualified stated interest. In
the case of adjustable rate mortgage loans, the applicable index used to
compute interest on the mortgage loans in effect on the pricing date (or
possibly the issue date) will be deemed to be in effect over the life of the
mortgage loans beginning with the period in which the first weighted average
adjustment date occurring after the issue date occurs. Adjustments will be made
in each accrual period either increasing or decreasing the amount or ordinary
income reportable to reflect the interest rate on the Regular Certificates.
Market Discount
A purchaser of a Regular Certificate also may be subject to the market
discount rules of Code Section 1276 through 1278. Under these Code sections and
the principles applied by the OID Regulations in the context of original issue
discount, "market discount" is the amount by which the purchaser's original
basis in the Regular Certificate (i) is exceeded by the then-current principal
amount of the Regular Certificate or (ii) in the case of a Regular Certificate
having original issue discount, is exceeded by the adjusted issue price of such
Regular Certificate at the time of purchase. Such purchaser generally will be
required to recognize ordinary income to the extent of accrued market discount
on such Regular Certificate as distributions includible in the stated
redemption price at maturity thereof are received, in an amount not exceeding
any such distribution. Such market discount would accrue in a manner to be
provided in Treasury regulations and should take into account the Prepayment
Assumption. The Conference Committee Report to the 1986 Act provides that until
such regulations are issued, such market discount would accrue either (i) on
the basis of a constant interest rate, (ii) in the ratio of stated interest
allocable to the relevant period to the sum of the interest for such period
plus the remaining interest as of the end of such period, or (iii) in the case
of a Regular Certificate issued with original issue discount, in the ratio of
original issue discount accrued for the relevant period to the sum of the
original issue discount accrued for such period plus the remaining original
issue discount as of the end of such period. Such purchaser also generally will
be required to treat a portion of any gain on a sale or exchange of the Regular
Certificate as ordinary income to the extent of the market discount accrued to
the date of disposition under one of the foregoing methods, less any accrued
market discount previously reported as ordinary income as partial distributions
in reduction of the stated redemption price at maturity were received. Such
purchaser will be required to defer deduction of a portion of the excess of the
interest paid or accrued on indebtedness incurred to purchase or carry a
Regular Certificate over the interest distributable thereon. The deferred
portion of such interest expense in any taxable year generally will not exceed
the accrued market discount on the Regular Certificate for such year. Any such
deferred interest expense is, in general, allowed as a deduction not later than
the year in which the related market discount income is recognized or the
Regular Certificate is disposed of. As an alternative to the inclusion of
market discount in income on the foregoing basis, the Regular Certificateholder
may elect to include market discount in income currently as it accrues on all
market discount instruments acquired by such Regular Certificateholder in that
taxable year or thereafter, in which case the interest deferral rule will not
apply. See "-- Election to Treat All Interest Under the Constant Yield Method"
below regarding an alternative manner in which such election may be deemed to
be made.
Market discount with respect to a Regular Certificate will be considered
to be zero if such market discount is less than 0.25% of the remaining stated
redemption price at maturity of such Regular Certificate multiplied by the
weighted average maturity of the Regular Certificate (determined as described
above in the third paragraph under "Original Issue Discount") remaining after
the date of purchase. It appears that de minimis market discount would be
reported in a manner similar to de minimis original issue discount. See "--
Original Issue Discount" above. Treasury regulations implementing the market
discount rules have not yet been issued, and therefore investors should consult
their own tax advisors regarding the application of these rules. Investors
should also consult Revenue Procedure 92-67 concerning the elections to include
market discount in income currently and to accrue market discount on the basis
of the constant yield method.
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Premium
A Regular Certificate purchased at a cost greater than its remaining
stated redemption price at maturity generally is considered to be purchased at
a premium. If the Regular Certificateholder holds such Regular Certificate as a
"capital asset" within the meaning of Code Section 1221, the Regular
Certificateholder may elect under Code Section 171 to amortize such premium
under the constant yield method. Final Treasury Regulations issued under Code
Section 171 do not by their terms apply to prepayable debt instruments such as
the Regular Certificates. However, the Conference Committee Report to the 1986
Act indicates a Congressional intent that the same rules that will apply to the
accrual of market discount on installment obligations will also apply to
amortizing bond premium under Code Section 171 on installment obligations such
as the Regular Certificates, although it is unclear whether the alternatives to
the constant yield method described above under "Market Discount" are
available. Amortizable bond premium will be treated as an offset to interest
income on a Regular Certificate rather than as a separate deduction item. See
"-- Election to Treat All Interest Under the Constant Yield Method" below
regarding an alternative manner in which the Code Section 171 election may be
deemed to be made.
Election to Treat All Interest Under the Constant Yield Method
A holder of a debt instrument such as a Regular Certificate may elect to
treat all interest that accrues on the instrument using the constant yield
method, with none of the interest being treated as qualified stated interest.
For purposes of applying the constant yield method to a debt instrument subject
to such an election, (i) "interest" includes stated interest, original issue
discount, de minimis original issue discount, market discount and de minimis
market discount, as adjusted by any amortizable bond premium or acquisition
premium and (ii) the debt instrument is treated as if the instrument were
issued on the holder's acquisition date in the amount of the holder's adjusted
basis immediately after acquisition. It is unclear whether, for this purpose,
the initial Prepayment Assumption would continue to apply or if a new
prepayment assumption as of the date of the holder's acquisition would apply. A
holder generally may make such an election on an instrument by instrument basis
or for a class or group of debt instruments. However, if the holder makes such
an election with respect to a debt instrument with amortizable bond premium or
with market discount, the holder is deemed to have made elections to amortize
bond premium or to report market discount income currently as it accrues under
the constant yield method, respectively, for all debt instruments acquired by
the holder in the same taxable year or thereafter. The election is made on the
holder's federal income tax return for the year in which the debt instrument is
acquired and is irrevocable except with the approval of the Service. Investors
should consult their own tax advisors regarding the advisability of making such
an election.
SALE OR EXCHANGE OF REGULAR CERTIFICATES
If a Regular Certificateholder sells or exchanges a Regular Certificate,
the Regular Certificateholder will recognize gain or loss equal to the
difference, if any, between the amount realized and its adjusted basis in the
Regular Certificate. The adjusted basis of a Regular Certificate generally will
equal the cost of the Regular Certificate to the seller, increased by any
original issue discount or market discount previously included in the seller's
gross income with respect to the Regular Certificate and reduced by amounts
included in the stated redemption price at maturity of the Regular Certificate
that were previously received by the seller, by any amortized premium and by
any recognized losses.
Except as described above with respect to market discount, and except as
provided in this paragraph, any gain or loss on the sale or exchange of a
Regular Certificate realized by an investor who holds the Regular Certificate
as a capital asset will be capital gain or loss and will be long-term, or
short-term depending on whether the Regular Certificate has been held for the
applicable capital gain holding period. Such gain will be treated as ordinary
income (i) if a Regular Certificate is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of interest
that would have accrued on the Regular Certificateholder's net investment in
the conversion transaction at 120% of the appropriate applicable Federal rate
under Code Section 1274(d) in effect at the time the taxpayer entered into the
transaction minus any amount previously treated as ordinary income with respect
to any
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prior distribution of property that was held as a part of such transaction,
(ii) in the case of a non-corporate taxpayer, to the extent such taxpayer has
made an election under Code Section 163(d)(4) to have net capital gains taxed
as investment income at ordinary rates, or (iii) to the extent that such gain
does not exceed the excess, if any, of (a) the amount that would have been
includible in the gross income of the holder if its yield on such Regular
Certificate were 110% of the applicable Federal rate as of the date of
purchase, over (b) the amount of income actually includible in the gross income
of such holder with respect to the Regular Certificate. In addition, gain or
loss recognized from the sale of a Regular Certificate by certain banks or
thrift institutions will be treated as ordinary income or loss pursuant to Code
Section 582(c). Generally, short-term capital gains of certain non-corporate
taxpayers are subject to the same tax rate as the ordinary income of such
taxpayers (39.6%) for property held for not more than one year, and long-term
capital gains of such taxpayers are subject to a maximum tax rate of 20% for
property held for more than one year. The maximum tax rate for corporations is
the same with respect to both ordinary income and capital gains.
Treatment of Losses
Holders of Regular Certificates will be required to report income with
respect to Regular Certificates on the accrual method of accounting, without
giving effect to delays or reductions in distributions attributable to defaults
or delinquencies on the mortgage loans allocable to a particular class of
Regular Certificates, except to the extent it can be established that such
losses are uncollectible. Accordingly, the holder of a Regular Certificate may
have income, or may incur a diminution in cash flow as a result of a default or
delinquency, but may not be able to take a deduction (subject to the discussion
below) for the corresponding loss until a subsequent taxable year. In this
regard, investors are cautioned that while they may generally cease to accrue
interest income if it reasonably appears that the interest will be
uncollectible, the Internal Revenue Service may take the position that original
issue discount must continue to be accrued in spite of its uncollectibility
until the debt instrument is disposed of in a taxable transaction or becomes
worthless in accordance with the rules of Code Section 166. Under Code Section
166, it appears that holders of Regular Certificates that are corporations or
that otherwise hold the Regular Certificates in connection with a trade or
business should in general be allowed to deduct as an ordinary loss any such
loss sustained during the taxable year on account of any such Regular
Certificates becoming wholly or partially worthless, and that, in general,
holders of Regular Certificates that are not corporations and do not hold the
Regular Certificates in connection with a trade or business will be allowed to
deduct as a short-term capital loss any loss with respect to principal
sustained during the taxable year on account of a portion of any class or
subclass of such Regular Certificates becoming wholly worthless. Although the
matter is not free from doubt, non-corporate holders of Regular Certificates
should be allowed a bad debt deduction at such time as the principal balance of
any class or subclass of such Regular Certificates is reduced to reflect losses
resulting from any liquidated mortgage loans. The Service, however, could take
the position that non-corporate holders will be allowed a bad debt deduction to
reflect such losses only after all mortgage loans remaining in the Trust Fund
have been liquidated or such class of Regular Certificates has been otherwise
retired. The Service could also assert that losses on the Regular Certificates
are deductible based on some other method that may defer such deductions for
all holders, such as reducing future cash flow for purposes of computing
original issue discount. This may have the effect of creating "negative"
original issue discount which would be deductible only against future positive
original issue discount or otherwise upon termination of the class. Holders of
Regular Certificates are urged to consult their own tax advisors regarding the
appropriate timing, amount and character of any loss sustained with respect to
such Regular Certificates. While losses attributable to interest previously
reported as income should be deductible as ordinary losses by both corporate
and non-corporate holders the Service may take the position that losses
attributable to accrued original issue discount may only be deducted as capital
losses in the case of non-corporate holders who do not hold Regular
Certificates in connection with a trade or business. Special loss rules are
applicable to banks and thrift institutions, including rules regarding reserves
for bad debts. Such taxpayers are advised to consult their tax advisors
regarding the treatment of losses on Regular Certificates.
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TAXATION OF RESIDUAL CERTIFICATES
Taxation of REMIC Income
Generally, the "daily portions" of REMIC taxable income or net loss will
be includible as ordinary income or loss in determining the federal taxable
income of holders of Residual Certificates ("Residual Certificateholders"), and
will not be taxed separately to the REMIC Pool. The daily portions of REMIC
taxable income or net loss of a Residual Certificateholder are determined by
allocating the REMIC Pool's taxable income or net loss for each calendar
quarter ratably to each day in such quarter and by allocating such daily
portion among the Residual Certificateholders in proportion to their respective
holdings of Residual Certificates in the REMIC Pool on such day. REMIC taxable
income is generally determined in the same manner as the taxable income of an
individual using the accrual method of accounting, except that (i) the
limitations on deductibility of investment interest expense and expenses for
the production of income do not apply, (ii) all bad loans will be deductible as
business bad debts and (iii) the limitation on the deductibility of interest
and expenses related to tax-exempt income will apply. The REMIC Pool's gross
income includes interest, original issue discount income and market discount
income, if any, on the mortgage loans (reduced by amortization of any premium
on the mortgage loans), plus issue premium on Regular Certificates, plus income
on reinvestment of cash flows and reserve assets, plus any cancellation of
indebtedness income upon allocation of realized losses to the Regular
Certificates. The REMIC Pool's deductions include interest and original issue
discount expense on the Regular Certificates, servicing fees on the mortgage
loans, other administrative expenses of the REMIC Pool and realized losses on
the mortgage loans. The requirement that Residual Certificateholders report
their pro rata share of taxable income or net loss of the REMIC Pool will
continue until there are no certificates of any class of the related series
outstanding.
The taxable income recognized by a Residual Certificateholder in any
taxable year will be affected by, among other factors, the relationship between
the timing of recognition of interest and original issue discount or market
discount income or amortization of premium with respect to the mortgage loans,
on the one hand, and the timing of deductions for interest (including original
issue discount) or income from amortization of issue premium on the Regular
Certificates, on the other hand. In the event that an interest in the mortgage
loans is acquired by the REMIC Pool at a discount, and one or more of such
mortgage loans is prepaid, the Residual Certificateholder may recognize taxable
income without being entitled to receive a corresponding amount of cash because
(i) the prepayment may be used in whole or in part to make distributions in
reduction of principal on the Regular Certificates and (ii) the discount on the
mortgage loans which is includible in income may exceed the deduction allowed
upon such distributions on those Regular Certificates on account of any
unaccrued original issue discount relating to those Regular Certificates. When
there is more than one class of Regular Certificates that distribute principal
sequentially, this mismatching of income and deductions is particularly likely
to occur in the early years following issuance of the Regular Certificates when
distributions in reduction of principal are being made in respect of earlier
classes of Regular Certificates to the extent that such classes are not issued
with substantial discount or are issued at a premium. If taxable income
attributable to such a mismatching is realized, in general, losses would be
allowed in later years as distributions on the later classes of Regular
Certificates are made. Taxable income may also be greater in earlier years than
in later years as a result of the fact that interest expense deductions,
expressed as a percentage of the outstanding principal amount of such a series
of Regular Certificates, may increase over time as distributions in reduction
of principal are made on the lower yielding classes of Regular Certificates,
whereas to the extent that the REMIC Pool includes fixed rate mortgage loans,
interest income with respect to any given mortgage loan will remain constant
over time as a percentage of the outstanding principal amount of that loan.
Consequently, Residual Certificateholders must have sufficient other sources of
cash to pay any federal, state or local income taxes due as a result of such
mismatching or unrelated deductions against which to offset such income,
subject to the discussion of "excess inclusions" below under "-- Limitations on
Offset or Exemption of REMIC Income." The timing of such mismatching of income
and deductions described in this paragraph, if present with respect to a series
of certificates, may have a significant adverse effect upon the Residual
Certificateholder's after-tax rate of return. In addition, a Residual
Certificateholder's taxable income during certain periods may exceed the income
reflected by such
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Residual Certificateholder for such periods in accordance with generally
accepted accounting principles. Investors should consult their own accountants
concerning the accounting treatment of their investment in Residual
Certificates.
Basis and Losses
The amount of any net loss of the REMIC Pool that may be taken into
account by the Residual Certificateholder is limited to the adjusted basis of
the Residual Certificate as of the close of the quarter (or time of disposition
of the Residual Certificate if earlier), determined without taking into account
the net loss for the quarter. The initial adjusted basis of a purchaser of a
Residual Certificate is the amount paid for such Residual Certificate. Such
adjusted basis will be increased by the amount of taxable income of the REMIC
Pool reportable by the Residual Certificateholder and will be decreased (but
not below zero), first, by a cash distribution from the REMIC Pool and, second,
by the amount of loss of the REMIC Pool reportable by the Residual
Certificateholder. Any loss that is disallowed on account of this limitation
may be carried over indefinitely with respect to the Residual Certificateholder
as to whom such loss was disallowed and may be used by such Residual
Certificateholder only to offset any income generated by the same REMIC Pool.
A Residual Certificateholder will not be permitted to amortize directly
the cost of its Residual Certificate as an offset to its share of the taxable
income of the related REMIC Pool. However, that taxable income will not include
cash received by the REMIC Pool that represents a recovery of the REMIC Pool's
basis in its assets. Such recovery of basis by the REMIC Pool will have the
effect of amortization of the issue price of the Residual Certificates over
their life. However, in view of the possible acceleration of the income of
Residual Certificateholders described above under "-- Taxation of REMIC Income"
, the period of time over which such issue price is effectively amortized may
be longer than the economic life of the Residual Certificates.
A Residual Certificate may have a negative value if the net present value
of anticipated tax liabilities exceeds the present value of anticipated cash
flows. The REMIC Regulations appear to treat the issue price of such a residual
interest as zero rather than such negative amount for purposes of determining
the REMIC Pool's basis in its assets. The preamble to the REMIC Regulations
states that the Service may provide future guidance on the proper tax treatment
of payments made by a transferor of such a residual interest to induce the
transferee to acquire the interest, and Residual Certificateholders should
consult their own tax advisors in this regard.
Further, to the extent that the initial adjusted basis of a Residual
Certificateholder (other than an original holder) in the Residual Certificate
is greater that the corresponding portion of the REMIC Pool's basis in the
mortgage loans, the Residual Certificateholder will not recover a portion of
such basis until termination of the REMIC Pool unless future Treasury
regulations provide for periodic adjustments to the REMIC income otherwise
reportable by such holder. The REMIC Regulations currently in effect do not so
provide. See "-- Treatment of Certain Items of REMIC Income and Expense --
Market Discount" below regarding the basis of mortgage loans to the REMIC Pool
and "-- Sale or Exchange of a Residual Certificate" below regarding possible
treatment of a loss upon termination of the REMIC Pool as a capital loss.
Treatment of Certain Items of REMIC Income and Expense
Although the Seller intends to compute REMIC income and expense in
accordance with the Code and applicable regulations, the authorities regarding
the determination of specific items of income and expense are subject to
differing interpretations. The Seller makes no representation as to the
specific method that the Trustee will use for reporting income with respect to
the mortgage loans and expenses with respect to the Regular Certificates, and
different methods could result in different timing of reporting of taxable
income or net loss to Residual Certificateholders or differences in capital
gain versus ordinary income.
Original Issue Discount and Premium. Generally, the REMIC Pool's
deductions for original issue discount will be determined in the same manner as
original issue discount income on Regular
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Certificates as described above under "-- Taxation of Regular Certificates --
Original Issue Discount " and "-- Variable Rate Regular Certificates", without
regard to the de minimis rule described therein, and "-- Taxation of Regular
Certificates -- Premium" above.
Market Discount. The REMIC Pool will have market discount income in
respect of mortgage loans if, in general, the basis of the REMIC Pool allocable
to such mortgage loans is exceeded by their unpaid principal balances. The
REMIC Pool's basis in such mortgage loans is generally the fair market value of
the mortgage loans immediately after the transfer thereof to the REMIC Pool.
The REMIC Regulations provide that such basis is equal in the aggregate to the
issue prices of all regular and residual interests in the REMIC Pool (or the
fair market value thereof at the Closing Date, in the case of a retained
class). In respect of mortgage loans that have market discount to which Code
Section 1276 applies, the accrued portion of such market discount would be
recognized currently as an item of ordinary income in a manner similar to
original issue discount. Market discount income generally will accrue on a
constant yield method.
Premium. Generally, if the basis of the REMIC Pool in the mortgage loans
exceeds the unpaid principal balances thereof, the REMIC Pool will be
considered to have acquired such mortgage loans at a premium equal to the
amount of such excess. As stated above, the REMIC Pool's basis in mortgage
loans is the fair market value of the mortgage loans, based on the aggregate of
the issue prices (or the fair market value of retained classes) of the regular
and residual interests in the REMIC Pool immediately after the transfer thereof
to the REMIC Pool. In a manner analogous to the discussion above under
"-- Taxation of Regular Certificates -- Premium," a REMIC Pool that holds a
mortgage loan as a capital asset under Code Section 1221 may elect under Code
Section 171 to amortize premium on whole mortgage loans under the constant
yield method. Amortizable bond premium will be treated as an offset to interest
income on the mortgage loans, rather than as a separate deduction item. To the
extent that the mortgagors with respect to the mortgage loans are individuals,
Code Section 171 will not be available for premium on mortgage loans originated
on or prior to September 27, 1985. Premium with respect to such mortgage loans
may be deductible in accordance with a reasonable method regularly employed by
the holder thereof. The allocation of such premium pro rata among principal
payments should be considered a reasonable method; however, the Service may
argue that such premium should be allocated in a different manner, such as
allocating such premium entirely to the final payment of principal.
Limitations on Offset or Exemption of REMIC Income
A portion or all of the REMIC taxable income includible in determining the
federal income tax liability of a Residual Certificateholder will be subject to
special treatment. That portion, referred to as the "excess inclusion," is
equal to the excess of REMIC taxable income for the calendar quarter allocable
to a Residual Certificate over the daily accruals for such quarterly period of
(i) 120% of the long-term applicable Federal rate that would have applied to
the Residual Certificate (if it were a debt instrument) on the Startup Day
under Code Section 1274(d), multiplied by (ii) the adjusted issue price of such
Residual Certificate at the beginning of such quarterly period. For this
purpose, the adjusted issue price of a Residual Certificate at the beginning of
a quarter is the issue price of the Residual Certificate, plus the amount of
such daily accruals of REMIC income described in this paragraph for all prior
quarters, decreased by any distributions made with respect to such Residual
Certificate prior to the beginning of such quarterly period. Accordingly, the
portion of the REMIC Pool's taxable income that will be treated as excess
inclusions will be a larger portion of such income as the adjusted issue price
of the Residual Certificates diminishes.
The portion of a Residual Certificateholder's REMIC taxable income
consisting of the excess inclusions generally may not be offset by other
deductions, including net operating loss carryforwards, on such Residual
Certificateholder's return. However, net operating loss carryovers are
determined without regard to excess inclusion income. Further, if the Residual
Certificateholder is an organization subject to the tax on unrelated business
income imposed by Code Section 511, the Residual Certificateholder's excess
inclusions will be treated as unrelated business taxable income of such
Residual Certificateholder for purposes of Code Section 511. In addition, REMIC
taxable income is subject to 30% withholding tax with respect to certain
persons who are not U.S. Persons (as defined
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below under "-- Tax-Related Restrictions on Transfer of Residual Certificates
- -- Foreign Investors" ), and the portion thereof attributable to excess
inclusions is not eligible for any reduction in the rate of withholding tax (by
treaty or otherwise). See "-- Taxation of Certain Foreign Investors -- Residual
Certificates" below. Finally, if a real estate investment trust or a regulated
investment company owns a Residual Certificate, a portion (allocated under
Treasury regulations yet to be issued) of dividends paid by the real estate
investment trust or a regulated investment company could not be offset by net
operating losses of its shareholders, would constitute unrelated business
taxable income for tax-exempt shareholders, and would be ineligible for
reduction of withholding to certain persons who are not U.S. Persons. The SBJPA
of 1996 has eliminated the special rule permitting Section 593 institutions
("thrift institutions") to use net operating losses and other allowable
deductions to offset their excess inclusion income from Residual Certificates
that have "significant value" within the meaning of the REMIC Regulations,
effective for taxable years beginning after December 31, 1995, except with
respect to Residual Certificates continuously held by thrift institutions since
November 1, 1995.
In addition, the SBJPA of 1996 provides three rules for determining the
effect of excess inclusions on the alternative minimum taxable income of a
Residual Holder. First, alternative minimum taxable income for a Residual
Holder is determined without regard to the special rule, discussed above, that
taxable income cannot be less than excess inclusions. Second, a Residual
Holder's alternative minimum taxable income for a taxable year cannot be less
than the excess inclusions for the year. Third, the amount of any alternative
minimum tax net operating loss deduction must be computed without regard to any
excess inclusions. These rules are effective for taxable years beginning after
December 31, 1986, unless a Residual Holder elects to have such rules apply
only to taxable years beginning after August 20, 1996.
Tax-Related Restrictions on Transfer of Residual Certificates
Disqualified Organizations. If any legal or beneficial interest in a
Residual Certificate is transferred to a Disqualified Organization (as defined
below), a tax would be imposed in an amount equal to the product of (i) the
present value of the total anticipated excess inclusions with respect to such
Residual Certificate for periods after the transfer and (ii) the highest
marginal federal income tax rate applicable to corporations. The REMIC
Regulations provide that the anticipated excess inclusions are based on actual
prepayment experience to the date of the transfer and projected payments based
on the Prepayment Assumption. The present value rate equals the applicable
Federal rate under Code Section 1274(d) as of the date of the transfer for a
term ending with the last calendar quarter in which excess inclusions are
expected to accrue. Such a tax generally would be imposed on the transferor of
the Residual Certificate, except that where such transfer is through an agent
(including a broker, nominee or other middleman) for a Disqualified
Organization, the tax would instead be imposed on such agent. However, a
transferor of a Residual Certificate would in no event be liable for such tax
with respect to a transfer if the transferee furnishes to the transferor an
affidavit that the transferee is not a Disqualified Organization and, as of the
time of the transfer, the transferor does not have actual knowledge that such
affidavit is false. The tax also may be waived by the Treasury Department if
the Disqualified Organization promptly disposes of the residual interest and
the transferor pays income tax at the highest corporate rate on the excess
inclusions for the period the Residual Certificate is actually held by the
Disqualified Organization.
In addition, if a "Pass-Through Entity" (as defined below) has excess
inclusion income with respect to a Residual Certificate during a taxable year
and a Disqualified Organization is the record holder of an equity interest in
such entity, then a tax is imposed on such entity equal to the product of (i)
the amount of excess inclusions on the Residual Certificate that are allocable
to the interest in the Pass-Through Entity during the period such interest is
held by such Disqualified Organization, and (ii) the highest marginal federal
corporate income tax rate. Such tax would be deductible from the ordinary gross
income of the Pass-Through Entity for the taxable year. The Pass-Through Entity
would not be liable for such tax if it has received an affidavit from such
record holder that it is not a Disqualified Organization or stating such
holder's taxpayer identification number and, during the period such person is
the record holder of the Residual Certificate, the Pass-Through Entity does not
have actual knowledge that such affidavit is false.
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For taxable years beginning on or after January 1, 1998, if an "electing
large partnership" holds a Residual Certificate, all interests in the electing
large partnership are treated as held by Disqualified Organizations for
purposes of the tax imposed upon a Pass-Through Entity by Section 860E(c) of
the Code. An exception to this tax, otherwise available to a Pass-Through
Entity that is furnished certain affidavits by record holders of interests in
the entity and that does not know such affidavits are false, is not available
to an electing large partnership.
For these purposes, (i) "Disqualified Organization" means the United
States, any state or political subdivision thereof, any foreign government, any
international organization, any agency or instrumentality of any of the
foregoing (provided, that such term does not include an instrumentality if all
of its activities are subject to tax and a majority of its board of directors
is not selected by any such governmental entity), any cooperative organization
furnishing electric energy or providing telephone service to persons in rural
areas as described in Code Section 1381(a)(2)(C), and any organization (other
than a farmers' cooperative described in Code Section 521) that is exempt from
taxation under the Code unless such organization is subject to the tax on
unrelated business income imposed by Code Section 511, (ii) "Pass-Through
Entity" means any regulated investment company, real estate investment trust,
common trust fund, partnership, trust or estate and certain corporations
operating on a cooperative basis. Except as may be provided in Treasury
regulations, any person holding an interest in a Pass-Through Entity as a
nominee for another will, with respect to such interest, be treated as a
Pass-Through Entity and (iii) an "electing large partnership" means any
partnership having more than 100 members during the preceding tax year (other
than certain service partnerships and commodity pools), which elect to apply
simplified reporting provisions under the Code.
The Agreement with respect to a series of certificates will provide that
no legal or beneficial interest in a Residual Certificate may be transferred
unless (i) the proposed transferee provides to the transferor and the Trustee
an affidavit providing its taxpayer identification number and stating that such
transferee is the beneficial owner of the Residual Certificate, is not a
Disqualified Organization and is not purchasing such Residual Certificates on
behalf of a Disqualified Organization (i.e., as a broker, nominee or middleman
thereof), and (ii) the transferor provides a statement in writing to the Seller
and the Trustee that it has no actual knowledge that such affidavit is false.
Moreover, the Agreement will provide that any attempted or purported transfer
in violation of these transfer restrictions will be null and void and will vest
no rights in any purported transferee. Each Residual Certificate with respect
to a series will bear a legend referring to such restrictions on transfer, and
each Residual Certificateholder will be deemed to have agreed, as a condition
of ownership thereof, to any amendments to the related Agreement required under
the Code or applicable Treasury regulations to effectuate the foregoing
restrictions. Information necessary to compute an applicable excise tax must be
furnished to the Service and to the requesting party within 60 days of the
request, and the Seller or the Trustee may charge a fee for computing and
providing such information.
Noneconomic Residual Interests. The REMIC Regulations would disregard
certain transfers of Residual Certificates, in which case the transferor would
continue to be treated as the owner of the Residual Certificates and thus would
continue to be subject to tax on its allocable portion of the net income of the
REMIC Pool. Under the REMIC Regulations, a transfer of a "noneconomic residual
interest" (as defined below) to a Residual Certificateholder (other than a
Residual Certificateholder who is not a U.S. Person, as defined below under
"-- Taxation of Certain Foreign Investors" ) is disregarded for all federal
income tax purposes if a significant purpose of the transferor is to impede the
assessment or collection of tax. A residual interest in a REMIC (including a
residual interest with a positive value at issuance) is a "noneconomic residual
interest" unless, at the time of the transfer, (i) the present value of the
expected future distributions on the residual interest at least equals the
product of the present value of the anticipated excess inclusions and the
highest corporate income tax rate in effect for the year in which the transfer
occurs, and (ii) the transferor reasonably expects that the transferee will
receive distributions from the REMIC at or after the time at which taxes accrue
on the anticipated excess inclusions in an amount sufficient to satisfy the
accrued taxes. The anticipated excess inclusions and the present value rate are
determined in the same manner as set forth above under "Disqualified
Organizations." The REMIC Regulations explain that a significant purpose to
impede the assessment or
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collection of tax exists if the transferor, at the time of the transfer, either
knew or should have known that the transferee would be unwilling or unable to
pay taxes due on its share of the taxable income of the REMIC. A safe harbor is
provided if (i) the transferor conducted, at the time of the transfer, a
reasonable investigation of the financial condition of the transferee and found
that the transferee historically had paid its debts as they came due and found
no significant evidence to indicate that the transferee would not continue to
pay its debts as they came due in the future, and (ii) the transferee
represents to the transferor that it understands that, as the holder of the
noneconomic residual interest, the transferee may incur tax liabilities in
excess of cash flows generated by the interest and that the transferee intends
to pay taxes associated with holding the residual interest as they become due.
The Agreement with respect to each series of certificates will require the
transferee of a Residual Certificate to certify to the matters in the preceding
sentence as part of the affidavit described above under "-- Disqualified
Organizations". The transferor must have no actual knowledge or reason to know
that such statements are false.
Foreign Investors. The REMIC Regulations provide that the transfer of a
Residual Certificate that has "tax avoidance potential" to a "foreign person"
will be disregarded for all federal tax purposes. This rule appears intended to
apply to a transferee who is not a "U.S. Person" (as defined below), unless
such transferee's income is effectively connected with the conduct of a trade
or business within the United States. A Residual Certificate is deemed to have
tax avoidance potential unless, at the time of the transfer, (i) the future
value of expected distributions equals at least 30% of the anticipated excess
inclusions after the transfer, and (ii) the transferor reasonably expects that
the transferee will receive sufficient distributions from the REMIC Pool at or
after the time at which the excess inclusions accrue and prior to the end of
the next succeeding taxable year for the accumulated withholding tax liability
to be paid. If the non-U.S. Person transfers the Residual Certificate back to a
U.S. Person, the transfer will be disregarded and the foreign transferor will
continue to be treated as the owner unless arrangements are made so that the
transfer does not have the effect of allowing the transferor to avoid tax on
accrued excess inclusions.
The prospectus supplement relating to a series of certificates may provide
that a Residual Certificate may not be purchased by or transferred to any
person that is not a U.S. Person or may describe the circumstances and
restrictions pursuant to which such a transfer may be made. The term "U.S.
Person" means a citizen or resident of the United States, a corporation,
partnership (except to the extent provided in applicable Treasury regulations)
or other entity created or organized in or under the laws of the United States
or any political subdivision thereof, an estate that is subject to U.S. federal
income tax regardless of the source of its income, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of such trust, and one or more such U.S. Persons have the
authority to control all substantial decisions of such trust (or, to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996 which are eligible to elect to be treated as U.S. Persons).
Sale or Exchange of a Residual Certificate
Upon the sale or exchange of a Residual Certificate, the Residual
Certificateholder will recognize gain or loss equal to the excess, if any,
of the amount realized over the adjusted basis (as described above under
"-- Taxation of Residual Certificates -- Basis and Losses") of such Residual
Certificateholder in such Residual Certificate at the time of the sale or
exchange. In addition to reporting the taxable income of the REMIC Pool, a
Residual Certificateholder will have taxable income to the extent that any cash
distribution to it from the REMIC Pool exceeds such adjusted basis on that
Distribution Date. Such income will be treated as gain from the sale or
exchange of the Residual Certificate. It is possible that the termination of
the REMIC Pool may be treated as a sale or exchange of a Residual
Certificateholder's Residual Certificate, in which case, if the Residual
Certificateholder has an adjusted basis in such Residual Certificateholder's
Residual Certificate remaining when its interest in the REMIC Pool terminates,
and if such Residual Certificateholder holds such Residual Certificate as a
capital asset under Code Section 1221, then such Residual Certificateholder
will recognize a capital loss at that time in the amount of such remaining
adjusted basis.
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Any gain on the sale of a Residual Certificate will be treated as ordinary
income (i) if a Residual Certificate is held as part of a "conversion
transaction" as defined in Code Section 1258(c), up to the amount of interest
that would have accrued on the Residual Certificateholder's net investment in
the conversion transaction at 120% of the appropriate applicable Federal rate
in effect at the time the taxpayer entered into the transaction minus any
amount previously treated as ordinary income with respect to any prior
disposition of property that was held as a part of such transaction or (ii) in
the case of a non-corporate taxpayer, to the extent such taxpayer has made an
election under Code Section 163(d)(4) to have net capital gains taxed as
investment income at ordinary income rates. In addition, gain or loss
recognized from the sale of a Residual Certificate by certain banks or thrift
institutions will be treated as ordinary income or loss pursuant to Code
Section 582(c).
The Conference Committee Report to the 1986 Act provides that, except as
provided in Treasury regulations yet to be issued, the wash sale rules of Code
Section 1091 will apply to dispositions of Residual Certificates where the
seller of the Residual Certificate, during the period beginning six months
before the sale or disposition of the Residual Certificate and ending six
months after such sale or disposition, acquires (or enters into any other
transaction that results in the application of Section 1091) any residual
interest in any REMIC or any interest in a "taxable mortgage pool" (such as a
non-REMIC owner trust) that is economically comparable to a Residual
Certificate.
Mark-to-Market Regulations
Prospective purchasers of the Residual Certificates should also be aware
that on January 3, 1995, the Service issued final regulations (the
"Mark-to-Market Regulations") under Code Section 475 relating to the
requirement that a securities dealer mark to market securities held for sale to
customers. This mark-to-market requirement applies to all securities of a
dealer, except to the extent that the dealer has specifically identified a
security as held for investment. The Mark-to-Market Regulations provide that,
for purposes of this mark-to-market requirement, a Residual Certificate is not
treated as a security and thus may not be marked to market. The Mark to Market
Regulations apply to all Residual Certificates acquired on or after January 4,
1995.
TAXES THAT MAY BE IMPOSED ON THE REMIC POOL
Prohibited Transactions
Income from certain transactions by the REMIC Pool, called prohibited
transactions, will not be part of the calculation of income or loss includible
in the federal income tax returns of Residual Certificateholders, but rather
will be taxed directly to the REMIC Pool at a 100% rate. Prohibited
transactions generally include (i) the disposition of a qualified mortgage
other than for (a) substitution within two years of the Startup Day for a
defective (including a defaulted) obligation (or repurchase in lieu of
substitution of a defective (including a defaulted) obligation at any time) or
for any qualified mortgage within three months of the Startup Day, (b)
foreclosure, default or imminent default of a qualified mortgage, (c)
bankruptcy or insolvency of the REMIC Pool or (d) a qualified (complete)
liquidation, (ii) the receipt of income from assets that are not the type of
mortgages or investments that the REMIC Pool is permitted to hold, (iii) the
receipt of compensation for services or (iv) the receipt of gain from
disposition of cash flow investments other than pursuant to a qualified
liquidation. Notwithstanding clauses (i) and (iv) above, it is not a prohibited
transaction to sell REMIC Pool property to prevent a default on Regular
Certificates as a result of a default on qualified mortgages or to facilitate a
clean-up call (generally, an optional termination to save administrative costs
when no more than a small percentage of the certificates is outstanding). The
REMIC Regulations indicate that the modification of a mortgage loan generally
will not be treated as a disposition if it is occasioned by a default or
reasonably foreseeable default, an assumption of the mortgage loan, the waiver
of a due-on-sale or due-on-encumbrance clause or the conversion of an interest
rate by a mortgagor pursuant to the terms of a convertible adjustable rate
mortgage loan.
Contributions to the REMIC Pool After the Startup Day
In general, the REMIC Pool will be subject to a tax at a 100% rate on the
value of any property contributed to the REMIC Pool after the Startup Day.
Exceptions are provided for cash contributions to
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the REMIC Pool (i) during the three months following the Startup Day, (ii) made
to a qualified reserve fund by a Residual Certificateholder, (iii) in the
nature of a guarantee, (iv) made to facilitate a qualified liquidation or
clean-up call and (v) as otherwise permitted in Treasury regulations yet to be
issued.
Net Income from Foreclosure Property
The REMIC Pool will be subject to federal income tax at the highest
corporate rate on "net income from foreclosure property," determined by
reference to the rules applicable to real estate investment trusts. Generally,
property acquired by deed in lieu of foreclosure would be treated as
"foreclosure property" for a period not exceeding the close of the third
calendar year beginning after the year in which the REMIC Pool acquired such
property, with a possible extension. Net income from foreclosure property
generally means gain from the sale of a foreclosure property that is inventory
property and gross income from foreclosure property other than qualifying rents
and other qualifying income for a real estate investment trust.
It is not anticipated that the REMIC Pool will receive income or
contributions subject to tax under the preceding three paragraphs, except as
described in the applicable prospectus supplement with respect to net income
from foreclosure property on a commercial or multifamily residential property
that secured a mortgage loan. In addition, it is not anticipated that any
material state income or franchise tax will be imposed on a REMIC Pool.
LIQUIDATION OF THE REMIC POOL
If a REMIC Pool adopts a plan of complete liquidation, within the meaning
of Code Section 860F(a)(4)(A)(i), which may be accomplished by designating in
the REMIC Pool's final tax return a date on which such adoption is deemed to
occur, and sells all of its assets (other than cash) within a 90-day period
beginning on the date of the adoption of the plan of liquidation, the REMIC
Pool will not be subject to the prohibited transaction rules on the sale of its
assets, provided that the REMIC Pool credits or distributes in liquidation all
of the sale proceeds plus its cash (other than amounts retained to meet claims)
to holders of Regular Certificates and Residual Certificateholders within the
90-day period.
ADMINISTRATIVE MATTERS
The REMIC Pool will be required to maintain its books on a calendar year
basis and to file federal income tax returns for federal income tax purposes in
a manner similar to a partnership. The form for such income tax return is Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return. The
Trustee will be required to sign the REMIC Pool's returns. Treasury regulations
provide that, except where there is a single Residual Certificateholder for an
entire taxable year, the REMIC Pool will be subject to the procedural and
administrative rules of the Code applicable to partnerships, including the
determination by the Service of any adjustments to, among other things, items
of REMIC income, gain, loss, deduction or credit in a unified administrative
proceeding. The Residual Certificateholder owning the largest percentage
interest in the Residual Certificates will be obligated to act as "tax matters
person", as defined in applicable Treasury regulations, with respect to the
REMIC Pool. Each Residual Certificateholder will be deemed, by acceptance of
such Residual Certificates, to have agreed (i) to the appointment of the tax
matters person as provided in the preceding sentence and (ii) to the
irrevocable designation of the Trustee as agent for performing the functions of
the tax matters person.
LIMITATIONS ON DEDUCTION OF CERTAIN EXPENSES
An investor who is an individual, estate or trust will be subject to
limitation with respect to certain itemized deductions described in Code
Section 67, to the extent that such itemized deductions, in the aggregate, do
not exceed 2% of the investor's adjusted gross income. In addition, Code
Section 68 provides that itemized deductions otherwise allowable for a taxable
year of an individual taxpayer will be reduced by the lesser of (i) 3% of the
excess, if any, of adjusted gross income over $100,000 ($50,000 in the case of
a married individual filing a separate return) (subject to annual adjustments
for post-1991 inflation) or (ii) 80% of the amount of itemized deductions
otherwise allowable for such year. In the case
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of a REMIC Pool, such deductions may include deductions under Code Section 212
for the Servicing Fee and all administrative and other expenses relating to the
REMIC Pool or any similar expenses allocated to the REMIC Pool with respect to
a regular interest it holds in another REMIC. Such investors who hold REMIC
Certificates either directly or indirectly through certain pass-through
entities may have their pro rata share of such expenses allocated to them as
additional gross income, but may be subject to such limitation on deductions.
In addition, such expenses are not deductible at all for purposes of computing
the alternative minimum tax, and may cause such investors to be subject to
significant additional tax liability. Temporary Treasury regulations provide
that the additional gross income and corresponding amount of expenses generally
are to be allocated entirely to the holders of Residual Certificates in the
case of a REMIC Pool that would not qualify as a fixed investment trust in the
absence of a REMIC election. However, such additional gross income and
limitation on deductions will apply to the allocable portion of such expenses
to holders of Regular Certificates, as well as holders of Residual
Certificates, where such Regular Certificates are issued in a manner that is
similar to pass-through certificates in a fixed investment trust. In general,
such allocable portion will be determined based on the ratio that a REMIC
Certificateholder's income, determined on a daily basis, bears to the income of
all holders of Regular Certificates and Residual Certificates with respect to a
REMIC Pool. As a result, individuals, estates or trusts holding REMIC
Certificates (either directly or indirectly through a grantor trust,
partnership, S corporation, REMIC, or certain other pass-through entities
described in the foregoing temporary Treasury regulations) may have taxable
income in excess of the interest income at the pass-through rate on Regular
Certificates that are issued in a single class or otherwise consistently with
fixed investment trust status or in excess of cash distributions for the
related period on Residual Certificates. All such expenses will be allocable to
the Residual Certificates or as otherwise indicated in the prospectus
supplement.
TAXATION OF CERTAIN FOREIGN INVESTORS
Regular Certificates
Interest, including original issue discount, distributable to Regular
Certificateholders who are non-resident aliens, foreign corporations, or other
Non-U.S Persons (as defined below), will be considered "portfolio interest"
and, therefore, generally will not be subject to 30% United States withholding
tax, provided that such Non-U.S. Person (i) is not a "10-percent shareholder"
(within the meaning of Code Section 871(h)(3)(B)) of, or a controlled foreign
corporation (described in Code Section 881(c)(3)(C)) related to, the REMIC (or
possibly one or more mortgagors) and (ii) provides the Trustee, or the person
who would otherwise be required to withhold tax from such distributions under
Code Section 1441 or 1442, with an appropriate statement, signed under
penalties of perjury, identifying the beneficial owner and stating, among other
things, that the beneficial owner of the Regular Certificate is a Non-U.S.
Person. If such statement, or any other required statement, is not provided,
30% withholding will apply unless reduced or eliminated pursuant to an
applicable tax treaty or unless the interest on the Regular Certificate is
effectively connected with the conduct of a trade or business within the United
States by such Non-U.S. Person. In the latter case, such Non-U.S. Person will
be subject to United States federal income tax at regular rates. Prepayment
Premiums distributable to Regular Certificateholders who are Non-U.S. Persons
may be subject to 30% United States withholding tax. Investors who are Non-U.S.
Persons should consult their own tax advisors regarding the specific tax
consequences to them of owning a Regular Certificate. The term "Non-U.S.
Person" means any person who is not a U.S. Person.
The IRS recently issued final regulations (the "New Regulations") which
would provide alternative methods of satisfying the beneficial ownership
certification requirement described above. The New Regulations are effective
January 1, 2000, although valid withholding certificates that are held on
December 31, 1999, remain valid until the earlier of December 31, 2000 or the
due date of expiration of the certificate under the rules as currently in
effect. The New Regulations would require, in the case of Regular Certificates
held by a foreign partnership, that (x) the certification described above be
provided by the partners rather than by the foreign partnership and (y) the
partnership provide certain information, including a United States taxpayer
identification number. A look-through rule would apply in the case of
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tiered partnerships. Non-U.S. Persons should consult their own tax advisors
concerning the application of the certification requirements in the New
Regulations.
Residual Certificates
The Conference Committee Report to the 1986 Act indicates that amounts
paid to Residual Certificateholders who are Non-U.S. Persons are treated as
interest for purposes of the 30% (or lower treaty rate) United States
withholding tax. Treasury regulations provide that amounts distributed to
Residual Certificateholders may qualify as "portfolio interest", subject to the
conditions described in "Regular Certificates" above, but only to the extent
that (i) the mortgage loans were issued after July 18, 1984 and (ii) the Trust
Fund or segregated pool of assets therein (as to which a separate REMIC
election will be made), to which the Residual Certificate relates, consists of
obligations issued in "registered form" within the meaning of Code Section
163(f)(1). Generally, whole mortgage loans will not be considered obligations
issued in registered form. Furthermore, a Residual Certificateholder will not
be entitled to any exemption from the 30% withholding tax (or lower treaty
rate) to the extent of that portion of REMIC taxable income that constitutes an
"excess inclusion". See "-- Taxation of Residual Certificates -- Limitations on
Offset or Exemption of REMIC Income." If the amounts paid to Residual
Certificateholders who are Non-U.S. Persons are effectively connected with the
conduct of a trade or business within the United States by such Non-U.S.
Persons, 30% (or lower treaty rate) withholding will not apply. Instead, the
amounts paid to such Non-U.S. Persons will be subject to United States federal
income tax at regular rates. If 30% (or lower treaty rate) withholding is
applicable, such amounts generally will be taken into account for purposes of
withholding only when paid or otherwise distributed (or when the Residual
Certificate is disposed of) under rules similar to withholding upon disposition
of debt instruments that have original issue discount. See "-- Tax-Related
Restrictions on Transfer of Residual Certificates -- Foreign Investors" above
concerning the disregard of certain transfers having "tax avoidance potential."
Investors who are Non-U.S. Persons should consult their own tax advisors
regarding the specific tax consequences to them of owning Residual
Certificates.
BACKUP WITHHOLDING
Distributions made on the Regular Certificates, and proceeds from the sale
of the Regular Certificates to or through certain brokers, may be subject to a
"backup" withholding tax under Code Section 3406 of 31% on "reportable
payments" (including interest distributions, original issue discount, and,
under certain circumstances, principal distributions) unless the Regular
Certificateholder complies with certain reporting and/or certification
procedures, including the provision of its taxpayer identification number to
the Trustee, its agent or the broker who effected the sale of the Regular
Certificate, or such Certificateholder is otherwise an exempt recipient under
applicable provisions of the Code. Any amounts to be withheld from distribution
on the Regular Certificates would be refunded by the Service or allowed as a
credit against the Regular Certificateholder's federal income tax liability.
The New Regulations change certain of the rules relating to certain
presumptions currently available relating to information reporting and backup
withholding. Non-U.S. Persons are urged to contact their own tax advisors
regarding the application to them of backup withholding and information
reporting.
REPORTING REQUIREMENTS
Reports of accrued interest, original issue discount and information
necessary to compute the accrual of any market discount on the Regular
Certificates will be made annually to the Service and to individuals, estates,
non-exempt and non-charitable trusts, and partnerships who are either holders
of record of Regular Certificates or beneficial owners who own Regular
Certificates through a broker or middleman as nominee. All brokers, nominees
and all other non-exempt holders of record of Regular Certificates (including
corporations, non-calendar year taxpayers, securities or commodities dealers,
real estate investment trusts, investment companies, common trust funds, thrift
institutions and charitable trusts) may request such information for any
calendar quarter by telephone or in writing by contacting the person designated
in Service Publication 938 with respect to a particular series of Regular
Certificates. Holders through nominees must request such information from the
nominee.
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The Service's Form 1066 has an accompanying Schedule Q, Quarterly Notice
to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation.
Treasury regulations require that Schedule Q be furnished by the REMIC Pool to
each Residual Certificateholder by the end of the month following the close of
each calendar quarter (41 days after the end of a quarter under proposed
Treasury regulations) in which the REMIC Pool is in existence.
Treasury regulations require that, in addition to the foregoing
requirements, information must be furnished quarterly to Residual
Certificateholders, furnished annually, if applicable, to holders of Regular
Certificates, and filed annually with the Service concerning Code Section 67
expenses (see "-- Limitations on Deduction of Certain Expenses" above)
allocable to such holders. Furthermore, under such regulations, information
must be furnished quarterly to Residual Certificateholders, furnished annually
to holders of Regular Certificates, and filed annually with the Service
concerning the percentage of the REMIC Pool's assets meeting the qualified
asset tests described above under "-- Status of REMIC Certificates."
FEDERAL INCOME TAX CONSEQUENCES FOR CERTIFICATES
AS TO WHICH NO REMIC ELECTION IS MADE
STANDARD CERTIFICATES
General
In the event that no election is made to treat a Trust Fund (or a
segregated pool of assets therein) with respect to a series of Certificates
that are not designated as "Stripped Certificates", as described below, as a
REMIC (Certificates of such a series hereinafter referred to as "Standard
Certificates"), in the opinion of Cadwalader, Wickersham & Taft, the Trust Fund
will be classified as a grantor trust under subpart E, Part 1 of subchapter J
of the Code and not as an association taxable as a corporation or a "taxable
mortgage pool" within the meaning of Code Section 7701(i). This opinion will be
filed as an Exhibit to the Form 8-K filed with the Commission relating to such
series of certificates. Where there is no retention of a portion of the
interest payments with respect to the mortgage loans underlying the Standard
Certificates, the holder of each such Standard Certificate (a "Standard
Certificateholder") in such series will be treated as the owner of a pro rata
undivided interest in the ordinary income and corpus portions of the Trust Fund
represented by its Standard Certificate and will be considered the beneficial
owner of a pro rata undivided interest in each of the mortgage loans, subject
to the discussion below under "-- Recharacterization of Servicing Fees."
Accordingly, the holder of a Standard Certificate of a particular series will
be required to report on its federal income tax return its pro rata share of
the entire income from the mortgage loans represented by its Standard
Certificate, including interest at the coupon rate on such mortgage loans,
original issue discount (if any), Prepayment Premiums, assumption fees, and
late payment charges received by the Master Servicer, in accordance with such
Standard Certificateholder's method of accounting. A Standard Certificateholder
generally will be able to deduct its share of the Servicing Fee and all
administrative and other expenses of the Trust Fund in accordance with its
method of accounting, provided that such amounts are reasonable compensation
for services rendered to that Trust Fund. However, investors who are
individuals, estates or trusts who own Standard Certificates, either directly
or indirectly through certain pass-through entities, will be subject to
limitation with respect to certain itemized deductions described in Code
Section 67, including deductions under Code Section 212 for the Servicing Fee
and all such administrative and other expenses of the Trust Fund, to the extent
that such deductions, in the aggregate, do not exceed two percent of an
investor's adjusted gross income. In addition, Code Section 68 provides that
itemized deductions otherwise allowable for a taxable year of an individual
taxpayer will be reduced by the lesser of (i) 3% of the excess, if any, of
adjusted gross income over $100,000 ($50,000 in the case of a married
individual filing a separate return) (subject to adjustments for inflation), or
(ii) 80% of the amount of itemized deductions otherwise allowable for such
year. As a result, such investors holding Standard Certificates, directly or
indirectly through a pass-through entity, may have aggregate taxable income in
excess of the aggregate amount of cash received on such Standard Certificates
with respect to interest at the pass-through rate on such Standard
Certificates. In addition, such expenses are not deductible at all for purposes
of
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computing the alternative minimum tax, and may cause such investors to be
subject to significant additional tax liability. Moreover, where there is fixed
retained yield with respect to the mortgage loans underlying a series of
Standard Certificates or where the Servicing Fee is in excess of reasonable
servicing compensation, the transaction will be subject to the application of
the "stripped bond" and "stripped coupon" rules of the Code, as described below
under "-- Stripped Certificates" and "-- Recharacterization of Servicing Fees,"
respectively.
Tax Status
In the opinion of Cadwalader, Wickersham & Taft, Standard Certificates
will have the following status for federal income tax purposes:
1. A Standard Certificate owned by a "domestic building and loan
association" within the meaning of Code Section 7701(a)(19) will be
considered to represent "loans secured by an interest in real property"
within the meaning of Code Section 7701(a)(19)(C)(v), provided that the
real property securing the mortgage loans represented by that Standard
Certificate is of the type described in such section of the Code.
2. A Standard Certificate owned by a real estate investment trust will
be considered to represent "real estate assets" within the meaning of Code
Section 856(c)(4)(A) to the extent that the assets of the related Trust
Fund consist of qualified assets, and interest income on such assets will
be considered "interest on obligations secured by mortgages on real
property" to such extent within the meaning of Code Section 856(c)(3)(B).
3. A Standard Certificate owned by a REMIC will be considered to
represent an "obligation . . . which is principally secured by an interest
in real property" within the meaning of Code Section 860G(a)(3)(A) to the
extent that the assets of the related Trust Fund consist of "qualified
mortgages" within the meaning of Code Section 860G(a)(3).
4. A certificate owned by a "financial asset securitization investment
trust" within the meaning of Code Section 860L(c) will be considered to
represent "permitted assets" within the meaning of Code Section 860L(c) to
the extent that the assets of the trust estate consist of "debt
instruments" or other permitted assets within the meaning of Code Section
860L(c).
Premium and Discount
Standard Certificateholders are advised to consult with their tax advisors
as to the federal income tax treatment of premium and discount arising either
upon initial acquisition of Standard Certificates or thereafter.
Premium. The treatment of premium incurred upon the purchase of a Standard
Certificate will be determined generally as described above under "-- Federal
Income Tax Consequences for REMIC Certificates -- Taxation of Residual
Certificates -- Premium."
Original Issue Discount. The original issue discount rules will be
applicable to a Standard Certificateholder's interest in those mortgage loans
as to which the conditions for the application of those sections are met. Rules
regarding periodic inclusion of original issue discount income are applicable
to mortgages of corporations originated after May 27, 1969, mortgages of
noncorporate mortgagors (other than individuals) originated after July 1, 1982,
and mortgages of individuals originated after March 2, 1984. Under the OID
Regulations, such original issue discount could arise by the charging of points
by the originator of the mortgages in an amount greater than a statutory de
minimis exception, including a payment of points currently deductible by the
borrower under applicable Code provisions or, under certain circumstances, by
the presence of "teaser rates" on the mortgage loans.
Original issue discount must generally be reported as ordinary gross
income as it accrues under a constant interest method that takes into account
the compounding of interest, in advance of the cash attributable to such
income. It is anticipated that no prepayment assumption will be assumed for
purposes of such accrual. However, Code Section 1272 provides for a reduction
in the amount of original
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issue discount includible in the income of a holder of an obligation that
acquires the obligation after its initial issuance at a price greater than the
sum of the original issue price and the previously accrued original issue
discount, less prior payments of principal. Accordingly, if such mortgage loans
acquired by a Standard Certificateholder are purchased at a price equal to the
then unpaid principal amount of such mortgage loans, no original issue discount
attributable to the difference between the issue price and the original
principal amount of such mortgage loans (i.e., points) will be includible by
such holder.
Market Discount. Standard Certificateholders also will be subject to the
market discount rules to the extent that the conditions for application of
those sections are met. Market discount on the mortgage loans will be
determined and will be reported as ordinary income generally in the manner
described above under "-- Federal Income Tax Consequences for REMIC
Certificates -- Taxation of Regular Certificates -- Market Discount," except
that the ratable accrual methods described therein will not apply. Rather, the
holder will accrue market discount pro rata over the life of the mortgage
loans, unless the constant yield method is elected. It is anticipated that no
prepayment assumption will be assumed for purposes of such accrual.
Recharacterization of Servicing Fees
If the Servicing Fee paid to the Master Servicer were deemed to exceed
reasonable servicing compensation, the amount of such excess would represent
neither income nor a deduction to Certificateholders. In this regard, there are
no authoritative guidelines for federal income tax purposes as to either the
maximum amount of servicing compensation that may be considered reasonable in
the context of this or similar transactions or whether, in the case of the
Standard Certificate, the reasonableness of servicing compensation should be
determined on a weighted average or loan-by-loan basis. If a loan-by-loan basis
is appropriate, the likelihood that such amount would exceed reasonable
servicing compensation as to some of the mortgage loans would be increased.
Service guidance indicates that a servicing fee in excess of reasonable
compensation ("excess servicing") will cause the mortgage loans to be treated
under the "stripped bond" rules. Such guidance provides safe harbors for
servicing deemed to be reasonable and requires taxpayers to demonstrate that
the value of servicing fees in excess of such amounts is not greater than the
value of the services provided.
Accordingly, if the Service's approach is upheld, a servicer who receives
a servicing fee in excess of such amounts would be viewed as retaining an
ownership interest in a portion of the interest payments on the mortgage loans.
Under the rules of Code Section 1286, the separation of ownership of the right
to receive some or all of the interest payments on an obligation from the right
to receive some or all of the principal payments on the obligation would result
in treatment of such mortgage loans as "stripped coupons" and "stripped bonds".
Subject to the de minimis rule discussed below under "-- Stripped
Certificates," each stripped bond or stripped coupon could be considered for
this purpose as a non-interest bearing obligation issued on the date of issue
of the Standard Certificates, and the original issue discount rules of the Code
would apply to the holder thereof. While Standard Certificateholders would
still be treated as owners of beneficial interests in a grantor trust for
federal income tax purposes, the corpus of such trust could be viewed as
excluding the portion of the mortgage loans the ownership of which is
attributed to the Master Servicer, or as including such portion as a second
class of equitable interest. Applicable Treasury regulations treat such an
arrangement as a fixed investment trust, since the multiple classes of trust
interests should be treated as merely facilitating direct investments in the
trust assets and the existence of multiple classes of ownership interests is
incidental to that purpose. In general, such a recharacterization should not
have any significant effect upon the timing or amount of income reported by a
Standard Certificateholder, except that the income reported by a cash method
holder may be slightly accelerated. See "-- Stripped Certificates" below for a
further description of the federal income tax treatment of stripped bonds and
stripped coupons.
Sale or Exchange of Standard Certificates
Upon sale or exchange of a Standard Certificate, a Standard
Certificateholder will recognize gain or loss equal to the difference between
the amount realized on the sale and its aggregate adjusted basis in the
mortgage loans and the other assets represented by the Standard Certificate. In
general, the
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aggregate adjusted basis will equal the Standard Certificateholder's cost for
the Standard Certificate, increased by the amount of any income previously
reported with respect to the Standard Certificate and decreased by the amount
of any losses previously reported with respect to the Standard Certificate and
the amount of any distributions received thereon. Except as provided above with
respect to market discount on any mortgage loans, and except for certain
financial institutions subject to the provisions of Code Section 582(c), any
such gain or loss would be capital gain or loss if the Standard Certificate was
held as a capital asset. However, gain on the sale of a Standard Certificate
will be treated as ordinary income (i) if a Standard Certificate is held as
part of a "conversion transaction" as defined in Code Section 1258(c), up to
the amount of interest that would have accrued on the Standard
Certificateholder's net investment in the conversion transaction at 120% of the
appropriate applicable Federal rate in effect at the time the taxpayer entered
into the transaction minus any amount previously treated as ordinary income
with respect to any prior disposition of property that was held as a part of
such transaction or (ii) in the case of a non-corporate taxpayer, to the extent
such taxpayer has made an election under Code Section 163(d)(4) to have net
capital gains taxed as investment income at ordinary income rates. Long-term
capital gains of certain non-corporate taxpayers generally are subject to a
lower maximum tax rate (20%) than ordinary income or short-term capital gains
of such taxpayers (39.6%) for property held for more than one year. The maximum
tax rate for corporations is the same with respect to both ordinary income and
capital gains.
STRIPPED CERTIFICATES
General
Pursuant to Code Section 1286, the separation of ownership of the right to
receive some or all of the principal payments on an obligation from ownership
of the right to receive some or all of the interest payments results in the
creation of "stripped bonds" with respect to principal payments and "stripped
coupons" with respect to interest payments. For purposes of this discussion,
certificates that are subject to those rules will be referred to as "Stripped
Certificates".
The certificates will be subject to those rules if (i) the Seller or any
of its affiliates retains (for its own account or for purposes of resale), in
the form of fixed retained yield or otherwise, an ownership interest in a
portion of the payments on the mortgage loans, (ii) the Master Servicer is
treated as having an ownership interest in the mortgage loans to the extent it
is paid (or retains) servicing compensation in an amount greater than
reasonable consideration for servicing the mortgage loans (see "-- Standard
Certificates -- Recharacterization of Servicing Fees" above) and (iii)
certificates are issued in two or more classes or subclasses representing the
right to non-pro-rata percentages of the interest and principal payments on the
mortgage loans.
In general, a holder of a Stripped Certificate will be considered to own
"stripped bonds" with respect to its pro rata share of all or a portion of the
principal payments on each mortgage loan and/or "stripped coupons" with respect
to its pro rata share of all or a portion of the interest payments on each
mortgage loan, including the Stripped Certificate's allocable share of the
servicing fees paid to the Master Servicer, to the extent that such fees
represent reasonable compensation for services rendered. See discussion above
under "--Standard Certificates -- Recharacterization of Servicing Fees" above.
Although not free from doubt, for purposes of reporting to Stripped
Certificateholders, the servicing fees will be allocated to the Stripped
Certificates in proportion to the respective entitlements to distributions of
each class (or subclass) of Stripped Certificates for the related period or
periods. The holder of a Stripped Certificate generally will be entitled to a
deduction each year in respect of the servicing fees, as described above under
"-- Standard Certificates -- General," subject to the limitation described
therein.
Code Section 1286 treats a stripped bond or a stripped coupon as an
obligation issued at an original issue discount on the date that such stripped
interest is purchased. Although the treatment of Stripped Certificates for
federal income tax purposes is not clear in certain respects at this time,
particularly where such Stripped Certificates are issued with respect to a
mortgage pool containing variable-rate mortgage loans, in the opinion of
Cadwalader, Wickersham & Taft (i) the Trust Fund will be treated as a grantor
trust under subpart E, Part 1 of subchapter J of the Code and not as an
association taxable as a corporation
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or a "taxable mortgage pool" within the meaning of Code Section 7701(i), and
(ii) each Stripped Certificate should be treated as a single installment
obligation for purposes of calculating original issue discount and gain or loss
on disposition. This treatment is based on the interrelationship of Code
Section 1286, Code Sections 1272 through 1275, and the OID Regulations. While
under Code Section 1286 computations with respect to Stripped Certificates
arguably should be made in one of the ways described below under "-- Taxation
of Stripped Certificates -- Possible Alternative Characterizations," the OID
Regulations state, in general, that two or more debt instruments issued by a
single issuer to a single investor in a single transaction should be treated as
a single debt instrument for original issue discount purposes. The Agreement
requires that the Trustee make and report all computations described below
using this aggregate approach, unless substantial legal authority requires
otherwise.
Furthermore, Treasury regulations issued December 28, 1992 provide for the
treatment of a Stripped Certificate as a single debt instrument issued on the
date it is purchased for purposes of calculating any original issue discount.
In addition, under these regulations, a Stripped Certificate that represents a
right to payments of both interest and principal may be viewed either as issued
with original issue discount or market discount (as described below), at a de
minimis original issue discount, or, presumably, at a premium. This treatment
suggests that the interest component of such a Stripped Certificate would be
treated as qualified stated interest under the OID Regulations. Further, these
final regulations provide that the purchaser of such a Stripped Certificate
will be required to account for any discount as market discount rather than
original issue discount if either (i) the initial discount with respect to the
Stripped Certificate was treated as zero under the de minimis rule, or (ii) no
more than 100 basis points in excess of reasonable servicing is stripped off
the related mortgage loans. Any such market discount would be reportable as
described under "-- Federal Income Tax Consequences for REMIC Certificates --
Taxation of Regular Certificates -- Market Discount," without regard to the de
minimis rule therein, assuming that a prepayment assumption is employed in such
computation.
Status of Stripped Certificates
No specific legal authority exists as to whether the character of the
Stripped Certificates, for federal income tax purposes, will be the same as
that of the mortgage loans. Although the issue is not free from doubt, in the
opinion of Cadwalader, Wickersham & Taft, Stripped Certificates owned by
applicable holders should be considered to represent "real estate assets"
within the meaning of Code Section 856(c)(4)(A), "obligation[s] principally
secured by an interest in real property" within the meaning of Code Section
860G(a)(3)(A), and "loans secured by an interest in real property" within the
meaning of Code Section 7701(a)(19)(C)(v), and interest (including original
issue discount) income attributable to Stripped Certificates should be
considered to represent "interest on obligations secured by mortgages on real
property" within the meaning of Code Section 856(c)(3)(B), provided that in
each case the mortgage loans and interest on such mortgage loans qualify for
such treatment. The application of such Code provisions to buy-down mortgage
loans is uncertain. See "-- Standard Certificates -- Tax Status" above.
Taxation of Stripped Certificates
Original Issue Discount. Except as described above under "-- General,"
each Stripped Certificate will be considered to have been issued at an original
issue discount for federal income tax purposes. Original issue discount with
respect to a Stripped Certificate must be included in ordinary income as it
accrues, in accordance with a constant interest method that takes into account
the compounding of interest, which may be prior to the receipt of the cash
attributable to such income. Based in part on the OID Regulations and the
amendments to the original issue discount sections of the Code made by the 1986
Act, the amount of original issue discount required to be included in the
income of a holder of a Stripped Certificate (referred to in this discussion as
a "Stripped Certificateholder") in any taxable year likely will be computed
generally as described above under "-- Federal Income Tax Consequences for
REMIC Certificates -- Taxation of Regular Certificates -- Original Issue
Discount" and " --Variable Rate Regular Certificates." However, with the
apparent exception of a Stripped Certificate issued with de minimis original
issue discount as described above under "-- General," the issue price of a
Stripped Certificate will be the purchase price paid by each holder thereof,
and the stated redemption price at
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maturity will include the aggregate amount of the payments to be made on the
Stripped Certificate to such Stripped Certificateholder, presumably under the
Prepayment Assumption.
If the mortgage loans prepay at a rate either faster or slower than that
under the Prepayment Assumption, a Stripped Certificateholder's recognition of
original issue discount will be either accelerated or decelerated and the
amount of such original issue discount will be either increased or decreased
depending on the relative interests in principal and interest on each mortgage
loan represented by such Stripped Certificateholder's Stripped Certificate.
While the matter is not free from doubt, the holder of a Stripped Certificate
should be entitled in the year that it becomes certain (assuming no further
prepayments) that the holder will not recover a portion of its adjusted basis
in such Stripped Certificate to recognize an ordinary loss equal to such
portion of unrecoverable basis.
As an alternative to the method described above, the fact that some or all
of the interest payments with respect to the Stripped Certificates will not be
made if the mortgage loans are prepaid could lead to the interpretation that
such interest payments are "contingent" within the meaning of the OID
Regulations. The OID Regulations, as they relate to the treatment of contingent
interest, are by their terms not applicable to prepayable securities such as
the Stripped Certificates. However, if final regulations dealing with
contingent interest with respect to the Stripped Certificates apply the same
principles as the OID Regulations, such regulations may lead to different
timing of income inclusion that would be the case under the OID Regulations.
Furthermore, application of such principles could lead to the characterization
of gain on the sale of contingent interest Stripped Certificates as ordinary
income. Investors should consult their tax advisors regarding the appropriate
tax treatment of Stripped Certificates.
Sale or Exchange of Stripped Certificates. Sale or exchange of a Stripped
Certificate prior to its maturity will result in gain or loss equal to the
difference, if any, between the amount received and the Stripped
Certificateholder's adjusted basis in such Stripped Certificate, as described
above under "-- Federal Income Tax Consequences for REMIC Certificates --
Taxation of Regular Certificates -- Sale or Exchange of Regular Certificates."
To the extent that a subsequent purchaser's purchase price is exceeded by the
remaining payments on the Stripped Certificates, such subsequent purchaser will
be required for federal income tax purposes to accrue and report such excess as
if it were original issue discount in the manner described above. It is not
clear for this purpose whether the assumed prepayment rate that is to be used
in the case of a Stripped Certificateholder other than an original Stripped
Certificateholder should be the Prepayment Assumption or a new rate based on
the circumstances at the date of subsequent purchase.
Purchase of More Than One Class of Stripped Certificates. Where an
investor purchases more than one class of Stripped Certificates, it is
currently unclear whether for federal income tax purposes such classes of
Stripped Certificates should be treated separately or aggregated for purposes
of the rules described above.
Possible Alternative Characterizations. The characterizations of the
Stripped Certificates discussed above are not the only possible interpretations
of the applicable Code provisions. For example, the Stripped Certificateholder
may be treated as the owner of (i) one installment obligation consisting of
such Stripped Certificate's pro rata share of the payments attributable to
principal on each mortgage loan and a second installment obligation consisting
of such Stripped Certificate's pro rata share of the payments attributable to
interest on each mortgage loan, (ii) as many stripped bonds or stripped coupons
as there are scheduled payments of principal and/or interest on each mortgage
loan or (iii) a separate installment obligation for each mortgage loan,
representing the Stripped Certificate's pro rata share of payments of principal
and/or interest to be made with respect thereto. Alternatively, the holder of
one or more classes of Stripped Certificates may be treated as the owner of a
pro rata fractional undivided interest in each mortgage loan to the extent that
such Stripped Certificate, or classes of Stripped Certificates in the
aggregate, represent the same pro rata portion of principal and interest on
each such mortgage loan, and a stripped bond or stripped coupon (as the case
may be), treated as an installment obligation or contingent payment obligation,
as to the remainder. Final regulations issued on December 28, 1992 regarding
original issue discount on stripped obligations make the foregoing
interpretations
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less likely to be applicable. The preamble to those regulations states that
they are premised on the assumption that an aggregation approach is appropriate
for determining whether original issue discount on a stripped bond or stripped
coupon is de minimis, and solicits comments on appropriate rules for
aggregating stripped bonds and stripped coupons under Code Section 1286.
Because of these possible varying characterizations of Stripped
Certificates and the resultant differing treatment of income recognition,
Stripped Certificateholders are urged to consult their own tax advisors
regarding the proper treatment of Stripped Certificates for federal income tax
purposes.
REPORTING REQUIREMENTS AND BACKUP WITHHOLDING
It is anticipated that, the Trustee will furnish, within a reasonable time
after the end of each calendar year, to each Standard Certificateholder or
Stripped Certificateholder at any time during such year, such information
(prepared on the basis described above) as the Trustee deems to be necessary or
desirable to enable such Certificateholders to prepare their federal income tax
returns. Such information will include the amount of original issue discount
accrued on certificates held by persons other than Certificateholders exempted
from the reporting requirements. The amounts required to be reported by the
Trustee may not be equal to the proper amount of original issue discount
required to be reported as taxable income by a Certificateholder, other than an
original Certificateholder that purchased at the issue price. In particular, in
the case of Stripped Certificates such reporting will be based upon a
representative initial offering price of each class of Stripped Certificates or
as otherwise provided in the prospectus supplement. It is anticipated that the
Trustee will also file such original issue discount information with the
Service. If a Certificateholder fails to supply an accurate taxpayer
identification number or if the Secretary of the Treasury determines that a
Certificateholder has not reported all interest and dividend income required to
be shown on his federal income tax return, 31% backup withholding may be
required in respect of any reportable payments, as described above under
"-- Federal Income Tax Consequences for REMIC Certificates -- Backup
Withholding" above.
TAXATION OF CERTAIN FOREIGN INVESTORS
To the extent that a certificate evidences ownership in mortgage loans
that are issued on or before July 18, 1984, interest or original issue discount
paid by the person required to withhold tax under Code Section 1441 or 1442 to
nonresident aliens, foreign corporations, or other Non-U.S. Persons generally
will be subject to 30% United States withholding tax, or such lower rate as may
be provided for interest by an applicable tax treaty. Accrued original issue
discount recognized by the Standard Certificateholder or Stripped
Certificateholder on original issue discount recognized by the Standard
Certificateholder or Stripped Certificateholders on the sale or exchange of
such a certificate also will be subject to federal income tax at the same rate.
Treasury regulations provide that interest or original issue discount paid
by the Trustee or other withholding agent to a Non-U.S. Person evidencing
ownership interest in mortgage loans issued after July 18, 1984 will be
"portfolio interest" and will be treated in the manner, and such persons will
be subject to the same certification requirements, described above under "--
Federal Income Tax Consequences for REMIC Certificates -- Taxation of Certain
Foreign Investors -- Regular Certificates."
STATE TAX CONSIDERATIONS
In addition to the Federal income tax consequences described in "FEDERAL
INCOME TAX CONSEQUENCES" in this prospectus, potential investors should
consider the state income tax consequences of the acquisition, ownership, and
disposition of the certificates. State income tax law may differ substantially
from the corresponding federal law, and this discussion does not purport to
describe any aspect of the income tax laws of any state. Therefore, potential
investors should consult their own tax advisors with respect to the various
state tax consequences of an investment in the certificates.
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ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
imposes certain requirements on employee benefit plans subject to ERISA
("ERISA Plans") and prohibits certain transactions between ERISA Plans and
persons who are parties in interest (as defined under ERISA) ("parties in
interest") with respect to such Plans. The Code prohibits a similar set of
transactions between certain plans ("Code Plans," and together with ERISA
Plans, "Plans") and persons who are disqualified persons (as defined in the
Code) with respect to Code Plans.
Investments by ERISA Plans and entities the assets of which are deemed to
include plan assets are subject to ERISA's general fiduciary requirements,
including the requirement of investment prudence and diversification and the
requirement that investments be made in accordance with the documents governing
the ERISA Plan. Before investing in a certificate, an ERISA Plan fiduciary
should consider, among other factors, whether to do so is appropriate in view
of the overall investment policy and liquidity needs of the ERISA Plan. Such
fiduciary should especially consider the sensitivity of the investments to the
rate of principal payments (including prepayments) on the mortgage loans, as
discussed in the prospectus supplement related to a series.
PROHIBITED TRANSACTIONS
Section 406 of ERISA and Section 4975 of the Code prohibit parties in
interest and disqualified persons with respect to ERISA Plans and Code Plans
from engaging in certain transactions involving such Plans and their assets
unless a statutory or administrative exemption applies to the transaction.
Section 4975 of the Code and Sections 502(i) and 502(l) of ERISA provide for
the imposition of certain excise taxes and civil penalties on certain persons
that engage or participate in such prohibited transactions. The Seller, the
Master Servicer, the Special Servicer, if any, the Trustee or certain
affiliates thereof might be considered or might become parties in interest or
disqualified persons with respect to an ERISA Plan or a Code Plan. If so, the
acquisition or holding of certificates by or on behalf of such Plan could be
considered to give rise to a "prohibited transaction" within the meaning of
ERISA and/or the Code unless an administrative exemption described below or
some other exemption is available.
Special caution should be exercised before the assets of a Plan are used
to purchase a certificate if, with respect to such assets, the Seller, the
Master Servicer, the Special Servicer, if any, the Trustee or an affiliate
thereof either: (a) has investment discretion with respect to the investment of
such assets of such Plan; or (b) has authority or responsibility to give, or
regularly gives investment advice with respect to such assets for a fee and
pursuant to an agreement or understanding that such advice will serve as a
primary basis for investment decisions with respect to such assets and that
such advice will be based on the particular investment needs of the Plan.
Further, if the assets included in a Trust Fund were deemed to constitute
"plan assets," it is possible that an ERISA Plan's investment in the
certificates might be deemed to constitute a delegation, under ERISA, of the
duty to manage plan assets by the fiduciary deciding to invest in the
certificates, and certain transactions involved in the operation of the Trust
Fund might be deemed to constitute prohibited transactions under ERISA and/or
the Code. Neither ERISA nor the Code defines the term "plan assets."
The U.S. Department of Labor (the "Department") has issued regulations
(the "Regulations") concerning whether or not a Plan's assets would be deemed
to include an interest in the underlying assets of an entity (such as the Trust
Fund) for purposes of the reporting and disclosure and general fiduciary
responsibility provisions of ERISA, as well as for the prohibited transaction
provisions of ERISA and the Code, if the Plan acquires an "equity interest"
(such as a certificate) in such an entity.
Certain exceptions are provided in the Regulations whereby an investing
Plan's assets would be deemed merely to include its interest in the
certificates instead of being deemed to include an interest in the assets of
the Trust Fund. However, it cannot be predicted in advance nor can there be a
continuing assurance whether such exceptions may be met, because of the factual
nature of certain of the rules set forth in the Regulations. For example, one
of the exceptions in the Regulations states that the underlying assets of an
entity will not be considered "plan assets" if less than 25% of the value of
all classes of equity interests are held by "benefit plan investors," which are
defined as ERISA Plans, Code Plans,
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employee benefit plans not subject to ERISA (for example, governmental plans)
and entities whose underlying assets include plan assets by reason of a Plan's
investment therein, but this exemption is tested immediately after each
acquisition of an equity interest in the entity whether upon initial issuance
or in the secondary market.
Pursuant to the Regulations, if the assets of the Trust Fund were deemed
to be plan assets by reason of a Plan's investment in any certificates, such
plan assets would include an undivided interest in the mortgage loans, the
mortgages underlying the mortgage loans and any other assets held in the Trust
Fund. Therefore, because the mortgage loans and other assets held in the Trust
Fund may be deemed to be the assets of each Plan that purchases certificates,
in the absence of an exemption, the purchase, sale or holding of certificates
of any series or class by a Plan might result in a prohibited transaction and
the imposition of civil penalties or excise taxes. The Department has issued
administrative exemptions from application of certain prohibited transaction
restrictions of ERISA and the Code to several underwriters of mortgage-backed
securities (each, an "Underwriter's Exemption"). Such an Underwriter's
Exemption can only apply to mortgage-backed securities which, among other
conditions, are sold in an offering with respect to which such underwriter
serves as the sole or a managing underwriter, or as a selling or placement
agent. If such an Underwriter's Exemption might be applicable to a series of
certificates, the related prospectus supplement will refer to such possibility.
UNRELATED BUSINESS TAXABLE INCOME -- RESIDUAL INTERESTS
The purchase of a certificate that is a Residual Certificate by any
person, including any employee benefit plan that is exempt from federal income
tax under Code Section 501(a), including most varieties of ERISA Plans, may
give rise to "unrelated business taxable income" as described in Code Sections
511-515 and 860E. Further, prior to the purchase of an interest in a Residual
Certificate, a prospective transferee may be required to provide an affidavit
to a transferor that it is not, nor is it purchasing an interest in a Residual
Certificate on behalf of, a "Disqualified Organization," which term as defined
above includes certain tax-exempt entities not subject to Code Section 511,
such as certain governmental plans, as discussed above under "FEDERAL INCOME
TAX CONSEQUENCES -- Federal Income Tax Consequences for REMIC Certificates --
Taxation of Residual Certificates."
DUE TO THE COMPLEXITY OF THESE RULES AND THE PENALTIES IMPOSED UPON
PERSONS INVOLVED IN PROHIBITED TRANSACTIONS, IT IS PARTICULARLY IMPORTANT THAT
INDIVIDUALS RESPONSIBLE FOR INVESTMENT DECISIONS WITH RESPECT TO ERISA PLANS
AND CODE PLANS CONSULT WITH THEIR COUNSEL REGARDING THE CONSEQUENCES UNDER
ERISA AND/OR THE CODE OF THEIR ACQUISITIONS AND OWNERSHIP OF CERTIFICATES.
THE SALE OF CERTIFICATES TO A PLAN IS IN NO RESPECT A REPRESENTATION BY
THE SELLER OR THE APPLICABLE UNDERWRITER THAT THIS INVESTMENT MEETS ALL
RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY PLANS GENERALLY OR
ANY PARTICULAR PLAN, OR THAT THIS INVESTMENT IS APPROPRIATE FOR PLANS GENERALLY
OR ANY PARTICULAR PLAN.
LEGAL INVESTMENT
THE SECONDARY MORTGAGE MARKET ENHANCEMENT ACT
The prospectus supplement for each series will identify those classes of
offered certificates, if any, which constitute "mortgage related securities"
for purposes of the Secondary Mortgage Market Enhancement Act of 1984, as
amended ("SMMEA"). The appropriate characterization of those offered
certificates not qualifying as "mortgage related securities" ("Non-SMMEA
Certificates") under various legal investment restrictions, and thus the
ability of investors subject to these restrictions to purchase such
certificates, may be subject to significant interpretive uncertainties.
Accordingly, investors whose investment authority is subject to legal
restrictions should consult their own legal advisors to determine whether and
to what extent the Non-SMMEA Certificates constitute legal investments for
them.
A class or classes of certificates of a series will constitute "mortgage
related securities" for so long as they (i) are rated in one of the two highest
rating categories by at least one nationally recognized statistical rating
organization and (ii) are part of a series evidencing interests in a Trust Fund
consisting
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of loans secured by first liens on real property and originated by certain
types of originators as specified in SMMEA. As "mortgage related securities,"
such classes will constitute legal investments for persons, trusts,
corporations, partnerships, associations, business trusts and business entities
(including, but not limited to, state-chartered depository institutions and
insurance companies, as well as trustees and state government employee
retirement systems) created pursuant to or existing under the laws of the
United States or of any state (including the District of Columbia and Puerto
Rico) whose authorized investments are subject to state regulation to the same
extent that, under applicable law, obligations issued by or guaranteed as to
principal and interest by the United States or any agency or instrumentality
thereof constitute legal investments for such entities.
Pursuant to SMMEA, a number of states enacted legislation, on or before
the October 3, 1991 cutoff for such enactments, limiting to varying extents the
ability of certain entities (in particular, insurance companies) to invest in
"mortgage related securities" secured by liens on residential, or mixed
residential and commercial properties, in most cases by requiring the affected
investors to rely solely upon existing state law, and not SMMEA. Pursuant to
Section 347 of the Riegle Community Development and Regulatory Improvement Act
of 1994, which amended the definition of "mortgage related security" to
include, in relevant part, certificates satisfying the rating, first lien and
qualified originator requirements for "mortgage related securities," but
evidencing interests in a Trust Fund consisting, in whole or in part, of first
liens on one or more parcels of real estate upon which are located one or more
commercial structures, states were authorized to enact legislation, on or
before September 23, 2001, specifically referring to Section 347 and
prohibiting or restricting the purchase, holding or investment by state-
regulated entities in such types of certificates. Section 347 also provides
that the enactment by a state of any such legislative restrictions shall not
affect the validity of any contractual commitment to purchase, hold or invest
in securities qualifying as "mortgage related securities" solely by reason of
Section 347 that was made, and shall not acquire the sale or disposition of any
securities acquired, prior to the enactment of such state legislation.
Accordingly, investors affected by any such state legislation, when and if
enacted, will be authorized to invest in certificates qualifying as "mortgage
related securities" only to the extent provided in such legislation.
SMMEA also amended the legal investment authority of federally-chartered
depository institutions as follows: federal savings and loan associations and
federal savings banks may invest in, sell or otherwise deal in "mortgage
related securities" without limitation as to the percentage of their assets
represented thereby, federal credit unions may invest in such securities, and
national banks may purchase such securities for their own account without
regard to the limitations generally applicable to investment securities set
forth in 12 U.S.C. Section 24 (Seventh), subject in each case to such
regulations as the applicable federal regulatory authority may prescribe. In
this connection, the Office of the Comptroller of the Currency (the "OCC") has
amended 12 C.F.R. Part 1 to authorize national banks to purchase and sell for
their own account, without limitation as to a percentage of the bank's capital
and surplus (but subject to compliance with certain general standards in 12
C.F.R. Section 1.5 concerning "safety and soundness" and retention of credit
information), certain "Type IV securities," defined in 12 C.F.R. Section
1.2(l) to include, among other things, certain "commercial mortgage-related
securities" and "residential mortgage-related securities." As so defined,
"commercial mortgage-related security" and "residential mortgage-related
security" mean, in relevant part, "mortgage related security" within the
meaning of SMMEA, provided that, in the case of a "commercial mortgage-related
security," it "represents ownership of a promissory note or certificate of
interest or participation that is directly secured by a first lien on one or
more parcels of real estate upon which one or more commercial structures are
located and that is fully secured by interests in a pool of loans to numerous
obligors." In the absence of any rule or administrative interpretation by the
OCC defining the term "numerous obligors," no representation is made as to
whether any class of certificates will qualify as "commercial mortgage-related
securities," and thus as "Type IV securities," for investment by national
banks. The National Credit Union Administration (the "NCUA") has adopted rules,
codified at 12 C.F.R. Part 703, which permit federal credit unions to invest in
"mortgage related securities" under certain limited circumstances, other than
stripped mortgage related securities, residual interests in mortgage related
securities, and commercial mortgage related securities, unless the credit union
has obtained written approval from the NCUA to participate in the "investment
pilot program" described in 12 C.F.R. Section 703.140.
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All depository institutions considering an investment in the certificates
should review the "Supervisory Policy Statement on Investment Securities and
End-User Derivatives Activities" (the "1998 Policy Statement") of the Federal
Financial Institutions Examination Council, which has been adopted by the Board
of Governors of the Federal Reserve System (the "Federal Reserve Board") , the
Federal Deposit Insurance Corporation (the "FDIC") , the OCC and the Office of
Thrift Supervision (the "OTS"), effective May 26, 1998, and by the NCUA,
effective October 1, 1998. The 1998 Policy Statement sets forth the general
guidelines which depository institutions must follow in managing risks
(including market, credit, liquidity, operational (transaction), and legal
risks) applicable to all securities (including mortgage pass-through
certificates and mortgage-derivative products) used for investment purposes.
Institutions whose investment activities are subject to regulation by
federal or state authorities should review rules, policies and guidelines
adopted from time to time by such authorities before purchasing any
certificates, as certain series, classes or subclasses may be deemed unsuitable
investments, or may otherwise be restricted, under such rules, policies or
guidelines (in certain instances irrespective of SMMEA).
The foregoing does not take into consideration the applicability of
statutes, rules, regulations, orders, guidelines or agreements generally
governing investments made by a particular investor, including, but not limited
to, "prudent investor" provisions, percentage-of-assets limits, provisions
which may restrict or prohibit investment in securities which are not
"interest-bearing" or "income-paying," and, with regard to any certificates
issued in book-entry form, provisions which may restrict or prohibit
investments in securities which are issued in book-entry form.
Except as to the status of certain classes of certificates identified in
the prospectus supplement for a series as "mortgage related securities" under
SMMEA, no representation is made as to the proper characterization of the
certificates for legal investment purposes, financial institution regulatory
purposes or other purposes, or as to the ability of particular investors to
purchase any certificates under applicable legal investment restrictions. The
uncertainties described above (and any unfavorable future determinations
concerning legal investment or financial institution regulatory characteristics
of the certificates) may adversely affect the liquidity of the certificates.
ACCORDINGLY, INVESTORS WHOSE INVESTMENT ACTIVITIES ARE SUBJECT TO LEGAL
INVESTMENT LAWS AND REGULATIONS, REGULATORY CAPITAL REQUIREMENTS OR REVIEW BY
REGULATORY AUTHORITIES SHOULD CONSULT WITH THEIR OWN LEGAL ADVISORS IN
DETERMINING WHETHER, AND TO WHAT EXTENT, THE CERTIFICATES CONSTITUTE LEGAL
INVESTMENTS FOR SUCH INVESTORS AND, IF APPLICABLE, WHETHER SMMEA HAS BEEN
OVERRIDDEN IN ANY JURISDICTION RELEVANT TO SUCH INVESTOR.
THE APPRAISAL REGULATIONS
Pursuant to Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FIRREA") , the Federal Reserve Board, the OCC, the
FDIC and the OTS have adopted regulations (the "Appraisal Regulations")
applicable to bank holding companies, their non-bank subsidiaries and
state-chartered banks that are members of the Federal Reserve System (12 C.F.R.
Section Section 225.61-225.67), national banks (12 C.F.R. Section Section
34.41-34.47), state-chartered banks that are not members of the Federal Reserve
System (12 C.F.R. Part 323), and savings associations (12 C.F.R. Part 564),
respectively. The Appraisal Regulations, which are substantially similar,
although not identical, for each agency, generally require the affected
institutions and entities to obtain appraisals performed by state-certified or
state-licensed appraisers (each, a "FIRREA Appraisal") in connection with a
wide range of real estate-related transactions, including the purchase of
interests in loans secured by real estate in the form of mortgage-backed
securities, unless an exemption applies. With respect to purchases of mortgage-
backed securities such as the certificates offered hereby, the Appraisal
Regulations provide for an exemption from the requirement of obtaining new
FIRREA Appraisals for the properties securing the underlying loans so long as
at the time of origination each such loan was the subject of either a FIRREA
Appraisal, or, if a FIRREA Appraisal was not required, met the appraisal
requirements of the appropriate regulator.
77
<PAGE>
No assurance can be given that each of the underlying mortgage loans in a
mortgage pool will have been the subject of a FIRREA Appraisal or, if a FIRREA
Appraisal was not required, an appraisal that conformed to the requirements of
the appropriate regulator at origination. To the extent available, information
will be provided in the prospectus supplement with respect to appraisals on the
mortgage loans underlying each series of certificates. However, such
information may not be available on every mortgage loan. Prospective investors
that may be subject to the Appraisal Regulations are advised to consult with
their legal advisors and/or the appropriate regulators with respect to the
effect of such regulations on their ability to invest in a particular series of
certificates.
PLAN OF DISTRIBUTION
The certificates offered hereby and by means of the related prospectus
supplements will be offered through one or more of the methods described below.
The prospectus supplement with respect to each such series of certificates will
describe the method of offering of such series of certificates, including the
initial public offering or purchase price of each class of certificates or the
method by which such price will be determined and the net proceeds to the
Seller of such sale.
The offered certificates will be offered through the following methods
from time to time and offerings may be made concurrently through more than one
of these methods or an offering of a particular series of certificates may be
made through a combination of two or more of these methods:
1. By negotiated firm commitment underwriting and public reoffering by
underwriters specified in the applicable prospectus supplement;
2. By placements by the Seller with investors through dealers; and
3. By direct placements by the Seller with investors.
As more fully described in the prospectus supplement, if underwriters are
used in a sale of any offered certificates, such certificates will be acquired
by the underwriters for their own account and may be resold from time to time
in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying prices to be determined at the time of sale
or at the time of commitment thereof. Firm commitment underwriting and public
reoffering by underwriters may be done through underwriting syndicates or
through one or more firms acting alone. The specific managing underwriter or
underwriters, if any, with respect to the offer and sale of the offered
certificates of a particular series will be set forth on the cover of the
related prospectus supplement and the members of the underwriting syndicate, if
any, will be named in such prospectus supplement. If so specified in the
related prospectus supplement, the offered certificates will be distributed in
a firm commitment underwriting, subject to the terms and conditions of the
underwriting agreement, by Goldman, Sachs & Co. acting as underwriter with
other underwriters, if any, named therein. The Seller is an affiliate of
Goldman, Sachs & Co. The prospectus supplement will describe any discounts and
commissions to be allowed or paid by the Seller to the underwriters, any other
items constituting underwriting compensation and any discounts and commissions
to be allowed or paid to the dealers. The obligations of the underwriters will
be subject to certain conditions precedent. The underwriters with respect to a
sale of any class of certificates will be obligated to purchase all such
certificates if any are purchased. The Seller and, if specified in the
prospectus supplement, a selling Certificateholder will agree to indemnify the
underwriters against certain civil liabilities, including liabilities under the
Securities Act or will contribute to payments required to be made in respect
thereof.
In the ordinary course of business, Goldman, Sachs & Co., or its
affiliates, and the Seller may engage in various securities and financing
transactions, including repurchase agreements to provide interim financing of
the Seller's mortgage loans pending the sale of such mortgage loans or
interests therein, including the certificates.
If specified in the prospectus supplement relating to a series of
certificates, a holder of one or more classes of offered certificates that is
required to deliver a prospectus in connection with the offer and sale thereof
may offer and sell, pursuant to this prospectus and a related prospectus
supplement, such classes directly, through one or more underwriters to be
designated at the time of the offering of such
78
<PAGE>
certificates or through dealers acting as agent and/or principal. The specific
managing underwriter or underwriters, if any, with respect to any such offer
and sale of certificates by unaffiliated parties will be set forth on the cover
of the prospectus supplement applicable to such certificates and the members of
the underwriting syndicate, if any, will be named in such prospectus
supplement, and the prospectus supplement will describe any discounts and
commissions to be allowed or paid by such unaffiliated parties to the
underwriters, any other items constituting underwriting compensation and any
discounts and commissions to be allowed or paid to any dealers participating in
such offering. Any offerings described in this paragraph may be restricted in
the manner specified in such prospectus supplement. Such transactions may be
effected at market prices prevailing at the time of sale, at negotiated prices
or at fixed prices. The underwriters and dealers participating in such selling
Certificateholder's offering of such certificates may receive compensation in
the form of underwriting discounts or commissions from such selling
Certificateholder, and such dealers may receive commissions from the investors
purchasing such certificates for whom they may act as agent (which discounts or
commissions will not exceed those customary in those types of transactions
involved). Any dealer that participates in the distribution of such
certificates may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any commissions and discounts received by such dealer and
any profit on the resale of such certificates by such dealer might be deemed to
be underwriting discounts and commissions under the Securities Act.
If the certificates of a series are offered other than through
underwriters, the related prospectus supplement will contain information
regarding the nature of such offering and any agreements to be entered into
between the Seller and dealers and/or the Seller and the purchasers of such
certificates. Purchasers of certificates, including dealers, may, depending on
the facts and circumstances of such purchases, be deemed to be "underwriters"
within the meaning of the Securities Act in connection with reoffers and sales
by them of certificates. Holders of certificates should consult with their
legal advisors in this regard prior to any such reoffer or sale.
The place and time of delivery for each series of certificates offered
hereby and by means of the related prospectus supplement will be set forth in
the prospectus supplement with respect to such series.
If and to the extent required by applicable law or regulation, this
prospectus will be used by Goldman, Sachs & Co. in connection with offers and
sales of the offered certificates in certain market-making transactions at
prices related to prevailing market prices at the time of sale. The Seller will
not receive any proceeds from such transactions. Goldman, Sachs & Co. may act
as principal or agent in such transactions.
INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of this prospectus and prior to the
termination of the offering of the offered certificates of a series will be
deemed to be incorporated by reference into this prospectus and to be a part of
this prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this prospectus shall be deemed to be modified or superseded for purposes of
this prospectus to the extent that a statement contained in this prospectus or
in any other subsequently filed document which is or is deemed to be
incorporated by reference in this prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this prospectus.
We will provide without charge to each person to whom a copy of this
prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the documents incorporated by reference in this
prospectus (not including the exhibits to such documents, unless such exhibits
are specifically incorporated by reference in such documents). Requests for
such copies should be directed to the office of the Secretary, 85 Broad Street,
New York, New York 10004 (phone: 212/902-1000).
This prospectus and the prospectus supplement for each series are parts of
our Registration Statement. This prospectus does not contain, and the related
prospectus supplement will not contain, all
79
<PAGE>
of the information in our Registration Statement. For further information,
please see our Registration Statement and the accompanying exhibits which we
have filed with the Commission. This prospectus and any prospectus supplement
may summarize contracts and/or other documents. For further information, please
see the copy of the contract or other document filed as an exhibit to the
Registration Statement. You can obtain copies of the Registration Statement
from the Commission upon payment of the prescribed charges, or you can examine
the Registration Statement free of charge at the Commission's offices. Reports
and other information filed with the Commission can be inspected and copied at
the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at Seven World Trade Center, 13th Floor, New York, New York 10048;
and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661. Copies of such material can be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. You can obtain information on the operation of the Public
Reference Section by calling 1-800-732-0330. The Commission also maintains a
site on the World Wide Web at "http://www.sec.gov" at which users can view and
download copies of reports, proxy and information statements and other
information filed electronically through the EDGAR system. Copies of the
Agreement pursuant to which a series of certificates is issued will be provided
to each person to whom a prospectus and the related prospectus supplement are
delivered, upon written or oral request directed to our offices at 85 Broad
Street, SC Level, New York, New York 10004 (phone: 212/902-1171), Attention:
prospectus Department.
LEGAL MATTERS
The validity of the certificates offered hereby and certain federal income
tax matters will be passed upon for the Seller by Cadwalader, Wickersham & Taft
or by other counsel identified in the related prospectus supplement.
80
<PAGE>
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1986 Act ................................. 50
1998 Policy Statement .................... 77
ADA ...................................... 46
Advances ................................. 23
Agreement ................................ 8
Appraisal Regulations .................... 77
Balloon Payments ......................... 30
Bankruptcy Code .......................... 34
CERCLA ................................... 37
Certificateholder ........................ 47
Certificateholders ....................... 10
Closing Date ............................. 17
Code ..................................... 47
Code Plans ............................... 74
Collection Account ....................... 11
Commission ............................... 14
Cut-Off Date ............................. 11
Defective Mortgage Loans ................. 19
Department ............................... 74
Depository ............................... 6
Disqualified Organization ................ 61
Distribution Account ..................... 11
Distribution Date ........................ 10
EDGAR .................................... 15
Environmental Condition .................. 36
ERISA .................................... 74
ERISA Plans .............................. 74
Event of Default ......................... 25
Exchange Act ............................. 15
FASIT .................................... 13
FDIC ..................................... 77
Federal Reserve Board .................... 77
Financial Intermediary ................... 10
FIRREA ................................... 77
FIRREA Appraisal ......................... 77
Form 8-K ................................. 17
Funding Note ............................. 9
Garn-St Germain Act ...................... 42
Holders .................................. 10
Installment Contracts .................... 16
Insurance Proceeds ....................... 11
Interest Rate Caps ....................... 29
Interest Rate Collars .................... 29
Interest Rate Floors ..................... 29
Interest Rate Swap ....................... 29
Lender Liability Act ..................... 37
Letter of Credit Bank .................... 27
Letter of Credit Percentage .............. 28
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Liquidation Proceeds ..................... 11
Mark-to-Market Regulations ............... 63
Master Servicer .......................... 20
Master Servicer Remittance Date .......... 12
Mortgage Loan File ....................... 18
Mortgage Loan Schedule ................... 18
Mortgaged Property ....................... 16
Mortgages ................................ 16
NCUA ..................................... 45, 76
New Regulations .......................... 65
Non-SMMEA Certificates ................... 75
Non-U.S. Person .......................... 65
OCC ...................................... 76
OID Regulations .......................... 50
Operating Advisor ........................ 21
OTS ...................................... 77
Pass-Through Entity ...................... 61
Permitted Investments .................... 13
Plans .................................... 74
Prepayment Assumption .................... 51
Prepayment Premium ....................... 12
Property Protection Expenses ............. 12
Random Lot Certificates .................. 50
Rating Agency ............................ 8
Regular Certificateholder ................ 50
Regular Certificates ..................... 47
Regulations .............................. 74
Relief Act ............................... 43
REMIC .................................... 13
REMIC Certificates ....................... 47
REMIC Pool ............................... 47
REMIC Regulations ........................ 47
REO Account .............................. 12
REO Property ............................. 11
Repurchase Price ......................... 19
Residual Certificateholders .............. 57
Responsible Party ........................ 18
SBJPA of 1996 ............................ 48
Securities Act ........................... 7
Seller ................................... 7
Senior Certificates ...................... 27
Service .................................. 49
Servicing Fee ............................ 23
Simple Interest Loans .................... 16
SMMEA .................................... 75
Special Servicer ......................... 20
Specially Serviced Mortgage Loans 20
Standard Certificateholder ............... 67
</TABLE>
81
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Standard Certificates .................... 67
Stripped Certificateholder ............... 71
Stripped Certificates .................... 70
Subordinate Certificates ................. 27
Substitute Mortgage Loans ................ 19
Title V .................................. 44
Title VIII ............................... 45
Treasury ................................. 47
Trust Fund ............................... 8
Trustee .................................. 15
Underwriter's Exemption .................. 75
U.S. Person .............................. 62
Voting Rights ............................ 26
</TABLE>
82
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
GS MORTGAGE SECURITIES CORPORATION II
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES SERIES 1999-C1
IMPORTANT NOTICE TO ALL POTENTIAL INVESTORS
The file on this diskette contains the `Certain Characteristics of the
Mortgage Loans' and `Multifamily' Schedule in Microsoft Excel Version 5.0
format. The information contained in this diskette appears elsewhere in
paper form in this Prospectus Supplement and must be considered part of, and
together with, the information contained elsewhere in the Prospectus
Supplement and the Prospectus. Defined terms used in this diskette but not
otherwise defined therein shall have the respective meanings assigned to
them in the paper portion of the Prospectus Supplement and Prospectus. All
of the information contained in this diskette is subject to the same
limitations and qualifications contained elsewhere in this Prospectus and
Prospectus Supplement. Prospective investors are strongly urged to read the
paper portion of this Prospectus Supplement and the Prospectus in its
entirety prior to accessing this diskette. The information contained in this
diskette has been filed by the Seller with the Securities and Exchange
Commission as part of a Current Report on Form 8-K, which is incorporated by
reference in this Prospectus Supplement, and is also available through the
public reference branch of the Securities and Exchange Commission. IF THIS
DISKETTE WAS NOT RECEIVED IN A SEALED PACKAGE, THERE CAN BE NO ASSURANCES
THAT IT REMAINS IN ITS ORIGINAL FORMAT AND SHOULD NOT BE RELIED UPON FOR ANY
PURPOSE. PROSPECTIVE INVESTORS MAY CONTACT ROLF EDWARDS OF GOLDMAN, SACHS &
CO. AT (212) 902-5637 TO RECEIVE AN ADDITIONAL COPY OF THE DISKETTE.
<PAGE>
This diskette contains a spreadsheet file that can be put on a
user-specified hard drive or network drive. The file is "GSMSCII.xls". The file
"GSMSCII.xls" is a Microsoft Excel(1), Version 5.0 spreadsheet. The file
provides, in electronic format, certain loan level information shown in ANNEX A
of the Preliminary Prospectus Supplement.
Open the file as you would normally open any spreadsheet in Microsoft
Excel. After the file is opened, a screen will appear requesting a password.
Please "click" the "read only" option. At that point a securities law legend
will be displayed. READ THE LEGEND CAREFULLY. To view the ANNEX A data, "click"
on the worksheet labeled "Characteristics." To view the multifamily schedule
data, "click" on the worksheet labeled "Multifamily Schedule."
- ----------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE>
===============================================================================
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus and
prospectus supplement. You must not rely on any unauthorized information or
representations. This prospectus and prospectus supplement is an offer to sell
only the certificates offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus and prospectus supplement is current only as of its date.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PROSPECTUS SUPPLEMENT
PAGE
------
<S> <C>
Summary of Prospectus Supplement ...................... S-7
Risk Factors .......................................... S-18
Description of the Mortgage Pool ...................... S-35
Description of the Offered Certificates ............... S-42
Yield, Prepayment and Maturity Considerations ......... S-58
The Pooling Agreement ................................. S-71
Use of Proceeds ....................................... S-92
Certain Legal Aspects of the Mortgage Loans ........... S-92
Federal Income Tax Consequences ....................... S-94
State Tax Considerations .............................. S-96
ERISA Considerations .................................. S-96
Legal Investment ...................................... S-97
Underwriting .......................................... S-98
Legal Matters ......................................... S-98
Ratings ............................................... S-99
Index of Significant Definitions ...................... S-100
Annex A--Certain Characteristics of the Mortgage
Loans ............................................... A-1
Annex B--Representations and Warranties ............... B-1
Annex C--Form of Statement to Certificateholders ...... C-1
Annex D--Structural and Collateral Term Sheet ......... D-1
PROSPECTUS
Table of Contents ..................................... 2
Risk Factors .......................................... 3
The Prospectus Supplement ............................. 5
The Seller ............................................ 7
Use of Proceeds ....................................... 7
Description of the Certificates ....................... 8
The Mortgage Pools .................................... 16
Servicing of the Mortgage Loans ....................... 20
Credit Enhancement .................................... 26
Swap Agreement ........................................ 29
Yield Considerations .................................. 29
Certain Legal Aspects of the Mortgage Loans ........... 31
Federal Income Tax Consequences ....................... 47
State Tax Considerations .............................. 73
ERISA Considerations .................................. 74
Legal Investment ...................................... 75
Plan of Distribution .................................. 78
Incorporation of Certain Information by Reference ..... 79
Legal Matters ......................................... 80
Index of Defined Terms ................................ 81
</TABLE>
Until , 1999, all dealers effecting transactions in the Offered
Certificates, whether or not participating in this distribution, may be
required to deliver a Prospectus Supplement and Prospectus. This is in addition
to the dealer's obligation to deliver a prospectus when acting as an
underwriter and with respect to an unsold allotment or subscription.
===============================================================================
===============================================================================
$779,262,000
(Approximate)
GS MORTGAGE
SECURITIES CORPORATION II
(AS SELLER)
Commercial Mortgage Pass-Through
Certificates Series 1999-C1
<TABLE>
<S> <C>
Class A-1 Certificates ......... $165,650,000
Class A-2 Certificates ......... $455,533,000
Class X Certificates ........... $890,585,907
Class B Certificates ........... $ 42,303,000
Class C Certificates ........... $ 44,529,000
Class D Certificates ........... $ 57,888,000
Class E Certificates ........... $ 13,359,000
</TABLE>
-----------------------------------------------------
PROSPECTUS SUPPLEMENT
-----------------------------------------------------
GOLDMAN, SACHS & CO.
NORWEST INVESTMENT
SERVICES, INC.
===============================================================================
