<PAGE> 1
Filed Pursuant to Rule 424(b)(5)
Registration No. 333-66805
Information contained herein is subject to completion or amendment. These
securities may not be sold nor may offers to buy be accepted prior to the
delivery of a final Prospectus Supplement. This Prospectus Supplement and the
Prospectus to which it relates shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
The information in this prospectus supplement will be amended or completed;
dated October 27, 1999.
Prospectus Supplement
(To Prospectus dated October 27, 1999)
$813,466,233 (APPROXIMATE)
NATIONSLINK FUNDING CORPORATION
DEPOSITOR
ORIX REAL ESTATE CAPITAL MARKETS, LLC
MASTER SERVICER
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 1999-2
<TABLE>
<CAPTION>
<S> <C>
---------------------------------
The Series 1999-2 Commercial Mortgage Pass-Through
CONSIDER CAREFULLY THE RISK Certificates will consist of the following classes:
FACTORS BEGINNING ON PAGE S-18
IN THIS PROSPECTUS SUPPLEMENT - senior certificates consisting of the Class A-1, Class
AND PAGE 10 IN THE ACCOMPANYING A-2, Class A-3, Class A-4, Class A-1C, Class A-2C and Class
PROSPECTUS. X Certificates;
Neither the certificates nor the - junior certificates consisting of the Class B, Class C,
underlying mortgage loans are Class D, Class E, Class F, Class G, Class H, Class J and
insured or guaranteed by any Class K Certificates; and
governmental agency.
- the residual certificates consisting of the Class R-I,
The certificates will represent Class R-II, Class R-III, Class R-IIIU and Class R-IV
interests only in the trust and Certificates.
will not represent interests in
or obligations of NationsLink Only the Class A-2, Class A-3, Class A-4, Class A-1C, Class
Funding Corporation or any of A-2C, Class X, Class B, Class C and Class D Certificates are
its affiliates, including Bank offered hereby.
of America Corporation.
The trust's assets will consist primarily of 330 mortgage
loans and other property described in this prospectus
supplement and the accompanying prospectus. The mortgage
loans are secured by first liens on commercial and
multifamily properties. This prospectus supplement more
fully describes the offered certificates, as well as the
characteristics of the mortgage loans and the related
mortgaged properties.
---------------------------------
</TABLE>
Certain characteristics of the offered certificates include:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
CERTIFICATE BALANCE OR ASSUMED FINAL
NOTIONAL AMOUNT PASS-THROUGH RATE DISTRIBUTION RATINGS
CLASS AS OF DELIVERY DATE(1) AS OF DELIVERY DATE DATE(3) (DCR/S&P/FITCH)(4)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-2............... $ 84,648,789 % October 20, 2003 AAA/AAA/AAA
Class A-3............... $ 232,000,439 %(2) December 20, 2006 AAA/AAA/AAA
Class A-4............... $ 110,485,256 %(8) October 20, 2008 AAA/AAA/AAA
Class A-1C.............. $ 103,960,279 %(2) January 20, 2008 AAA/AAA/AAA
Class A-2C.............. $ 114,048,463 %(2) October 20, 2008 AAA/AAA/AAA
Class X................. $1,115,186,747(6) %(7) February 20, 2014 AAA/AAAr/AAA
Class B................. $ 56,107,669 %(8) November 20, 2008 AA/AA/AA
Class C................. $ 44,886,135 %(8) January 20, 2009 A/A/A
Class D................. $ 67,329,203 %(8) February 20, 2009 BBB/BBB/BBB
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ------------------------ --------------------
- ------------------------ --------------------
RATED FINAL
DISTRIBUTION
CLASS DATE(5)
- ------------------------ --------------------
<S> <C>
Class A-2............... May 20, 2031
Class A-3............... May 20, 2031
Class A-4............... May 20, 2031
Class A-1C.............. May 20, 2031
Class A-2C.............. May 20, 2031
Class X................. May 20, 2031
Class B................. May 20, 2031
Class C................. May 20, 2031
Class D................. May 20, 2031
- -------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
(Footnotes to table on page S-4)
The underwriter, Banc of America Securities LLC, will purchase the offered
certificates from NationsLink Funding Corporation and will offer them to the
public at negotiated prices determined at the time of sale. Banc of America
Securities LLC expects to deliver the offered certificates to purchasers on or
about November , 1999, NationsLink Funding Corporation expects to receive from
this offering approximately % of the initial principal amount of the offered
certificates, plus accrued interest from November 1, 1999, before deducting
expenses payable by NationsLink Funding Corporation.
- --------------------------------------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE OFFERED SECURITIES OR DETERMINED
IF THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
BANC OF AMERICA SECURITIES LLC
November , 1999
<PAGE> 2
NationsLink Funding Corporation
- --------------------------------------------------------------------------------
Commercial Mortgage Pass-Through Certificates, Series 1999-2
Geographic Overview of Mortgage Pool
[THE NARRATIVE AND/OR TABULAR INFORMATION BELOW IS A FAIR AND ACCURATE
DESCRIPTION OF GRAPHIC OR IMAGE MATERIAL OMITTED FOR THE PURPOSE OF EDGAR
FILING.]
[MAP]
<TABLE>
<CAPTION>
% OF
NUMBER OF AGGREGATE INITIAL
MORTGAGED CUT-OFF DATE POOL
PROPERTY LOCATION PROPERTIES BALANCE BALANCE
----------------- ---------- -------------- -------
<S> <C> <C> <C>
CA................... 132 $ 399,756,342 35.8%
NV................... 27 118,634,985 10.6%
WA................... 37 116,180,280 10.4%
FL................... 16 89,820,903 8.1%
AZ................... 27 60,790,914 5.5%
TX................... 14 59,718,065 5.4%
OR................... 15 55,278,972 5.0%
VA................... 8 26,193,949 2.3%
NJ................... 7 25,979,179 2.3%
NC................... 6 23,941,967 2.1%
IL................... 9 19,457,897 1.7%
NY................... 9 17,094,443 1.5%
LA................... 1 10,139,434 0.9%
MN................... 9 8,512,053 0.8%
GA................... 4 8,245,594 0.7%
MO................... 3 7,362,832 0.7%
AK................... 4 7,074,990 0.6%
NM................... 2 7,062,826 0.6%
ID................... 3 6,899,505 0.6%
OK................... 3 6,886,701 0.6%
NE................... 1 6,638,970 0.6%
AL................... 3 5,972,973 0.5%
WI................... 1 4,806,900 0.4%
KY................... 1 4,407,633 0.4%
IN................... 3 4,131,865 0.4%
KS................... 2 3,761,671 0.3%
MA................... 1 2,759,241 0.2%
UT................... 1 2,552,183 0.2%
CO................... 2 2,031,991 0.2%
AR................... 1 1,896,276 0.2%
PA................... 1 1,195,213 0.1%
</TABLE>
MORTGAGE POOL BY PROPERTY TYPE
- ------------------------------
[PIE CHART] [ ] < 1.0% of Initial Pool Balance
-
Multifamily.......... 32.1% [ ] 1.1% - 5.0% of Initial Pool Balance
Retail............... 26.2% [ ] 5.1% - 10.0% of Initial Pool Balance
Industrial........... 13.5% [ ] > 10.0% of Initial Pool Balance
Office............... 13.2%
Health Care.......... 5.3%
Mobile Home.......... 3.2%
Mini Storage......... 2.7%
Special Purpose...... 2.5%
Hotel................ 0.8%
Mixed Use............ 0.3%
<PAGE> 3
FOR MORE INFORMATION
NationsLink Funding
Corporation has filed with the
SEC additional registration
materials relating to the
certificates. You may read
and copy any of these
materials at the SEC's Public
Reference Room at the
following locations:
- SEC Public Reference
Section
450 Fifth Street, N.W.
Room 1204
Washington, D.C. 20549
- SEC Midwest Regional
Offices
Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois
60661-2511
- SEC Northeast Regional
Office
7 World Trade Center
Suite 1300
New York, New York 10048
You may obtain information on
the operation of the Public
Reference Room by calling the
SEC at 1-800-SEC-0330. The
SEC also maintains an
Internet site that contains
reports, proxy and
information statements, and
other information that has
been filed electronically
with the SEC. The Internet
address is
http://www.sec.gov.
You may also contact
NationsLink Funding
Corporation in writing at
Bank of America Corporate
Center, 100 North Tryon
Street, Charlotte, North
Carolina 28255, or by
telephone at (704) 386-2400.
See also the sections
captioned "Available
Information" and
"Incorporation of Certain
Information by Reference"
appearing at the end of the
accompanying prospectus.
TABLE OF CONTENTS
<TABLE>
<S> <C>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING
PROSPECTUS....................................... S-5
EXECUTIVE SUMMARY................................ S-6
SUMMARY OF PROSPECTUS SUPPLEMENT................. S-8
RISK FACTORS..................................... S-18
Risks Related to the Certificates.............. S-18
Lack of Control Over Trust Fund.............. S-18
Potential Conflicts of Interest.............. S-18
Yield Considerations......................... S-18
Prepayments and Repurchases.................. S-19
Borrower Default............................. S-20
Bankruptcy Proceedings....................... S-21
Advance Interest and Other Payments.......... S-21
Limited Liquidity and Market Value........... S-21
Different Timing of Mortgage Loan
Amortization.............................. S-22
Subordination of Subordinate Offered
Certificates.............................. S-22
Year 2000 Disruptions........................ S-22
Risks Related to the Mortgage Loans............ S-22
Nature of the Mortgaged Properties........... S-22
Seasoning of the Portfolio Mortgage Loans.... S-24
Management................................... S-24
Balloon Payments............................. S-24
Risks Particular to Multifamily Properties... S-25
Risks Particular to Retail Properties........ S-25
Risks Particular to Senior Housing/Health
Care Properties........................... S-26
Risks Particular to Office Properties........ S-27
Risks Particular to Hotels................... S-27
Risks Particular to Mobile Home Park
Properties................................ S-27
Risks Particular to Mini-Storage
Facilities................................ S-28
Risks of Subordinate Financing............... S-28
Limited Recourse............................. S-28
Environmental Considerations................. S-29
Limitations on Enforceability of Cross-
Collateralization......................... S-29
Related Parties.............................. S-30
Geographic Concentration..................... S-30
Seismic Risks................................ S-31
Other Concentrations......................... S-31
Changes in Concentrations.................... S-31
Prepayment Premiums.......................... S-31
Tax Considerations Related to Foreclosure.... S-33
Leasehold Risks.............................. S-33
Zoning and Building Code Compliance.......... S-33
Limited Information.......................... S-33
Litigation................................... S-34
Other Risks.................................... S-34
DESCRIPTION OF THE MORTGAGE POOL................. S-35
General........................................ S-35
Certain Terms and Conditions of the Mortgage
Loans........................................ S-36
Due Dates.................................... S-36
Mortgage Rates; Calculations of Interest..... S-36
Recourse..................................... S-36
Amortization of Principal.................... S-37
Prepayment Provisions........................ S-37
Defeasance................................... S-38
"Due-on-Sale" and "Due-on-Encumbrance"
Provisions................................ S-38
</TABLE>
S-1
<PAGE> 4
<TABLE>
<S> <C>
Significant Mortgage Loans....................... S-39
Rancho Palisades Apartments.................. S-39
The Loan.................................. S-39
The Property.............................. S-39
Recourse Loan............................. S-39
Property Management....................... S-40
Operating History......................... S-40
Bank of America Regional Headquarters
Loan --Conduit Mortgage Loan.............. S-40
The Loan.................................. S-40
The Property.............................. S-40
Lock Box Account.......................... S-41
Property Management....................... S-41
Operating History......................... S-41
Indian Hills and The Club Mira Lago Loans --
Conduit Mortgage Loans.................... S-41
The Loans................................. S-41
The Properties............................ S-42
Property Management....................... S-43
Operating History-Indian Hills............ S-43
Operating History-The Club Mira Lago...... S-43
Additional Mortgage Loan Information........... S-43
General...................................... S-43
Delinquencies................................ S-43
Tenant Matters............................... S-43
Ground Leases................................ S-44
Subordinate Financing........................ S-44
Conduit Mortgage Loans.................... S-44
Portfolio Mortgage Loans.................. S-44
Generally................................. S-44
Health Care Properties....................... S-44
Lender/Borrower Relationships................ S-44
Certain Underwriting Matters................... S-45
Environmental Assessments.................... S-45
Conduit Mortgage Loans.................... S-45
Portfolio Mortgage Loans.................. S-45
Generally................................. S-45
Property Condition Assessments............... S-46
Conduit Mortgage Loans.................... S-46
Portfolio Mortgage Loans.................. S-47
Appraisals and Market Studies................ S-47
Conduit Mortgage Loans.................... S-47
Portfolio Mortgage Loans.................. S-47
Seismic Reviews.............................. S-48
Conduit Mortgage Loans....................... S-48
Portfolio Mortgage Loans..................... S-48
Zoning and Building Code Compliance.......... S-48
Hazard, Liability and Other Insurance........ S-48
The Mortgage Loan Seller....................... S-49
Assignment of the Mortgage Loans;
Repurchases.................................. S-50
Representations and Warranties; Repurchases.... S-52
Conduit Mortgage Loans....................... S-52
Portfolio Mortgage Loans..................... S-54
Changes in Mortgage Pool Characteristics....... S-56
Portfolio Loan Environmental Policy............ S-56
SERVICING OF THE MORTGAGE LOANS.................. S-57
General........................................ S-57
The Master Servicer and the Special Servicer... S-60
Sub-Servicers.................................. S-60
Servicing and Other Compensation and Payment of
Expenses..................................... S-61
Evidence as to Compliance...................... S-64
Modifications, Waivers, Amendments and
Consents..................................... S-64
</TABLE>
S-2
<PAGE> 5
<TABLE>
<S> <C>
Sale of Defaulted Mortgage Loans................. S-65
REO Properties................................. S-66
Inspections; Collection of Operating
Information.................................. S-67
Termination of the Special Servicer............ S-67
DESCRIPTION OF THE CERTIFICATES.................. S-68
General........................................ S-68
Registration and Denominations................. S-68
Certificate Balances and Notional Amount....... S-69
Pass-Through Rates............................. S-70
Distributions.................................. S-71
General...................................... S-71
The Available Distribution Amount............ S-72
Application of the Available Distribution
Amount.................................... S-72
Distributable Certificate Interest........... S-75
Principal Distribution Amount................ S-76
Distributions of Prepayment Premiums......... S-77
Treatment of REO Properties.................. S-78
Subordination; Allocation of Losses and Certain
Expenses..................................... S-78
Interest Reserve Account....................... S-79
P&I Advances................................... S-79
Appraisal Reductions........................... S-80
Reports to Certificateholders; Certain
Available Information........................ S-82
Trustee Reports.............................. S-82
Servicer Reports............................. S-83
Other Information............................ S-84
Voting Rights.................................. S-85
Termination.................................... S-85
The Trustee.................................... S-86
YIELD AND MATURITY CONSIDERATIONS................ S-87
Yield Considerations........................... S-87
General...................................... S-87
Class X Certificate Pass-Through Rate........ S-87
Rate and Timing of Principal Payments........ S-87
Losses and Shortfalls........................ S-88
Certain Relevant Factors..................... S-89
Weighted Average Lives......................... S-89
Yield Sensitivity of the Class X
Certificates................................. S-94
USE OF PROCEEDS.................................. S-95
CERTAIN FEDERAL INCOME TAX CONSEQUENCES.......... S-95
General........................................ S-95
Discount and Premium; Prepayment Premiums...... S-95
Characterization of Investments in Offered
Certificates................................. S-96
Possible Taxes on Income From Foreclosure
Property and Other Taxes..................... S-96
Reporting and Other Administrative Matters..... S-97
CERTAIN ERISA CONSIDERATIONS..................... S-97
LEGAL INVESTMENT................................. S-100
METHOD OF DISTRIBUTION........................... S-100
LEGAL MATTERS.................................... S-101
RATINGS.......................................... S-101
INDEX OF PRINCIPAL DEFINITIONS................... S-103
ANNEX A.......................................... A-1
ANNEX B.......................................... B-1
ANNEX C.......................................... C-1
</TABLE>
S-3
<PAGE> 6
FOOTNOTES TO TABLE ON COVER OF PROSPECTUS SUPPLEMENT
(1) Subject to a variance of plus or minus 5%.
(2) Pass-Through Rate as of Delivery Date. The Pass-Through Rate for any Class
A-3, Class A-1C or Class A-2C Certificate on any Distribution Date will not
exceed the weighted average of the interest rates (net of the fee rates
payable to the Master Servicer, the Special Servicer and the Trustee) borne
by the mortgage loans. See "Description of the Certificates -- Pass-Through
Rates" in this prospectus supplement.
(3) The "Assumed Final Distribution Date" with respect to any class of offered
certificates is the Distribution Date on which the final distribution would
occur for such class of certificates based upon the assumptions, among
others, that all payments are made when due and that no prepayments are
made on any Mortgage Loan, except that 6% CPR was assumed in the case of
the Portfolio Mortgage Loans after the expiration of the applicable
Lock-Out Period, if any. The actual performance and experience of the
mortgage loans will likely differ from such assumptions. See "Yield and
Maturity Considerations" in this prospectus supplement.
(4) It is a condition to their issuance that the classes of offered
certificates be assigned ratings by Duff and Phelps Credit Rating Co.
("DCR"), Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. ("S&P") and/or Fitch IBCA, Inc. ("Fitch"; and together with
S&P and DCR, the "Rating Agencies") no lower than those set forth above.
The ratings on the offered certificates do not represent any assessments of
(i) the likelihood or frequency of voluntary or involuntary principal
prepayments on the mortgage loans, (ii) the degree to which such
prepayments might differ from those originally anticipated or (iii) whether
and to what extent Prepayment Premiums will be received. Also a security
rating does not represent any assessment of the yield to maturity that
investors may experience or the possibility that the Class X
certificateholders might not fully recover their investment in the event of
rapid prepayments of the mortgage loans (including both voluntary and
involuntary prepayments).
(5) The "Rated Final Distribution Date" for each class of offered certificates
has been set at the first Distribution Date that follows two years after
the end of the amortization term for the mortgage loan that, as of the
Cut-off Date, has the longest remaining amortization term, irrespective of
its scheduled maturity. See "Ratings" in this prospectus supplement.
(6) The Class X Certificates will not have a Certificate Balance. The Class X
Certificates will accrue interest on a Notional Amount that is equal to the
aggregate of the Certificate Balances of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J and Class K certificates outstanding
from time to time.
(7) Pass-Through Rate as of Delivery Date. The Pass-Through Rate for the Class
X Certificates will equal the excess, if any, of (a) the weighted average
of the interest rates (net of the fee rates payable to the Master Servicer,
the Special Servicer and the Trustee) borne by the mortgage loans, over (b)
the weighted average of the Pass-Through Rates for the Class A-1, Class
A-2, Class A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C, Class
D, Class E, Class F, Class G, Class H, Class J and Class K certificates
from time to time. See "Description of the Certificates -- Pass-Through
Rates" in this prospectus supplement.
(8) Pass-Through Rate as of Delivery Date. The Pass-Through Rate for any Class
A-4, Class B, Class C or Class D Certificate will, in general, equal the
weighted average of the interest rates (net of the fee rates payable to the
Master Servicer, the Special Servicer and the Trustee) borne by the
mortgage loans.
S-4
<PAGE> 7
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 1999-2 and the trust in abbreviated form:
Executive Summary, which begins on page S-6 of this prospectus
supplement and shows certain characteristics of the offered certificates in
tabular form;
Summary of Prospectus Supplement, which begins on page S-8 of this
prospectus supplement and gives a brief introduction of the key features of
Series 1999-2 and the mortgage loans; and
Risk Factors, which begins on page S-18 of this prospectus supplement
and describes risks that apply to Series 1999-2 which are in addition to
those described in the accompanying 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
accompanying 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 Principal Definitions" beginning on page S-103 in this prospectus
supplement. The capitalized terms used in the accompanying prospectus are
defined on the pages indicated under the caption "Index of Principal
Definitions" beginning on page 100 in the prospectus.
In this prospectus supplement, "we" refers to the Depositor, NationsLink
Funding Corporation, and "you" refers to a prospective investor in the offered
certificates.
---------------------
Until February [ ], 2000 all dealers that buy, sell or trade the offered
certificates, whether or not participating in this offering, may be required to
deliver a prospectus supplement and the accompanying prospectus. This is in
addition to the dealers' obligation to deliver a prospectus supplement and the
accompanying prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
If and to the extent required by applicable law or regulation, this
prospectus supplement and the accompanying prospectus will be used by the
underwriter in connection with offers and sales related to market-making
transactions in the offered certificates with respect to which the underwriter
is a principal. The underwriter may also act as agent in such transactions. Such
sales will be made at negotiated prices at the time of sale.
S-5
<PAGE> 8
EXECUTIVE SUMMARY
The following Executive Summary does not include all relevant information
relating to the offered certificates and the mortgage loans. In particular, the
Executive Summary does not address the risks and special considerations involved
with an investment in the offered certificates, and prospective investors should
carefully review the detailed information appearing elsewhere in this prospectus
supplement and in the accompanying prospectus before making any investment
decision. Certain capitalized terms used in this Executive Summary may be
defined elsewhere in this prospectus supplement, including in Annex A hereto, or
in the prospectus. An "Index of Principal Definitions" is included at the end of
both this prospectus supplement and the prospectus. Terms that are used but not
defined in this prospectus supplement will have the meanings specified in the
prospectus.
As described under "Description of the Certificates -- General," the
Depositor originally issued its Commercial Mortgage Pass-Through Certificates,
Series 1999-2 on August 17, 1999 (the "Trust Formation Date"), and interests
corresponding to the offered certificates were issued to the Mortgage Loan
Seller as part of the consideration for the mortgage loans. On the Delivery
Date, the Mortgage Loan Seller will transfer interests corresponding to the
offered certificates to the Depositor, the Depositor will transfer such
interests to the Trustee in exchange for the offered certificates, and the
pooling agreement governing the offered certificates will be amended and
restated in accordance with its terms to enable the issuance of the offered
certificates.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
APPROXI-
CERTIFICATE MATE APPROXI- PASS-THROUGH WEIGHTED
BALANCE OR PERCENTAGE MATE RATE AS AVERAGE
NOTIONAL OF POOL CREDIT OF DELIVERY LIFE
CLASS RATINGS(1) AMOUNT(2) BALANCE SUPPORT DESCRIPTION DATE (YEARS)(4)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Offered Certificates
- ----------------------------------------------------------------------------------------------------------------------
A-2 AAA/AAA/AAA $ 84,648,789 7.59% 27.17% Fixed Rate % 3.15
- ----------------------------------------------------------------------------------------------------------------------
A-3 AAA/AAA/AAA $ 232,000,439 20.80% 27.17% Fixed Rate(3) %(3) 5.70
- ----------------------------------------------------------------------------------------------------------------------
A-4 AAA/AAA/AAA $ 110,485,256 9.91% 27.17% WAC(7) %(7) 8.07
- ----------------------------------------------------------------------------------------------------------------------
A-1C AAA/AAA/AAA $ 103,960,279 9.32% 27.17% Fixed Rate(3) %(3) 5.50
- ----------------------------------------------------------------------------------------------------------------------
A-2C AAA/AAA/AAA $ 114,048,463 10.23% 27.17% Fixed Rate(3) %(3) 8.59
- ----------------------------------------------------------------------------------------------------------------------
X AAA/AAAr/AAA $ 1,115,186,747(5) N/A N/A Variable Rate(6) %(6) 6.43
- ----------------------------------------------------------------------------------------------------------------------
B AA/AA/AA $ 56,107,669 5.03% 22.14% WAC(7) %(7) 8.90
- ----------------------------------------------------------------------------------------------------------------------
C A/A/A $ 44,886,135 4.02% 18.11% WAC(7) %(7) 9.05
- ----------------------------------------------------------------------------------------------------------------------
D BBB/BBB/BBB $ 67,329,203 6.04% 12.07% WAC(7) %(7) 9.14
- ----------------------------------------------------------------------------------------------------------------------
Non-Offered Certificates -- Not Offered Hereby
- ----------------------------------------------------------------------------------------------------------------------
(Not
A-1 Offered) $ 167,062,105 14.98% 27.17% Fixed Rate 6.4780% 1.31
- ----------------------------------------------------------------------------------------------------------------------
(Not
E Offered) $ 16,832,300 1.51% 10.57% Fixed Rate 6.3200% 9.22
- ----------------------------------------------------------------------------------------------------------------------
(Not
F Offered) $ 56,107,669 5.03% 5.53% Fixed Rate 5.0000% 9.30
- ----------------------------------------------------------------------------------------------------------------------
(Not
G Offered) $ 8,416,150 0.75% 4.78% Fixed Rate 5.0000% 9.52
- ----------------------------------------------------------------------------------------------------------------------
(Not
H Offered) $ 22,443,067 2.01% 2.77% Fixed Rate 6.0000% 10.85
- ----------------------------------------------------------------------------------------------------------------------
(Not
J Offered) $ 2,805,383 0.25% 2.52% Fixed Rate 6.0000% 11.22
- ----------------------------------------------------------------------------------------------------------------------
(Not
K Offered) $ 28,053,840 2.52% N/A Fixed Rate 6.0000% 13.06
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
- --------- -------------------
PRINCIPAL
CLASS WINDOW(4)
- --------- -------------------
<S> <C>
- -------------------------------------------------------------------------------------------------------------
A-2 7/20/02-10/20/03
- ----------------------------------------------------------------------------------------------------------------------
A-3 10/20/03-12/20/06
- ----------------------------------------------------------------------------------------------------------------------
A-4 12/20/06-10/20/08
- ----------------------------------------------------------------------------------------------------------------------
A-1C 12/20/99-1/20/08
- ----------------------------------------------------------------------------------------------------------------------
A-2C 1/20/08-10/20/08
- ----------------------------------------------------------------------------------------------------------------------
X N/A
- ----------------------------------------------------------------------------------------------------------------------
B 10/20/08-11/20/08
- ----------------------------------------------------------------------------------------------------------------------
C 11/20/08-1/20/09
- ----------------------------------------------------------------------------------------------------------------------
D 1/20/09-2/20/09
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
A-1 12/20/99-7/20/02
- ----------------------------------------------------------------------------------------------------------------------
E 2/20/09-2/20/09
- ----------------------------------------------------------------------------------------------------------------------
F 2/20/09-5/20/09
- ----------------------------------------------------------------------------------------------------------------------
G 5/20/09-10/20/09
- ----------------------------------------------------------------------------------------------------------------------
H 10/20/09-2/20/11
- ----------------------------------------------------------------------------------------------------------------------
J 2/20/11-2/20/11
- ----------------------------------------------------------------------------------------------------------------------
K 2/20/11-2/20/14
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Ratings shown are those of DCR, S&P and Fitch, respectively.
(2) As of the Delivery Date. Subject to a variance of plus or minus 5%.
(3) The Pass-Through Rate for any Class A-3, Class A-1C and Class A-2C
Certificate on any Distribution Date will not exceed the weighted average of
the interest rates (net of the fee rates payable to the Master Servicer, the
Special Servicer and the Trustee) borne by the mortgage loans. The rate
shown in the "Pass-Through Rate as of Delivery Date" column is the
Pass-Through Rate as of the Delivery Date for such Classes. See "Description
of the Certificates -- Pass-Through Rates" in this prospectus supplement.
(4) Based on the Maturity Assumptions (as defined under "Yield and Maturity
Considerations" in this prospectus supplement). The calculations assumed no
prepayments on the Mortgage Loans, except that 6% CPR was assumed in the
case of the Portfolio Mortgage Loans after the expiration of the applicable
Lock-Out Period, if any.
(5) Notional Amount.
S-6
<PAGE> 9
(6) The Pass-Through Rate for the Class X Certificates for any Distribution Date
will, in general, equal the excess, if any, of (a) the weighted average of
the interest rates (net of the fee rates payable to the Master Servicer, the
Special Servicer and the Trustee) borne by the mortgage loans, over (b) the
weighted average of the Pass-Through Rates for the Class A-1, Class A-2,
Class A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J and Class K Certificates for
such Distribution Date. The rate shown in the "Pass-Through Rate as of
Delivery Date" column is the Pass-Through Rate as of the Delivery Date for
the Class X Certificates. See "Description of the
Certificate -- Pass-Through Rates" in this prospectus supplement.
(7) The Pass-Through Rate for any Class A-4, Class B, Class C and Class D
Certificate will, in general, equal the weighted average of the interest
rates (net of the fee rates payable to the Master Servicer, the Special
Servicer and the Trustee) borne by the mortgage loans. The rate shown in the
"Pass-Through Rate as of Delivery Date" column is the Pass-Through Rate as
of the Delivery Date for the Class A-4, Class B, Class C, and Class D
Certificates.
Below is certain information regarding the Mortgage Loans and the Mortgaged
Properties as of the Cut-off Date. All weighted averages set forth below are
based on the respective Cut-off Date Balances (as defined herein) of the
Mortgage Loans. Such information is described, and additional information
regarding the Mortgage Loans and the Mortgaged Properties is contained, under
"Description of the Mortgage Pool" in this prospectus supplement and in Annex A
to this prospectus supplement.
MORTGAGE POOL CHARACTERISTICS
<TABLE>
<CAPTION>
ENTIRE MORTGAGE POOL
CHARACTERISTICS (APPROXIMATE)
- --------------- --------------------
<S> <C>
Initial Pool Balance......................... $1,115,186,748
Number of Mortgage Loans..................... 330
Number of Mortgaged Properties............... 353
Average Cut-off Date Balance................. $ 3,379,354
Weighted Average Mortgage Rate............... 7.804%
Weighted Average Remaining Lock-Out Period... 44months
Weighted Average Remaining Term to
Maturity................................... 93months
Weighted Average Underwriting Debt Service
Coverage Ratio............................. 1.38x
Weighted Average Cut-off Date Loan-to-Value
Ratio...................................... 67.4%
</TABLE>
"Cut-off Date Loan-to-Value Ratio" and "Underwriting Debt Service Coverage
Ratio" are calculated as described in Annex A hereto.
S-7
<PAGE> 10
SUMMARY OF PROSPECTUS SUPPLEMENT
This summary highlights selected information from this prospectus
supplement. It does not contain all of the information you need to consider in
making your investment decision. TO UNDERSTAND ALL OF THE TERMS OF THE OFFERING
OF THE OFFERED CERTIFICATES, READ THIS ENTIRE DOCUMENT AND THE ACCOMPANYING
PROSPECTUS CAREFULLY.
RELEVANT PARTIES AND DATES
DEPOSITOR
NationsLink Funding Corporation. The Depositor, a Delaware corporation, is
a subsidiary of the Mortgage Loan Seller. The Depositor maintains its principal
office at Bank of America Corporate Center, 100 North Tryon Street, Charlotte,
North Carolina 28255. See "The Depositor" and "Method of Distribution" in this
prospectus supplement. Neither the Depositor nor any of its affiliates has
insured or guaranteed the Offered Certificates.
TRUSTEE
Norwest Bank Minnesota, National Association. The Trustee will also act as
REMIC Administrator. See "Description of the Certificates -- The Trustee".
MASTER SERVICER AND SPECIAL SERVICER
ORIX Real Estate Capital Markets, LLC, a Delaware limited liability company
formerly known as Banc One Mortgage Capital Markets, LLC. See "Servicing of the
Mortgage Loans -- The Master Servicer and the Special Servicer" in this
prospectus supplement.
MORTGAGE LOAN SELLER
Bank of America, N.A. (the "Mortgage Loan Seller"). The Mortgage Loan
Seller is a national banking association. The Mortgage Loan Seller is the parent
of the Depositor and a wholly-owned subsidiary of NB Holdings Corporation, which
in turn is a wholly-owned subsidiary of Bank of America Corporation. The
Mortgage Loan Seller maintains its principal office at Bank of America Corporate
Center, 100 North Tryon Street, Charlotte, North Carolina 28255. See
"Description of the Mortgage Pool -- The Mortgage Loan Seller" in this
prospectus supplement.
CUT-OFF DATE
November 10, 1999.
ORIGINAL CUT-OFF DATE
August 1, 1999.
TRUST FORMATION DATE
August 17, 1999.
DELIVERY DATE
On or about November , 1999.
RECORD DATE
With respect to each Class of Offered Certificates and each Distribution
Date, the last business day of the calendar month immediately preceding the
month in which such Distribution Date occurs.
S-8
<PAGE> 11
DISTRIBUTION DATE
The 20th day of each month or, if any such 20th day is not a business day,
the next succeeding business day. The first Distribution Date with respect to
the Offered Certificates will occur in December 1999.
DETERMINATION DATE
The 10th day of each month or, if any such 10th day is not a business day,
the next succeeding business day.
COLLECTION PERIOD
With respect to any Distribution Date, the period that begins immediately
following the Determination Date in the calendar month preceding the month in
which such Distribution Date occurs and ends on and includes the Determination
Date in the calendar month in which such Distribution Date occurs. The first
Collection Period applicable to the Offered Certificates will begin immediately
following the Determination Date in November 1999 and end on the Determination
Date in December 1999.
MORTGAGE LOANS
THE MORTGAGE POOL
The pool of mortgage loans (the "Mortgage Pool") consists of 154
conventional, multifamily and commercial mortgage loans originated prior to the
Merger by Bank of America, N.A. (formerly known as NationsBank, N.A.) or its
conduit participants (the "Conduit Mortgage Loans") representing 46.7% of the
Mortgage Pool and 176 conventional, multifamily and commercial mortgage loans
originated prior to the Merger by Bank of America NT&SA (or predecessor
institutions) (the "Portfolio Mortgage Loans"; together with the Conduit Loans,
the "Mortgage Loans") representing 53.3% of the Mortgage Pool. The Mortgage
Loans have an aggregate Cut-off Date Balance of approximately $1,115,186,748
(the "Initial Pool Balance"), subject to a variance of plus or minus 5%. The
Mortgage Loans comprise two separate groups, Loan Group 1 and Loan Group 2
(each, a "Loan Group"). Loan Group 2 will consist of 176 Portfolio Mortgage
Loans, which collectively represent approximately 53.3% of the Initial Pool
Balance. Loan Group 1 will consist of the remaining 154 Mortgage Loans, which
collectively represent approximately 46.7% of the Initial Pool Balance. Payments
of principal on the Mortgage Loans in Loan Group 2 will be paid first to the
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates, sequentially, until
the Certificate Balance of each such Class is reduced to zero. All remaining
payments in respect of principal (including Balloon Payments and unscheduled
payments of principal on the Mortgage Loans in Loan Group 1 and scheduled
payments (other than Balloon Payments on the Mortgage Loans in Loan Group 2) of
principal on all Mortgage Loans) will be paid sequentially to each Class of
Certificates as and to the extent described in this prospectus supplement. See
"Description of the Certificates -- Distributions."
All numerical information provided herein with respect to the Mortgage
Loans is provided on an approximate basis. All weighted average information
provided herein with respect to the Mortgage Loans reflects weighting by related
Cut-off Date Balance. All percentages of the Mortgage Pool, or of any specified
sub-group thereof, referred to herein without further description are
approximate percentages by aggregate Cut-off Date Balance. See "Description of
the Mortgage Pool -- Changes in Mortgage Pool Characteristics" in this
prospectus supplement.
The "Cut-off Date Balance" of each Mortgage Loan is the unpaid principal
balance thereof as of the Cut-off Date, after application of all payments of
principal due on or before such date, whether or not received. The Cut-off Date
Balances of the Mortgage Loans range from $317,179 to $25,919,852, and the
average Cut-off Date Balance is $3,379,354.
S-9
<PAGE> 12
As of the Cut-off Date, the Mortgage Loans had the following additional
characteristics.
SELECTED MORTGAGE LOAN CHARACTERISTICS
<TABLE>
<S> <C>
Range of Mortgage Rates.................. 6.348% per annum to 10.375% per annum
Weighted Average Mortgage Rate........... 7.804% per annum
Range of Remaining Terms to Stated
Maturity............................... 3 months to 171 months
Weighted Average Remaining Term to Stated
Maturity............................... 93 months
Range of Remaining Amortization Terms.... 33 months to 354 months
Weighted Average Remaining Amortization
Term................................... 283 months
Range of Cut-off Date Loan-to-Value
Ratios................................. 21.9% to 82.0%
Weighted Average Cut-off Date
Loan-to-Value Ratio.................... 67.4%
Range of Maturity Date Loan-to-Value
Ratios of Balloon Loans................ 19.1% to 80.4%
Weighted Average Maturity Date Loan-to-
Value Ratio of Balloon Loans........... 58.38%
Range of Underwriting Debt Service
Coverage Ratios........................ 1.10x to 4.88x
Weighted Average Underwriting Debt
Service Coverage Ratio................. 1.38x
</TABLE>
"Cut-off Date Loan-to-Value Ratio," "Maturity Date Loan-to-Value Ratio" and
"Underwriting Debt Service Coverage Ratio" are each defined in Annex A to this
prospectus supplement.
Set forth below are the number of Mortgaged Properties, and the approximate
percentage of the Initial Pool Balance secured by such Mortgaged Properties,
located in the five states with the highest concentrations:
GEOGRAPHIC CONCENTRATION
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGED INITIAL POOL
STATE PROPERTIES BALANCE
- ----- ---------- -------------
<S> <C> <C>
California.................................................. 132 35.8%
Nevada...................................................... 27 10.6
Washington.................................................. 37 10.4
Florida..................................................... 16 8.1
Arizona..................................................... 27 5.5
</TABLE>
The remaining Mortgaged Properties are located throughout 26 other states,
with no more than 5.4% of the Initial Pool Balance secured by Mortgaged
Properties located in any such other jurisdiction.
S-10
<PAGE> 13
Set forth below are the number of Mortgaged Properties, and the approximate
percentage of the Initial Pool Balance secured by such Mortgaged Properties,
operated for each indicated purpose:
PROPERTY TYPE
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
MORTGAGED INITIAL POOL
PROPERTIES BALANCE(1)
---------- -------------
<S> <C> <C>
Multifamily................................................. 110 32.1%
Retail...................................................... 80 26.2
Industrial.................................................. 63 13.5
Office...................................................... 42 13.2
Health Care................................................. 13 5.3
Mobile Home................................................. 13 3.2
Mini Storage................................................ 19 2.7
Special Purpose............................................. 10 2.5
Hotel....................................................... 2 0.8
Mixed Use................................................... 1 0.3
</TABLE>
- ---------------
(1) The sum of the percentages in this column may not equal 100% due to
rounding.
FOR MORE DETAILED STATISTICAL INFORMATION REGARDING THE MORTGAGE POOL, SEE
ANNEX A HERETO.
On the Trust Formation Date, the Mortgage Loan Seller, at the direction of
the Depositor, transferred all of the Conduit Mortgage Loans and all of the
Portfolio Mortgage Loans, without recourse, to the Trustee for the benefit of
holders of the Certificates (the "Certificateholders"). In connection with such
transfer, the Mortgage Loan Seller made certain representations and warranties
regarding the characteristics of the Mortgage Loans so transferred by the
Mortgage Loan Seller. As described in more detail later in this prospectus
supplement, the Mortgage Loan Seller will be obligated to cure any material
breach of any such representation or warranty made by the Mortgage Loan Seller
with respect to its Mortgage Loans or repurchase the affected Mortgage Loan. See
"Description of the Mortgage Pool -- Assignment of the Mortgage Loan;
Repurchases" and "--Representations and Warranties; Repurchases" in this
prospectus supplement.
The Mortgage Loan Seller has sold its respective Mortgage Loans without
recourse and will have no obligations with respect to the Offered Certificates
other than pursuant to such representations, warranties and repurchase
obligations. The Depositor will make no representations or warranties with
respect to the Mortgage Loans and will have no obligation to repurchase or
replace Mortgage Loans with deficient documentation or which are otherwise
defective. See "Description of the Mortgage Pool" and "Risk Factors -- Risks
Related to the Mortgage Loans" in this prospectus supplement and "Description of
the Trust Funds" and "Certain Legal Aspects of Mortgage Loans" in the
accompanying prospectus.
The Master Servicer and, if circumstances require, the Special Servicer,
will service and administer the Mortgage Loans pursuant to the Pooling Agreement
(as defined below). See "Servicing of the Mortgage Loans" in this prospectus
supplement and "The Pooling and Servicing Agreements" in the accompanying
prospectus. The compensation to be received by the Master Servicer (including
Master Servicing Fees) and the Special Servicer (including Standby Fees, Special
Servicing Fees, Liquidation Fees and Workout Fees) for their services is
described in this prospectus supplement under "Servicing of the Mortgage
Loans -- Servicing and Other Compensation and Payment of Expenses".
OFFERED SECURITIES
THE OFFERED CERTIFICATES; CERTIFICATE BALANCES AND PASS-THROUGH RATES
We are offering nine classes of Commercial Mortgage Pass-Through
Certificates (collectively, the "Offered Certificates") as part of Series
1999-2, namely the Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C,
Class X, Class B, Class C and Class D Certificates. As of the Delivery Date,
your certificates will
S-11
<PAGE> 14
have the approximate aggregate principal amount or notional amount indicated in
the chart on the cover of this prospectus supplement, subject to a variance of
plus or minus 5%, and will accrue interest at an annual rate (the "Pass-Through
Rate") indicated in the chart on the cover of this prospectus supplement and the
accompanying footnotes. See "Description of the Certificates -- Pass-Through
Rates" in this prospectus supplement. Interest on the Offered Certificates
(including the Class X Certificates) will be calculated based on a 360-day year
consisting of twelve 30-day months, or a 30/360 basis.
Series 1999-2 consists of a total of twenty-one classes of Certificates,
the following twelve of which are not being offered through this prospectus
supplement and the accompanying prospectus: Class A-1, Class E, Class F, Class
G, Class H, Class J, Class K, Class R-I, Class R-II, Class R-III, Class R-IIIU
and Class R-IV (collectively, the "Non-Offered Certificates"). The Pass-Through
Rates applicable to each of the Class A-1, Class E, Class F, Class G, Class H,
Class J and Class K Certificates for each Distribution Date are set forth on
page S-70 hereof. None of the Class R-I, Class R-II, Class R-III, Class R-IIIU
or Class R-IV Certificates (the "REMIC Residual Certificates") will have a
Certificate Balance or a Notional Amount.
The Offered Certificates and the Non-Offered Certificates will represent
beneficial ownership interests in a trust created by NationsLink Funding
Corporation. The trust's assets will primarily be 330 mortgage loans secured by
first liens on commercial and multifamily properties.
CLASS X CERTIFICATES
The notional amount of the Class X Certificates will generally be equal to
the aggregate of the Certificate Balances of the Class A-1, Class A-2, Class
A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C, Class D, Class E,
Class F, Class G, Class H, Class J and Class K Certificates (the "Sequential Pay
Certificates") outstanding from time to time. The notional amount of the Class X
Certificates is used solely for the purpose of determining the amount of
interest to be distributed on such Class of Certificates and does not represent
the right to receive any distributions of principal.
The Pass-Through Rate applicable to the Class X Certificates for each
Distribution Date will, in general, equal the excess, if any, of (1) the
Weighted Average Net Mortgage Rate, over (2) the weighted average of the
Pass-Through Rates applicable to all the Classes of Sequential Pay Certificates
for such Distribution Date (weighted on the basis of their respective
Certificate Balances immediately prior to such Distribution Date). The
Pass-Through Rate on the Class X Certificates will be calculated without regard
to any modification of the terms of any Mortgage Loan subsequent to the Trust
Formation Date.
See "Description of the Certificates -- Pass-Through Rates" and
"-- Distributions" in this prospectus supplement.
DISTRIBUTIONS
The total of all payments or other collections (or advances in lieu
thereof) on or in respect of the Mortgage Loans (but excluding Prepayment
Premiums) that are available for distributions of interest on and principal of
the Certificates on any Distribution Date is herein referred to as the
"Available Distribution Amount" for such date. The Available Distribution Amount
for either Loan Group for any Distribution Date generally is the total of all
such payments or other collections on or in respect of the Mortgage Loans in
such Loan Group that are available for distribution on the Certificates on such
date. The "Portfolio Senior Certificate Principal Distribution Amount" will be,
with respect to Loan Group 2 and any Distribution Date, the portion of the
Principal Distribution Amount for Loan Group 2 for such Distribution Date that
represents scheduled payments, Balloon Payments, Principal Prepayments,
Liquidation Proceeds, Insurance and Condemnation Proceeds, and REO Income on the
Mortgage Loans in Loan Group 2. See "Description of the
Certificates -- Distributions -- The Available Distribution Amount" in this
prospectus supplement.
S-12
<PAGE> 15
On each Distribution Date, the Trustee will apply the Available
Distribution Amount for such date for the following purposes and in the
following order of priority:
A. Amount and Order of Distributions
First, Class A and Class X: Concurrently, from the Available Distribution
Amount, pro rata, to interest on the Class A-1C, Class A-2C, Class A-1, Class
A-2, Class A-3, Class A-4 and Class X Certificates.
Second, Class A: Sequentially, to the Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates, in that order, the Portfolio Senior Certificate
Principal Distribution Amount, until each such class is reduced to zero.
Third, Class A: Sequentially, to the Class A-1C, Class A-2C, Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates, in that order and without
regard to Loan Group, the remaining funds available for distribution of
principal, until each such class is reduced to zero.
Fourth, Class A: To reimburse the Class A-1C, Class A-2C, Class A-1, Class
A-2, Class A-3 and Class A-4 Certificates, pro rata, for any previously
unreimbursed losses on the mortgage loans allocable to principal that were
previously borne by those classes.
Fifth, 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 available for
principal, 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.
Sixth, Class C: To Class C in a manner analogous to the Class B
allocations of the fifth step.
Seventh, Class D: To Class D in a manner analogous to the Class B
allocations of the fifth step.
Finally, Class E, Class F, Class G, Class H, Class J, Class K, Class R-I,
Class R-II, Class R-III, Class R-IIIU and Class R-IV: In the amounts and order
of priority provided for in the Pooling Agreement.
The distributions referred to in priority Second and Third above, in the
aggregate, will be made pro rata among the Class A-1C, Class A-2C, Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates when the Certificate Balances of
the Subordinate Certificates have been reduced to zero and in any event on the
final Distribution Date as described under "Description of the
Certificates -- Distributions -- The Available Distribution Amount" in this
prospectus supplement.
B. Interest and Principal Entitlements
A description of each Class's interest entitlement can be found in
"Description of the Certificates -- Distributions -- Distributable Certificate
Interest" 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.
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 Certificates -- Principal Distribution Amount" in this prospectus
supplement. If you invest in the Class X Certificates, you will not be entitled
to distributions of principal on the Class X Certificates.
C. Prepayment Premiums
The manner in which any prepayment consideration and yield maintenance
premiums received during a particular Collection Period will be allocated to one
or more of the classes of Offered Certificates is described in "Description of
the Certificates -- Distributions -- Distributions of Prepayment Premiums" in
this prospectus supplement.
S-13
<PAGE> 16
SUBORDINATION
A. General
The chart below describes the manner in which the rights of various classes
will be senior to the rights of other classes. Entitlement to receive principal
and interest on any Distribution Date is depicted in descending order. The
manner in which mortgage loan losses are allocated is depicted in ascending
order. No principal payments or loan losses will be allocated to the Class X
Certificates. However, the Notional Amount on the Class X Certificates (which is
used to calculate interest due on the Class X Certificates) will effectively be
reduced by the allocation of principal payments and loan losses to the other
classes of Certificates, the principal balances of which correspond to the
Notional Amount of the Class X Certificates.
(FLOW CHART)
Class A Certificates, Class X Certificates*
|
Class B Certificates
|
Class C Certificates
|
Class D Certificates
|
Class E, Class F, Class G, Class H, Class J and Class K Certificates
*The Class X Certificates will only be senior with respect to payments of
interest and will not be entitled to receive any payments in respect of
principal.
No other form of credit enhancement will be available for the benefit of
the holders of the Offered Certificates.
See "Description of the Certificates -- Subordination; Allocation of Losses
and Certain Expenses" in this prospectus supplement.
B. Shortfalls in Available Funds
The following types of shortfalls in available funds will be allocated in
the same manner as mortgage loan losses:
- shortfalls resulting from additional compensation which the
Master Servicer or Special Servicer is entitled to receive;
S-14
<PAGE> 17
- shortfalls resulting from interest on advances of principal
and interest or property expenses made by the Master
Servicer or the Trustee;
- shortfalls resulting from extraordinary expenses of the trust; and
- shortfalls resulting from a reduction of a mortgage loan's
interest rate by a bankruptcy court or from other
unanticipated or default-related expenses of the trust.
See "Description of the Certificates -- Distributions" in this prospectus
supplement.
ADVANCES OF PRINCIPAL AND INTEREST
A. P&I 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 loan's regular interest
rate. The Master Servicer also is not required to advance prepayment or yield
maintenance premiums. If an advance is made, the Master Servicer will not
advance its servicing fee, but will advance the Trustee's fee and the Special
Servicer's standby fee.
B. Property Protection Advances
The Master Servicer may also be 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 ("Servicing Advances," and collectively with P&I Advances,
"Advances").
C. Interest on Advances
The Master Servicer and the Trustee, 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.
See "Description of the Certificates -- P&I Advances" and "Servicing of the
Mortgage Loans -- Servicing and Other Compensation and Payment of Expenses" in
this prospectus supplement and "Description of the Certificates -- Advances in
Respect of Delinquencies" and "The Pooling and Servicing
Agreements -- Certificate Account" in the accompanying prospectus.
OTHER ASPECTS OF THE OFFERED CERTIFICATES
A. Denominations
The Class A-2, Class A-3, Class A-4, Class A-1C and Class A-2C Certificates
will be offered in minimum denominations of $10,000 initial principal amount.
The Class X Certificates will be offered in minimum denominations of $1,000,000
initial notional amount. The Class B, Class C and Class D Certificates will be
offered in minimum denominations of $100,000 initial principal amount.
Investments in excess of the minimum denominations may be made in multiples of
$1.
B. Registration, Clearance and Settlement
Each class of Offered Certificates will be registered in the name of Cede &
Co., as nominee of The Depository Trust Company ("DTC"). We may elect to
terminate the book-entry system through DTC with respect to all or any portion
of any class of the Offered Certificates.
See "Description of the Certificates -- Registration and Denominations" in
this prospectus supplement and in the accompanying prospectus.
S-15
<PAGE> 18
OPTIONAL TERMINATION
At its option, the Master Servicer or any holder or holders (other than the
Depositor or the Mortgage Loan Seller) of Certificates representing a majority
interest in the Controlling Class may purchase all of the Mortgage Loans and REO
Properties, and thereby effect a termination of the Trust and early retirement
of the then-outstanding Certificates, on any Distribution Date on which the
remaining aggregate Stated Principal Balance of the Mortgage Pool is less than
1.0% of the Initial Pool Balance. See "Description of the
Certificates -- Termination" in this prospectus supplement and in the
accompanying prospectus.
TAX STATUS
An election will be made to treat a portion of the Trust as five separate
REMICs -- REMIC I, REMIC II, REMIC III, REMIC IIIU and REMIC IV -- for federal
income tax purposes. In the opinion of counsel, such portion of the Trust will
qualify for this treatment.
Pertinent federal income tax consequences of an investment in the Offered
Certificates include:
- Each class of Offered Certificates will constitute "regular
interests" in one of the REMICs.
- The regular interests will be treated as newly originated
debt instruments for federal income tax purposes.
- Beneficial owners will be required to report income thereon
in accordance with the accrual method of accounting.
- The Class X Certificates will, and one or more other
classes of Offered Certificates may, be issued with
original issue discount for federal income tax purposes,
which generally requires you to report income in advance of
the related cash distributions.
See "Certain Federal Income Tax Consequences" in this prospectus supplement
and in the accompanying prospectus.
ERISA CONSIDERATIONS
Subject to important considerations described under "Certain ERISA
Considerations" in this prospectus supplement and in the accompanying
prospectus, the Depositor expects that the Class A-2, Class A-3, Class A-4,
Class A-1C, Class A-2C and Class X Certificates are eligible for purchase by
persons investing assets of employee benefit plans or individual retirement
accounts.
THE CLASS B, CLASS C AND CLASS D CERTIFICATES MAY NOT BE PURCHASED BY, OR
TRANSFERRED TO, A PLAN OR ANY PERSON INVESTING THE ASSETS OF A PLAN. (THIS
PROHIBITION DOES NOT APPLY TO AN INSURANCE COMPANY INVESTING ASSETS OF ITS
GENERAL ACCOUNT UNDER CIRCUMSTANCES WHICH WOULD QUALIFY FOR AN EXEMPTION UNDER
SECTION III OF U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION
95-60.)
See "Certain ERISA Considerations" in this prospectus supplement and in the
accompanying prospectus.
LEGAL INVESTMENT
The Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C, Class X and
Class B Certificates will constitute "mortgage related securities" for purposes
of the Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"),
so long as those certificates are rated in one of the two highest rating
categories by one or more rating agencies. The other classes of Offered
Certificates will not constitute "mortgage related securities" within the
meaning of SMMEA.
See "Legal Investment" in this prospectus supplement and in the
accompanying prospectus.
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<PAGE> 19
CERTIFICATE RATINGS
It is a requirement for issuance of the Offered Certificates that they
receive credit ratings no lower than the following credit ratings from DCR, S&P
and Fitch (together, the "Rating Agencies"):
<TABLE>
<CAPTION>
DCR S&P FITCH
--- --- -----
<S> <C> <C> <C>
Class A-2................................................... AAA AAA AAA
Class A-3................................................... AAA AAA AAA
Class A-4................................................... AAA AAA AAA
Class A-1C.................................................. AAA AAA AAA
Class A-2C.................................................. AAA AAA AAA
Class X..................................................... AAA AAAr AAA
Class B..................................................... AA AA AA
Class C..................................................... A A A
Class D..................................................... BBB BBB BBB
</TABLE>
S&P assigns the additional symbol 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; however, the absence of an "r" symbol should
not be taken as an indication that a Class will exhibit no volatility or
variability in total return.
The Rating Agencies' ratings of the Offered Certificates address the
likelihood of the timely payment of interest and the ultimate repayment of
principal by the Rated Final Distribution Date. A security rating does not
address the frequency of prepayments (either voluntary or involuntary) or the
possibility that certificateholders might suffer a lower than anticipated yield,
nor does a security rating address the likelihood of receipt of Prepayment
Premiums. Also, a security rating does not represent any assessment of the yield
to maturity that investors may experience or the possibility that the Class X
Certificateholders might not fully recover their investment in the event of
rapid prepayments and/or other liquidations of the Mortgage Loans (including
both voluntary and involuntary prepayments). In general, the ratings thus
address credit risk and not prepayment risk.
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
organization. Any such revision, if negative, or withdrawal of a rating could
have a material adverse effect on the affected class of Offered Certificates. In
this regard, we note that S&P considered the claims-paying ratings of the
Environmental Insurer in assigning its ratings to the Offered Certificates;
accordingly, the downgrade, withdrawal or qualification of the ratings
applicable to the Environmental Insurer could have a corresponding effect upon
the ratings assigned to one or more classes of the Offered Certificates. See
"Ratings" in this prospectus supplement and "Rating" in the accompanying
prospectus for a discussion of the basis upon which ratings are assigned, the
limitations and restrictions on ratings, and conclusions that should not be
drawn from a rating.
S-17
<PAGE> 20
RISK FACTORS
You should carefully consider the following risks 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.
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 actually occur, 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.
RISKS RELATED TO THE CERTIFICATES
LACK OF CONTROL OVER TRUST FUND
You and other certificateholders generally do not have the right to make
decisions with respect to the administration of the trust. See "Servicing of the
Mortgage Loans -- General" in this prospectus supplement. Such decisions are
generally made, subject to the express terms of the Pooling Agreement, by the
Master Servicer, the Trustee or the Special Servicer, as applicable. Any
decision made by one of those parties in respect of the trust, even if such
decision is determined to be in your best interests by such party, may be
contrary to the decision that you or other certificateholders would have made
and may negatively affect your interests.
POTENTIAL CONFLICTS OF INTEREST
The Special Servicer will have considerable latitude in determining whether
to liquidate or modify defaulted Mortgage Loans. See "Servicing of the Mortgage
Loans -- Modifications, Waivers, Amendments and Consents" in this prospectus
supplement.
The Special Servicer or an affiliate has purchased certain of the
Non-Offered Certificates (including the Controlling Class discussed in this
prospectus supplement under "Servicing of the Mortgage Loans -- General"). This
could cause a conflict between the Special Servicer's duties to the Trust under
the Pooling Agreement and its interest as a holder of a certificate. However,
the Pooling Agreement provides that the mortgage loans shall be administered in
accordance with the servicing standards without regard to ownership of any
certificate by the Master Servicer, the Special Servicer or any affiliate of the
Special Servicer. See "Servicing of the Mortgage Loans -- General" in this
prospectus supplement.
YIELD CONSIDERATIONS
The yield on any offered certificate will depend on (a) the price at which
such certificate is purchased by an investor and (b) the rate, timing and amount
of distributions on such certificate. The rate, timing and amount of
distributions on any offered certificate will, in turn, depend on, among other
things:
- the Pass-Through Rate for such certificate;
- the rate and timing of principal payments (including
principal prepayments) and other principal collections on
or in respect of the Mortgage Loans and the extent to which
such amounts are to be applied or otherwise result in a
reduction of the Certificate Balance or Notional Amount of
the class of certificates to which such certificate
belongs;
S-18
<PAGE> 21
- the rate, timing and severity of Realized Losses and
Additional Trust Fund Expenses and the extent to which such
losses and expenses result in the failure to pay interest
on, or a reduction of the Certificate Balance or Notional
Amount of, the class of certificates to which such
certificate belongs;
- the timing and severity of any Net Aggregate Prepayment
Interest Shortfalls and the extent to which such shortfalls
are allocated in reduction of the Distributable Certificate
Interest payable on the class of certificates to which such
certificate belongs; and
- the extent to which Prepayment Premiums are collected and,
in turn, distributed on the class of certificates to which
such certificate belongs.
It is impossible to predict with certainty any of the factors described in
the preceding paragraph. Accordingly, investors may find it difficult to analyze
the effect that such factors might have on the yield to maturity of any class of
offered certificates. See "Description of the Mortgage Pool", "Description of
the Certificates -- Distributions" and "-- Subordination; Allocation of Losses
and Certain Expenses" and "Yield and Maturity Considerations" in this prospectus
supplement. See also "Yield and Maturity Considerations" in the accompanying
prospectus.
The yield to investors in the Class A-2, Class A-3 and Class A-4
Certificates will be sensitive to the rate and timing of receipt of principal in
respect of the Portfolio Mortgage Loans, and the yield to investors in the Class
A-1C and Class A-2C Certificates will be sensitive to the rate and timing of
receipt of principal in respect of the Conduit Mortgage Loans.
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, loan extensions, defaults and liquidations) and losses on the
Mortgage Loans. Investors in the Class X Certificates should fully consider the
associated risks, including the risk that an extremely rapid rate of
amortization, prepayment or other liquidation of the Mortgage Loans could result
in the failure of such investors to recoup fully their initial investments.
Because the Notional Amount of the Class X Certificates is equal to the
aggregate of the Certificate Balances of the Sequential Pay Certificates
outstanding from time to time, any payment of principal in respect of any
Mortgage Loan that is applied in reduction of the Certificate Balance of any
class of Sequential Pay Certificates will reduce such Notional Amount.
In general, in the case of the Class X Certificates and any other class of
offered certificates purchased at a premium, if principal payments on the
Mortgage Loans occur at a rate faster than anticipated at the time of purchase,
then (to the extent that the required Prepayment Premiums are not received or
are distributable to a different class of certificates) the investors' actual
yield to maturity will be lower than that assumed at the time of purchase.
Conversely, in the case of any class of offered certificates purchased at a
discount, if principal payments on the Mortgage Loans occur at a rate slower
than anticipated at the time of purchase, then (to the extent that the required
Prepayment Premiums are not received or are distributable to a different class
of certificates) the investors' actual yield to maturity will be lower than that
assumed at the time of purchase. Prepayment Premiums, even if available and
distributable on the Class X Certificates or other classes of offered
certificates, may not be sufficient to offset fully any loss in yield on such
class or classes of certificates attributable to the related prepayments of the
Mortgage Loans.
PREPAYMENTS AND REPURCHASES
The yield to maturity on your certificates will depend, in significant
part, upon the rate and timing of principal payments on the mortgage loans. For
this purpose, principal payments include both voluntary prepayments, if
permitted, and involuntary prepayments, such as prepayments resulting from
casualty or condemnation, defaults and liquidations or repurchases upon breaches
of representations and warranties. Because the Notional Amount of the Class X
Certificates is based upon the Certificate Balances of the certificates with
principal balances, the yield to maturity on the Class X Certificates will be
extremely sensitive to the rate and timing of prepayments of principal.
S-19
<PAGE> 22
The investment performance of your certificates may vary materially and
adversely from your expectations if the actual rate of prepayment on the
mortgage loans is higher or lower than you anticipate.
Voluntary prepayments, if permitted, generally require payment of a
Prepayment Premium. Nevertheless, we cannot assure you that the related
borrowers will refrain from prepaying their mortgage loans due to the existence
of a prepayment premium. Also, we cannot assure you that involuntary prepayments
will not occur.
The rate at which voluntary prepayments occur on the mortgage loans will be
affected by a variety of factors, including:
- the terms of the mortgage loans;
- the length of any prepayment lockout period;
- the level of prevailing interest rates;
- the availability of mortgage credit;
- the applicable yield maintenance charges or prepayment premiums;
- the Master Servicer's or Special Servicer's ability to enforce those
charges or premiums;
- the occurrence of casualties or natural disasters; and
- economic, demographic, tax, legal or other factors.
No yield maintenance charge or prepayment premium will be required for
prepayments in connection with a casualty or condemnation unless, in the case of
most of the mortgage loans, an event of default has occurred and is continuing.
In addition, if the Mortgage Loan Seller repurchases any mortgage loan from the
trust due to breaches of representations or warranties, the repurchase price
paid will be passed through to the holders of the certificates with the same
effect as if the mortgage loan had been prepaid in part or in full, except that
no prepayment premium or yield maintenance charge would be payable. Such a
repurchase may therefore adversely affect the yield to maturity on your
certificates.
BORROWER DEFAULT
The rate and timing of delinquencies or defaults on the mortgage loans will
affect:
- the aggregate amount of distributions on the offered
certificates;
- their yield to maturity;
- the rate of principal payments; and
- their weighted average life.
If losses on the mortgage loans exceed the aggregate principal amount of
the classes of certificates subordinated to a particular class, such class will
suffer a loss equal to the full amount of such excess (up to the outstanding
principal amount of such certificate).
If you calculate your anticipated yield based on assumed rates of defaults
and losses that are lower than the default rate and losses actually experienced
and such losses are allocable to your certificates, your actual yield to
maturity will be lower than the assumed yield. Under certain extreme scenarios,
such yield could be negative. In general, the earlier a loss borne by you on
your certificates occurs, the greater the effect on your yield to maturity.
Even if losses on the mortgage loans are not borne by your certificates,
those losses may affect the weighted average life and yield to maturity of your
certificates. This may be so because those losses lead to your certificates
having a higher percentage ownership interest in the trust and related
distributions of principal payments on the mortgage loans than would otherwise
have been the case. The effect on the weighted average life and yield to
maturity of your certificates will depend upon the characteristics of the
remaining mortgage loans.
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<PAGE> 23
Additionally, delinquencies and defaults on the mortgage loans may
significantly delay the receipt of distributions by you on your certificates,
unless P&I Advances are made to cover delinquent payments or the subordination
of another class of certificates fully offsets the effects of any such
delinquency or default.
BANKRUPTCY PROCEEDINGS
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
prevent a lender from foreclosing on the mortgaged property (subject to certain
protections available to the lender). As part of a restructuring plan, a court
also 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: (1) grant a
debtor a reasonable time to cure a payment default on a mortgage loan; (2)
reduce monthly payments due under a mortgage loan; (3) change the rate of
interest due on a mortgage loan; or (4) 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
on the junior lien. 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, the 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.
ADVANCE INTEREST AND OTHER PAYMENTS
To the extent described in this prospectus supplement, the Master Servicer,
the Special Servicer or the Trustee, as applicable, will be entitled to receive
interest on unreimbursed Advances. This interest will generally accrue from the
date on which the related P&I Advance is made or the related expense is incurred
through the date of reimbursement. In addition, under certain circumstances,
including delinquencies in the payment of principal and interest, a mortgage
loan will be specially serviced and the Special Servicer will be entitled to
compensation for special servicing activities. The right to receive interest on
Advances or special servicing compensation is senior to the rights of
certificateholders to receive distributions on the offered certificates. The
payment of interest on advances and the payment of compensation to the Special
Servicer may lead to shortfalls in amounts otherwise distributable on your
certificates.
LIMITED LIQUIDITY AND MARKET VALUE
Your certificates will not be listed on any securities exchange or traded
on the NASDAQ Stock Market, and there is currently no secondary market for your
certificates. While the Underwriter currently intends to make a secondary market
in the offered certificates, it is 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. Many other factors may affect the market value of your
certificates including the then-prevailing interest rates.
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<PAGE> 24
DIFFERENT TIMING OF MORTGAGE LOAN AMORTIZATION
As principal payments or prepayments are made on a mortgage loan that is
part of a pool of mortgage loans, the pool will be subject to more concentrated
risks with respect to the diversity of mortgaged properties, types of mortgaged
properties and number of borrowers, as described above. Classes that have a
later sequential designation or a lower payment priority are more likely to be
exposed to this concentration risk than are classes with an earlier sequential
designation or a higher priority. This is so because principal on the offered
certificates is generally payable in sequential order, and no class entitled to
distribution of principal generally receives principal until the principal
amount of the preceding class or classes entitled to receive principal have been
reduced to zero.
SUBORDINATION OF SUBORDINATE OFFERED CERTIFICATES
As described in this prospectus supplement, unless your certificates are
Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C or Class X Certificates,
your rights to receive distributions of amounts collected or advanced on or in
respect of the mortgage loans will be subordinated to those of the holders of
the offered certificates with an earlier alphabetical designation.
YEAR 2000 DISRUPTIONS
Servicers and Trustee. The transition from the year 1999 to the year 2000
may disrupt the ability of computerized systems to process information. The
issue presented by the "year 2000 problem" 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. If the Master Servicer, the Special Servicer or
the Trustee do not have by the year 2000 computerized systems which are year
2000 compliant, the resulting disruptions in the collection or distribution of
receipts or the mortgage loans could materially and adversely affect your
investment.
DTC. With respect to year 2000 issues, DTC has informed members of the
financial community that it has developed and is implementing a program so that
its systems, as they relate to the timely payment of distributions, including
principal and interest payments, to security holders, book-entry deliveries, and
settlement of trades within DTC, continue to function appropriately on and after
January 1, 2000. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including but not limited to, its participating
organizations, through which Certificateholders will hold their Certificates, as
well as the computer systems of third party service providers. DTC has informed
the financial community that it is contacting, and will continue to contact,
third party vendors from whom DTC acquires services to: (1) impress upon them
the importance of these services being year 2000 compliant; and (2) determine
the extent of their efforts for year 2000 remediation, and, as appropriate,
testing, of their services. In addition, DTC has stated that it is in the
process of developing these contingency plans as it deems appropriate.
If problems associated with the Year 2000 issue were to occur with respect
to DTC and the services described above, payment to Certificateholders could be
delayed or otherwise adversely affected.
The forward-looking statements contained in this Year 2000 discussion
should be read in conjunction with the continuing statement included in the
fourth italicized paragraph on page S-18 of this prospectus supplement.
RISKS RELATED TO THE MORTGAGE LOANS
NATURE OF THE MORTGAGED PROPERTIES
The Mortgaged Properties consist solely of multifamily rental and
commercial properties. Commercial and multifamily lending is generally viewed as
exposing a lender to a greater risk of loss than lending on the
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<PAGE> 25
security of one- to four-family residences. This is because multifamily and
commercial real estate lending usually involves larger loans, and repayment is
typically dependent upon the successful operation of the related real estate
project.
A large number of factors may adversely affect the net operating income and
property value of the mortgaged properties. Some of these factors relate to the
property itself, such as:
- the age, design and construction quality of the property;
- perceptions regarding the safety, convenience and
attractiveness of the property;
- the proximity and attractiveness of competing properties;
- the adequacy of the property's management and maintenance;
- increases in operating expenses;
- an increase in the capital expenditures needed to maintain
the property or make improvements;
- a decline in the financial condition of a major tenant;
- an increase in vacancy rates; and
- a decline in rental rates as leases are renewed or entered
into with new tenants.
Operation of a multifamily or commercial property may also be affected by
circumstances outside the control of the borrower or lender, such as the quality
or stability of the surrounding neighborhood, the development of competing
projects or businesses, maintenance expenses (such as energy costs), and changes
in laws (such as the imposition of rent control or stabilization laws in the
case of multifamily rental properties, changes in the tax laws and retroactive
changes in building codes). If the cash flow from a particular property is
reduced (for example, if leases are not obtained or renewed, if tenant defaults
increase or rental rates decline or, in the case of a property occupied by its
owner, if the owner's business declines), the borrower's ability to repay the
loan may be impaired and the resale value of the particular property may
decline.
The borrowers' income would be adversely affected if tenants were unable to
pay rent, if space were unable to be rented on favorable terms or at all, or if
a significant tenant were to become a debtor in a bankruptcy case under the
United States Bankruptcy Code. For example, if any borrower were to relet or
renew the existing leases at rental rates significantly lower than expected
rates, then such lower rates would adversely affect borrower's funds from
operations. Changes in payment patterns by tenants may result from a variety of
social, legal and economic factors, such as the rate of inflation and
unemployment levels and may be reflected in the rental rates offered for
comparable space. In addition, upon reletting or renewing existing leases at
commercial properties, borrowers will likely be required to pay leasing
commissions and tenant improvement costs which may adversely affect cash flow
from the Mortgaged Property. See "Description of the Mortgage Pool -- Additional
Mortgage Loan Information -- Tenant Matters" herein.
Commercial properties represent security for 64.7% of the Initial Pool
Balance. Lending on commercial properties is generally perceived as involving
greater risk than lending on the security of multifamily residential properties,
and certain types of commercial properties are exposed to particular kinds of
risks. See "-- Risks Particular to Retail Properties", "-- Risks Particular to
Senior Housing/Health Care Properties", "-- Risks Particular to Hotels",
"-- Risks Particular to Office Properties", "-- Risks Particular to Mobile Home
Park Properties" and "-- Risks Particular to Mini-Storage Facilities" below.
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<PAGE> 26
SEASONING OF THE PORTFOLIO MORTGAGE LOANS
Many of the Portfolio Mortgage Loans are "seasoned" mortgage loans, having
been outstanding between 12 months and 296 months. The weighted average time
that the term Portfolio Mortgage Loans have been outstanding is 44 months. While
seasoned mortgage loans have the benefit of established payment histories, there
are a number of risks associated with seasoned mortgage loans that are not
present, or present to a lesser degree, with more recently originated mortgage
loans. For example:
- property values and the surrounding neighborhood may have changed
dramatically since origination;
- for most properties, no recent site inspections have been conducted to
verify the condition of the mortgaged property;
- origination standards may have been significantly different;
- the market for any related businesses may have changed significantly
from the time the mortgage loan was originated;
- the current financial performance of the related borrower, its
business, or the related mortgaged property in general, may be
significantly different than at origination, and debt service coverage
ratios and tests established at origination may no longer by
meaningful.
Among other things, such factors make it difficult to estimate the current
value on the related mortgaged property, and estimated values of mortgaged
properties discussed in this prospectus supplement, to the extent based upon or
extrapolated from general market data, may not be accurate in the case of
particular mortgaged properties.
Further, some of the mortgage loans have experienced delinquencies, or been
modified, since origination and accordingly have not been current during the
full seasoning term.
MANAGEMENT
The successful operation of a real estate project is dependent on the
performance and viability of the property manager of such project. The property
manager is responsible for responding to changes in the local market, planning
and implementing the rental structure or the business plan, as the case may be,
and ensuring that maintenance and capital improvements can be carried out in a
timely fashion. Accordingly, by controlling costs, providing appropriate service
to tenants and seeing to the maintenance of improvements, sound property
management can improve occupancy rates/business and cash flow, reduce operating
and repair costs and preserve building value. On the other hand, management
errors can, in some cases, impair the long term viability of a real estate
project.
There are 36 groups of Mortgaged Properties that have the same or related
management. No such group represents security for more than 3.9% of the Initial
Pool Balance.
BALLOON PAYMENTS
Three hundred nine of the Mortgage Loans, which represent 95.4% of the
Initial Pool Balance, will have substantial payments (that is, Balloon Payments)
due at their respective stated maturities, in each case unless the Mortgage Loan
is previously prepaid. One hundred fifty of the Balloon Loans, representing in
the aggregate 45.7% of the Initial Pool Balance, will have Balloon Payments due
during the period from January 2008 through May 2009.
Mortgage Loans with Balloon Payments involve a greater risk to the lender
than fully amortizing loans, because the ability of a borrower to make a Balloon
Payment typically will depend upon its ability either to refinance the loan or
to sell the related Mortgaged Property at a price sufficient to permit the
borrower to
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<PAGE> 27
make the Balloon Payment. Circumstances that will affect the ability of the
borrower to accomplish either of these goals at the time of attempted sale or
refinancing include:
- the level of available mortgage rates;
- the fair market value of the property;
- the borrower's equity in the related property;
- the financial condition of the borrower and operating
history of the property;
- tax laws;
- prevailing economic conditions; and
- the availability of credit for multifamily or commercial
properties, as the case may be.
See "Description of the Mortgage Pool -- Certain Terms and Conditions of
the Mortgage Loans" and "-- Additional Mortgage Loan Information" in this
prospectus supplement and "Risk Factors -- Certain Factors Affecting
Delinquency, Foreclosure and Loss of the Mortgage Loans -- Increased Risk of
Default Associated with Balloon Payments" in the accompanying prospectus.
RISKS PARTICULAR TO MULTIFAMILY PROPERTIES
Multifamily properties secure 98 of the Mortgage Loans, representing 32.1%
of the Initial Pool Balance.
Several factors may adversely affect the value and successful operation of
a multifamily property, including:
- the physical attributes of the apartment building (e.g.,
its age, appearance and construction quality);
- the location of the property (e.g., a change in the
neighborhood over time);
- the ability and willingness of management to provide
adequate maintenance and insurance;
- the types of services the property provides;
- the property's reputation;
- the level of mortgage interest rates (which may encourage
tenants to purchase rather than lease housing);
- the presence of competing properties;
- adverse local or national economic conditions; and
- state and local regulations.
RISKS PARTICULAR TO RETAIL PROPERTIES
Retail properties secure 76 of the Mortgage Loans, representing 26.5% of
the Initial Pool Balance.
Several factors may adversely affect the value and successful operation of
a retail property, including:
- changes in consumer spending patterns, local competitive
conditions (such as the supply of retail space or the
existence or construction of new competitive shopping
centers or shopping malls);
- alternative forms of retailing (such as direct mail, video
shopping networks and internet web sites which reduce the
need for retail space by retail companies);
- the quality and philosophy of management;
S-25
<PAGE> 28
- the attractiveness of the property to tenants and their
customers or clients;
- the public perception of the safety of customers at
shopping malls and shopping centers; and
- the need to make major repairs or improvements to satisfy
the needs of major tenants.
The general strength of retail sales also directly affects retail
properties. The retailing industry is currently undergoing consolidation due to
many factors, including growth in discount and alternative forms of retailing.
If the sales by tenants in the Mortgaged Properties that contain retail space
were to decline, the rents that are based on a percentage of revenues may also
decline, and tenants may be unable to pay the fixed portion of their rents or
other occupancy costs. The cessation of business by a significant tenant can
adversely affect a retail property, not only because of rent and other factors
specific to such tenant, but also because significant tenants at a retail
property play an important part in generating customer traffic and making a
retail property a desirable location for other tenants at such property. In
addition, certain tenants at retail properties may be entitled to terminate
their leases if an anchor tenant fails to renew or terminates its lease, becomes
the subject of a bankruptcy proceeding or ceases operations at such property.
Rite Aid Exposure. During the past several months, it has been reported
that Rite Aid Corporation ("Rite Aid") has experienced earnings shortfalls and
declining credit ratings, and become the subject of allegations of wrongdoing.
Five of the Mortgage Loans, representing approximately 1.2% of the Initial Pool
Balance, have Rite Aid as a significant tenant. Only one such Mortgage Loan,
representing approximately 0.3% of the Initial Pool Balance, has Rite Aid as the
sole tenant. With respect to these five loans (Loan Nos. 51019, 51327, 51484,
51516 and 3051141), the Mortgage Loan Seller has agreed to indemnify the Trust
for the benefit of the holders of the Offered Certificates, per their respective
entitlements, if any (as determined as described under "Description of the
Certificates -- Distributions -- Distributions of Prepayment Premiums" in this
prospectus supplement), for any Prepayment Premiums due, but not received, in
the event of a payment default relating to Rite Aid under any of such Mortgage
Loans. The total amount of this indemnification is limited to 10% of the
aggregate principal balance of such Mortgage Loans as of the Cut-off Date.
RISKS PARTICULAR TO SENIOR HOUSING/HEALTH CARE PROPERTIES
Properties operated as skilled nursing facilities or assisted living
facilities secure 13 of the Mortgage Loans, which represent approximately 5.3%
of the Initial Pool Balance. Providers of long-term nursing care and other
medical services are subject to federal and state laws that relate to the
adequacy of medical care, distribution of pharmaceuticals, rate setting,
equipment, personnel, operating policies and additions to facilities and
services. To the extent dependent on patients whose fees are reimbursed by
private insurers, such providers are also subject to the reimbursement policies
of such insurers. In addition, facilities where such care or other medical
services are provided are subject to periodic inspection by governmental
authorities to determine compliance with various standards necessary for
continued licensing under state law and continued participation in the Medicaid
and Medicare reimbursement programs.
The failure of any such borrowers to maintain or renew any required license
or regulatory approval could prevent it from continuing operations at a
Mortgaged Property (in which case no revenues would be received from such
property or portion thereof requiring licensing). A failure to be licensed also
could bar it from participation in government reimbursement programs. In the
event of foreclosure, we cannot assure you that the Trustee (or Master Servicer
or Special Servicer) or purchaser in a foreclosure sale would be entitled to the
rights under such licenses. Such party may have to apply in its own right for
such a license, and we cannot assure you that a new license could be obtained.
Nursing facilities may receive a substantial portion of their revenues from
government reimbursement programs, primarily Medicaid and Medicare. Medicaid and
Medicare are subject to statutory and regulatory changes, retroactive rate
adjustments, administrative rulings, policy interpretations, delays by fiscal
intermediaries and government funding restrictions. Moreover, governmental
payors have employed cost-containment measures that limit payments to health
care providers, and there are currently under considera-
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tion various proposals for national health care reform that could further limit
those payments. Accordingly, we cannot predict whether payments under government
reimbursement programs will be sufficient to fully reimburse the cost of caring
for program beneficiaries. Any such insufficiency could adversely affect the net
operating income of the Mortgaged Properties that receive revenues from those
sources, and consequently the ability of the related borrowers to meet their
Mortgage Loan obligations.
RISKS PARTICULAR TO OFFICE PROPERTIES
Office properties secure 42 of the Mortgage Loans, representing
approximately 13.2% of the Initial Pool Balance.
A large number of factors may adversely affect the value of office
properties, including:
- the quality of an office building's tenants;
- the physical attributes of the building in relation to
competing buildings (e.g., age, condition, design, access to
transportation and ability to offer certain amenities, such
as sophisticated building systems);
- the desirability of the area as a business location; and
- the strength and nature of the local economy (including
labor costs and quality, tax environment and quality of life
for employees).
In addition, there may be significant costs associated with tenant
improvements and concessions in connection with reletting office space.
Moreover, the cost of refitting office space for a new tenant is often higher
than the cost of refitting other types of property.
RISKS PARTICULAR TO HOTELS
Properties operated as hotels secure 2 of the Mortgage Loans, representing
approximately 0.8% of the Initial Pool Balance.
Various factors may adversely affect the economic performance of a hotel,
including:
- adverse economic and social conditions, either local,
regional or national (which may limit the amount that can be
charged for a room and reduce occupancy levels);
- the construction of competing hotels or resorts;
- continuing expenditures for modernizing, refurbishing, and
maintaining existing facilities prior to the expiration of
their anticipated useful lives;
- a deterioration in the financial strength or managerial
capabilities of the owner and operator of a hotel; and
- changes in travel patterns caused by changes in access,
energy prices, strikes, relocation of highways, the
construction of additional highways or other factors.
Because hotel rooms generally are rented for short periods of time, hotel
properties tend to respond more quickly to adverse economic conditions and
competition than do other commercial properties. In addition, the franchise
license may be owned by an entity operating the hotel and not the borrower or,
if the franchise license is owned by the borrower, the transferability of the
related franchise license agreement may be restricted and, in the event of a
foreclosure on a hotel property, the mortgagee may not have the right to use the
franchise license without the franchisor's consent. Furthermore, the ability of
a hotel to attract customers, and some of such hotel's revenues, may depend in
large part on its having a liquor license. Such a license may not be
transferable.
RISKS PARTICULAR TO MOBILE HOME PARK PROPERTIES
Mobile home park properties ("Mobile Home Properties") secure 13 of the
Mortgage Loans representing 3.2% of the Initial Pool Balance. Significant
factors determining the value of Mobile Home Properties are generally similar to
the factors affecting the value of multifamily residential properties. In
addition, the Mobile Home Properties are special purpose properties that could
not be readily converted to general residential, retail or office use. In fact,
certain states also regulate changes in mobile home park use and require that
the landlord
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give written notice to its tenants a substantial period of time prior to the
projected change. Consequently, if the operation of any of the Mobile Home
Properties becomes unprofitable such that the borrower becomes unable to meet
its obligation on the related Mortgage Loan, the liquidation value of that
Mobile Home Property may be substantially less, relative to the amount owing on
the Mortgage Loan, than would be the case if the Mobile Home Property were
readily adaptable to other uses.
RISKS PARTICULAR TO MINI-STORAGE FACILITIES
Properties operated as mini-storage facilities secure 18 of the Mortgage
Loans, representing security for approximately 2.7% of the Initial Pool Balance.
Mini-storage (or self-storage) properties are considered vulnerable to
competition, because both acquisition costs and break-even occupancy are
relatively low. The conversion of mini-storage facilities to alternative uses
generally requires substantial capital expenditures. Thus, if the operation of
any of the mini-storage Mortgaged Properties becomes unprofitable such that the
borrower becomes unable to meet its obligations on the related Mortgage Loan,
the liquidation value of that mini-storage Mortgaged Property may be
substantially less, relative to the amount owning on the Mortgage Loan, than
would be the case if the mini-storage Mortgaged Property were readily adaptable
to other uses. Tenant privacy, anonymity and efficient access may heighten
environmental risks. No environmental assessment of a Mortgaged Property
included an inspection of the contents of the self-storage units included in the
self-storage Mortgaged Properties. We cannot assure you that all of the units
included in the mini-storage Mortgaged Properties are free from hazardous
substances, or that they will remain so in the future.
RISKS OF SUBORDINATE FINANCING
The existence of subordinated indebtedness encumbering a Mortgaged Property
may increase the difficulty of refinancing the related Mortgage Loan at maturity
and the possibility that reduced cash flow could result in deferred maintenance.
Also, in the event that the holder of the subordinated debt files for bankruptcy
or is placed in involuntary receivership, foreclosure on the Mortgaged Property
could be delayed.
Conduit Mortgage Loans. None of the Mortgaged Properties relating to
Conduit Mortgage Loans are encumbered by secured subordinated debt. Although the
Conduit Mortgage Loans generally either prohibit the related borrower from
encumbering the Mortgaged Property with additional secured debt or require the
consent of the holder of the first lien prior to so encumbering such property, a
violation of such prohibition may not become evident until the related Mortgage
Loan otherwise defaults. In addition, the related borrower may be permitted to
incur additional indebtedness secured by furniture, fixtures and equipment, and
to incur additional unsecured indebtedness. See "Certain Legal Aspects of
Mortgage Loans -- Subordinate Financing" in the accompanying prospectus.
Portfolio Mortgage Loans. We are aware that 13 of the mortgaged properties
relating to the Portfolio Mortgage Loans, representing 3.6% of the Initial Pool
Balance, were encumbered by subordinate debt as of the Cut-off Date. However,
several of the Portfolio Mortgage Loans do not prohibit the related mortgagor
from incurring subordinate debt in the future. In addition, one Portfolio
Mortgage Loan, representing 0.3% of the Initial Pool Balance, is encumbered by a
subordinate mortgage securing the performance of certain guarantee obligations.
The existence of subordinated indebtedness encumbering a mortgaged property may
increase the difficulty of refinancing the related mortgage loan at maturity and
the possibility that reduced cash flow could result in deferred maintenance.
Also, in the event that the holder of the subordinated debt files for bankruptcy
or is placed in involuntary receivership, foreclosure on the mortgaged property
could be delayed. Regardless of whether the terms of a mortgage loan prohibit
the incurrence of subordinate debt, the related borrower may be permitted to
incur additional indebtedness secured by furniture, fixtures and equipment, and
to incur additional unsecured indebtedness. See "Certain Legal Aspects of
Mortgage Loans -- Subordinate Financing" in the accompanying prospectus.
LIMITED RECOURSE
If a default occurs under any Conduit Mortgage Loan, recourse generally may
be had only against the specific properties and other assets that have been
pledged to secure the loan. Payment prior to maturity is consequently dependent
primarily on the sufficiency of the net operating income of the mortgaged
property. Payment at maturity is primarily dependent upon the market value of
the mortgaged property or the
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borrower's ability to refinance the property. Even in the case of the Portfolio
Mortgage Loans, of which 96.8% (by Cut-off Date principal balance) are recourse
loans, and the very limited cases where recourse to a borrower is permitted by
the loan documents relating to a Conduit Mortgage Loan, the Depositor has not
undertaken an evaluation of the financial condition of such person.
ENVIRONMENTAL CONSIDERATIONS
Conduit Mortgage Loans. An environmental site assessment (or an update of
a previously conducted assessment) was performed (generally in a manner
consistent with industry-wide standards) at each of the Mortgaged Properties
relating to a Conduit Mortgage Loan during or after April 1997. No such
assessment or update otherwise revealed any material adverse environmental
condition or circumstance at any Mortgaged Property, except such potentially
material adverse conditions or circumstances as described under "Description of
the Mortgage Pool -- Certain Underwriting Matters -- Environmental Assessments"
in this prospectus supplement. We cannot assure you, however, that such
environmental assessments identified all environmental conditions and risks. Nor
can we assure you that all recommended operations and maintenance plans
recommended in environmental assessments have been or will continue to be
implemented.
Portfolio Mortgage Loans. The Mortgage Loan Seller has represented and
warranted in the Pooling Agreement with respect to each mortgaged property
relating to a Portfolio Mortgage Loan that there are no material adverse
environmental conditions existing at such mortgaged property at the Trust
Formation Date. Any breach of such warranty will result in an obligation to
repurchase the affected Portfolio Mortgage Loans, subject to a cure right as
described under "-- Representations and Warranties; Repurchases". Although we
are not aware of any such material adverse environmental conditions at the Trust
Formation Date, we otherwise cannot assure you that no such conditions that
would create a cure or repurchase obligation exist. Many of the Portfolio
Mortgage Loans are seasoned loans originated during a time when it was not
common practice for the originator of such loans to conduct environmental
assessments in connection with the origination of mortgage loans.
With respect to any material adverse conditions arising at such Mortgaged
Property after the Trust Formation Date, the Trust Fund will have the limited
benefit of an environmental insurance policy as described under Description of
the Mortgage Pool -- Portfolio Loan Environmental Policy".
LIMITATIONS ON ENFORCEABILITY OF CROSS-COLLATERALIZATION
As described under "Description of the Mortgage Pool -- General" herein,
the Mortgage Pool includes one set of Cross-Collateralized Mortgage Loans, which
represents 3.9% of the Initial Pool Balance. Cross-collateralization
arrangements seek to reduce the risk that the inability of one or more of the
Mortgaged Properties securing any such set of Cross-Collateralized Mortgage
Loans (or any such Mortgage Loan with multiple Mortgaged Properties) to generate
net operating income sufficient to pay debt service will result in defaults and
ultimate losses. In addition, one or more of the related Mortgaged Properties
for certain sets of related Cross-Collateralized Mortgage Loans may be released
from the lien of the applicable Mortgage under the circumstances described under
"Description of the Mortgage Pool -- Certain Terms and Conditions of the
Mortgage Loans" in this prospectus supplement.
Certain related Cross-Collateralized Mortgage Loans have different
borrowers. 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:
(1) such borrower was insolvent when granted the lien, was rendered
insolvent by the granting of the lien or was left with inadequate capital,
or was not able to pay its debts as they matured; and
(2) 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.
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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
(1) subordinate all or part of the pertinent mortgage loan to existing
or future indebtedness of that borrower;
(2) recover payments made under that mortgage loan; or
(3) 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.
RELATED PARTIES
Certain groups of borrowers under the Mortgage Loans are affiliated or
under common control with one another. However, no such group of affiliated
borrowers are obligors on Mortgage Loans representing more than 3.9% of the
Initial Pool Balance. In addition, tenants in certain Mortgaged Properties also
may be tenants in other Mortgaged Properties, and certain tenants may be owned
by affiliates of the borrowers or otherwise related to or affiliated with a
borrower. There are also several cases in which a particular entity is a tenant
at multiple Mortgaged Properties, and although it may not be a Major Tenant at
any such property, it may be significant to the success of such properties.
In such circumstances, any adverse circumstances relating to a borrower or
tenant or a respective affiliate and affecting one of the related Mortgage Loans
or Mortgaged Properties could arise in connection with the other related
Mortgage Loans or Mortgaged Properties. In particular, the bankruptcy or
insolvency of any such borrower or tenant or respective affiliate could have an
adverse effect on the operation of all of the related Mortgaged Properties and
on the ability of such related Mortgaged Properties to produce sufficient cash
flow to make required payments on the related Mortgage Loans. For example, if a
person that owns or directly or indirectly controls several Mortgaged Properties
experiences financial difficulty at one Mortgaged Property, it could defer
maintenance at one or more other Mortgaged Properties in order to satisfy
current expenses with respect to the Mortgaged Property experiencing financial
difficulty. It could also attempt to avert foreclosure by filing a bankruptcy
petition that might have the effect of interrupting Monthly Payments for an
indefinite period on all the related Mortgage Loans. See "Certain Legal Aspects
of Mortgage Loans -- Bankruptcy Laws" in the accompanying prospectus.
In addition, a number of the borrowers under the Mortgage Loans are limited
or general partnerships. Under certain circumstances, the bankruptcy of the
general partner in a partnership may result in the dissolution of such
partnership. The dissolution of a borrower partnership, the winding-up of its
affairs and the distribution of its assets could result in an acceleration of
its payment obligations under the related Mortgage Loan.
GEOGRAPHIC CONCENTRATION
A concentration of Mortgaged Properties in a particular state or region
increases the exposure of the Mortgage Pool to any adverse economic developments
that may occur in such state or region, conditions in the real estate market
where the Mortgaged Properties securing the related Mortgage Loans are located,
changes in governmental rules and fiscal polices, acts of nature, including
floods, tornadoes and earthquakes (which may result in uninsured losses), and
other factors which are beyond the control of the borrowers. In this regard:
- 132 of the Mortgaged Properties, which constitute security
for 35.8% of the Initial Pool Balance, are located in
California.
- 27 of the Mortgaged Properties, which constitute security
for 10.6% of the Initial Pool Balance, are located in
Nevada.
- 37 of the Mortgaged Properties, which constitute security
for 10.4% of the Initial Pool Balance, are located in
Washington.
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- 16 of the Mortgaged Properties, which constitute security
for 8.1% of the Initial Pool Balance, are located in
Florida.
- 27 of the Mortgaged Properties, which constitute security
for 5.5% of the Initial Pool Balance, are located in
Arizona.
No more than 8.6% of Initial Pool Balance is secured by Mortgaged
Properties located in any particular county in California.
SEISMIC RISKS
The mortgaged properties relating to 92 of the Portfolio Mortgage Loans,
representing 27.0% of the Initial Pool Balance, are located in California. In
general, the Portfolio Mortgage Loans do not require earthquake insurance.
Accordingly, the occurrence of an earthquake in California could result in
losses for which there would be no insurance or other form of recovery. Seismic
evaluations generally were not conducted in connection with the origination of
the Portfolio Mortgage Loans. However, the Mortgage Loan Seller has obtained a
seismic analysis as described under "Description of the Mortgage Pool -- Certain
Underwriting Matters -- Seismic Reviews."
OTHER CONCENTRATIONS
Concentrations in a pool of mortgage loans with larger than average
balances can result in losses that are more severe, relative to the size of the
pool, than would be the case if the aggregate balance of such pool were more
evenly distributed. In this regard:
- 100 Mortgage Loans have Cut-off Date Balances that are
higher than the average Cut-off Date Balance.
- The largest single Mortgage Loan, by Cut-off Date Balance,
represents approximately 2.3% of the Initial Pool Balance,
and the largest group of Cross-Collateralized Mortgage
Loans, by Cut-off Date Balances, represents in the aggregate
approximately 3.9% of the Initial Pool Balance.
- The ten largest Mortgage Loans, or groups of
Cross-Collateralized Mortgage Loans, have Cut-off Date
Balances that represent in the aggregate approximately 16.0%
of the Initial Pool Balance.
CHANGES IN CONCENTRATIONS
As payments in respect of principal (including payments in the form of
voluntary principal prepayments, Liquidation Proceeds and the repurchase prices
for any Mortgage Loans repurchased due to breaches of representations or
warranties) are received with respect to the Mortgage Loans, the remaining
Mortgage Loans as a group may exhibit increased concentration with respect to
the type of properties, property characteristics, number of borrowers and
affiliated borrowers and geographic location. Because principal on the
Sequential Pay Certificates is payable in sequential order, Classes that have a
lower priority with respect to the payment of principal are relatively more
likely to be exposed to any risks associated with changes in concentrations.
PREPAYMENT PREMIUMS
Conduit Mortgage Loans. Approximately 79.5% of the Conduit Mortgage Loans
(by Cut-off Date principal balance) generally permit defeasance only, and
prohibit any voluntary principal prepayment until two or three months prior to
the maturity date of the Mortgage Loan. The remaining approximately 20.5% of the
Conduit Mortgage Loans permit voluntary principal prepayments during certain
periods only upon the payment of a Prepayment Premium. See "Description of the
Mortgage Pool -- Certain Terms and Conditions of the Mortgage
Loans -- Prepayment Provisions" in this prospectus supplement. Any Prepayment
Premiums actually collected on the remaining Conduit Mortgage Loans, which
generally permit voluntary prepayments during particular periods and, depending
on the period, require the payment of a Prepayment Premium with such prepayment,
will be distributed among the respective Classes of the REMIC Regular
Certificates in the amounts and in accordance with the priorities described in
this prospectus supplement under "Description of
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<PAGE> 34
the Certificates -- Distributions -- Distributions of Prepayment Premiums". The
Depositor, however, makes no representation as to the collectibility of any
Prepayment Premium.
Portfolio Mortgage Loans. Most of the Portfolio Mortgage Loans do not
effectively prohibit principal prepayments either because they do not contain
any prohibition or because the related Lock-Out Period has expired. However, 175
of the Portfolio Mortgage Loans, representing 53.2% of the Initial Pool Balance
and 99.8% of the Cut-off Date principal balance of the Portfolio Mortgage Loans,
require that any voluntary principal prepayment be accompanied by a Prepayment
Premium. The formulas for determining the applicable Prepayment Premium differ
widely among the mortgage loans. See "Description of the Mortgage
Pool -- Certain Terms and Conditions of the Mortgage Loans -- Prepayment
Provisions" in this prospectus supplement. Prepayment Premiums actually
collected on the mortgage loans will be distributed as described under
"Description of the Certificates -- Distributions -- Prepayment Premiums" in
this prospectus supplement.
See "Servicing of the Mortgage Loans -- Modifications, Waivers, Amendments
and Consents" herein and "Certain Legal Aspects of Mortgage Loans -- Default
Interest and Limitations on Prepayments" in the Prospectus. See "Description of
the Mortgage Pool -- Assignment of the Mortgage Loans; Repurchases" and
"-- Representations and Warranties; Repurchases", "Servicing of the Mortgage
Loans -- Sale of Defaulted Mortgage Loans" and "Description of the
Certificates -- Termination" in this prospectus supplement.
Generally. Provisions requiring 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 Prepayment Premium will be enforceable. Also, we cannot
assure you that foreclosure proceeds will be sufficient to pay an enforceable
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 requiring a Prepayment Premium. In certain
jurisdictions those collateral substitution provisions might therefore be deemed
unenforceable under applicable law, or usurious.
We also note the following with respect to Prepayment Premiums:
- Liquidation Proceeds recovered in respect of any defaulted
Mortgage Loan will, in general, be applied to cover
outstanding servicing expenses and unpaid principal and
interest prior to being applied to cover any Prepayment
Premium due in connection with the liquidation of such
Mortgage Loan.
- The Special Servicer may waive a Prepayment Premium in
connection with obtaining a pay-off of a defaulted Mortgage
Loan.
- No Prepayment Premium will be payable in connection with any
repurchase of a Mortgage Loan by the Mortgage Loan Seller
for a material breach of representation or warranty on the
part of the Mortgage Loan Seller or any failure to deliver
documentation relating thereto.
- No Prepayment Premium will be payable in connection with the
purchase of all of the Mortgage Loans and any REO Properties
by the Master Servicer or any holder or holders of
Certificates evidencing a majority interest in the
Controlling Class in connection with the termination of the
Trust.
- No Prepayment Premium will be payable in connection with the
purchase of defaulted Mortgage Loans by the Master Servicer,
Special Servicer or any holder or holders of Certificates
evidencing a majority interest in the Controlling Class.
See "Servicing of the Mortgage Loans -- Modifications, Waivers, Amendments
and Consents" herein and "Certain Legal Aspects of Mortgage Loans -- Default
Interest and Limitations on Prepayments" in the accompanying prospectus. See
"Description of the Mortgage Pool -- Assignment of the Mortgage Loans;
Repurchases" and "-- Representations and Warranties; Repurchases", "Servicing of
the Mortgage Loans -- Sale of Defaulted Mortgage Loans" and "Description of the
Certificates -- Termination" in this prospectus supplement.
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TAX CONSIDERATIONS RELATED TO FORECLOSURE
If the Trust Fund were to acquire a mortgaged property subsequent to a
default on the related mortgage loan pursuant to a foreclosure or deed in lieu
of foreclosure, the Special Servicer would be required to retain an independent
contractor to operate and manage the mortgaged property. Among other things, the
independent contractor would not be permitted to perform construction work on
the mortgaged property unless such construction generally was at least 10%
complete at the time default on the related mortgage loan became imminent. In
addition, any net income from such operation and management, other than
qualifying "rents from real property" (as defined in Section 856(d) of the
Internal Revenue Code of 1986, as amended (the "Code")), or any rental income
based on the net profits of a tenant or sub-tenant or allocable to a service
that is non-customary in the area and for the type of building involved, will
subject the Trust Fund to federal (and possibly state or local) tax on such
income at the highest marginal corporate tax rate (currently 35%), thereby
reducing net proceeds available for distribution to Certificateholders.
LEASEHOLD RISKS
Six mortgage loans, representing approximately 1.9% of the Initial Pool
Balance, are secured primarily by a mortgage on a ground lease. Leasehold
mortgages are subject to certain risks not associated with mortgage loans
secured by the fee estate of the mortgagor. The most significant of these risks
is that the ground lease may terminate if, among other reasons, the ground
lessee breaches or defaults in its obligations under the ground lease or there
is a bankruptcy of the ground lessee or the ground lessor. Accordingly, a
leasehold mortgagee may lose the collateral securing its leasehold mortgage. In
addition, although the consent of the ground lessor generally will not be
required for foreclosure, the terms and conditions of a leasehold mortgage are
subject to the terms and conditions of the ground lease, and the rights of a
ground lessee or a leasehold mortgagee with respect to, among other things,
insurance, casualty and condemnation will be governed by the provisions of the
ground lease.
ZONING AND BUILDING CODE COMPLIANCE
The Mortgage Loan Seller has not examined whether the use and operation of
the mortgaged properties related to the Portfolio Mortgage Loans were in
compliance with all applicable zoning, land-use, environmental, building, fire
and health ordinances, rules, regulations and orders applicable to such
mortgaged properties at the time such mortgage loans were originated.
LIMITED INFORMATION
Conduit Mortgage Loans. The information set forth in this prospectus
supplement with respect to the Conduit Mortgage Loans is derived principally
from one or more of the following sources:
- A review of the available credit and legal files relating to
the Mortgage Loans.
- Inspections of the Mortgaged Properties related to the
Conduit Mortgage Loans undertaken by or on behalf of the
Mortgage Loan Seller.
- Unaudited operating statements for the Mortgaged Properties
related to the Conduit Mortgage Loans supplied by the
borrowers.
- Appraisals for the Mortgaged Properties related to the
Conduit Mortgage Loans that generally were performed at
origination (which appraisals were used in presenting
information regarding the values of such Mortgaged
Properties as of the Cut-off Date under "Description of the
Mortgage Pool" and under Annex A for illustrative purposes
only).
- Information supplied by entities from which the Mortgage
Loan Seller acquired, or which currently service, certain of
the Conduit Mortgage Loans.
Also, several Conduit Mortgage Loans constitute acquisition financing.
Accordingly, limited or no operating information is available with respect to
the related Mortgaged Property. All of the Conduit Mortgage Loans were
originated during the preceding 25 months.
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Portfolio Mortgage Loans. The information set forth in this prospectus
supplement with respect to the Portfolio Mortgage Loans is derived principally
from one or more of the following sources:
- A partial review of the available credit and legal files
relating to the Portfolio Mortgage Loans.
- Inspections of the Mortgaged Properties related to the
Portfolio Mortgage Loans undertaken by or on behalf of the
originators of the Portfolio Mortgage Loans, and inspections
of a sampling of the mortgaged properties conducted on
behalf of the Mortgage Loan Seller.
- Appraisals of the Mortgaged Properties related to the
Portfolio Mortgage Loans that generally were performed at
origination or other source documents or information
provided by the Mortgage Loan Seller (appraisal values and
compilations based on appraisals used in this prospectus
supplement are based on such appraisals, documents and/or
information).
- Information supplied by entities from which the Mortgage
Loan Seller acquired, or which currently service, certain of
the Portfolio Mortgage Loans.
- Broker price opinions.
Because many of the Portfolio Mortgage Loans are seasoned loans, the
information from many of these sources may be out of date and we cannot assure
you that it is accurate or complete with respect to the Portfolio Mortgage Loans
as they exist on the date hereof. We note that delinquency data on the Portfolio
Mortgage Loans generally has been compiled only since approximately September
30, 1997. In addition, with only very limited exceptions, the Mortgage Loan
Seller has not undertaken any inspection or other form of assessment of any
Mortgaged Property. In particular, it has made no attempt to determine whether
any Mortgaged Property related to the Portfolio Mortgage Loans is in compliance
with applicable laws.
As described in this prospectus supplement under "Representations and
Warranties; Repurchases," the Mortgage Loan Seller has made certain
representations and warranties about the Portfolio Mortgage Loans. While the
Mortgage Loan Seller has no reason to believe that there is breach of
representations or warranties with respect to any Portfolio Mortgage Loans, or
that information in this prospectus supplement with respect to such mortgage
loans is incorrect, a more complete review of mortgage files might have revealed
such a breach or inaccuracy. Any material breach of representation or warranty,
if not cured by the Mortgage Loan Seller, may require the Mortgage Loan Seller
to repurchase the applicable Portfolio Mortgage Loan, having the same impact on
certificateholders as a prepayment.
LITIGATION
Certain borrowers and the principals of certain borrowers and/or managers
may have been involved in bankruptcy or similar proceedings or have otherwise
been parties to real estate-related litigation.
There may also be other legal proceedings pending and, from time to time,
threatened against the borrowers and their affiliates relating to the business
of or arising out of the ordinary course of business of the borrowers and their
affiliates. We cannot assure you that such litigation will not have a material
adverse effect on the distributions to Certificateholders.
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 AND THE MORTGAGE LOANS.
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DESCRIPTION OF THE MORTGAGE POOL
GENERAL
The Mortgage Pool consists of 154 conventional, multifamily and commercial
mortgage loans originated by NationsBank, N.A. (or its conduit participants)
(the "Conduit Mortgage Loans"), representing 46.7% of the Mortgage Pool, and 176
conventional, multifamily and commercial loans originated by Bank of America
NT&SA (or its predecessor institutions) (the "Portfolio Mortgage Loans" and,
together with the Conduit Mortgage Loans, the "Mortgage Loans"), representing
53.3% of the Mortgage Pool. The Mortgage Loans have an aggregate Cut-off Date
Balance of $1,115,186,748 (the "Initial Pool Balance"), subject to a variance of
plus or minus 5%. See "Description of the Trust Funds" and "Certain Legal
Aspects of Mortgage Loans" in the prospectus. The Mortgage Loans comprise two
separate groups, Loan Group 1 and Loan Group 2 (each, a "Loan Group"). Loan
Group 1 will consist of the Conduit Mortgage Loans, and Loan Group 2 will
consist of the Portfolio Mortgage Loans. The Portfolio Senior Certificate
Principal Distribution Amount first will be paid sequentially to the Class A-1,
Class A-2, Class A-3 and Class A-4 Certificates until the Certificate Balance of
each such Class is reduced to zero.
The "Cut-off Date Balance" of each Mortgage Loan is the unpaid principal
balance thereof as of November 10, 1999 (the "Cut-off Date"), after application
of all payments of principal due on or before such date, whether or not
received. All numerical information provided herein with respect to the Mortgage
Loans is provided on an approximate basis. All weighted average information
provided herein with respect to the Mortgage Loans reflects weighting by related
Cut-off Date Balance. All percentages of the Mortgage Pool, or of any specified
sub-group thereof, referred to herein without further description are
approximate percentages by aggregate Cut-off Date 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") that creates a first mortgage lien on a fee simple and/or leasehold
interest in real property (a "Mortgaged Property"). Each Mortgaged Property is
improved by (i) an apartment building or complex consisting of five or more
rental living units or a mobile home park (a "Multifamily Mortgaged Property";
and any Mortgage Loan secured thereby, a "Multifamily Loan") (111 Mortgage
Loans, representing 35.3% of the Initial Pool Balance), or (ii) a retail
shopping mall or center, an office building or complex, a hotel, a health care
facility, an industrial building, a self storage facility or a theater (a
"Commercial Mortgaged Property"; and any Mortgage Loan secured thereby, a
"Commercial Loan") (219 Mortgage Loans, representing 64.7% of the Initial Pool
Balance).
One set of Mortgage Loans contains Mortgage Loans (the
"Cross-Collateralized Mortgage Loans") that are, solely as among such Mortgage
Loans in such particular set, cross-defaulted and cross-collateralized with each
other. The set of related Cross-Collateralized Mortgage Loans represents 3.9% of
the Initial Pool Balance. Each of the Cross-Collateralized Mortgage Loans is
evidenced by a separate Mortgage Note and secured by a separate Mortgage, which
Mortgage contains provisions creating the relevant cross-collateralization and
cross-default arrangements. See Annex A hereto for information regarding the
Cross-Collateralized Mortgage Loans and see "Risk Factors -- Risks Related to
the Mortgage Loans -- Limitations on Enforceability of Cross-Collateralization"
in this prospectus supplement.
In general, with limited exception, the Conduit Mortgage Loans constitute
nonrecourse obligations of the related borrower. Upon any such borrower's
default in the payment of any amount due under the related Mortgage Loan, the
holder thereof may look only to the related Mortgaged Property or Properties for
satisfaction of the borrower's obligation. In addition, in the case of the
Portfolio Mortgage Loans (which generally do permit recourse to a borrower or a
guarantor) and in the case of certain Conduit Mortgage Loans where the loan
documents permit recourse to a borrower or guarantor, the Depositor has not
undertaken an evaluation of the financial condition of any such person, and
prospective investors should thus consider all of the Mortgage Loans to be
nonrecourse. None of the Mortgage Loans is insured or guaranteed by the United
States, any governmental entity or instrumentality, or any private mortgage
insurer. See "Risk Factors -- Risks Related to the Mortgage Loans -- Limited
Recourse" in this prospectus supplement.
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<PAGE> 38
One hundred thirty-two of the Mortgaged Properties, which constitute
security for 35.8% of the Initial Pool Balance, are located in California; 27 of
the Mortgaged Properties, which constitute security for 10.6% of the Initial
Pool Balance, are located in Nevada; 37 of the Mortgaged Properties, which
constitute security for 10.4% of the Initial Pool Balance, are located in
Washington; 16 of the Mortgaged Properties, which constitute security for 8.1%
of the Initial Pool Balance, are located in Florida; and 27 of the Mortgaged
Properties, which constitute security for 5.5% of the Initial Pool Balance, are
located in Arizona. The remaining Mortgaged Properties are located throughout 26
other states, with no more than 5.4% of the Initial Pool Balance secured by
Mortgaged Properties located in any such other jurisdiction.
CERTAIN TERMS AND CONDITIONS OF THE MORTGAGE LOANS
Due Dates. With the exception of 9 Portfolio Mortgage Loans, representing
approximately 4.6% of the Initial Pool Balance, each of the Mortgage Loans
provides for scheduled payments of principal and interest ("Monthly Payments")
to be due on the first day of each month (as to each such Mortgage Loan, the
"Due Date").
Mortgage Rates; Calculations of Interest. All of the Mortgage Loans bear
interest at a rate per annum (a "Mortgage Rate") that is fixed for the remaining
term of the Mortgage Loan. As of the Cut-off Date, the Mortgage Rates of the
Mortgage Loans ranged from 6.348% per annum to 10.375% per annum, and the
weighted average Mortgage Rate of the Mortgage Loans was 7.804%. No Mortgage
Loan permits negative amortization or the deferral of accrued interest.
One hundred sixty-seven Mortgage Loans (the "Actual/360 Mortgage Loans"),
which represent 50.7% of the Initial Pool Balance, accrue interest on the basis
of the actual number of days elapsed in the relevant month of accrual and a
360-day year (an "Actual/360 Basis"). One hundred sixty-three Mortgage Loans
(the "30/360 Mortgage Loans"), which represent 49.3% of the Initial Pool
Balance, accrue interest on the basis of a 360-day year consisting of twelve
30-day months (a "30/360 Basis"). The total amount of the Monthly Payment for
each Actual/360 Mortgage Loan is determined as though the Mortgage Loan accrued
interest on a 30/360 Basis, and the portion of such Monthly Payment allocated to
interest is determined based on interest accrued in the preceding month on an
Actual/360 Basis with the balance allocated to amortized principal. As a result,
the full amortization term is longer than would be the case if calculated on a
30/360 Basis, and the Balloon Payment on any such Mortgage Loan will be larger
than would be the case if interest accrued on a 30/360 Basis.
Recourse. The Conduit Mortgage Loans are generally non-recourse loans,
while the Portfolio Mortgage Loans are generally recourse loans.
Most of the Portfolio Mortgage Loans, representing approximately 96.8% of
such Mortgage Loans (by Cut-off Date principal balance) are recourse obligations
of the related borrower. Upon any such borrower's default in the payment of any
amount due under the related Portfolio Mortgage Loan, the holder thereof may
look to other assets of the borrower in addition to the related Mortgaged
Property or Properties for satisfaction of any deficiency. Although most of the
loan documents permit recourse to a borrower or guarantor, the Depositor has not
undertaken current evaluation of the financial condition of any such person.
None of the Portfolio Mortgage Loans (or Conduit Mortgage Loans) is insured or
guaranteed by the United States, any governmental entity or instrumentality, or
any private mortgage insurer. Several states have laws that prohibit more than
one "judicial action" to enforce a mortgage obligation, and some courts have
construed the term "judicial action" broadly. Accordingly, the Pooling Agreement
will require the Master Servicer to obtain advice of counsel prior to enforcing
any of the Trust Fund's rights under any of the Portfolio Mortgage Loans that
include properties where the rule could be applicable. In addition, in the case
of a Portfolio Mortgage Loan secured by Mortgaged Properties located in multiple
states, the Special Servicer may be required to foreclose first on properties
located in states where such "one action" rules apply (and where non-judicial
foreclosure is permitted) before foreclosing on properties located in states
where judicial foreclosure is the
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<PAGE> 39
only permitted method of foreclosure. See "Certain Legal Aspects of Mortgage
Loans -- Foreclosure" in the accompanying prospectus.
RECOURSE TO THE BORROWER -- PORTFOLIO MORTGAGE LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED
% OF INITIAL AVERAGE AVERAGED WEIGHTED
RECOURSE TO THE NUMBER OF MORTGAGE AGGREGATE CUT-OFF POOL UNDERWRITING CUT-OFF DATE AVERAGE
BORROWER MORTGAGE LOANS LOANS DATE BALANCE BALANCE DSCR LTV RATIO MORTGAGE RATE
- --------------- -------------- -------- ----------------- ------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Full................. 172 97.7% $575,377,027 96.8% 1.42 62.9% 8.223%
None................. 3 1.7% 12,827,500 2.2% 1.54 55.8% 8.071%
Partial.............. 1 0.6% 5,992,063 1.0% 1.23 64.4% 8.900%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd. Avg. ..... 176 100.0% $594,196,590 100.0% 1.42 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
Amortization of Principal. Three hundred nine Mortgage Loans, which
represent 95.4% of the Initial Pool Balance, provide for monthly payments of
principal based on amortization schedules significantly longer than the
respective remaining terms thereof, thereby leaving substantial principal
amounts due and payable (each such loan, a "Balloon Loan," and each such
payment, together with the corresponding interest payment, a "Balloon Payment")
on their respective maturity dates, unless prepaid prior thereto. Twenty-one
Mortgage Loans, which represent 4.6% of the Initial Pool Balance, are fully
amortizing loans.
The original term to stated maturity of each Mortgage Loan was between 60
and 355 months. The original amortization schedules of the Mortgage Loans
(calculated, in the case of Actual/360 Mortgage Loans on a 30/360 Basis for the
purposes of the accrual of interest) ranged from 96 to 360 months. As of the
Cut-off Date, the remaining terms to stated maturity of the Mortgage Loans will
range from 3 to 171 months, and the weighted average remaining term to stated
maturity of the Mortgage Loans will be 93 months. As of the Cut-off Date, the
remaining amortization terms of the Mortgage Loans (calculated on a 30/360 Basis
for the accrual of interest) will range from 33 to 354 months, and the weighted
average remaining amortization term (calculated on a 30/360 Basis for purposes
of the accrual of interest) of the Mortgage Loans will be 283 months. See "Risk
Factors -- Risks Related to the Mortgage Loans -- Balloon Payments" in this
prospectus supplement.
Prepayment Provisions. All of the Conduit Mortgage Loans provided as of
origination either (a) that voluntary prepayments were prohibited until a period
generally two or three months before the final payment date of such Mortgage
Loan, during which voluntary prepayments can be made without penalty, or (b) for
a sequence of three periods as follows:
(1) a period (a "Lock-out Period") during which voluntary principal
prepayments are prohibited, followed by
(2) a period (a "Prepayment Premium Period") during which any
voluntary principal prepayment be accompanied by a premium, penalty, or fee
(a "Prepayment Premium"), followed by
(3) a period (an "Open Period") during which voluntary principal
prepayments may be made without an accompanying Prepayment Premium.
Voluntary principal prepayments (after any Lock-out Period) may be made in
full or in part, subject to certain limitations and, during a Prepayment Premium
Period, payment of the applicable Prepayment Premium. As of the Cut-off Date,
the remaining Lock-out Periods for the Conduit Mortgage Loans ranged from 1
month to 168 months, with a weighted average remaining Lock-out Period of 94
months. As of the Cut-off Date, the Open Period for each Conduit Mortgage Loan
ranged from 2 months to 7 months prior to stated maturity with a weighted
average Open Period of 4 months. Prepayment Premiums on the Conduit Mortgage
Loans are generally calculated either on the basis of a yield maintenance
formula (subject, in certain instances, to a minimum equal to a specified
percentage of the principal amount prepaid) or as a percentage (which may
decline over time) of the principal amount prepaid. The prepayment terms of each
of the Conduit Mortgage Loans are more particularly described in Annex A to this
prospectus supplement.
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<PAGE> 40
Any Lock-Out Periods once applicable to the Portfolio Mortgage Loans have
expired. Approximately 9 Portfolio Mortgage Loans have Open Periods that have
not expired, which range from 1 to 75 months. Prepayment Premiums, to the extent
applicable with respect to Portfolio Mortgage Loans, are more particularly
described in Annex A to this prospectus supplement.
As more fully described herein, Prepayment Premiums actually collected on
the Mortgage Loans will be distributed to the respective Classes of
Certificateholders in the amounts and priorities described under "Description of
the Certificates -- Distributions -- Distributions of Prepayment Premiums"
herein. The Depositor makes no representation as to the enforceability of the
provision of any Mortgage Loan requiring the payment of a Prepayment Premium or
as to the collectibility of any Prepayment Premium. See "Risk Factors -- Risks
Related to the Mortgage Loans -- Prepayment Premiums" in this prospectus
supplement and "Certain Legal Aspects of Mortgage Loans -- Default Interest and
Limitations on Prepayments" in the accompanying prospectus.
Defeasance. One-hundred thirty nine Conduit Mortgage Loans, representing
39.3% of the Initial Pool Balance and 84.2% of the Cut-off Date principal
balance of the Conduit Mortgage Loans, permit the applicable borrower at any
time after a specified period (the "Defeasance Lock-Out Period"), which is at
least two years from the Trust Formation Date, provided no event of default
exists, to obtain a release of a Mortgaged Property from the lien of the related
Mortgage (a "Defeasance Option"). None of the Portfolio Mortgage Loans provide
for defeasance. The borrower must meet certain conditions in order to exercise
its Defeasance Option. Among other conditions the borrower must pay on any Due
Date (the "Release Date"):
(1) all interest accrued and unpaid on the principal balance of the
Note to and including the Release Date
(2) all other sums, excluding scheduled interest or principal
payments, due under the Mortgage Loan and all other loan documents executed
in connection therewith and
(3) an amount (the "Collateral Substitution Deposit") that will be
sufficient to purchase direct non-callable obligations of the United States
of America providing payments (a) on or prior to, but as close as possible
to, all successive scheduled payment dates from the Release Date to the
related maturity date, (b) in amounts equal to the scheduled payments due
on such dates under the Mortgage Loan or the defeased amount thereof in the
case of a partial defeasance and (c) any costs and expenses incurred in
connection with the purchase of such U.S. government obligations.
In addition, the borrower must deliver a security agreement granting the
Trust Fund a first priority lien on the Collateral Substitution Deposit and
generally, an opinion of counsel to such effect. 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 pursuant to the related loan
documents 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.
The Depositor makes no representation as to the enforceability of the
defeasance provisions of any Mortgage Loan. See "Risk Factors -- Risks Related
to the Certificates -- Yield Considerations" in this prospectus supplement.
"Due-on-Sale" and "Due-on-Encumbrance" Provisions. Substantially all of
the Mortgage Loans contain both "due-on-sale" and "due-on-encumbrance" clauses
that in each case, subject to certain limited exceptions, permit the holder of
the Mortgage to accelerate the maturity of the related Mortgage Loan if the
borrower sells or otherwise transfers or encumbers the related Mortgaged
Property or prohibit the borrower from doing so without consent of the holder of
the Mortgage. See "-- Additional Mortgage Loan Information -- Subordinate
Financing" herein. Certain of the Mortgage Loans permit transfer of the related
Mortgaged Property if certain specified conditions are satisfied or if the
transfer is to a borrower reasonably acceptable to the lender. The Master
Servicer or the Special Servicer, as applicable, will determine, in a manner
consistent with the servicing standard described herein under "Servicing of the
Mortgage Loans --
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<PAGE> 41
General" and with the REMIC Provisions, whether to exercise any right the holder
of any Mortgage 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; provided, however, that
neither the Master Servicer nor the Special Servicer shall waive any right it
has, or grant any consent that it may otherwise withhold, under any related
"due-on-sale" or "due-on-encumbrance" clause unless it: (1) shall have received
written confirmation from each Rating Agency that such action would not result
in the qualification, downgrade or withdrawal of the rating then assigned by
such Rating Agency to any Class of Certificates, such confirmation to be
required in the case of any waiver of rights under a related "due-on-sale"
clause only if the then-outstanding principal balance of the subject Mortgage
Loan (together with the then-outstanding aggregate principal balance of all
other Mortgage Loans to the same borrower or borrowers that are, to the actual
knowledge of the Master Servicer, affiliated) exceeds the applicable threshold
amount for such Rating Agency; and (2) shall have provided, at least five days
prior to the granting of such waiver or consent, to any majority
Certificateholder of the Controlling Class and, in the case of the Master
Servicer, to the Special Servicer, written notice of the matter and a written
explanation of the surrounding circumstances and, upon request made within such
five-day period, shall have discussed the matter with such majority
Certificateholder of the Controlling Class and, in the case of the Master
Servicer, with the Special Servicer. See "The Pooling and Servicing
Agreements -- Due-on-Sale and Due-on-Encumbrance Provisions" and "Certain Legal
Aspects of Mortgage Loans -- Due-on-Sale and Due-on-Encumbrance" in the
accompanying prospectus.
SIGNIFICANT MORTGAGE LOANS
Certain of the larger Mortgage Loans or groups of Mortgage Loans (by
outstanding principal balance) are described below. Terms used below relating to
underwriting or property characteristics have the meaning assigned to such term
in Annex A.
Rancho Palisades Apartments -- Portfolio Mortgage Loan
The Loan. The Mortgage Loan (the "Rancho Palisades Apartments Loan"),
which is secured by the first deed of trust on a garden apartment complex (the
"Rancho Palisades Apartments") in Dallas, Texas, represents approximately 2.3%
of the Initial Pool Balance. Originated on June 9, 1998, the Rancho Palisades
Apartments Loan has a principal balance as of the Cut-off Date of $25,919,852.
Rancho Palisades Apartments Loan was made to Rancho Palisades Partners (the
"Rancho Palisades Borrower"), a single asset Texas Corporation which is owned by
the Frankel Family Trust (84%) and Lakewood Land 5203 (16%).
The Rancho Palisades Apartments Loan has a remaining term of 104 months and
matures on July 1, 2008. The Rancho Palisades Apartments Loan may be prepaid
prior to maturity; however a yield maintenance prepayment penalty will be
applicable up to the maturity date. The Rancho Palisades Apartments Loan was
originated as a ten year loan with a thirty year amortization period.
Additional terms and escrows for the Rancho Palisades Apartments Loan are
set forth in Annex A.
The Property. The Rancho Palisades Apartments is a 562 unit luxury garden
apartment complex with 497,080 total square footage. The subject is situated on
23.9 acres and is improved with twenty-two, three-story garden apartment
buildings. The property, built in two phases; Phase I in 1991 and Phase II in
1992, was constructed with a wood frame and stucco exterior with tile covered
roofs. Additional improvements include two clubhouse buildings totaling 11,804
square feet that contain a leasing office, business center, basketball
half-court, racquetball court, weight room and social room facilities. Both
phases have a swimming pool, tennis court, sand volleyball court, drive-through
mail port and laundry rooms.
Recourse Loan. The Rancho Palisades Apartments loan is full recourse to
the borrower and Mr. Edward Frankel. Mr. Frankel has been a Bank of America (or
its predecessor in interest) customer since 1965.
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<PAGE> 42
Property Management. The Rancho Palisades property is managed by
Management Support, an entity affiliated with the borrowing entity through
common ownership. The company and its predecessors have over 30 years of
property management experience. In the Dallas submarket, Management Support
oversees 8 properties totaling 3,249 units. Overall, they manage 5,941 units
located in Texas, Arizona and California.
Operating History
<TABLE>
<CAPTION>
PARTIAL YEAR
10 MTHS ENDED ORIGINATOR'S
1997 ACTUAL 3/31/99, ANNUALIZED UNDERWRITTEN
----------- ------------------- ------------
<S> <C> <C> <C>
EGI.................................................. $5,052,651 $5,038,700 $5,038,701
Expenses............................................. 2,238,898 2,226,924 2,423,020
---------- ---------- ----------
NOI.................................................. $2,813,753 $2,811,776 $2,615,681
Cash Flow............................................ $2,570,793 $2,811,776 $2,475,181
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Occupancy............................................ NAV 95% 90.33%
DSCR based on NOI.................................... 1.38x 1.38x 1.28x
DSCR based on Cash Flow.............................. 1.26x 1.38x 1.21x
</TABLE>
Bank of America Regional Headquarters Loan -- Conduit Mortgage Loan
The Loan. The Mortgage Loan (the "Bank of America Regional Headquarters
Loan"), which is secured by a first mortgage encumbering an office building (the
"Bank of America Regional Headquarters") in Rancho Cordova, Sacramento County,
California, represents approximately 2.2% of the Initial Pool Balance. The
subject office building is 100% occupied by Bank of America with a lease
maturity date of February 23, 2011. The loan-to-value ratio as of the maturity
date is 59.2%. Each of DCR and S&P rates the sole tenant's corporate debt AA-,
Moody's rates the sole tenant's corporate debt Aa2, and Fitch rates it AA.
Originated on February 23, 1999, the Bank of America Regional Headquarters Loan
has a principal balance as of the Cut-off Date of $24,328,468.
The Bank of America Regional Headquarters Loan was made to BARC, LLC, a
single-asset bankruptcy-remote Delaware limited liability company which is owned
100% by YCMC, LLC, an Ohio limited liability company. Ownership of YCMC, LLC
consists of the following: the GFW Family Trust (74% and also a borrower
principal), C. Frederick Wehba II (10% and also a borrower principal), Chad
Wehba (7%), TPF Trust III (5%), Christian F. Wehba 1998 Trust (2%), and Cyle F.
Wehba 1998 Trust (2%). Due to loan size, the subject financing includes a
non-consolidation opinion, lock box, and an independent director.
The borrower, BARC, LLC, acquired title to the subject property from the
prior developer/landlord (Panattoni-Catlin) through a sale/assignment of the
tenant's right to purchase option as contained in the lease. Prior to the
assignment of the right to purchase option, the seller carved out an adjacent
parcel and recorded a reciprocal easement agreement.
The Bank of America Regional Headquarters Loan was originated on February
23, 1999 and matures on February 1, 2011. The Bank of America Regional
Headquarters Loan may not be prepaid prior to December 1, 2010. The Bank of
America Regional Headquarters Loan may be prepaid without a prepayment penalty
during the two (2) months preceding the maturity date.
Additional terms and escrows for the Bank of America Regional Headquarters
Loan are set forth in Annex A.
The Property. The Bank of America Regional Headquarters consists of a
single-tenant 187,875 net rentable square foot build-to-suit office headquarters
located on 10.94 acres at the southeast corner of Zinfandel Drive and White Rock
Road in Rancho Cordova (Unincorporated), Sacramento County, California. The loan
term is co-terminus with the twelve-year lease term. The subject improvements
include a two-story Class "A" steel frame and concrete tilt-up office building.
Construction on the center was completed in late 1997, and has been 100%
occupied by the credit tenant ever since. Bank of America utilizes the facility
as a regional headquarters, including a customer service, training, commercial
banking, community banking, and processing center. The estimated remaining
useful life of the facility is 40-45 years.
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<PAGE> 43
Lock Box Account. The lender required a hard lock box for the loan term.
The loan is serviced by L.J. Melody, and their agent is BancOne, which has a
long-term unsecured debt rating of A+ by S&P. The account was established to
capture all rents paid by the tenant and disbursed as follows by the lender: (1)
monthly reserve deposit to the tax and insurance reserve account, if applicable;
(2) monthly payment amount to the debt service account for payment of principal
& interest; (3) maintenance, repair or replacement reserve account(s), if any,
as may be required pursuant to the loan agreement, (4) reimbursement of any
amounts expended by the lender to insure that parking requirements under the
related lease are complied with, if applicable, (5) any interest accruing at the
default rate and late payment charges, if any, (6) provided no Event of Default
has occurred and remains uncured, all amounts remaining in the Lockbox Account
after deposits for items (1) through (5) shall be paid to or at the written
direction of the borrower. While no reserves are currently being collected under
the loan, the documents provide for springing reserves in the event of certain
defaults by the borrower or under the lease. Consequently, those items have a
place in the waterfall even though they may not currently be collected.
On the first Business Day of each month, the agent shall withdraw all funds
on deposit in the Lockbox Account from all collections received during the
previous calendar month and disburse such funds in the order of priority
mentioned in the above paragraph.
Property Management. The Bank of America Regional Headquarters is managed
by BFG Management Co., an affiliate of the borrower, which reportedly has 17
commercial properties and approximately 1,400,000 square feet under management.
Operating History
<TABLE>
<CAPTION>
APPRAISER'S ORIGINATOR'S
ESTIMATE UNDERWRITTEN
----------- ------------
<S> <C> <C>
EGI......................................................... $4,099,066 $4,099,066
Expenses.................................................... $1,275,855 $1,326,623
---------- ----------
NOI......................................................... $2,823,211 $2,772,443
Cash Flow................................................... $2,823,211 $2,526,702
========== ==========
Occupancy................................................... 100% 100%
DSCR based on NOI........................................... 1.35x 1.33x
DSCR based on Cash Flow..................................... 1.35x 1.21x
</TABLE>
Notes:
- - Due to the Bank of America Regional Headquarters' change in lease terms from
full service gross to triple net with the subject acquisition, the subject's
financial history is not applicable.
- - Tenant arranges and pays for all operating expenses directly with local
providers, including taxes, insurance, janitorial, repairs & maintenance, roof
repair, security, and trash removal. Despite actual lease terms, all
market-derived operating expense estimates and their full reimbursement were
underwritten to provide a cost estimate to operate the subject building on an
on-going basis.
Indian Hills and The Club Mira Lago Loans -- Conduit Mortgage Loans
The Loans. The Mortgage Loans (the "Indian Hills Loan" and the "Club Mira
Lago Loan"), are each secured by a first deed of trust on an apartment. Indian
Hills is located in Las Vegas, Nevada and Club Mira Lago is located in Coral
Springs, Florida. Each represents approximately 2.1% and 1.9% of the Initial
Pool Balance, respectively. Both loans were originated on December 14, 1998. The
Indian Hills Loan and the Club Mira Lago Loan have principal balances as of the
Cut-off Date of $23,032,935 and $20,689,929 respectively. The Indian Hills Loan
was made to Indian Hills, LLC and the Club Mira Lago Loan was made to Olen
Residential Realty Encumbrance I Corp. Indian Hills, LLC is a single asset
Nevada limited liability company and Olen Residential Realty Encumbrance I Corp
is a single asset Florida corporation. Each is owned 100% by Olen Properties,
Inc. Seller's counsel has provided both a satisfactory non-consolidation opinion
and an
S-41
<PAGE> 44
opinion that the Borrower is a bankruptcy remote, special purpose entity with an
independent director. The Indian Hills Loan and the Club Mira Lago Loan are
cross-collateralized and cross-defaulted with each other.
The Indian Hills Loan and the Club Mira Lago Loan have remaining terms of
110 months and mature on January 1, 2009. The Indian Hills Loan and the Club
Mira Lago Loan may not be prepaid prior to, and including, October 1, 2008.
However, the Indian Hills Loan and the Club Mira Lago Loan are subject to
Defeasance with United States Treasury obligations beginning two years from the
Trust Formation Date. The Indian Hills Loan and the Club Mira Lago Loan may be
prepaid without the payment of a prepayment penalty during the three (3) months
preceding the maturity date.
Additional terms and escrows for Indian Hills Loan and the Club Mira Lago
Loan are set forth in Annex A.
The Properties. The property securing the Indian Hills Loan is a 484 unit
apartment complex on 23 acres. It is located at 4550 Sahara Avenue in Las Vegas,
Nevada which is about a mile west of the gambling strip. The tenant base at the
property is over 70% professional or retiree with no concentration for any
single employer. The complex was built in 1988. It consists of a building
containing the club house and leasing office along with 60 buildings containing
192 one bedroom and 292 two bedroom apartment units. There are 436,620 net
rentable square feet ("NRSF") with 484 covered parking spaces and 360
non-covered parking spaces. Project amenities include 3 swimming pools, 1
fitness centers, 2 lighted tennis courts, a full size basketball court, and
picnic facilities. The units are large and have a full amenity package including
full size washer/dryers, roman size bathtubs, microwaves, fireplaces in selected
units, security systems, ceiling fans and patios or balconies.
The property securing the Club Mira Lago Loan is a 304 unit apartment
complex located in the southwestern portion of Coral Springs, Florida. Coral
Springs is a bedroom community for Fort Lauderdale and Miami. Club Mira Lago was
built in 1996. It consists of a building containing the club house and leasing
office along with 26 buildings containing 16 one bedroom, 192 two bedroom and 96
three bedroom apartment units. The subject contains 377,440 NRSF on 15.69 acres
with 600 open parking spaces. Project amenities include beach/boating access on
a small lake, a swimming pool, clubhouse, fitness center, recreation room, and a
recreation area of 2.73 acres containing 2 lighted tennis courts, a sand volley
ball pit, a full basketball court, barbecue grills and picnic facilities. The
units are spacious and have a full amenity package including full size
washer/dryers, Roman size bathtubs, microwaves, ceiling fans, security systems,
walk-in closets, and patios or balconies.
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<PAGE> 45
Property Management. Both properties are managed by the Olen Properties,
Corp. ("Olen Properties"), an entity that is affiliated to the borrowing entity
through common ownership. Olen Properties owns Olen Residential Realty Corp
which owns the Indian Hills borrower and the Club Mira Lago borrower. Olen
Properties manages a total of 8,247 units in 28 apartment communities located in
either Las Vegas, the Coral Springs vicinity of Florida or San Bernardino,
California. Within Las Vegas alone, Olen Properties manages 17 communities
comprising a total of 5,749 units. Olen Properties also manages 11 communities
comprising 2,498 units in the Coral Springs vicinity of east Florida and one
project in San Bernardino, California. Other managed properties include 3
million square feet of office and industrial space in Orange County, California.
Olen Properties is not a third-party fee based management company and only
exists to exclusively manage company owned real estate.
Operating History-Indian Hills
<TABLE>
<CAPTION>
1997 1998 ORIGINATOR'S
ACTUAL ACTUAL UNDERWRITTEN
---------- ---------- ------------
<S> <C> <C> <C>
EGI........................................................ $3,758,660 $3,971,327 $3,881,610
Expenses................................................... 1,126,957 1,124,968 1,282,662
---------- ---------- ----------
NOI........................................................ $2,631,703 $2,846,359 $2,598,948
Cash Flow.................................................. $2,547,783 $2,743,531 $2,462,460
========== ========== ==========
Occupancy.................................................. 91.5% 94.4% 92.5%
DSCR based on NOI.......................................... 1.39x 1.50x 1.37x
DSCR based on Cash Flow.................................... 1.34x 1.44x 1.30x
</TABLE>
Operating History-The Club Mira Lago
<TABLE>
<CAPTION>
1997 1998 ORIGINATOR'S
ACTUAL ACTUAL UNDERWRITTEN
---------- ---------- ------------
<S> <C> <C> <C>
EGI........................................................ $2,798,507 $3,774,827 $3,635,863
Expenses................................................... 885,719 1,122,659 1,394,407
---------- ---------- ----------
NOI........................................................ $1,912,788 $2,652,168 $2,241,456
Cash Flow.................................................. $1,857,133 $2,582,838 $2,165,456
========== ========== ==========
Occupancy.................................................. 68.9% 93.1% 92.0%
DSCR based on NOI.......................................... 1.12x 1.55x 1.31x
DSCR based on Cash Flow.................................... 1.09x 1.51x 1.27x
</TABLE>
ADDITIONAL MORTGAGE LOAN INFORMATION
General. For a detailed presentation of certain characteristics of the
Mortgage Loans and Mortgaged Properties, on an individual basis and in tabular
format, see Annex A hereto. Certain capitalized terms that appear herein are
defined in Annex A. See Annex B hereto for certain information with respect to
capital improvement, replacement and tenant improvement reserve accounts, as
well as certain other information with respect to Multifamily Mortgaged
Properties.
Delinquencies. As of the Cut-off Date, no Mortgage Loan will have been 30
days or more delinquent in respect of any Monthly Payment during the past 12
months. All of the Mortgage Loans were originated during the 296 months prior to
the Cut-off Date.
Tenant Matters. One hundred fifty-two of the retail, office and industrial
Mortgaged Properties, which represent security for 44.3% of the Initial Pool
Balance, are leased in large part to one or more Major Tenants. The largest four
concentrations of Major Tenants with respect to more than one property (groups
of Mortgage Loans where the same company is a Major Tenant of each Mortgage Loan
in the group) represent 2.4%, 2.3%, 2.2%, and 2.0%, of the Initial Pool Balance.
In addition, there are several cases in which a particular entity is a tenant at
multiple Mortgaged Properties, and although it may not be a Major Tenant at any
such property, it may be significant to the success of such properties. "Major
Tenants" means any tenant at a Commercial
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<PAGE> 46
Mortgaged Property that rents at least 20% of the Leasable Square Footage (as
defined in Annex A) at such property.
Certain of the Multifamily Mortgaged Properties have material
concentrations of student tenants.
Ground Leases. Six Mortgage Loans, which represent 1.9% of the Initial
Pool Balance, are, in each such case, secured primarily by a Mortgage on the
applicable borrower's leasehold interest in the related Mortgaged Property. In
each case, either (i) the ground lessor has subordinated its interest in the
related Mortgaged Property to the interest of the holder of the related Mortgage
Loan or (ii) the ground lessor has agreed to give the holder of the Mortgage
Loan notice of, and has granted such holder the right to cure, any default or
breach by the lessee. See "Certain Legal Aspects of Mortgage
Loans -- Foreclosure -- Leasehold Considerations" in the accompanying
prospectus.
Subordinate Financing
Conduit Mortgage Loans. None of the Mortgaged Properties relating to
Conduit Mortgage Loans are encumbered by secured subordinated debt. The Conduit
Mortgage Loans either prohibit the related borrower from encumbering the
Mortgaged Property with additional secured debt or require the consent of the
holder of the first lien prior to so encumbering such property.
Portfolio Mortgage Loans. We are aware that 13 of the mortgaged properties
relating to the Portfolio Mortgage Loans, representing security for 3.6% of the
Initial Pool Balance, are presently encumbered by subordinate debt. In addition,
one Portfolio Mortgage Loan, representing 0.3% of the Initial Pool Balance, is
encumbered by a subordinate mortgage securing the performance of certain
guarantee obligations. However, several of the Portfolio Mortgage Loans do not
prohibit the related mortgagor from incurring such subordinate debt in the
future.
Generally. The existence of subordinated indebtedness encumbering a
mortgaged property may increase the difficulty of refinancing the related
mortgage loan at maturity and the possibility that reduced cash flow could
result in deferred maintenance. Also, in the event that the holder of the
subordinated debt files for bankruptcy or is placed in involuntary receivership,
foreclosure on the mortgaged property could be delayed. Regardless of whether
the terms of a mortgage loan prohibit the incurrence of subordinate debt, the
related borrower may be permitted to incur additional indebtedness secured by
furniture, fixtures and equipment, and to incur additional unsecured
indebtedness. See "Certain Legal Aspects of Mortgage Loans -- Subordinate
Financing" in the accompanying prospectus.
Health Care Properties. Thirteen Mortgage Loans, which represent 5.3% of
the Initial Pool Balance, are secured by liens on health care properties. Health
care facilities typically receive a substantial portion of their revenues from
government reimbursement programs, primarily Medicaid and Medicare. Medicaid and
Medicare are subject to statutory and regulatory changes, retroactive rate
adjustments, administrative rulings, policy interpretations, delays by fiscal
intermediaries and government funding restrictions, all of which can adversely
affect revenues from operation. Moreover, governmental payors have employed
cost-containment measures that limit payments to health care providers and there
are currently under consideration various proposals for national health care
relief that could further limit these payments. In addition, providers of long-
term nursing care and other medical services are highly regulated by federal,
state and local law and are subject to, among other things, federal and state
licensing requirements, facility inspections, rate setting, reimbursement
policies, and laws relating to the adequacy of medical care, distribution of
pharmaceuticals, equipment, personnel, operating policies and maintenance of and
additions to facilities and services, any or all of which factors can increase
the cost of operation, limit growth and, in extreme cases, require or result in
suspension or cessation of operations.
Lender/Borrower Relationships. The Mortgage Loan Seller or the Depositor
or any of their affiliates may maintain certain banking or other relationships
with borrowers under the Mortgage Loans or their affiliates, and proceeds of the
Mortgage Loans may, in certain limited cases, be used by such borrowers or their
affiliates in whole or in part to pay indebtedness owed to the Mortgage Loan
Seller, the Depositor or such other entities.
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<PAGE> 47
CERTAIN UNDERWRITING MATTERS
Environmental Assessments
Conduit Mortgage Loans. Each of the Mortgaged Properties related to a
Conduit Mortgage Loan was subject to an environmental site assessment consisting
of a "Phase I" or, in the case of certain Conduit Mortgage Loans having an
initial principal balance under $1,000,000, a transaction screen or an update of
a previously conducted assessment, which assessment or update was conducted
generally in accordance with industry-wide standards, during or after June 1997.
No such assessment or update otherwise revealed any material adverse
environmental condition or circumstance at any Mortgaged Property, except the
potentially materially adverse conditions or circumstances as set forth below or
in certain other cases in which environmental site assessments recommend
corrective action to address environmental conditions, and which environmental
conditions have been mitigated, or are expected to be addressed in the manner
and within the time frames specified in third-party clean-up agreements or the
related Mortgage Loan documents.
Portfolio Mortgage Loans. The Mortgage Loan Seller has represented and
warranted in the Pooling Agreement with respect to each Mortgaged Property
relating to a Portfolio Mortgage Loan that there are no material adverse
environmental conditions existing at such Mortgaged Property at the Trust
Formation Date. Any breach of such warranty will result in an obligation to
repurchase the affected Mortgage Loans, subject to a cure right as described
under "-- Representations and Warranties; Repurchases". Although we are not
aware of any material adverse environmental conditions with respect to the
Portfolio Mortgage Loans, we otherwise cannot assure you that any such
conditions do not exist. Some of the Portfolio Mortgage Loans are seasoned loans
originated during a time when it was not required to conduct environmental
assessments in connection with the origination of mortgage loans. As a result,
in such cases no environmental assessments have been conducted.
The Mortgage Loan Seller will not make any representation or warranty with
respect to environmental conditions arising after the Trust Formation Date, and
will not be obligated to repurchase any Mortgage Loan due to any such condition.
However, the Trust Fund will have the benefit of an environmental insurance
policy as described under "-- Portfolio Loan Environmental Policy".
Generally. Certain federal, state and local laws, regulations and
ordinances govern the management, removal, encapsulation or disturbance of
asbestos-containing materials ("ACMs"). Such laws, as well as common law, may
impose liability for releases of or exposure to ACMs and may provide for third
parties to seek recovery from owners or operators of real properties for
personal injuries associated with such releases.
Owners of residential housing constructed prior to 1978 are required by
federal law to disclose to potential residents or purchasers any known
lead-based paint hazards and violations can incur treble damages for any failure
to so notify. In addition, the ingestion of lead-based paint chips or dust
particles by children can result in lead poisoning, and the owner of a property
where such circumstances exist may be held liable for such injuries and for the
costs of removal or encapsulation of the lead-based paint. Testing for
lead-based paint or lead in the water was conducted with respect to certain of
the Mortgaged Properties, generally based on the age and/or condition thereof.
The Environmental Protection Agency has identified certain health risks
associated with elevated radon gas in buildings, and has recommended that
certain mitigating measures be considered.
When recommended by environmental site assessments, operations and
maintenance plans (addressing in some cases ACMs, lead-based paint, and/or
radon) were required, except in the case of certain Mortgaged Properties where
the environmental consultant conducting the assessment also identified the
condition of the ACM as good and non-friable(i.e., not easily crumbled). In a
few instances where related Mortgage Loan documents required the submission of
operations and maintenance plans, these plans have yet to be received. There can
be no assurance that recommended operations and maintenance plans have been or
will continue to be implemented. In many cases, certain potentially adverse
environmental conditions were not tested for. For example, lead based paint and
radon were tested for only at Multifamily Mortgaged Properties and only if, in
the case of lead based paint, the age of the Mortgaged Property warranted such
testing and, in the case of radon, radon is prevalent in the geographic area
where the Mortgaged Property is located; however, at several
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<PAGE> 48
Multifamily Mortgaged Properties located in geographic areas where radon is
prevalent, radon testing was not conducted.
Certain of the Mortgaged Properties have off-site leaking underground
storage tank ("UST") sites located nearby which the environmental assessments
either have indicated are not likely to contaminate the related Mortgaged
Properties but may require future monitoring or have identified a party not
related to the mortgagor (borrower) as responsible for such condition. Certain
other Mortgaged Properties may contain contaminants in the soil or groundwater
at levels which the environmental consultant has advised are below regulatory
levels or otherwise are indicative of conditions typically not of regulatory
concern and are not likely to require any further action. In some cases, there
was no further investigation of a potentially adverse environmental condition.
In the case of several of the Mortgaged Properties where the environmental site
assessment recommended the repair or removal of ACM in poor condition, such
repair or removal was not required in the related Mortgage Loan documents. In a
few instances where related Mortgage Loan documents required ACM repair or
removal and the submission of a confirmation that this work has been performed,
the confirmations have yet to be received.
The environmental assessments revealed other adverse environmental
conditions such as the existence of old or abandoned USTs needing replacement or
removal, possible polychlorinated byphenyl materials in equipment on-site, and
elevated radon levels, in connection with which environmental reserves have been
established and/or removal or monitoring programs have been or are expected to
be implemented. At certain Mortgaged Properties, a leaking UST has been, or is
in the process of being, removed and cleanup is being undertaken with state
oversight. In at least one such case, response costs are expected to be
reimbursed by a state UST cleanup fund.
The information contained herein regarding environmental conditions at the
Mortgaged Properties is based on the environmental assessments and has not been
independently verified by the Depositor, the Mortgage Loan Seller, the
Underwriter, the Master Servicer, the Special Servicer, the Trustee, the REMIC
Administrator, or any of their respective affiliates. There can be no assurance
that such environmental assessments or studies, as applicable, identified all
environmental conditions and risks, or that any such environmental conditions
will not have material adverse effect on the value or cash flow of the related
Mortgaged Property.
The Pooling Agreement requires that the Special Servicer obtain an
environmental site assessment of a Mortgaged Property prior to acquiring title
thereto or assuming its operation. Such requirement precludes enforcement of the
security for the related Mortgage Loan until a satisfactory environmental site
assessment is obtained (or until any required remedial action is taken), but
will decrease the likelihood that the Trust will become liable for a material
adverse environmental condition at the Mortgaged Property. However, there can be
no assurance that the requirements of the Pooling Agreement will effectively
insulate the Trust from potential liability for a materially adverse
environmental condition at any Mortgaged Property. See "Servicing of the
Mortgage Loans" herein and "The Pooling and Servicing Agreements -- Realization
Upon Defaulted Mortgage Loans", "Risk Factors -- Certain Factors Affecting
Delinquency, Foreclosure and Loss of the Mortgage Loans -- Risk of Liability
Arising from Environmental Conditions" and "Certain Legal Aspects of Mortgage
Loans -- Environmental Considerations" in the accompanying prospectus.
Property Condition Assessments
Conduit Mortgage Loans. Inspections of each of the Mortgaged Properties
relating to the Conduit Mortgage Loans were conducted by independent licensed
engineers in connection with or subsequent to the origination of the related
Conduit Mortgage Loan. Such inspections were generally commissioned to inspect
the exterior walls, roofing, interior construction, mechanical and electrical
systems and general condition of the site, buildings and other improvements
located at a Mortgaged Property. With respect to certain of the Conduit Mortgage
Loans, the resulting reports indicated a variety of deferred maintenance items
and recommended capital improvements. The estimated cost of the necessary
repairs or replacements at a Mortgaged Property was included in the related
property condition assessment; and, in the case of certain Mortgaged Properties,
such cost exceeded $100,000. In general, with limited exception, cash reserves
were
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<PAGE> 49
established to fund such estimated deferred maintenance or replacement items. In
addition, various Mortgage Loans require monthly deposits into cash reserve
accounts to fund property maintenance expenses.
Portfolio Mortgage Loans. The Mortgage Loan Seller has inspected, or
caused to have been inspected, each of the Mortgaged Properties relating to the
Portfolio Mortgage Loans at least once since January 1, 1997. Such inspections
were performed by employees or third-party contractors of the Mortgage Loan
Seller and did not include all the procedures that would be performed by a
licensed engineer. While we cannot assure you that such scope was adequate to
identify every possible defect, no such inspection revealed any condition
existing at any Mortgaged Property relating to a Portfolio Mortgage Loan which
would materially and adversely impair the value of such Mortgaged Property.
Appraisals and Market Studies
Conduit Mortgage Loans. An independent appraiser that is either a member
of the Appraisal Institute ("MAI") or state certified performed an appraisal (or
updated an existing appraisal) of each of the related Mortgaged Properties in
connection with or subsequent to the origination of each Conduit Mortgage Loan
in order to establish that the appraised value of the related Mortgaged Property
or Properties exceeded the original principal balance of the Mortgage Loan (or,
in the case of certain sets of related Cross-Collateralized Mortgage Loans, the
aggregate original principal balance of such sets). Such appraisal or property
valuation was prepared on or about the "Appraisal Date" indicated on Annex A
hereto, and except for certain mortgaged properties involving operating
businesses, conforms to the appraisal guidelines set forth in Title XI of the
Federal Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"). In general, such appraisals represent the analysis and opinions of
the respective appraisers at or before the time made, and are not guarantees of,
and may not be indicative of, present or future value. There can be no assurance
that another appraiser would not have arrived at a different valuation, even if
such appraiser used the same general approach to and same method of appraising
the property. In addition, appraisals seek to establish the amount a typically
motivated buyer would pay a typically motivated seller. Such amount could be
significantly higher than the amount obtained from the sale of a Mortgaged
Property under a distress or liquidation sale.
None of the Depositor, the Mortgage Loan Seller, the Underwriter, the
Master Servicer, the Special Servicer, the Trustee, the REMIC Administrator, or
any of their respective affiliates has prepared or conducted its own separate
appraisal or reappraisal of any Mortgaged Property.
Portfolio Mortgage Loans. Most of the Portfolio Mortgage Loans are
seasoned loans. At the time the Portfolio Mortgage Loans were originated it was
the practice of the Mortgage Loan Seller for an independent appraiser or an
appraiser then in its employ which, in either case, was either MAI or state
certified, to perform an appraisal (or update an existing appraisal) of each of
the related Mortgaged Properties in connection with the origination of each
Mortgage Loan in order to establish that the appraised value of the related
Mortgaged Property or Properties exceeded the original principal balance of the
Mortgage Loan (or, in the case of certain sets of related Cross-Collateralized
Mortgage Loans, the aggregate original principal balance of such sets). In
general, such appraisals represent the analysis and opinions of the respective
appraisers at or before the time made, and are not guarantees of, and may not be
indicative of, present or future value. There can be no assurance that another
appraiser would not have arrived at a different valuation, even if such
appraiser used the same general approach to and same method of appraising the
property. In addition, appraisals seek to establish the amount a typically
motivated buyer would pay a typically motivated seller. Such amount could be
significantly higher than the amount obtained from the sale of a Mortgaged
Property under a distress or liquidation sale.
None of the Depositor, the Mortgage Loan Seller, the Underwriter, the
Master Servicer, the Special Servicer, the Trustee, the REMIC Administrator, or
any of their respective affiliates has prepared or conducted its own separate
appraisal or reappraisal of any Mortgaged Property (except for appraisals
conducted with respect to some of the Mortgaged Properties at the time of
origination by appraisers then in the employ of Bank of America).
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<PAGE> 50
Seismic Reviews.
Conduit Mortgage Loans. With respect to any Conduit Mortgage Loan
originated in California, a seismic study was performed in connection with the
origination of such Conduit Mortgage Loan. Based on such studies, 5 Conduit
Mortgage Loans, representing approximately 1.6% of the Initial Pool Balance, can
expect at least one event that will cause at least a total property loss greater
than 20% of the appraised value over the next 475 years.
Portfolio Mortgage Loans. The Mortgage Loan Seller has, however,
contracted with Risk Management Solutions, Inc. ("RMS") to perform a review of
the Portfolio Mortgage Loans.
RMS conducted an analysis of the potential property and default losses due
to earthquakes for Mortgage Loans in the states of California, Oregon, and
Washington. From this analysis, RMS concluded that 4 Mortgage Loans representing
1.0% of the pool can expect at least one event that will cause at least a total
property loss greater than 20% of the appraised value over the next 475 years.
Mobile Home Properties were not included in this analysis.
The results are based on data provided by the Mortgage Loan Seller and
compiled using IRAS(TM) (Insurance and Investment Risk Assessment System), a
proprietary RMS computer risk assessment system. The system is based on
scientific data, mathematical and empirical models, and the encoded experience
of earthquake engineers, structural engineers, geologists, seismologists, and
geotechnical specialists. As with any model of complex physical systems,
particularly those with low frequencies of occurrence and potentially high
severity outcomes, the actual losses from catastrophic events may differ from
the results of simulation analyses. Furthermore, the accuracy of the loss
estimations presented above is largely dependent on the accuracy and quality of
the information and data supplied to RMS by Bank of America NT&SA.
Zoning and Building Code Compliance. The Mortgage Loan Seller has
examined whether the use and operation of the Mortgaged Properties related to
the Conduit Mortgage Loans were in compliance in all material respects with all
applicable zoning, land-use, environmental, building, fire and health
ordinances, rules, regulations and orders applicable to such Mortgaged
Properties at the time such Mortgage Loans were originated. The Mortgage Loan
Seller has made no such examination of the Mortgaged Properties related to the
Portfolio Mortgage Loans. Establishment of such compliance may have been
supported by legal opinions, certifications from government officials and/or
representations by the related borrower contained in the related Mortgage Loan
documents. Certain violations may exist, but the Mortgage Loan Seller does not
consider them to be material.
In some cases, the use, operation and/or structure of the related Mortgaged
Property constitutes a permitted nonconforming use and/or structure that may not
be rebuilt to its current state in the event of a material casualty event. With
respect to such Mortgaged Properties, the Mortgage Loan Seller has determined
that in the event of a material casualty affecting the Mortgaged Property that
either:
(1) insurance proceeds would be available and sufficient to pay off
the related Mortgage Loan in full,
(2) the Mortgaged Property, if permitted to be repaired or restored in
conformity with current law, would constitute adequate security for the
related Mortgage Loan, or
(3) the risk that the entire Mortgaged Property would suffer a
material casualty to such a magnitude that it could not be rebuilt to its
current state is remote.
Although the lender expects insurance proceeds to be available for
application to the related Mortgage Loan in the event of a material casualty, no
assurance can be given that such proceeds would be sufficient to pay off such
Mortgage Loan in full. In addition, if the Mortgaged Property were to be
repaired or restored in conformity with current law, no assurance can be given
as to what its value would be relative to the remaining balance of the related
Mortgage Loan or what would be the revenue-producing potential of the property.
Hazard, Liability and Other Insurance. The Mortgage Loans require that
each Mortgaged Property be insured by a hazard insurance policy in an amount
(subject to a customary deductible) at least equal to the
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<PAGE> 51
lesser of the outstanding principal balance of the related Mortgage Loan and
100% of the full insurable replacement cost of the improvements located on the
related Mortgaged Property, and if applicable, that the related hazard insurance
policy contain appropriate endorsements to avoid the application of co-insurance
and not permit reduction in insurance proceeds for depreciation; provided that,
in the case of certain of the Mortgage Loans, the hazard insurance may be in
such other amounts as was required by the related originators.
In addition, if any portion of a Mortgaged Property securing any Mortgage
Loan was, at the time of the origination of such Mortgage Loan, in an area
identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, and flood insurance was available, a flood
insurance policy meeting any requirements of the then-current guidelines of the
Federal Insurance Administration is required to be 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,
(3) the maximum amount of insurance available under the National Flood
Insurance Act of 1968, as amended, and
(4) 100% of the replacement cost of the improvements located on the
related Mortgaged Property.
In general, the standard form of hazard insurance policy covers physical
damage to, or destruction of, the improvements on the Mortgaged Property by
fire, lightning, explosion, smoke, windstorm and hail, riot or strike and civil
commotion, subject to the conditions and exclusions set forth in each policy.
Each Conduit Mortgage Loan generally also requires the related borrower to
maintain comprehensive general liability insurance against claims for personal
and bodily injury, death or property damage occurring on, in or about the
related Mortgaged Property in an amount customarily required by institutional
lenders.
Each Conduit Mortgage Loan generally further requires the related borrower
to maintain business interruption insurance in an amount not less than 100% of
the projected rental income from the related Mortgaged Property for not less
than twelve months (or, in the case of a Mortgaged Property not having an
elevator, for at least a six month period).
In general, the Mortgage Loans (including those secured by Mortgaged
Properties located in California) do not require earthquake insurance.
THE MORTGAGE LOAN SELLER
The Mortgage Loan Seller is a national banking association. The principal
office of the Mortgage Loan Seller is in Charlotte, North Carolina. The Mortgage
Loan Seller was formed by the merger on July 23, 1999 of Bank of America, N.A.
(known prior to July 5, 1999 as NationsBank, N.A.) and Bank of America NT&SA
(the "Merger"). The Mortgage Loan Seller is a wholly-owned subsidiary of NB
Holdings Corporation, which in turn is a wholly-owned subsidiary of Bank of
America Corporation.
The information set forth herein concerning the Mortgage Loan Seller has
been provided by the Mortgage Loan Seller. Neither the Depositor nor Banc of
America Securities LLC (the "Underwriter") makes any representation or warranty
as to the accuracy or completeness of such information.
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<PAGE> 52
The table below reflects accounting losses and recoveries for Bank of
America NT&SA's commercial term real estate mortgage portfolio while the assets
were recorded as loans. The loans in this pool were selected from this category
of loans. The commercial term mortgage portfolio is a subset of a larger real
estate category and as such is not separately disclosed. The numbers shown have
been extracted from the larger portfolio using methods believed to be accurate.
BANK OF AMERICA NT&SA COMMERCIAL TERM MORTGAGE PORTFOLIO
LOAN LOSS HISTORY (PRE-MERGER)
<TABLE>
<CAPTION>
LOSS RECOVERY NET LOSS
% OF % OF % OF
PRINCIPAL PRINCIPAL PRINCIPAL
YEAR BALANCE BALANCE BALANCE
- ---- --------- --------- ---------
<S> <C> <C> <C>
1989........................................................ 0.66% 0.82% (0.16)%
1990........................................................ 0.90% 0.28% 0.62%
1991........................................................ 0.87% 0.15% 0.72%
1992........................................................ 0.55% 0.11% 0.44%
1993........................................................ 0.98% 0.35% 0.63%
1994........................................................ 0.51% 0.27% 0.25%
1995........................................................ 0.46% 0.15% 0.31%
1996........................................................ 0.18% 0.11% 0.07%
1997........................................................ 0.19% 0.06% 0.12%
1998........................................................ 0.03% 0.04% (0.01)%
3 Year Average.............................................. 0.13% 0.07% 0.06%
5 Year Average.............................................. 0.27% 0.13% 0.15%
10 Year Average............................................. 0.53% 0.23% 0.30%
</TABLE>
ASSIGNMENT OF THE MORTGAGE LOANS; REPURCHASES
On or prior to the Trust Formation Date, by agreement with the Depositor,
the Mortgage Loan Seller (except as described in the next paragraph) assigned,
sold and transferred the Mortgage Loans, without recourse, to the Trustee for
the benefit of the Certificateholders. In connection with such assignment, the
Mortgage Loan Seller was required to deliver the following documents, among
others, to the Trustee with respect to each Mortgage Loan so assigned by the
Mortgage Loan Seller:
(1) the original Mortgage Note, endorsed (without recourse) to the
order of the Trustee;
(2) the original or a copy of the related Mortgage(s), together with
originals or copies of any intervening assignments of such document(s), in
each case (unless the particular document has not been returned from the
applicable recording office) with evidence of recording thereon;
(3) the original or a copy of any related assignment(s) of leases and
rents (if any such item is a document separate from the Mortgage), together
with originals or copies of any intervening assignments of such
document(s), in each case (unless the particular document has not been
returned from the applicable recording office) with evidence of recording
thereon;
(4) an assignment of each related Mortgage in favor of the Trustee, in
recordable form (or a certified copy of such assignment as sent for
recording);
(5) an assignment of any related assignment(s) of leases and rents (if
any such item is a document separate from the Mortgage) in favor of the
Trustee, in recordable form (or a certified copy of such assignment as sent
for recording);
(6) an original or copy of the related lender's title insurance policy
(or, if a title insurance policy has not yet been issued, a commitment for
title insurance "marked-up" at the closing of such Mortgage Loan or other
binding commitment to issue title insurance);
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(7) an assignment in favor of the Trustee of each effective UCC
financing statement in the possession of the transferor (or a certified
copy of such assignment as sent for filing); and
(8) in those cases where applicable, the original or a copy of the
related ground lease.
Some or all of the Mortgage Loans were instead transferred to the Trustee
by a Delaware business trust wholly owned by the Mortgage Loan Seller (the "NB
Owner Trust"). With respect to such Mortgage Loans, the Mortgage Loan Seller has
nevertheless made the representations and warranties described below under
"-- Representations and Warranties; Repurchases" and, at the direction of such
business trust, has been required to deliver the documents listed above.
The Trustee is required to review the documents delivered thereto by the
Mortgage Loan Seller (regardless whether so delivered at the direction of the
Depositor or the NB Owner Trust) with respect to each Mortgage Loan within a
specified period following such delivery, and the Trustee will hold the related
documents in trust. If it is found during the course of such review or at any
time thereafter that any of the above-described documents was not delivered with
respect to any Mortgage Loan or that any such document is defective, and in
either case such omission or defect materially and adversely affects the value
of the related Mortgage Loan or the interests of Certificateholders therein,
then the Mortgage Loan Seller will be obligated, except as otherwise described
below, within a period of 90 days following its receipt of notice of such
omission or defect to deliver the missing documents or cure the defect in all
material respects, as the case may be, or to repurchase (or cause the repurchase
of) the affected Mortgage Loan at a price (the "Purchase Price") generally equal
to the unpaid principal balance of such Mortgage Loan, plus any accrued but
unpaid interest thereon at the related Mortgage Rate to but not including the
Due Date in the Collection Period of repurchase, plus any related unreimbursed
Servicing Advances (as defined herein) and any interest on any Advances.
However, if such defect or breach is capable of being cured but not within the
90 day period and the Mortgage Loan Seller has commenced and is diligently
proceeding with cure of such defect or breach within such 90 day period, then
the Mortgage Loan Seller, shall have an additional 90 days to complete such cure
or, failing such cure, to repurchase the related Mortgage Loan (such possible
additional cure period shall not apply in the event of a defect that causes the
Mortgage Loan not to constitute a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code or not to meet certain Code-specified criteria
with respect to required loan-to-value ratio, customary prepayment penalties or
permissible defeasance).
The cure/repurchase obligations of the Mortgage Loan Seller will constitute
the sole remedies available to the Certificateholders for any failure on the
part of the Mortgage Loan Seller to deliver any of the above-described documents
with respect to any Mortgage Loan or for any defect in any such document, and
neither the Depositor nor any other person will be obligated to repurchase the
affected Mortgage Loan if the Mortgage Loan Seller defaults on its obligation to
do so. Notwithstanding the foregoing, if any of the above-described documents is
not delivered with respect to any Mortgage Loan because such document has been
submitted for recording, and neither such document nor a copy thereof, in either
case with evidence of recording thereon, can be obtained because of delays on
the part of the applicable recording office, then the Mortgage Loan Seller will
not be required to repurchase (or cause the repurchase of) the affected Mortgage
Loan on the basis of such missing document so long as it continues in good faith
attempt to obtain such document or such copy.
The Pooling Agreement required that the assignments in favor of the Trustee
with respect to each Mortgage Loan described in clauses (4) and (5) of the first
paragraph under this heading be submitted for recording in the real property
records of the appropriate jurisdictions within a specified number of days
following the Trust Formation Date at the expense of the Mortgage Loan Seller.
See "The Pooling and Servicing Agreements -- Assignment of Mortgage Loans;
Repurchases" in the accompanying prospectus.
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REPRESENTATIONS AND WARRANTIES; REPURCHASES
Conduit Mortgage Loans. In the Pooling Agreement, the Mortgage Loan Seller
represented and warranted with respect to the Conduit Mortgage Loans, as of the
Trust Formation Date or as of such earlier date specifically provided in the
related representation or warranty, among other things, substantially as
follows:
(1) the information set forth in the schedule of Conduit Mortgage
Loans (the "Conduit Mortgage Loan Schedule") attached to the Pooling
Agreement (which will contain a limited portion of the information set
forth in Annex A) is true and correct in all material respects as of August
1, 1999 (the "Original Cut-off Date");
(2) each Mortgage securing a Conduit Mortgage Loan is a valid first
lien on the related Mortgaged Property subject only to (a) the lien of
current real estate taxes and assessments not yet due and payable, (b)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record, (c) rights of tenants (whether under ground
leases, space leases or operating 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 related lender's title insurance policy
issued or, as evidenced by a "marked-up" commitment, to be issued in
respect of such Conduit Mortgage Loan and (e) if such Conduit Mortgage Loan
is cross-collateralized with any other Conduit Mortgage Loan, the lien of
the Mortgage for such other Conduit Mortgage Loan (the exceptions set forth
in the foregoing clauses (a), (b), (c), (d), and (e) collectively,
"Permitted Encumbrances");
(3) the Mortgage(s) and Mortgage Note for each Conduit Mortgage Loan
and all other documents to which the related borrower is a party and which
evidence or secure such Conduit Mortgage Loan, are the legal, valid and
binding obligations of the related borrower (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, 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;
(4) no Conduit Mortgage Loan was as of the Original Cut-off Date, or
during the twelve-month period prior thereto, 30 days or more delinquent in
respect of any Monthly Payment, without giving effect to any applicable
grace period;
(5) there is no valid offset, defense or counterclaim to any Conduit
Mortgage Loan;
(6) it has not waived any material default, breach, violation or event
of acceleration existing under any Mortgage or Mortgage Note;
(7) it has not received actual notice that (a) there is any proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property, or (b) there is any material damage at any Mortgaged
Property that materially and adversely affects the value of such Mortgaged
Property;
(8) all insurance coverage required under each Mortgage securing a
Conduit Mortgage Loan is in full force and effect with respect to the
related Mortgaged Property;
(9) at origination, each Conduit Mortgage Loan complied in all
material respects with all requirements of federal and state law, including
those requirements pertaining to usury, relating to the origination of such
Conduit Mortgage Loan;
(10) in connection with or subsequent to the origination of the
related Conduit Mortgage Loan, one or more environmental site assessments
(or an update of a previously conducted assessment) has been performed with
respect to each Mortgaged Property, and it, having made no independent
inquiry other than reviewing the resulting report(s) and/or employing an
environmental consultant to perform the assessments or updates referenced
herein, has no knowledge of any material and adverse environmental
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condition or circumstance affecting such Mortgaged Property that was not
disclosed in the related report(s);
(11) the lien of each Mortgage is insured by a title insurance policy
issued by a nationally recognized title insurance company that insures the
originator, its successors and assigns, as to the first priority lien of
such Mortgage in the original principal amount of the related Conduit
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 Conduit Mortgage Loan, a policy meeting the foregoing
description is evidenced by a commitment for title insurance "marked-up" at
the closing of such loan);
(12) the proceeds of each Conduit Mortgage Loan have been fully
disbursed, and there is no requirement for future advances thereunder;
(13) the terms of the Mortgage Note and Mortgage(s) for each Conduit
Mortgage Loan have not been impaired, waived, altered or modified in any
material respect, except as specifically set forth in the related Mortgage
File or indicated on the Mortgage Loan Schedule;
(14) there are no delinquent taxes, ground rents, insurance premiums,
assessments, including, without limitation, assessments payable in future
installments, or other similar outstanding charges (and, to its actual
knowledge, at the origination of such Conduit Mortgage Loan, there were no
delinquent water charges or sewer rents) affecting the related Mortgaged
Property;
(15) the related borrower's interest in each Mortgaged Property
securing a Conduit Mortgage Loan consists of a fee simple and/or leasehold
estate or interest in real property;
(16) no Conduit Mortgage Loan contains any equity participation by the
lender, provides for any contingent or additional interest in the form of
participation in the cash flow of the related Mortgaged Property or
provides for the negative amortization of interest; and
(17) all escrow deposits (including capital improvements and
environmental remediation reserves) relating to each Conduit 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 representing party or its agents (which shall include
the Master Servicer).
In the Pooling Agreement, the Mortgage Loan Seller has also made
representations, among other things, concerning the priority and certain terms
of ground leases securing Conduit Mortgage Loans, and certain terms of the
mortgage loan documents and other characteristics relating to Mortgaged
Properties that are health care facilities. The Mortgage Loan Seller has also
represented and warranted, as of the Trust Formation Date, that, immediately
prior to the transfer of the Conduit Mortgage Loans to the Trustee, the Mortgage
Loan Seller or the NB Owner Trust had good and marketable title to, and was the
sole owner of, each Conduit Mortgage Loan and had full right and authority to
sell, assign and transfer such Conduit Mortgage Loan. The Mortgage Loan Seller
has also represented with respect to each Conduit Mortgage Loan that the related
Mortgage File contains an appraisal of the Mortgaged Property, and that such
appraisal and the related appraisal satisfy the requirements of Title XI of the
Federal Financial Institutions, Reform, Recovery and Enforcement Act of 1989 and
the regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated.
If the Mortgage Loan Seller discovers or is notified of a breach of any of
the foregoing representations and warranties with respect to any Conduit
Mortgage Loan and such breach materially and adversely affects the value of such
Conduit Mortgage Loan or the interests of Certificateholders therein, then the
Mortgage Loan Seller will be obligated, within a period of 90 days following its
discovery or receipt of notice of such breach, to cure such breach in all
material respects or to repurchase (or cause the repurchase of) the affected
Conduit Mortgage Loan at the applicable Purchase Price. However, if such defect
or breach is capable of being cured but not within the 90 day period and the
Mortgage Loan Seller has commenced and is diligently proceeding with cure of
such defect or breach within such 90 day period, the Mortgage Loan Seller shall
have an additional 90 days to complete such cure or, failing such cure, to
repurchase the related Conduit Mortgage
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Loan (such possible additional cure period shall not apply on the event of a
defect that causes the Conduit Mortgage Loan not to constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, including not
meeting certain Code-specified criteria with respect to required loan-to-value
ratio, customary prepayment penalties or permissible defeasance).
The foregoing cure/repurchase obligation of the Mortgage Loan Seller will
constitute the sole remedy available to the Certificateholders for any breach of
any of the foregoing representations and warranties, and neither the Depositor
nor any other person will be obligated to repurchase any affected Conduit
Mortgage Loan in connection with a breach of such representations and warranties
if the Mortgage Loan Seller defaults on its obligation to do so. The Mortgage
Loan Seller will be the sole Warranting Party (as defined in the accompanying
prospectus) in respect of the Conduit Mortgage Loans. See "The Pooling and
Servicing Agreements -- Representations and Warranties; Repurchases" in the
accompanying prospectus.
Portfolio Mortgage Loans. In the Pooling Agreement, the Mortgage Loan
Seller represented and warranted with respect to the Portfolio Mortgage Loans,
as of the Trust Formation Date or as of such earlier date specifically provided
in the related representation or warranty, among other things, substantially as
follows:
(1) The information set forth in the schedule of Portfolio Mortgage
Loans (the "Portfolio Mortgage Loan Schedule") attached to the Pooling
Agreement is true and correct in all material respects as of the Original
Cut-off Date.
(2) No Portfolio Mortgage Loan was as of the Original Cut-off Date, or
during the twelve-month period prior thereto, 30 days or more delinquent in
respect of any Monthly Payment, without giving effect to any applicable
grace period. Such non-delinquent status with respect to principal and/or
interest is not due to any advance made by the Mortgage Loan Seller.
(3) Each Mortgage securing a Portfolio Mortgage Loan is a valid first
lien on the related Mortgaged Property subject only to (a) the lien of
delinquent real estate taxes and assessments or current real estate taxes
and assessments not yet due and payable, (b) covenants, conditions and
restrictions, rights of way, easements and other matters of public record,
(c) rights of tenants (whether under ground leases, space leases or
operating 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 related lender's title insurance policy issued or, as
evidenced by a "marked-up" commitment, to be issued in respect to such
Portfolio Mortgage Loan and (e) if such Portfolio Mortgage Loan is
cross-collateralized with any other Portfolio Mortgage Loan, the lien of
the Mortgage for such other Portfolio Mortgage Loan (the exceptions set
forth in the foregoing clauses (a), (b), (c), (d) and (e) collectively,
"Permitted Encumbrances"). Such Permitted Encumbrances do not materially
interfere with the security intended to be provided by the related
Mortgage(s), the current use of the related Mortgaged Property, or the
ability of the related borrower to timely pay in full the principal and
interest on the Portfolio Mortgage Loan. Notwithstanding the foregoing, no
representation is made as to the perfection of any security interest in
personal property.
(4) The lien of each Mortgage is insured by a title insurance policy
issued by a nationally recognized title insurance company that insures the
originator, its successors and assigns, as to the first priority lien of
such Mortgage in the original principal amount of the related Portfolio
Mortgage Loan after all advances of principal, subject only to Permitted
Encumbrances. The premiums under such title insurance policy have been
paid, and to the Mortgage Loan Seller's actual knowledge, each title
insurance policy is in full force and effect and no claims have been made
under any title insurance policy.
(5) To the best of the Mortgage Loan Seller's knowledge, it has not
waived any material default, breach, violation or event of acceleration
existing under any Mortgage or Mortgage Note.
(6) There is no valid offset, defense or counterclaim to any Portfolio
Mortgage Loan.
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(7) It has not received actual notice that (a) there is any proceeding
pending or threatened for the total or partial condemnation of any
Mortgaged Property, or (b) there is any material damage at any Mortgaged
Property that materially and adversely affects the value of such Mortgaged
Property.
(8) At origination, each Portfolio Mortgage Loan complied in all
material respects with all requirements of federal and state law, including
those requirements pertaining to usury, relating to the origination of such
Portfolio Mortgage Loan.
(9) The proceeds of each Portfolio Mortgage Loan have been fully
disbursed, and there is no requirement for future advances thereunder.
(10) The Mortgage(s) and Mortgage Note for each Portfolio Mortgage
Loan and all other documents to which the related borrower is a party and
which evidence or secure such Portfolio Mortgage Loan, are the legal, valid
and binding obligations of the related borrower (subject to any
non-recourse provisions contained in any of the foregoing agreements and
any applicable state antideficiency legislation), enforceable in accordance
with their respective terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium or other
laws relating to or affecting the rights of creditors generally and by
general principles if equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
(11) There is no material and adverse environmental condition or
circumstance affecting the Mortgaged Property.
(12) Except as contained in the related Mortgage File, the terms of
the Mortgage Note and Mortgage(s) for each Portfolio Mortgage Loan have not
been impaired, waived, altered or modified in any material respect.
(13) Except as identified in the Pooling Agreement, there are no
delinquent or unpaid taxes or assessments (including assessments payable in
future installments), or other outstanding charges affecting any Mortgaged
Property which are or may become a lien of priority equal to or higher than
the lien of the related Mortgage.
(14) The related borrower's interest in each Mortgaged Property
securing a Portfolio Mortgage Loan consist of a fee simple and/or leasehold
estate or interest in real property.
(15) All escrow deposits (including capital improvements and
environmental remediation reserves) relating to each Portfolio 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 representing party or its agents (which shall include
the Master Servicer).
In the Pooling Agreement, the Mortgage Loan Seller has also made
representations concerning, among other things, the priority and certain terms
of ground leases securing Portfolio Mortgage Loans, and certain terms of the
mortgage loan documents and characteristics of the Mortgaged Properties. The
Mortgage Loan Seller has also represented and warranted, as of the Trust
Formation Date, that, immediately prior to the transfer of the Mortgage Loans to
the Trustee, the Mortgage Loan Seller had good and marketable title to, and was
the sole owner of, each Portfolio Mortgage Loan and had full right and authority
to sell, assign and transfer such Portfolio Mortgage Loan.
If the Mortgage Loan Seller discovers or is notified of a breach of any of
the representations and warranties contained in the Pooling Agreement with
respect to any Portfolio Mortgage Loan and such breach materially and adversely
affects the value of such Portfolio Mortgage Loan or the interests of
Certificateholders therein, then the Mortgage Loan Seller will be obligated,
within a period of 90 days following its discovery or receipt of notice of such
breach, to cure such breach in all material respects or to repurchase (or cause
the repurchase of) the affected Portfolio Mortgage Loan at the applicable
Purchase Price. However, if such defect or breach is capable of being cured but
not within the 90 day period and the Mortgage Loan Seller has commenced and is
diligently proceeding to cure such defect or breach within such 90 day period,
the Mortgage Loan Seller shall have an additional 90 days to complete such cure
or, failing such cure, to
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repurchase the related Portfolio Mortgage Loan (such possible additional cure
period shall not apply in the event of a defect that causes the Portfolio
Mortgage Loan not to constitute a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, including not meeting certain Code-specified
criteria with respect to required loan-to-value ratio, permissible index or
customary prepayment penalties). In the event of discovery of a breach of the
representation and warranty with respect to environmental conditions, the
Mortgage Loan Seller will similarly have an opportunity to cure such breach.
However, the breach will be deemed to have been cured if and only if the Special
Servicer (or if the Mortgage Loan Seller shall be the Special Servicer, an
independent party designated by the Master Servicer) shall have determined in
good faith that (a) the Mortgage Loan Seller has either caused the condition
that was the cause of such breach to be eliminated, or has established a reserve
for the costs of remediating the condition that was the cause of such breach and
has instituted a program which was reasonably expected to remediate such
condition within two years after the program was instituted; (b) the estimated
cost to cure is less than $5,000,000 and less than 50% of the then-outstanding
principal balance of the loan after taking into account the increase in value
attributable to any such reserve fund; and (c) retention of such Portfolio
Mortgage Loan in the Mortgage Pool would not violate the Servicing Standard.
None of the Master Servicer, the Special Servicer or the Trustee will be
entitled to interest from the Trust on Advances made by it with respect to such
Portfolio Mortgage Loan until any such environmental breach is cured.
The foregoing cure/repurchase obligation of the Mortgage Loan Seller will
constitute the sole remedy available to the Certificateholders for any breach of
any of the foregoing representations and warranties, and neither the Depositor
nor any other person will be obligated to repurchase any affected Portfolio
Mortgage Loan in connection with a breach of such representations and warranties
if the Mortgage Loan Seller defaults on its obligation to do so. The Mortgage
Loan Seller will be the sole Warranting Party (as defined in the accompanying
prospectus) in respect of the Portfolio Mortgage Loans. See "The Pooling and
Servicing Agreements -- Representations and Warranties; Repurchases" in the
accompanying prospectus. In addition, each of the foregoing representations and
warranties by the Mortgage Loan Seller has been made as of the Trust Formation
Date or such earlier date specifically provided for in the related
representation and warranty, and the Mortgage Loan Seller will not be obligated
to cure or repurchase any Mortgage Loan due to the breach arising from events
subsequent to the date which such representation or warranty was made.
CHANGES IN MORTGAGE POOL CHARACTERISTICS
The description in this prospectus supplement of the Mortgage Pool and the
Mortgaged Properties is based upon the Mortgage Pool as constituted on the
Cut-off Date, as adjusted for the scheduled principal payments due on the
Mortgage Loans on or before the Cut-off Date. The Depositor believes that the
information set forth herein is representative of the characteristics of the
Mortgage Pool as constituted on the Cut-off Date, although the range of Mortgage
Rates and maturities, as well as the other characteristics of the Mortgage Loans
described herein, may vary.
A Current Report on Form 8-K (the "Form 8-K") will be available to
purchasers of the Offered Certificates on or shortly after the Delivery Date 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. In the event Mortgage Loans are removed from or added to
the Mortgage Pool as set forth in the preceding paragraph, such removal or
addition will be noted in the Form 8-K.
PORTFOLIO LOAN ENVIRONMENTAL POLICY
As described above under "Representations and Warranties;
Repurchases -- Portfolio Mortgage Loans," with respect to each Portfolio
Mortgage Loan, the Mortgage Loan Seller has represented and warranted that there
are no material adverse environmental conditions on the related Mortgaged
Properties as of the Trust Formation Date, and except to the extent such
condition is covered by the Environmental Policy described below, the repurchase
obligation described above (subject to the cure obligation also described above)
is the sole remedy available to Certificateholders with respect to any such
environmental condition arising on or prior to the Trust Formation Date.
The Mortgage Loan Seller, in pursuing a cure or following its repurchase of
a Portfolio Mortgage Loan with respect to any related Mortgaged Property as to
which such an environmental condition arose prior to the
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Trust Formation Date, may have the benefit of an environmental insurance policy
(the "Environmental Policy") issued by Steadfast Insurance Company (the
"Environmental Insurer"). The Trust Fund may also have the benefit of the
Environmental Policy with respect to any such environmental condition covered by
such Environmental Policy arising prior to or after the Trust Formation Date. If
there is a default with respect to the related Mortgage Loan, the Environmental
Policy provides coverage for adverse environmental conditions in an amount
generally equal to the lesser of the outstanding principal balance of such
Mortgage Loan or the estimated cleanup costs. The Environmental Policy is
subject to coverage limits of $13,000,000 per occurrence and $130,000,000 in the
aggregate. Because each of the Mortgage Loan Seller and the Trustee are named
insureds under the Environmental Policy, claims paid to the Mortgage Loan Seller
in respect of environmental conditions arising on or prior to the Delivery Date
will reduce the remaining coverage available for claims by the Trustee (or the
Servicer on its behalf), and vice versa.
The Environmental Insurer is a member of the Zurich U.S. group of pooled
companies, which has been assigned an "A+" rating from A.M. Best.
The Environmental Policy relates only to Portfolio Mortgage Loans, and
provides no coverage in respect of any mortgaged property relating to any
Conduit Mortgage Loan.
SERVICING OF THE MORTGAGE LOANS
GENERAL
The Master Servicer and the Special Servicer, either directly or through
sub-servicers, will each be required to service and administer the respective
Mortgage Loans for which it is responsible, in the best interests and for the
benefit of the Certificateholders, in accordance with any and all applicable
laws, the terms of the Pooling Agreement, related insurance policies and the
respective Mortgage Loans and, to the extent consistent with the foregoing, the
following standard (the "Servicing Standard"): (a) in the same manner in which,
and with the same care, skill, prudence and diligence with which, the Master
Servicer or Special Servicer, as the case may be, generally services and
administers similar mortgage loans or assets, as applicable, for third parties
or generally services and administers similar mortgage loans or assets, as
applicable, held in its own portfolio, whichever servicing procedure is of a
higher standard; (b) 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 (collectively) on a
present value basis; and (c) without regard to (1) any relationship that the
Master Servicer or the Special Servicer, as the case may be, or any affiliate
thereof may have with any related borrower; (2) the ownership of any Certificate
by the Master Servicer or the Special Servicer, as the case may be, or any
affiliate thereof; (3) the Master Servicer's obligation to make Advances (as
defined herein); (4) the Special Servicer's obligation to make Emergency
Advances (as defined herein) or to direct the Master Servicer to make Servicing
Advances (as defined herein); (5) the right of the Master Servicer or the
Special Servicer, as the case may be, or any affiliate thereof to receive
compensation for its services or reimbursement of costs under the Pooling
Agreement or with respect to any particular transaction; and (6) the servicing
of other mortgage loans by the Master Servicer or the Special Servicer, as the
case may be.
In general, the Master Servicer will be responsible for the servicing and
administration of all the Mortgage Loans as to which no Servicing Transfer Event
(as defined herein) has occurred and all Corrected Mortgage Loans (as defined
herein), and the Special Servicer will be obligated to service and administer
each Mortgage Loan (other than a Corrected Mortgage Loan) as to which a
Servicing Transfer Event has occurred (each, a "Specially Serviced Mortgage
Loan") and each Mortgaged Property acquired on behalf of the Certificateholders
in respect of a defaulted Mortgage Loan through foreclosure, deed-in-lieu of
foreclosure or otherwise (upon acquisition, an "REO Property"). A "Servicing
Transfer Event" with respect to any Mortgage Loan consists of any of the
following events: (1) the related borrower has failed to make when due any
Balloon Payment, which failure has continued, or the Master Servicer determines
in its good faith and reasonable judgment will continue, unremedied for 30 days;
(2) the related borrower has failed to make when
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due any Monthly Payment (other than a Balloon Payment) or any other payment
required under the related Mortgage Note or the related Mortgage(s), which
failure has continued, or the Master Servicer determines in its good faith and
reasonable judgment will continue, unremedied for 60 days; (3) the Master
Servicer has determined in its good faith and reasonable judgment that a default
in the making of a Monthly Payment (including a Balloon Payment) or any other
payment required under the related Mortgage Note or the related Mortgage(s) is
likely to occur within 30 days and is likely to remain unremedied for at least
60 days or, in the case of a Balloon Payment, for at least 30 days; (4) there
shall have occurred a default under the related loan documents, other than as
described in clause (1) or (2) above, that may, in the Master Servicer's good
faith and reasonable judgment, materially impair the value of the related
Mortgaged Property as security for the Mortgage Loan or otherwise materially and
adversely affect the interests of Certificateholders, which default has
continued unremedied for the applicable cure period under the terms of the
Mortgage Loan (or, if no cure period is specified, 60 days); (5) a decree or
order of a court or agency or supervisory authority having jurisdiction in the
premises in an involuntary case under any present or future federal or state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the related borrower
and such decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; (6) the related borrower shall have consented to the
appointment of a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to such borrower or of or relating to all or
substantially all of its property; (7) the related borrower shall have admitted
in writing its inability to pay its debts generally as they become due, filed a
petition to take advantage of any applicable insolvency or reorganization
statute, made an assignment for the benefit of its creditors, or voluntarily
suspended payment of its obligations; (8) the Master Servicer shall have
received notice of the commencement of foreclosure or similar proceedings with
respect to the related Mortgaged Property or Properties; (9) the Special
Servicer, the Master Servicer or the Trustee has made three consecutive P&I
Advances (exclusive of P&I Advances with respect to Mortgage Loans not
delinquent past their grace periods) regardless of reimbursement of such P&I
Advances; (10) the Master Servicer has received actual knowledge that the
related borrower is experiencing a hardship which will cause an inability to pay
the Mortgage Loan or that the related borrower is at imminent risk of default of
material terms of the Mortgage Loan; or (11) the related borrower has failed to
pay when due any taxes, assessments, water or sewer rents, or other similar
charges relating to or assessed against the Mortgaged Property, or upon the
interest of the Mortgagee of the Mortgaged Property, which failure has continued
unresolved for more than a period of time specified in the Pooling Agreement.
The Master Servicer shall continue to collect information and prepare all
reports to the Trustee required under the Pooling Agreement with respect to any
Specially Serviced Mortgage Loans and REO Properties, and further to render
incidental services with respect to any Specially Serviced Mortgage Loans and
REO Properties as are specifically provided for in the Pooling Agreement. The
Master Servicer and the Special Servicer shall not have any responsibility for
the performance by each other of their respective duties under the Pooling
Agreement.
A Mortgage Loan will cease to be a Specially Serviced Mortgage Loan (and
will become a "Corrected Mortgage Loan" as to which the Master Servicer will
re-assume servicing responsibilities) at such time as such of the following as
are applicable occur with respect to the circumstances identified above that
caused the Mortgage Loan to be characterized as a Specially Serviced Mortgage
Loan (and provided that no other Servicing Transfer Event then exists):
(w) with respect to the circumstances described in clauses (1) and (2)
of the preceding paragraph, the related borrower has made three consecutive
full and timely Monthly Payments under the terms of such Mortgage Loan (as
such terms may be changed or modified in connection with a bankruptcy or
similar proceeding involving the related borrower or by reason of a
modification, waiver or amendment granted or agreed to by the Special
Servicer);
(x) with respect to the circumstances described in clauses (3), (5),
(6) and (7) of the preceding paragraph, such circumstances cease to exist
in the good faith and reasonable judgment of the Special Servicer;
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(y) with respect to the circumstances described in clause (4) of the
preceding paragraph, such default is cured; and
(z) with respect to the circumstances described in clause (8) of the
preceding paragraph, such proceedings are terminated.
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 Directing
Certificateholder (as defined below), the Master Servicer and the Rating
Agencies. The Directing Certificateholder 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 in accordance with the Servicing
Standard that such objection is not in the best interest of all the
Certificateholders. In connection with making such affirmative determination,
the Special Servicer may request a vote by all Certificateholders, but shall in
any event take the recommended action after making such affirmative
determination. If the Directing Certificateholder does not disapprove an Asset
Status Report within 10 business days, the Special Servicer shall implement the
recommended action as outlined in such Asset Status Report. If the Directing
Certificateholder 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 Directing Certificateholder fails to
disapprove such revised Asset Status Report as described above or until the
Special Servicer, in accordance with the Servicing Standard makes a
determination that such objection is not in the best interests of the
Certificateholders. The Pooling Agreement requires that the approval process for
the Asset Status Report not last longer than 60 days after the delivery of such
report unless the Special Servicer determines in accordance with the Servicing
Standard that a longer period is not inconsistent with the best interests of
Certificateholders. Accordingly, if after 60 days (or such longer period) the
Asset Status Report has not been approved by the Directing Certificateholder,
the Special Servicer shall nevertheless implement the Asset Status Report or
take such other actions with respect to the related Mortgage Loan as it deems
appropriate in accordance with the Servicing Standard.
The "Directing Certificateholder" is the Controlling Class
Certificateholder selected by the majority Certificateholder of the Controlling
Class, as certified by the Trustee from time to time; provided, however, that
(i) absent such selection, or (ii) until a Directing Certificateholder is so
selected, or (iii) upon receipt of a notice from a majority of the Controlling
Class, by Certificate Balance, that a Directing Certificateholder is no longer
designated, the Controlling Class Certificateholder that owns the largest
aggregate Certificate Balance of the Controlling Class will be the Directing
Certificateholder.
A "Controlling Class Certificateholder" is each Holder (or Certificate
Owner, if applicable) of a Certificate of the Controlling Class as certified to
the Trustee from time to time by such Holder (or Certificate Owner).
The "Controlling Class" will be, as of any date of determination, the
outstanding Class of Sequential Pay Certificates with the lowest payment
priority (the Class A Certificates being treated as a single class for this
purpose) that has a then outstanding Certificate Balance at least equal to 25%
of its initial Certificate Balance (or, if no Class of Sequential Pay
Certificates has a Certificate Balance at least equal to 25% of its initial
Certificate Balance, then the Controlling Class shall be the outstanding Class
of Sequential Pay Certificates with the largest outstanding Certificate
Balance). The Controlling Class as of the Delivery Date will be the Class K
Certificates.
The Special Servicer will not be required to take or refrain from taking
any action pursuant to instructions from the Directing Certificateholder that
would cause it to violate applicable law, the Pooling Agreement, including the
Servicing Standard, or the REMIC Provisions.
The Master Servicer and Special Servicer will each be required to service
and administer any group of related Cross-Collateralized Mortgage Loans as a
single Mortgage Loan as and when it deems necessary and
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appropriate, consistent with the Servicing Standard. If any Cross-Collateralized
Mortgage Loan becomes a Specially Serviced Mortgage Loan, then each other
Mortgage Loan that is cross-collateralized with it shall also become a Specially
Serviced Mortgage Loan. Similarly, no Cross-Collateralized Mortgage Loan shall
subsequently become a Corrected Mortgage Loan, unless and until all Servicing
Transfer Events in respect of each other Mortgage Loan with which it is
cross-collateralized, are remediated or otherwise addressed as contemplated
above.
Set forth below is a description of certain pertinent provisions of the
Pooling Agreement relating to the servicing of the Mortgage Loans. Reference is
also made to the accompanying prospectus, in particular to the section captioned
"The Pooling and Servicing Agreements," for additional important information
regarding the terms and conditions of the Pooling Agreement as such terms and
conditions relate to the rights and obligations of the Master Servicer and the
Special Servicer thereunder.
THE MASTER SERVICER AND THE SPECIAL SERVICER
ORIX Real Estate Capital Markets, LLC ("ORIX") or an affiliate thereof will
act as the master servicer (the "Master Servicer") pursuant to the Pooling
Agreement. ORIX is a Delaware limited liability company. ORIX manages a
servicing portfolio of commercial and multifamily loans encompassing 10,874
assets with an aggregate principal balance, as of June 30, 1999, of
approximately $28.5 billion, the collateral for which is located in 50 states,
Puerto Rico, the District of Columbia, Canada, the Dominican Republic and the
Virgin Islands. ORIX's servicing operations are located at 1717 Main Street,
Dallas, Texas 75201. The Master Servicer will be responsible for servicing the
Mortgage Loans (other than Specially Serviced Mortgage Loans and REO
Properties). Although the Master Servicer is authorized to employ agents to
directly service certain of the Mortgage Loans as long as they are not Specially
Serviced Mortgage Loans, the Master Servicer will remain liable for its
servicing obligations under the Pooling Agreement. The Master Servicer's
principal offices are located at 1717 Main Street, Dallas, Texas 75201.
ORIX or an affiliate thereof is expected to act as the special servicer
(the "Special Servicer") pursuant to the Pooling Agreement. As of June 30, 1999,
ORIX served as the named Special Servicer on 63 securitized transactions
encompassing 18,039 loans, with an aggregate principal balance of approximately
$46.1 billion.
The information set forth herein concerning the Master Servicer and the
Special Servicer has been provided by ORIX and neither the Depositor nor the
Underwriter makes any representation or warranty as to the accuracy or
completeness of such information.
SUB-SERVICERS
The Master Servicer and Special Servicer may each delegate its servicing
obligations in respect of the Mortgage Loans serviced thereby to one or more
third-party servicers (each, a "Sub-Servicer"); provided that the Master
Servicer or Special Servicer, as the case may be, will remain obligated under
the Pooling Agreement for such delegated duties. A majority of the Mortgage
Loans are currently being primary serviced by third-party servicers that are
entitled to and will become Sub-Servicers of such loans on behalf of the Master
Servicer. Each sub-servicing agreement between the Master Servicer or Special
Servicer, as the case may be, and a Sub-Servicer (each, a "Sub-Servicing
Agreement") must provide that, if for any reason the Master Servicer or Special
Servicer, as the case may be, is no longer acting in such capacity, the Trustee
or any successor to such Master Servicer or Special Servicer may (1) assume such
party's rights and obligations under such Sub-Servicing Agreement, (2) enter
into a new Sub-Servicing Agreement with such Sub-Servicer on such terms as the
Trustee or such other successor Master Servicer or Special Servicer and such
Sub-Servicer shall mutually agree or (3) terminate such Sub-Servicer without
cause (but only upon payment to the Sub-Servicer of specified compensation). The
Master Servicer and Special Servicer will each be required to monitor the
performance of Sub-Servicers retained by it.
The Trust will not be responsible for any fees owed to any Sub-Servicer
retained by the Master Servicer or the Special Servicer. Each Sub-Servicer
retained thereby will be reimbursed by the Master Servicer or Special Servicer,
as the case may be, for certain expenditures which it makes, generally to the
same extent the
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Master Servicer or Special Servicer would be reimbursed under the Pooling
Agreement. See " -- Servicing and Other Compensation and Payment of Expenses"
herein.
SERVICING AND OTHER COMPENSATION AND PAYMENT OF EXPENSES
The principal compensation to be paid to the Master Servicer in respect of
its master servicing activities will be the Master Servicing Fee. The "Master
Servicing Fee" will be payable monthly on a loan-by-loan basis from amounts
received in respect of interest on each Mortgage Loan (including Specially
Serviced Mortgage Loans and Mortgage Loans as to which the related Mortgaged
Property has become an REO Property), will accrue at the applicable Master
Servicing Fee Rate and will be computed on the Stated Principal Balance as of
the Due Date in the immediately preceding Collection Period and for the same
number of days respecting which any related interest payment on the related
Mortgage Loan is computed under the terms of the related Mortgage Note and
applicable law. The "Master Servicing Fee Rate" will range from .09075% to
.29075% per annum, on a loan-by-loan basis, with a weighted average Master
Servicing Fee Rate of .13956% per annum as of the Cut-off Date. In the event
that ORIX shall resign or be terminated as the Master Servicer and a successor
Master Servicer shall agree for any reason to perform services of the Master
Servicer for an amount (the "Successor Servicer Retained Fee") less than the
Master Servicing Fee, no part of any excess of the Master Servicing Fee over the
Successor Servicer Retained Fee will be available for payment to
Certificateholders. As additional servicing compensation, the Master Servicer
will be entitled to retain Prepayment Interest Excesses (as described below)
collected on the Mortgage Loans. In addition, the Master Servicer will be
authorized to invest or direct the investment of funds held in any and all
accounts maintained by it that constitute part of the Certificate Account, in
certain government securities and other investment grade obligations specified
in the Pooling Agreement ("Permitted Investments"), and the Master Servicer will
be entitled to retain any interest or other income earned on such funds, but
will be required to cover any losses from its own funds without any right to
reimbursement.
If a borrower prepays a Mortgage Loan, in whole or in part, after the Due
Date but on or before the Determination Date in any calendar month, the amount
of interest (net of related Master Servicing Fees) accrued on such prepayment
from such Due Date to, but not including, the date of prepayment (or any later
date through which interest accrues) will, to the extent actually collected,
constitute a "Prepayment Interest Excess". Conversely, if a borrower prepays a
Mortgage Loan other than a Specially-Serviced Mortgage Loan (a "Non-Specially
Serviced Mortgage Loan"), in whole or in part, after the Determination Date in
any calendar month and does not pay interest on such prepayment through the end
of such calendar month, then the shortfall in a full month's interest (net of
related Master Servicing Fees) on such prepayment will constitute a "Prepayment
Interest Shortfall". Prepayment Interest Excesses collected on the Mortgage
Loans will be retained by the Master Servicer as additional servicing
compensation. The Master Servicer will cover, out of its own funds, any
Prepayment Interest Shortfalls incurred with respect to the Non-Specially
Serviced Mortgage Loans during any Collection Period, but only to the extent of
Prepayment Interest Excesses and a portion of its aggregate Master Servicing Fee
for the related Collection Period, which portion is, in the case of each and
every Non-Specially Serviced Mortgage Loan, calculated at .020% per annum.
The principal compensation to be paid to the Special Servicer in respect of
its special servicing activities will be the Standby Fee, the Special Servicing
Fee, the Workout Fee and the Liquidation Fee. The "Standby Fee" will accrue with
respect to each Mortgage Loan (including a Specially Serviced Mortgage Loan and
a Mortgage Loan as to which the related Mortgaged Property has become an REO
Property) in the same manner as the Master Servicing Fee, and will be payable by
the Master Servicer out of its Master Servicing Fees received with respect to
such Mortgage Loan (or be advanced if such fees are insufficient). The "Special
Servicing Fee" will accrue with respect to each Specially Serviced Mortgage Loan
and each Mortgage Loan as to which the related Mortgaged Property has become an
REO Property, at a rate equal to 0.25% per annum (the "Special Servicing Fee
Rate"), on the Stated Principal Balance as of the Due Date in the immediately
preceding Collection Period and for the same number of days respecting which any
related interest payment due or deemed due on such Mortgage Loan is computed
under the related Mortgage Loan and applicable law. All such Special Servicing
Fees will be payable monthly from general collections on the Mortgage Loans and
any REO Properties on deposit in the Certificate Account from time to time. A
"Workout Fee" will in general
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be payable with respect to each Corrected Mortgage Loan. As to each Corrected
Mortgage Loan, the Workout Fee will be payable out of, and will be calculated by
application of a "Workout Fee Rate" of 1.0% to, each collection of interest
(other than Default Interest (as defined below)) and principal (including
scheduled payments, prepayments, Balloon Payments and payments at maturity)
received on such Mortgage Loan for so long as it remains a Corrected Mortgage
Loan. The Workout Fee with respect to any Corrected Mortgage Loan will cease to
be payable if such loan again becomes a Specially Serviced Mortgage Loan or if
the related Mortgaged Property becomes an REO Property; provided that a new
Workout Fee will become payable if and when such Mortgage Loan again becomes a
Corrected Mortgage Loan. If the Special Servicer is terminated (other than for
cause) or resigns, it shall retain the right to receive any and all Workout Fees
payable with respect to Mortgage Loans that became Corrected Mortgage Loans
during the period that it acted as Special Servicer and were still such at the
time of such termination or resignation (and the successor Special Servicer
shall not be entitled to any portion of such Workout Fees), in each case until
the Workout Fee for any such loan ceases to be payable in accordance with the
preceding sentence. A "Liquidation Fee" will be payable with respect to each
Specially Serviced Mortgage Loan as to which the Special Servicer obtains a full
or discounted payoff or unscheduled or partial payments in lieu thereof with
respect thereto from the related borrower and, except as otherwise described
below, with respect to any Specially Serviced Mortgage Loan or REO Property as
to which the Special Servicer receives any Liquidation Proceeds. As to each such
Specially Serviced Mortgage Loan and REO Property, the Liquidation Fee will be
payable from, and will be calculated by application of a "Liquidation Fee Rate"
of 1.0% to, the related payment or proceeds (other than any portion thereof that
represents accrued but unpaid Default Interest). Notwithstanding anything to the
contrary described above, no Liquidation Fee will be payable based on, or out
of, Liquidation Proceeds received in connection with (i) the repurchase of any
Mortgage Loan by the Mortgage Loan Seller, for a breach of representation or
warranty or for defective or deficient Mortgage Loan documentation so long as
such repurchase occurs within the time required under the Pooling Agreement,
(ii) the purchase of any Specially Serviced Mortgage Loan or REO Property by the
Master Servicer, the Special Servicer or any holder or holders of Certificates
evidencing a majority interest in the Controlling Class or (iii) the purchase of
all of the Mortgage Loans and REO Properties by the Master Servicer or any
holder or holders of Certificates evidencing a majority interest in the
Controlling Class in connection with the termination of the Trust. If, however,
Liquidation Proceeds are received with respect to any Corrected Mortgage Loan
and the Special Servicer is properly entitled to a Workout Fee, such Workout Fee
will be payable based on and out of the portion of such Liquidation Proceeds
that constitute principal and/or interest. The Special Servicer will be
authorized to invest or direct the investment of funds held in any accounts
maintained by it that constitute part of the Certificate Account, in Permitted
Investments, and the Special Servicer will be entitled to retain any interest or
other income earned on such funds, but will be required to cover any losses from
its own funds without any right to reimbursement.
The Master Servicer and the Special Servicer will each be responsible for
the fees of any Sub-Servicers retained by it (without right of reimbursement
therefor). As additional servicing compensation, the Sub-Servicers (or, to the
extent such Sub-Servicers are not entitled thereto, the Master Servicer) with
respect to Mortgage Loans that are not Specially Serviced Mortgage Loans, and
the Special Servicer with respect to Specially Serviced Mortgage Loans,
generally will be entitled to retain all assumption and modification fees,
"Default Interest" (that is, interest in excess of interest at the related
Mortgage Rate accrued as a result of a default) and late payment charges (to the
extent such Default Interest and/or late payment charges are not otherwise
applied to cover interest on Advances if received on a Specially Serviced
Mortgage Loan), charges for beneficiary statements or demands and any similar
fees, in each case to the extent actually paid by the borrowers with respect to
such Mortgage Loans (and, accordingly, such amounts will not be available for
distribution to Certificateholders). With respect to the Portfolio Mortgage
Loans sub-serviced by the Mortgage Loan Seller, however, the Mortgage Loan
Seller will be entitled to 75% of assumption, modification and extension fees
collected and the Master Servicer will be entitled to the remaining 25% of such
fees. The respective Sub-Servicers (or, to the extent such Sub-Servicers are not
entitled thereto, the Master Servicer) shall be entitled to receive all amounts
collected for checks returned for insufficient funds with respect to all
Mortgage Loans (except for Specially Serviced Mortgage Loans) as additional
servicing compensation. Default Interest and late payment charges accrued in
respect of any Mortgage Loan after it has become a
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Specially Serviced Mortgage Loan are to be applied to cover interest on Advances
in respect of such Mortgage Loan. In addition, collections on a Mortgage Loan
are to be applied to interest (at the related Mortgage Rate) and principal then
due and owing prior to being applied to Default Interest and late payment
charges.
The Master Servicer and the Special Servicer will, in general, each be
required to pay its overhead and any general and administrative expenses
incurred by it in connection with its servicing activities under the Pooling
Agreement, and neither will be entitled to reimbursement therefor except as
expressly provided in the Pooling Agreement. In general, customary, reasonable
and necessary "out of pocket" costs and expenses incurred by the Master Servicer
or Special Servicer in connection with the servicing of a Mortgage Loan after a
default, delinquency or other unanticipated event, or in connection with the
administration of any REO Property, will constitute "Servicing Advances"
(Servicing Advances and P&I Advances, collectively, "Advances") and, in all
cases (subject to recoverability), will be reimbursable from future payments and
other collections, including in the form of Insurance Proceeds, Condemnation
Proceeds and Liquidation Proceeds, on or in respect of the related Mortgage Loan
or REO Property ("Related Proceeds"). Notwithstanding the foregoing, the Master
Servicer and the Special Servicer will each be permitted to pay, or to direct
the payment of, certain servicing expenses directly out of the Certificate
Account and at times without regard to the relationship between the expense and
the funds from which it is being paid (including in connection with the
remediation of any adverse environmental circumstance or condition at a
Mortgaged Property or an REO Property, although in such specific circumstances
the Master Servicer may advance the costs thereof). The Special Servicer will
only be required to make Servicing Advances if such a Servicing Advance must be
made within five Business Days in order to avoid a material adverse consequence
to the Trust Fund (each such Servicing Advance, an "Emergency Advance"). The
Special Servicer may from time to time require the Master Servicer to reimburse
it for any Servicing Advance made as an Emergency Advance thereby (in which
case, such Servicing Advance will be deemed to have been made by the Master
Servicer). Servicing Advances other than Emergency Advances will be made by the
Master Servicer. However, the Special Servicer is obligated to make any
Servicing Advance with respect to Specially Serviced Mortgage Loans and REO
Properties that it fails to timely request the Master Servicer to make. The
Special Servicer will, with limited exception as described in the preceding
sentence, be relieved of any obligations with respect to an Advance that it
timely requests the Master Servicer to make (regardless of whether or not the
Master Servicer makes that Advance). The Master Servicer will be required to
make any such Servicing Advance that it is requested by the Special Servicer to
so make within five business days of the Master Servicer's receipt of such
request.
If the Master Servicer or Special Servicer is required under the Pooling
Agreement to make a Servicing Advance, but neither does so within 15 days after
such Servicing Advance is required to be made, then the Trustee will, if it has
actual knowledge of such failure, be required to give the defaulting party
notice of such failure and, if such failure continues for one more business day,
the Trustee will be required to make such Servicing Advance.
The Master Servicer, the Special Servicer and the Trustee will be obligated
to make Servicing Advances only to the extent that such Servicing Advances are,
in the reasonable and good faith judgment of the Master Servicer, the Special
Servicer or the Trustee, as the case may be, ultimately recoverable from Related
Proceeds (any Servicing Advance not so recoverable, a "Nonrecoverable Servicing
Advance").
The foregoing paragraph notwithstanding, the Master Servicer is required
(at the direction of the Special Servicer if a Specially Serviced Mortgage Loan
or an REO Property is involved) to pay directly out of the Certificate Account
any servicing expense that, if paid by the Master Servicer or the Special
Servicer, would constitute a Nonrecoverable Servicing Advance; provided that the
Master Servicer (or the Special Servicer, if a Specially Serviced Mortgage Loan
or an REO Property is involved) has determined in accordance with the Servicing
Standard that making such payment is in the best interests of the
Certificateholders (as a collective whole), as evidenced by an officer's
certificate delivered promptly to the Trustee, the Depositor and the Rating
Agencies, setting forth the basis for such determination and accompanied by any
supporting information the Master Servicer or the Special Servicer may have
obtained.
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As and to the extent described herein, the Master Servicer, the Special
Servicer and the Trustee are each entitled to receive interest at the
Reimbursement Rate (compounded monthly) on Servicing Advances made thereby. See
"The Pooling and Servicing Agreements -- Certificate Account" and "-- Servicing
Compensation and Payment of Expenses" in the accompanying prospectus and
"Description of the Certificates -- P&I Advances" in this prospectus supplement.
EVIDENCE AS TO COMPLIANCE
On or before April 30 of each year, beginning April 30, 2000, each of the
Master Servicer and the Special Servicer, at its expense, will be required to
cause a firm of independent public accountants that is a member of the American
Institute of Certified Public Accountants to furnish a statement to the
Depositor and the Trustee to the effect that such firm has examined such
documents and records as it has deemed necessary and appropriate relating to the
Master Servicer's or Special Servicer's, as the case may be, servicing of the
Mortgage Loans under the Pooling Agreement or servicing of mortgage loans
similar to the Mortgage Loans under substantially similar agreements for the
preceding calendar year (or during the period from the date of commencement of
the Master Servicer's or Special Servicer's, as the case may be, duties under
the Pooling Agreement until the end of such preceding calendar year in the case
of the first such certificate) and that on the basis of such examination
conducted substantially in compliance with generally accepted auditing standards
and the Uniform Single Attestation Program for Mortgage Bankers, such servicing
has been conducted in compliance with similar agreements except for such
significant exceptions or errors in records that, in the opinion of such firm,
generally accepted auditing standards and the Uniform Single Attestation Program
for Mortgage Bankers require it to report, in which case such exceptions and
errors shall be so reported.
The Pooling Agreement also requires that, on or before a specified date in
each year, commencing in 2000, each of the Master Servicer and the Special
Servicer deliver to the Trustee a statement signed by one or more officers
thereof to the effect that the Master Servicer or Special Servicer, as the case
may be, has fulfilled its material obligations under the Pooling Agreement in
all material respects throughout the preceding calendar year or the portion
thereof during which the Certificates were outstanding.
MODIFICATIONS, WAIVERS, AMENDMENTS AND CONSENTS
The Master Servicer (as to Non-Specially Serviced Mortgage Loans) and the
Special Servicer (as to Specially Serviced Mortgage Loans) each may, consistent
with the Servicing Standard, agree to any modification, waiver or amendment of
any term of, forgive or defer the payment of interest on and principal of,
permit the release, addition or substitution of collateral securing, and/or
permit the release of the borrower on or any guarantor of any Mortgage Loan it
is required to service and administer, without the consent of the Trustee or any
Certificateholder, subject, however, to each of the following limitations,
conditions and restrictions:
(i) with limited exception, neither the Master Servicer nor the
Special Servicer may agree to any modification, waiver or amendment of any
term of, or take any of the other above referenced actions with respect to,
any Mortgage Loan it is required to service and administer that would
affect the amount or timing of any related payment of principal, interest
or other amount payable thereunder or, in the Master Servicer's or the
Special Servicer's good faith and reasonable judgment, would materially
alter the security for such Mortgage Loan or reduce the likelihood of
timely payment of amounts due thereon; provided, however, the Special
Servicer may agree to any modification, waiver or amendment of any term of,
or take any of the other above referenced actions with respect to, a
Specially Serviced Mortgage Loan that would have any such effect, but only
if a material default on such Mortgage Loan has occurred or, in the Special
Servicer's reasonable and good faith judgment, a default in respect of
payment on such Mortgage Loan is reasonably foreseeable, and such
modification, waiver, amendment or other action is reasonably likely to
produce a greater recovery to Certificateholders (collectively) on a
present value basis than would liquidation as certified to the Trustee in
an officer's certificate;
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(ii) the Special Servicer may not, in connection with any particular
extension, extend the maturity date of a Mortgage Loan beyond a date that
is two years prior to the Rated Final Distribution Date, or beyond a date
which is 10 years prior to the expiration date of any related Ground Lease;
(iii) unless the proviso to clause (i) above applies, neither the
Master Servicer nor the Special Servicer may make or permit any
modification, waiver or amendment of any term of, or take any of the other
above referenced actions with respect to, any Mortgage Loan that would
constitute a "significant modification" of such Mortgage Loan within the
meaning of Treasury Regulations Section 1.860G-2(b) (neither the Master
Servicer nor the Special Servicer shall be liable for judgments as regards
decisions made under this subsection which were made in good faith and,
unless it would constitute bad faith or gross negligence to do so, each of
the Master Servicer and the Special Servicer may rely on opinions of
counsel in making such decisions);
(iv) neither the Master Servicer nor the Special Servicer may permit
any borrower to add or substitute any collateral for an outstanding
Mortgage Loan, which collateral constitutes real property, unless (A) the
Special Servicer shall have first determined in accordance with the
Servicing Standard, based upon a Phase I environmental assessment (and such
additional environmental testing as the Special Servicer deems necessary
and appropriate), that such additional or substitute collateral is in
compliance with applicable environmental laws and regulations and that
there are no circumstances or conditions present with respect to such new
collateral relating to the use, management or disposal of any hazardous
materials for which investigation, testing, monitoring, containment,
clean-up or remediation would be required under any then applicable
environmental laws and/or regulations and (B) in the case of substitutions
of collateral only, the Master Servicer or the Special Servicer, as the
case may be, shall have obtained written confirmation from each Rating
Agency that such substitution will not result in the withdrawal, downgrade
or qualification of any rating then assigned to any Class of Certificates;
and
(v) with limited exceptions, including a permitted defeasance as
described above under "Description of the Mortgage Pool -- Certain Terms
and Conditions of the Mortgage Loans -- Defeasance" and specific releases
contemplated by the terms of the mortgage loans in effect on the Delivery
Date, neither the Master Servicer nor the Special Servicer shall release
any collateral securing an outstanding Mortgage Loan;
In addition, assumptions of Non-Specially Serviced Mortgage Loans will also
require the consent of the Special Servicer. Notwithstanding clauses (i) through
(v) above, neither the Master Servicer nor the Special Servicer will be required
to oppose the confirmation of a plan in any bankruptcy or similar proceeding
involving a borrower if in their reasonable and good faith judgment such
opposition would not ultimately prevent the confirmation of such plan or one
substantially similar.
SALE OF DEFAULTED MORTGAGE LOANS
The Pooling Agreement grants to the Master Servicer, the Special Servicer
and any holder or holders of Certificates evidencing a majority interest in the
Controlling Class a right to purchase from the Trust certain defaulted Mortgage
Loans in the priority described below. If the Special Servicer has determined,
in its good faith and reasonable judgment, that any defaulted Mortgage Loan will
become the subject of a foreclosure sale or similar proceeding and that the sale
of such Mortgage Loan under the circumstances described in this paragraph is in
accordance with the Servicing Standard, the Special Servicer will be required to
promptly so notify in writing the Trustee and the Master Servicer, and the
Trustee will be required, within 10 days after receipt of such notice, to notify
the holder (or holders) of the Controlling Class. A single holder or particular
group of holders of Certificates evidencing a majority interest in the
Controlling Class may, at its or their option, purchase any such defaulted
Mortgage Loan from the Trust, at a price equal to the applicable Purchase Price.
If such Certificateholder(s) has (have) not purchased such defaulted Mortgage
Loan within 15 days of its having received notice in respect thereof, either the
Special Servicer or the Master Servicer, in that order, may, at its option,
purchase such defaulted Mortgage Loan from the Trust, at a price equal to the
applicable Purchase Price.
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The Special Servicer may offer to sell any defaulted Mortgage Loan that has
not otherwise been purchased as described in the prior paragraph, if and when
the Special Servicer determines, consistent with the Servicing Standard, that
such a sale would be in the best economic interests of the Trust. Such offer is
to be made in a commercially reasonable manner for a period of not less than 30
days. Unless the Special Servicer determines that acceptance of any offer would
not be in the best economic interests of the Trust, the Special Servicer shall
accept the highest cash offer received from any person that constitutes a fair
price (which may be less than the Purchase Price) for such Mortgage Loan;
provided that none of the Special Servicer, the Master Servicer, the Depositor,
the Mortgage Loan Seller, the holder of any Certificate or any affiliate of any
such party (each, an "Interested Person") may purchase such Mortgage Loan (or
any REO Property acquired in respect thereof) for less than the Purchase Price
unless at least two other offers are received from independent third parties at
a price that is less than the Purchase Price and the price proposed by any
Interested Persons; and provided, further, that neither the Trustee nor an
affiliate thereof may make an offer for any such Mortgage Loan. See also "The
Pooling and Servicing Agreements--Realization Upon Defaulted Mortgage Loans" in
the accompanying prospectus.
REO PROPERTIES
If title to any Mortgaged Property is acquired by the Special Servicer on
behalf of the Certificateholders, the Special Servicer, on behalf of such
holders, will be required to sell the Mortgaged Property not later than the end
of third calendar year following the year of acquisition, unless (i) the
Internal Revenue Service grants an extension of time to sell such property (an
"REO Extension") or (ii) the Special Servicer obtains an opinion of independent
counsel generally to the effect that the holding of the property subsequent to
the end of the third calendar year following the year in which such acquisition
occurred will not result in the imposition of a tax on the Trust or cause REMIC
I, REMIC II, REMIC III, REMIC IIIU or REMIC IV to fail to qualify as a REMIC
under the Code. Subject to the foregoing, the Special Servicer will generally be
required to solicit cash offers for any Mortgaged Property so acquired in such a
manner as will be reasonably likely to realize a fair price for such property.
The Special Servicer may retain an independent contractor to operate and manage
any REO Property; however, the retention of an independent contractor will not
relieve the Special Servicer of its obligations with respect to such REO
Property.
In general, the Special Servicer will be obligated to cause any Mortgaged
Property acquired as REO Property to be operated and managed in a manner that
would, to the extent commercially feasible, maximize the Trust's net after-tax
proceeds from such property. The Special Servicer could determine that it would
not be commercially feasible to manage and operate such property in a manner
that would avoid the imposition of a tax on "net income from foreclosure
property". Generally, net income from foreclosure property means income which
does not qualify as "rents from real property" within the meaning of Code
Section 856(c)(3)(A) and Treasury regulations thereunder or as income from the
sale of such REO Property. "Rents from real property" 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 Trust Fund, 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 REMIC I, such as a hotel or skilled nursing care business,
will not constitute "rents from real property." Any of the foregoing types of
income instead constitute "net income from foreclosure property," which would be
taxable to REMIC I 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
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distribution to holders of Certificates. See "Certain Federal Income Tax
Consequences -- REMICs -- Prohibited Transactions Tax and Other Taxes" in the
accompanying prospectus.
INSPECTIONS; COLLECTION OF OPERATING INFORMATION
Commencing in 2000, the Master Servicer is required to perform (or cause to
be performed) physical inspections of each Mortgaged Property (other than REO
Properties and Mortgaged Properties securing Specially Serviced Mortgage Loans)
at least once every two years (or, if the related Mortgage Loan has a
then-current balance greater than $2,000,000 or greater than or equal to 2% of
the then current aggregate principal balance of the Mortgage Pool, at least once
every year), provided that at least 50% of the Mortgaged Properties (by both
number and aggregate Stated Principal Balances of the related Mortgage Loans)
will be inspected each year by the Master Servicer (or an entity employed by the
Master Servicer for such purpose) or, as described in the following sentence,
the Special Servicer. In addition, the Special Servicer, subject to statutory
limitations or limitations set forth in the related loan documents, is required
to perform a physical inspection of each Mortgaged Property as soon as
practicable after servicing of the related Mortgage Loan is transferred thereto
and annually thereafter so long as it is a Specially Serviced Mortgage Loan. The
Special Servicer and the Master Servicer will each be required to prepare (or
cause to be prepared) as soon as reasonably possible a written report of each
such inspection performed thereby describing the condition of the Mortgaged
Property.
With respect to each Mortgage Loan that requires the borrower to deliver
quarterly or annual operating statements with respect to the related Mortgaged
Property, the Master Servicer or the Special Servicer, depending on which is
obligated to service such Mortgage Loan, is also required to make reasonable
efforts to collect and review such statements. However, there can be no
assurance that any operating statements required to be delivered will in fact be
so delivered, nor is the Master Servicer or the Special Servicer likely to have
any practical means of compelling such delivery in the case of an otherwise
performing Mortgage Loan.
TERMINATION OF THE SPECIAL SERVICER
The holder or holders of Certificates evidencing a majority interest in the
Controlling Class may at any time replace any Special Servicer. Such holder(s)
shall designate a replacement to so serve by the delivery to the Trustee of a
written notice stating such designation. The Trustee shall, promptly after
receiving any such notice, so notify the Rating Agencies. If the designated
replacement is acceptable to the Trustee, which approval may not be unreasonably
withheld, the designated replacement shall become the Special Servicer as of the
date the Trustee shall have received: (i) written confirmation from each Rating
Agency stating that if the designated replacement were to serve as Special
Servicer under the Pooling Agreement, the then-current rating or ratings of one
or more Classes of the Certificates would not be qualified, downgraded or
withdrawn as a result thereof; (ii) a written acceptance of all obligations of
the Special Servicer, executed by the designated replacement; and (iii) an
opinion of counsel to the effect that the designation of such replacement to
serve as Special Servicer is in compliance with the Pooling Agreement, that the
designated replacement will be bound by the terms of the Pooling Agreement and
that the Pooling Agreement will be enforceable against such designated
replacement in accordance with its terms. The existing Special Servicer shall be
deemed to have resigned simultaneously with such designated replacement's
becoming the Special Servicer under the Pooling Agreement.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
The Depositor originally issued its Commercial Mortgage Pass-Through
Certificates, Series 1999-2 (the "Certificates") on August 17, 1999 (the "Trust
Formation Date"), pursuant to a Pooling and Servicing Agreement, dated as of the
Cut-off Date, among the Depositor, the Master Servicer, the Special Servicer,
the Trustee, the REMIC Administrator and the Mortgage Loan Seller (the "Original
Pooling Agreement"). Interests in the trust established by the Original Pooling
Agreement corresponding to the Class A-1 Certificates and the Offered
Certificates were issued to the Mortgage Loan Seller in partial consideration
for the Mortgage Loans. On October 14, 1999 (the "First Amendment Date"), the
Mortgage Loan Seller transferred interests corresponding to the Class A-1 and
Class X Certificates to the Depositor, the Depositor transferred such interests
to the Trustee in exchange for the Class A-1 and Class X Certificates, and the
Original Pooling Agreement was amended and restated in accordance with its terms
to enable the issuance of the Class A-1 and Class X Certificates (the Original
Pooling Agreement, as so amended and restated, is referred to in this prospectus
supplement as the "First Amended Pooling Agreement"). On and as of November ,
1999 (the "Delivery Date"), the Mortgage Loan Seller will transfer interests
corresponding to the Offered Certificates to the Depositor, the Depositor will
transfer such interests to the Trustee in exchange for the Offered Certificates,
and the First Amended Pooling Agreement will be amended and restated in
accordance with its terms to enable the issuance of the Offered Certificates.
The First Amended Pooling Agreement, as so amended and restated, is referred to
in this prospectus supplement as the "Pooling Agreement".
The Offered Certificates, together with the Non-Offered Certificates, will
represent in the aggregate the entire beneficial interest in a trust (the
"Trust"), the assets of which (such assets collectively, the "Trust Fund")
include: (i) the Mortgage Loans and all payments thereunder and proceeds thereof
received after the Cut-off Date (exclusive of payments of principal, interest
and other amounts due thereon on or before the Cut-off Date); (ii) any REO
Properties; and (iii) such funds or assets as from time to time are deposited in
the Certificate Account and the Interest Reserve Account (see "The Pooling and
Servicing Agreements -- Certificate Account" in the accompanying prospectus).
The Certificates will consist of twenty-one classes (each, a "Class") to be
designated as: (i) the Class A-1 Certificates, the Class A-2 Certificates, the
Class A-3 Certificates, the Class A-4 Certificates, the Class A-1C Certificates
and the Class A-2C Certificates (collectively, the "Class A Certificates" and
together with the Class X Certificates, the "Senior Certificates"); (ii) 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 and the Class K Certificates
(collectively with the Class A Certificates, the "Sequential Pay Certificates");
(iii) the Class X Certificates (the "Class X Certificates", and collectively
with the Sequential Pay Certificates, the "REMIC Regular Certificates"); and
(iv) the Class R-I Certificates, the Class R-II Certificates, the Class R-III
Certificates, the Class R-IIIU Certificates and the Class R-IV Certificates
(collectively, the "REMIC Residual Certificates"). Only the Class X, Class A-2,
Class A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C and Class D
Certificates (collectively, the "Offered Certificates") are offered hereby.
The Class A-1, Class E, Class F, Class G, Class H, Class J and Class K
Certificates and the REMIC Residual Certificates (collectively, the "Non-Offered
Certificates") have not been registered under the Securities Act and are not
offered hereby. Accordingly, to the extent this prospectus supplement contains
information regarding the terms of the Non-Offered Certificates, such
information is provided because of its potential relevance to a prospective
purchaser of an Offered Certificate.
REGISTRATION AND DENOMINATIONS
The Offered Certificates will be issued in book-entry format in
denominations of: (i) in the case of the Class A-2, Class A-3, Class A-4, Class
A-1C and Class A-2C Certificates, $10,000 actual principal amount and in any
whole dollar denomination in excess thereof; (ii) in the case of the Class X
Certificates, $1,000,000
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notional principal amount and in any whole dollar denomination in excess
thereof; and (iii) in the case of the other Offered Certificates, $100,000
actual principal amount and in any whole dollar denomination in excess thereof.
Each Class of Offered Certificates will initially be represented by one or
more Certificates registered in the name of the nominee of The Depository Trust
Company ("DTC"). The Depositor has been informed by DTC that DTC's nominee will
be Cede & Co. No beneficial owner of an Offered Certificate (each, a
"Certificate Owner") will be entitled to receive a fully registered physical
certificate (a "Definitive Certificate") representing its interest in such
Class, except under the limited circumstances described under "Description of
the Certificates -- Book-Entry Registration and Definitive Certificates" in the
accompanying prospectus. Unless and until Definitive Certificates are issued in
respect of the Offered Certificates, beneficial ownership interests in each such
Class of Certificates will be maintained and transferred on the book-entry
records of DTC and its participating organizations (its "Participants"), and all
references to actions by holders of each such Class of Certificates will refer
to actions taken by DTC upon instructions received from the related Certificate
Owners through its Participants in accordance with DTC procedures, and all
references herein to payments, notices, reports and statements to holders of
each such Class of Certificates will refer to payments, notices, reports and
statements to DTC or Cede & Co., as the registered holder thereof, for
distribution to the related Certificate Owners through its Participants in
accordance with DTC procedures. The form of such payments and transfers may
result in certain delays in receipt of payments by an investor and may restrict
an investor's ability to pledge its securities. See "Description of the
Certificates -- Book-Entry Registration and Definitive Certificates" in the
accompanying prospectus.
The Trustee will initially serve as registrar (in such capacity, the
"Certificate Registrar") for purposes of recording and otherwise providing for
the registration of the Offered Certificates and, if and to the extent
Definitive Certificates are issued in respect thereof, of transfers and
exchanges of the Offered Certificates.
CERTIFICATE BALANCES AND NOTIONAL AMOUNT
On the Delivery Date, the respective classes of Sequential Pay Certificates
will have the following Certificate Balances or Notional Amount, as the case may
be, (in each case, subject to a variance of plus or minus 5%):
<TABLE>
<CAPTION>
CERTIFICATE APPROXIMATE PERCENT APPROXIMATE
BALANCE OR OF CREDIT
CLASS NOTIONAL AMOUNT(1) POOL BALANCE(1) SUPPORT(1)
----- ------------------ ------------------- -----------
<S> <C> <C> <C>
Class A-1........................... $ 167,062,105 14.98% 27.17%
Class A-2........................... $ 84,648,789 7.59% 27.17%
Class A-3........................... $ 232,000,439 20.80% 27.17%
Class A-4........................... $ 110,485,256 9.91% 27.17%
Class A-1C.......................... $ 103,960,279 9.32% 27.17%
Class A-2C.......................... $ 114,048,463 10.23% 27.17%
Class X............................. $ 1,115,186,747 N/A N/A
Class B............................. $ 56,107,669 5.03% 22.14%
Class C............................. $ 44,886,135 4.02% 18.11%
Class D............................. $ 67,329,203 6.04% 12.07%
Class E............................. $ 16,832,300 1.51% 10.57%
Class F............................. $ 56,107,669 5.03% 5.53%
Class G............................. $ 8,416,150 0.75% 4.78%
Class H............................. $ 22,443,067 2.01% 2.77%
Class J............................. $ 2,805,383 0.25% 2.52%
Class K............................. $ 28,053,840 2.52% N/A
</TABLE>
- ---------------------
(1) As of the Cut-off Date.
The "Certificate Balance" of any Class of Sequential Pay Certificates
outstanding at any time will be the then aggregate stated principal amount
thereof. On each Distribution Date, the Certificate Balance of each Class of
Sequential Pay Certificates will be reduced by any distributions of principal
actually made on such Class of Certificates on such Distribution Date, and will
be further reduced by any Realized Losses and
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Additional Trust Fund Expenses allocated to such Class of Certificates on such
Distribution Date. See "-- Distributions" and "-- Subordination; Allocation of
Losses and Certain Expenses" below.
The Class X Certificates will not have a Certificate Balance. The Class X
Certificates will represent the right to receive distributions of interest
accrued as described herein on a notional amount ("Notional Amount") equal to
the aggregate of the Certificate Balances of all of the Classes of Sequential
Pay Certificates outstanding from time to time.
No class of REMIC Residual Certificates will have a Certificate Balance or
a Notional Amount.
A Class of Offered Certificates will be considered to be outstanding until
its Certificate Balance or Notional Amount, as the case may be, is reduced to
zero; provided, however, that, under very limited circumstances, reimbursement
of any previously allocated Realized Losses and Additional Trust Fund Expenses
may thereafter be made with respect thereto.
PASS-THROUGH RATES
The Pass-Through Rates applicable to the Class A-2, Class A-3, Class A-1C,
and Class A-2C Certificates will, for any Distribution Date, at all times, be
equal to the rate set forth on the cover of this prospectus supplement. However,
the Pass-Through Rates of the Class A-3, Class A-1C and Class A-2C Certificates
will not exceed the Weighted Average Net Mortgage Rate on any Distribution Date.
The Pass-Through Rates for the Class A-4, Class B, Class C and Class D
Certificates for the December 1999 Distribution Date will equal approximately
[ ]%, [ ]%, [ ]% and [ ]% per annum, respectively. The
Pass-Through Rates applicable to the Class A-4, Class B, Class C and Class D
Certificates for each subsequent Distribution Date will, in general, equal the
Weighted Average Net Mortgage Rate.
The Pass-Through Rate applicable to the Class X Certificates for the
December 1999 Distribution Date will equal approximately [ ]%. The
Pass-Through Rate applicable to the Class X Certificates for each subsequent
Distribution Date will, in general, equal the excess, if any, of (i) the
Weighted Average Net Mortgage Rate, over (ii) the weighted average of the
Pass-Through Rates applicable to the Sequential Pay Certificates for such
Distribution Date (weighted on the basis of their respective Certificate
Balances immediately prior to such Distribution Date), such that the interest
accrued at such Pass-Through Rate on the Notional Amount of the Class X
Certificates will, in general, equal the sum of the amounts by which interest
accrued at the Weighted Average Net Mortgage Rate on an amount equal to the
Certificate Balance of each Class of Sequential Pay Certificates exceeds the
interest accrued at the applicable Pass-Through Rate on such Class.
The Pass-Through Rate applicable to the Class A-1, Class E, Class F, Class
G, Class H, Class J and Class K Certificates will, for any Distribution Date, be
equal to 6.478%, 6.320%, 5.000%, 5.000%, 6.000%, 6.000% and 6.000% per annum,
respectively.
"Weighted Average Net Mortgage Rate" for any Distribution Date, means the
weighted average of the Net Mortgage Rates for all the Mortgage Loans (weighted
on the basis of their respective Stated Principal Balances (as defined herein)
immediately following the preceding Distribution Date.
The "Net Mortgage Rate" with respect to any Mortgage Loan is, in general, a
per annum rate equal to the related Mortgage Rate in effect from time to time,
minus the sum of the applicable Master Servicing Fee Rate (including the Standby
Fee rate) and the per annum rate at which the monthly Trustee Fee is calculated
(such sum, the "Administrative Fee Rate"); provided, however, that for purposes
of calculating the Pass-Through Rate for each Class of REMIC Regular
Certificates from time to time, the Net Mortgage Rate for any Mortgage Loan will
be calculated without regard to any modification, waiver or amendment of the
terms of such Mortgage Loan subsequent to the Trust Formation Date; and provided
further, however, that if any Mortgage Loan does not accrue interest on the
basis of a 360-day year consisting of twelve 30-day months (which is the basis
on which interest accrues in respect of the REMIC Regular Certificates), then
the Net 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 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 loan during such one-month period at the
related Mortgage Rate (net of the related
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Administrative Fee Rate, and adjusted to take into account the addition or
subtraction of any Withheld Amounts as described under "Description of the
Certificates -- Interest Reserve Account"). As of the Cut-off Date (without
regard to the adjustment described in the proviso to the second preceding
sentence), the Net Mortgage Rates for the Mortgage Loans ranged from 6.205% per
annum to 10.232% per annum, with a weighted average Net Mortgage Rate of 7.663%
per annum. See "Servicing of the Mortgage Loans -- Servicing and Other
Compensation and Payment of Expenses" in this prospectus supplement.
The "Stated Principal Balance" of each Mortgage Loan will initially equal
the Cut-off Date Balance thereof and will be permanently reduced (to not less
than zero) on each Distribution Date by (i) any payments or other collections
(or advances in lieu thereof) of principal on such Mortgage Loan that have been
(or, if they had not been applied to cover Additional Trust Fund Expenses, would
have been) distributed on the Certificates on such date, and (ii) the principal
portion of any Realized Loss incurred in respect of such Mortgage Loan during
the related Collection Period.
The "Collection Period" for each Distribution Date is the period that
begins immediately following the Determination Date in the calendar month
preceding the month in which such Distribution Date occurs and ends on the
Determination Date in the calendar month in which such Distribution Date occurs.
The "Determination Date" will be the 10th day of each month or, if any such 10th
day is not a business day, the next succeeding business day.
DISTRIBUTIONS
General. Distributions on or with respect to the Certificates will be made
by the Trustee, to the extent of available funds, on the 20th day of each month
or, if any such 20th day is not a business day, then on the next succeeding
business day (each, a "Distribution Date"). The first Distribution Date with
respect to the Offered Certificates will occur in December 1999. Except as
otherwise described below, all such distributions will be made to the persons in
whose names the Certificates are registered at the close of business on the
related Record Date and, as to each such person, will be made 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 will have provided the Trustee with written wiring
instructions no less than five business days prior to the related Record Date,
or otherwise by check mailed to such Certificateholder. Until Definitive
Certificates are issued in respect thereof, Cede & Co. will be the registered
holder of the Offered Certificates. See "-- Registration and Denominations"
above. The final distribution on any Certificate (determined without regard to
any possible future reimbursement of any Realized Losses or Additional Trust
Fund Expense previously allocated to such Certificate) will be made in like
manner, but only upon presentation and surrender of such Certificate at the
location that will be specified in a notice of the pendency of such final
distribution. Any distribution that is to be made with respect to a Certificate
in reimbursement of a Realized Loss or Additional Trust Fund Expense previously
allocated thereto, which reimbursement is to occur after the date on which such
Certificate is surrendered as contemplated by the preceding sentence (the
likelihood of any such distribution being remote), will be made by check mailed
to the Certificateholder that surrendered such Certificate. All distributions
made on or with respect to a Class of Certificates will be allocated pro rata
among such Certificates based on their respective percentage interests in such
Class.
With respect to any Distribution Date and any Class of Certificates, the
"Record Date" will be the last business day of the calendar month immediately
preceding the month in which such Distribution Date occurs.
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The Available Distribution Amount. With respect to any Distribution Date,
distributions of interest on and principal of the Certificates will be made from
the Available Distribution Amount for such Distribution Date. The "Available
Distribution Amount" for any Distribution Date will, in general, equal (a) all
amounts on deposit in the Certificate Account as of the close of business on the
related Determination Date, exclusive of any portion thereof that represents one
or more of the following:
(i) Monthly Payments collected but due on a Due Date subsequent to the
related Collection Period;
(ii) Prepayment Premiums (which are separately distributable on the
Certificates as hereinafter described);
(iii) amounts that are payable or reimbursable to any person other
than the Certificateholders (including amounts payable to the Master
Servicer, the Special Servicer, any Sub-Servicers or the Trustee as
compensation (including Trustee Fees, Master Servicing Fees, Special
Servicing Fees, Workout Fees, Liquidation Fees, Default Interest and late
payment charges (to the extent not otherwise applied to cover interest on
Advances), assumption fees and modification fees), amounts payable in
reimbursement of outstanding Advances, together with interest thereon, and
amounts payable in respect of other Additional Trust Fund Expenses); and
(iv) amounts deposited in the Certificate Account in error; plus
(b) to the extent not already included in clause (a), any P&I Advances made
with respect to such Distribution Date and any payments made by the Master
Servicer to cover Prepayment Interest Shortfalls incurred during the related
Collection Period.
The Available Distribution Amount for any Distribution Date will also
include any interest or other income earned on funds in the Interest Reserve
Account (if any) and, for the Distribution Date occurring in each March, the
related Withheld Amounts as described below under "-- Interest Reserve Account."
However, with respect to any Distribution Date occurring in each February, and
in any January of a year that is not a leap year, the Available Distribution
Amount for any such Distribution Date will not include the related Withheld
Amount.
See "The Pooling and Servicing Agreements -- Certificate Account" in the
accompanying prospectus.
Application of the Available Distribution Amount. On each Distribution
Date, the Trustee will apply the Available Distribution Amount for such date for
the following purposes and in the following order of priority:
(1) concurrently from the Available Distribution Amount, pro rata, to
the Class A-1, Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C and
Class X Certificates, up to an amount equal to, and pro rata as among such
Classes in accordance with, all Distributable Certificate Interest in
respect of each such Class for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(2) sequentially to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, in reduction of the Certificate Balances thereof until the
Certificate Balances thereof have been reduced to zero, an amount up to the
Portfolio Senior Certificate Principal Distribution Amount (as defined
herein) for such Distribution Date;
(3) sequentially, to the Class A-1C, Class A-2C, Class A-1, Class A-2,
Class A-3 and Class A-4 Certificates, in reduction of the Certificate
Balances thereof, an amount up to the remaining portion of the Principal
Distribution Amount for such Distribution Date remaining after the
distribution described in clause (2) until the Certificate Balance of each
such Class is reduced to zero;
(4) to reimburse the holders of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-1C and Class A-2C Certificates, up to an amount equal
to, and pro rata as among such Classes in accordance with, the respective
amounts of Realized Losses and Additional Trust Fund Expenses, if any,
previously allocated to such Classes of Certificates and for which no
reimbursement has previously been paid; and
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(5) to make payments on the other Classes of Certificates
(collectively, the "Subordinate Certificates") as contemplated below;
provided that, on each Distribution Date as of which the aggregate Certificate
Balance of the Subordinate Certificates is to be or has been reduced to zero,
and in any event on the final Distribution Date in connection with a termination
of the Trust (see "--Termination" below), the payments of principal to be made
as contemplated by clause (2) and (3) above with respect to the Class A
Certificates, will be so made (subject to available funds) to the holders of the
respective Classes of such Certificates, up to an amount equal to, and pro rata
as among such Classes in accordance with, the respective then outstanding
Certificate Balances of such Classes of Certificates.
On each Distribution Date, following the above-described distributions on
the Senior Certificates, the Trustee will apply the remaining portion, if any,
of the Available Distribution Amount for such date for the following purposes
and in the following order of priority:
(1) to pay interest to the holders of the Class B Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(2) if the Certificate Balances of the Class A Certificates have been
reduced to zero, to pay principal to the holders of the Class B
Certificates, up to an amount equal to the lesser of (a) the then
outstanding Certificate Balance of such Class of Certificates and (b) the
remaining portion of the Principal Distribution Amount for such
Distribution Date;
(3) to reimburse the holders of the Class B Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been paid;
(4) to pay interest to the holders of the Class C Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(5) if the Certificate Balances of the Class A and Class B
Certificates have been reduced to zero, to pay principal to the holders of
the Class C Certificates, up to an amount equal to the lesser of (a) the
then outstanding Certificate Balance of such Class of Certificates and (b)
the remaining portion of the Principal Distribution Amount for such
Distribution Date;
(6) to reimburse the holders of the Class C Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(7) to pay interest to the holders of the Class D Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(8) if the Certificate Balances of the Class A, Class B and Class C
Certificates have been reduced to zero, to pay principal to the holders of
the Class D Certificates, up to an amount equal to the lesser of (a) the
then outstanding Certificate Balance of such Class of Certificates and (b)
the remaining portion of the Principal Distribution Amount for such
Distribution Date;
(9) to reimburse the holders of the Class D Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(10) to pay interest to the holders of the Class E Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
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(11) if the Certificate Balances of the Class A, Class B, Class C and
Class D Certificates have been reduced to zero, to pay principal to the
holders of the Class E Certificates, up to an amount equal to the lesser of
(a) the then outstanding Certificate Balance of such Class of Certificates
and (b) the remaining portion of the Principal Distribution Amount for such
Distribution Date;
(12) to reimburse the holders of the Class E Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(13) to pay interest to the holders of the Class F Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(14) if the Certificate Balances of the Class A, Class B, Class C,
Class D and Class E Certificates have been reduced to zero, to pay
principal to the holders of the Class F Certificates, up to an amount equal
to the lesser of (a) the then outstanding Certificate Balance of such Class
of Certificates and (b) the remaining portion of the Principal Distribution
Amount for such Distribution Date;
(15) to reimburse the holders of the Class F Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(16) to pay interest to the holders of the Class G Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(17) if the Certificate Balances of the Class A, Class B, Class C,
Class D, Class E and Class F Certificates have been reduced to zero, to pay
principal to the holders of the Class G Certificates, up to an amount equal
to the lesser of (a) the then outstanding Certificate Balance of such Class
of Certificates and (b) the remaining portion of the Principal Distribution
Amount for such Distribution Date;
(18) to reimburse the holders of the Class G Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(19) to pay interest to the holders of the Class H Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(20) if the Certificate Balances of the Class A, Class B, Class C,
Class D, Class E, Class F and Class G Certificates have been reduced to
zero, to pay principal to the holders of the Class H Certificates, up to an
amount equal to the lesser of (a) the then outstanding Certificate Balance
of such Class of Certificates and (b) the remaining portion of the
Principal Distribution Amount for such Distribution Date;
(21) to reimburse the holders of the Class H Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(22) to pay interest to the holders of the Class J Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(23) if the Certificate Balances of the Class A, Class B, Class C,
Class D, Class E, Class F, Class G and Class H Certificates have been
reduced to zero, to pay principal to the holders of the Class J
Certificates, up to an amount equal to the lesser of (a) the then
outstanding Certificate Balance of such Class of Certificates and (b) the
remaining portion of the Principal Distribution Amount for such
Distribution Date;
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(24) to reimburse the holders of the Class J Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
(25) to pay interest to the holders of the Class K Certificates, up to
an amount equal to all Distributable Certificate Interest in respect of
such Class of Certificates for such Distribution Date and, to the extent
not previously paid, for all prior Distribution Dates;
(26) if the Certificate Balances of the Class A, Class B, Class C,
Class D, Class E, Class F, Class G, Class H and Class J Certificates have
been reduced to zero, to pay principal to the holders of the Class K
Certificates, up to an amount equal to the lesser of (a) the then
outstanding Certificate Balance of such Class of Certificates and (b) the
remaining portion of the Principal Distribution Amount for such
Distribution Date;
(27) to reimburse the holders of the Class K Certificates, up to an
amount equal to all Realized Losses and Additional Trust Fund Expenses, if
any, previously allocated to the Certificate Balance of such Class of
Certificates and for which no reimbursement has previously been received;
and
(28) to pay to the holders of the REMIC Residual Certificates, the
balance, if any, of the Available Distribution Amount for such Distribution
Date;
provided that, on the final Distribution Date in connection with a termination
of the Trust, the payments of principal to be made as contemplated by any of
clauses (2), (5), (8), (11), (14), (17), (20), (23) and (26) above with respect
to any Class of Sequential Pay Certificates, will be so made (subject to
available funds) up to an amount equal to the entire then outstanding
Certificate Balance of such Class of Certificates.
Distributable Certificate Interest. The "Distributable Certificate
Interest" in respect of each Class of REMIC Regular Certificates for each
Distribution Date is equal to the Accrued Certificate Interest in respect of
such Class of Certificates for such Distribution Date, reduced by such Class of
Certificates' allocable share (calculated as described below) of any Net
Aggregate Prepayment Interest Shortfall for such Distribution Date.
The "Accrued Certificate Interest" in respect of each Class of REMIC
Regular Certificates for each Distribution Date is equal to one month's interest
at the Pass-Through Rate applicable to such Class of Certificates for such
Distribution Date accrued on the related Certificate Balance or Notional Amount,
as the case may be, outstanding immediately prior to such Distribution Date.
Accrued Certificate Interest will be calculated on the basis of a 360-day year
consisting of twelve 30-day months.
To the extent of Prepayment Interest Excesses and a portion of its
aggregate Master Servicing Fee for the related Collection Period, which portion
is, in the case of each and every Non-Specially Serviced Mortgage Loan,
calculated at 0.020% per annum, the Master Servicer is required to make a
non-reimbursable payment with respect to each Distribution Date to cover the
aggregate of any Prepayment Interest Shortfalls incurred with respect to the
Mortgage Pool during such Collection Period. The "Net Aggregate Prepayment
Interest Shortfall" for any Distribution Date will be the amount, if any, by
which (a) the aggregate of all Prepayment Interest Shortfalls incurred with
respect to the Mortgage Pool during the related Collection Period, exceeds (b)
any such payment made by the Master Servicer with respect to such Distribution
Date to cover such Prepayment Interest Shortfalls. See "Servicing of the
Mortgage Loans -- Servicing and Other Compensation and Payment of Expenses" in
this prospectus supplement. The Net Aggregate Prepayment Interest Shortfall, if
any, for each Distribution Date will be allocated on such Distribution Date: pro
rata among the Classes of REMIC Regular Certificates, in each case up to an
amount equal to the lesser of any remaining unallocated portion of such Net
Aggregate Prepayment Interest Shortfall and any Accrued Certificate Interest in
respect of the particular Class of Certificates for such Distribution Date.
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Principal Distribution Amount. The "Principal Distribution Amount" for any
Distribution Date will, in general, equal the aggregate of the following:
(a) the principal portions of all Monthly Payments (other than Balloon
Payments) and any Assumed Monthly Payments due or deemed due, as the case
may be, in respect of the Mortgage Loans for their respective Due Dates
occurring during the related Collection Period;
(b) all voluntary principal prepayments received on the Mortgage Loans
during the related Collection Period;
(c) with respect to any Balloon Loan as to which the related stated
maturity date occurred during or prior to the related Collection Period,
any payment of principal (exclusive of any voluntary principal prepayment
and any amount described in clause (d) below) made by or on behalf of the
related borrower during the related Collection Period, net of any portion
of such payment that represents a recovery of the principal portion of any
Monthly Payment (other than a Balloon Payment) due, or the principal
portion of any Assumed Monthly Payment deemed due, in respect of such
Mortgage Loan on a Due Date during or prior to the related Collection
Period and not previously recovered;
(d) all Liquidation Proceeds and Insurance and Condemnation Proceeds
received on the Mortgage Loans during the related Collection Period that
were identified and applied by the Master Servicer as recoveries of
principal thereof, in each case net of any portion of such amounts that
represents a recovery of the principal portion of any Monthly Payment
(other than a Balloon Payment) due, or the principal portion of any Assumed
Monthly Payment deemed due, in respect of the related Mortgage Loan on a
Due Date during or prior to the related Collection Period and not
previously recovered; and
(e) the excess, if any, of (i) the Principal Distribution Amount for
the immediately preceding Distribution Date, over (ii) the aggregate
distributions of principal made on the Sequential Pay Certificates in
respect of such Principal Distribution Amount on such immediately preceding
Distribution Date.
For purposes of the foregoing, the Monthly Payment due on any Mortgage Loan
on any related Due Date will reflect any waiver, modification or amendment of
the terms of such Mortgage Loan, whether agreed to by the Master Servicer or
Special Servicer or resulting from a bankruptcy, insolvency or similar
proceeding involving the related borrower.
The "Portfolio Senior Certificate Principal Distribution Amount" will be,
with respect to Loan Group 2, and any Distribution Date, the portion of the
Principal Distribution Amount for Loan Group 2 for such Distribution Date that
represents scheduled payments, Balloon Payments, Principal Prepayments,
Liquidation Proceeds, Insurance and Condemnation Proceeds, and income received
in connection with the operation of an REO Property ("REO Income").
An "Assumed Monthly Payment" is an amount deemed due in respect of: (i) any
Mortgage Loan that is delinquent in respect of its Balloon Payment beyond the
first Determination Date that follows its stated maturity date and as to which
no arrangements have been agreed to for collection of the delinquent amounts; or
(ii) any Mortgage Loan as to which the related Mortgaged Property has become an
REO Property. The Assumed Monthly Payment deemed due on any such Mortgage Loan
delinquent as to its Balloon Payment, for its stated maturity date and for each
successive Due Date that it remains outstanding, will equal the Monthly Payment
that would have been due thereon on such date if the related Balloon Payment had
not come due, but rather such Mortgage Loan had continued to amortize in
accordance with its amortization schedule, if any, in effect immediately prior
to maturity and had continued to accrue interest in accordance with such loan's
terms in effect immediately prior to maturity. The Assumed Monthly Payment
deemed due on any such Mortgage Loan as to which the related Mortgaged Property
has become an REO Property, for each Due Date that such REO Property remains
part of the Trust Fund, will equal the Monthly Payment (or, in the case of a
Mortgage Loan delinquent in respect of its Balloon Payment as described in the
prior sentence, the Assumed Monthly Payment) due on the last Due Date prior to
the acquisition of such REO Property.
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Distributions of Prepayment Premiums. On any Distribution Date, Prepayment
Premiums 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, Prepayment Premiums collected on the Mortgage
Loans in Loan Group 1 during the related Prepayment Period will be distributed
by the Trustee to the following Classes of Offered Certificates: to the Class
A-1C, Class A-2C, Class B, Class C and Class D Certificates, in an amount equal
to the product of (a) a fraction, not greater than 1, 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-1C, Class A-2C, Class B, Class C, Class D, Class E, Class F, Class G, Class H,
Class J and Class K Certificates on such Distribution Date, (b) the Base
Interest Fraction for the related principal payment on such Class of
Certificates, and (c) the aggregate amount of Prepayment Premiums relating to
the Mortgage Loans in Loan Group 1 collected on such principal prepayments
during the related Prepayment Period. Any Prepayment Premiums relating to the
Mortgage Loans in Loan Group 1 collected during the related Prepayment Period
remaining after such distributions will be distributed to the holders of the
Class X Certificates.
On each Distribution Date, Prepayment Premiums collected on the Mortgage
Loans in Loan Group 2 during the related Collection Period will be distributed
by the Trustee to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, in an amount equal to the product of (a) a fraction, not greater
than 1, 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 on such Distribution Date from the Mortgage Loans in Loan Group 2, (b)
the Base Interest Fraction for the related principal payment on such Class of
Certificates, and (c) the aggregate amount of Prepayment Premiums relating to
the Mortgage Loans in Loan Group 2 collected on such principal prepayments
during the related Prepayment Period. Any Prepayment Premiums relating to the
Mortgage Loans in Loan Group 2 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
Prepayment Premium with respect to such Principal Prepayment and (b) whose
denominator is the amount, if any, by which (i) the 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. However, 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 will equal zero.
No Prepayment Premiums will be distributed to the holders of the Class E,
Class F, Class G, Class H, Class J or Class K Certificates. Instead, after the
Certificate Balances of the Class A-1C, Class A-2C, Class B, Class C and Class D
Certificates have been reduced to zero, all prepayment premiums and yield
maintenance charges with respect to the Mortgage Loans in Loan Group 1 will be
distributed to the holders of the Class X Certificates. Similarly, after the
Certificate Balances of the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates have been reduced to zero, all Prepayment Premiums with respect to
the Mortgage Loans in Group 2 will be distributed to holders of the Class X
Certificates.
Prepayment Premiums 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.
The Depositor makes no representation as to the enforceability of the
provision of any Mortgage Note requiring the payment of a Prepayment Premium or
of the collectibility of any Prepayment Premium. See "Description of the
Mortgage Pool -- Certain Terms and Conditions of the Mortgage
Loans -- Prepayment Provisions" and "Risk Factors -- Risks Related to the
Mortgage Loans -- Prepayment Premiums" in this prospectus supplement.
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Treatment of REO Properties. Notwithstanding that any Mortgaged Property
may be acquired as part of the Trust Fund through foreclosure, deed in lieu of
foreclosure or otherwise, the related Mortgage Loan will be treated, for
purposes of, among other things, determining distributions on the Certificates,
allocations of Realized Losses and Additional Trust Fund Expenses to the
Certificates, and the amount of Master Servicing Fees, Standby Fees, Special
Servicing Fees and Trustee Fees payable under the Pooling Agreement, as having
remained outstanding until such REO Property is liquidated. Among other things,
such Mortgage Loan will be taken into account when determining the Pass-Through
Rate for the Class X Certificates and the Principal Distribution Amount for each
Distribution Date. In connection therewith, operating revenues and other
proceeds derived from such REO Property (after application thereof to pay
certain costs and taxes, including certain reimbursements payable to the Master
Servicer, the Special Servicer and/or the Trustee, incurred in connection with
the operation and disposition of such REO Property) will be "applied" by the
Master Servicer as principal, interest and other amounts "due" on such Mortgage
Loan; and, subject to the recoverability determination described below (see
"-- P&I Advances"), the Master Servicer and the Trustee will be required to make
P&I Advances in respect of such Mortgage Loan, in all cases as if such Mortgage
Loan had remained outstanding.
SUBORDINATION; ALLOCATION OF LOSSES AND CERTAIN EXPENSES
As and to the extent described herein, the rights of holders of the
Subordinate Certificates to receive distributions of amounts collected or
advanced on the Mortgage Loans will, in the case of each Class thereof, be
subordinated to the rights of holders of the Senior Certificates and, further,
to the rights of holders of each other Class of Subordinate Certificates, if
any, with an earlier alphabetical Class designation. This subordination is
intended to enhance the likelihood of timely receipt by holders of the
respective Classes of Senior Certificates of the full amount of Distributable
Certificate Interest payable in respect of their Certificates on each
Distribution Date, and the ultimate receipt by holders of the respective Classes
of Class A Certificates of principal equal to, in each such case, the entire
related Certificate Balance. Similarly, but to decreasing degrees, this
subordination is also intended to enhance the likelihood of timely receipt by
holders of the other Classes of Offered Certificates of the full amount of
Distributable Certificate Interest payable in respect of their Certificates on
each Distribution Date, and the ultimate receipt by holders of the other Classes
of Offered Certificates of principal equal to, in each such case, the entire
related Certificate Balance. The subordination of any Class of Subordinate
Certificates will be accomplished by, among other things, the application of the
Available Distribution Amount on each Distribution Date in the order of priority
described under "-- Distributions -- The Available Distribution Amount" above.
No other form of credit support will be available for the benefit of holders of
the Offered Certificates.
If, following the distributions to be made in respect of the Certificates
on any Distribution Date, the aggregate Stated Principal Balance of the Mortgage
Pool that will be outstanding immediately following such Distribution Date is
less than the then aggregate Certificate Balance of the Sequential Pay
Certificates, the Certificate Balances of the Class K, Class J, Class H, Class
G, Class F, Class E, Class D, Class C and Class B Certificates will be reduced,
sequentially in that order, in the case of each such Class until such deficit
(or the related Certificate Balance) is reduced to zero (whichever occurs
first). If any portion of such deficit remains at such time as the Certificate
Balances of such Classes of Certificates are reduced to zero, then the
respective Certificate Balances of the Class A Certificates will be reduced, pro
rata in accordance with the relative sizes of the remaining Certificate Balances
of such Classes of Certificates, until such deficit (or each such Certificate
Balance) is reduced to zero. Any such deficit will, in general, be the result of
Realized Losses incurred in respect of the Mortgage Loans and/or Additional
Trust Fund Expenses to the extent paid from funds which would otherwise have
been used to make distributions of principal. Accordingly, the foregoing
reductions in the Certificate Balances of the respective Classes of the
Sequential Pay Certificates will constitute an allocation of any such Realized
Losses and Additional Trust Fund Expenses. Any such reduction in the Certificate
Balance of a Class of Sequential Pay Certificates will result in a corresponding
reduction in the Notional Amount of the Class X Certificates.
"Realized Losses" are losses on or in respect of the Mortgage Loans arising
from the inability of the Master Servicer and/or the Special Servicer to collect
all amounts due and owing under any such Mortgage
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Loan, including by reason of the fraud or bankruptcy of a borrower or a casualty
of any nature at a Mortgaged Property, to the extent not covered by insurance.
The Realized Loss in respect of a liquidated Mortgage Loan (or related REO
Property) is an amount generally equal to the excess, if any, of (a) the
outstanding principal balance of such Mortgage Loan as of the date of
liquidation, together with (i) all accrued and unpaid interest thereon at the
related Mortgage Rate to but not including the Due Date in the Collection Period
in which the liquidation occurred and (ii) all related unreimbursed Servicing
Advances and outstanding liquidation expenses, over (b) the aggregate amount of
Liquidation Proceeds, if any, recovered in connection with such liquidation. If
any portion of the debt due under a Mortgage Loan is forgiven, whether in
connection with a modification, waiver or amendment granted or agreed to by the
Master Servicer or the Special Servicer or in connection with the bankruptcy or
similar proceeding involving the related borrower, the amount so forgiven also
will be treated as a Realized Loss.
"Additional Trust Fund Expenses" include, among other things, (i) all
Special Servicing Fees, Workout Fees and Liquidation Fees paid to the Special
Servicer, (ii) any interest paid to the Master Servicer, the Special Servicer
and/or the Trustee in respect of unreimbursed Advances, (iii) the cost of
various opinions of counsel required or permitted to be obtained in connection
with the servicing of the Mortgage Loans and the administration of the Trust
Fund, (iv) certain unanticipated, non-Mortgage Loan specific expenses of the
Trust, including certain reimbursements and indemnifications to the Trustee as
described under "The Pooling and Servicing Agreements -- Certain Matters
Regarding the Trustee" in the accompanying prospectus, certain reimbursements to
the Master Servicer, the Special Servicer, the REMIC Administrator and the
Depositor as described under "The Pooling and Servicing Agreements -- Certain
Matters Regarding the Master Servicer, the Special Servicer, the REMIC
Administrator and the Depositor" in the accompanying prospectus and certain
federal, state and local taxes, and certain tax-related expenses, payable out of
the Trust Fund as described under "Certain Federal Income Tax
Consequences -- Possible Taxes on Income From Foreclosure Property and Other
Taxes" herein and "Certain Federal Income Tax Consequences --
REMICs -- Prohibited Transactions Tax and Other Taxes" in the accompanying
prospectus, (v) if not advanced by the Master Servicer, any amounts expended on
behalf of the Trust to remediate an adverse environmental condition at any
Mortgaged Property securing a defaulted Mortgage Loan (see "The Pooling and
Servicing Agreements -- Realization Upon Defaulted Mortgage Loans" in the
accompanying prospectus), and (vi) any other expense of the Trust Fund not
specifically included in the calculation of "Realized Loss" for which there is
no corresponding collection from a borrower. Additional Trust Fund Expenses will
reduce amounts payable to Certificateholders and, consequently, may result in a
loss on the Offered Certificates.
INTEREST RESERVE ACCOUNT
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, an amount will be
required to be withdrawn from the Certificate Account, in respect of each
Mortgage Loan which accrues interest on an Actual/360 Basis, for deposit into
the Interest Reserve Account, 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 withdrawn in any consecutive
January (if applicable) and February, the "Withheld Amount"). The "Master
Servicer Remittance Date" for any month is the business day preceding each
Distribution Date. 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 Certificate Account.
Amounts on deposit in the Interest Reserve Account may be invested only in
Permitted Investments. The Trustee will have no obligation to invest the funds
on deposit in the Interest Reserve Account.
P&I ADVANCES
With respect to each Distribution Date, the Master Servicer will be
obligated, subject to the recoverability determination described below, to make
advances (each, a "P&I Advance") out of its own funds or,
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subject to the replacement thereof as and to the extent provided in the Pooling
Agreement, funds held in the Certificate Account that are not required to be
part of the Available Distribution Amount for such Distribution Date, in an
amount generally equal to the aggregate of all Monthly Payments (other than
Balloon Payments) and any Assumed Monthly Payments, in each case net of related
Master Servicing Fees (other than the portion thereof corresponding to the
Standby Fee), Liquidation Fees and Workout Fees, that were due or deemed due, as
the case may be, in respect of the Mortgage Loans during the related Collection
Period and that were not paid by or on behalf of the related borrowers or
otherwise collected as of the close of business on the last day of the related
Collection Period. The Master Servicer's obligations to make P&I Advances in
respect of any Mortgage Loan will continue through liquidation of such Mortgage
Loan or disposition of any REO Property acquired in respect thereof.
Notwithstanding the foregoing, if it is determined that an Appraisal Reduction
Amount (as defined below) exists with respect to any Required Appraisal Loan (as
defined below), then, with respect to the Distribution Date immediately
following the date of such determination and with respect to each subsequent
Distribution Date for so long as such Appraisal Reduction Amount exists, in the
event of subsequent delinquencies on such Mortgage Loan, the interest portion of
the P&I Advance required to be made in respect of such Mortgage Loan will be
reduced (no reduction to be made in the principal portion, however) to an amount
equal to the product of (i) the amount of the interest portion of such P&I
Advance that would otherwise be required to be made for such Distribution Date
without regard to this sentence, multiplied by (ii) a fraction (expressed as a
percentage), the numerator of which is equal to the Stated Principal Balance of
such Mortgage Loan, net of such Appraisal Reduction Amount, and the denominator
of which is equal to the Stated Principal Balance of such Mortgage Loan. See
"--Appraisal Reductions" below. Subject to the recoverability determination
described below, if the Master Servicer fails to make a required P&I Advance,
the Trustee will be required to make such P&I Advance. See "-- The Trustee"
below.
The Master Servicer and the Trustee will each be entitled to recover any
P&I Advance made out of its own funds from any Related Proceeds. Notwithstanding
the foregoing, neither the Master Servicer nor the Trustee will be obligated to
make any P&I Advance that it determines in its reasonable good faith judgment
would, if made, not be recoverable out of Related Proceeds (a "Nonrecoverable
P&I Advance"; and, together with a Nonrecoverable Servicing Advance,
"Nonrecoverable Advances"), and the Master Servicer and the Trustee, as
applicable, will be entitled to recover any Advance that at any time is
determined to be a Nonrecoverable Advance (and interest thereon) out of funds
received on or in respect of other Mortgage Loans. See "Description of the
Certificates -- Advances in Respect of Delinquencies" and "The Pooling and
Servicing Agreements -- Certificate Account" in the accompanying prospectus.
The Master Servicer and the Trustee will each be entitled with respect to
any Advance made thereby, and the Special Servicer will be entitled with respect
to any Servicing Advance made thereby, to interest accrued on the amount of such
Advance for so long as it is outstanding at a rate per annum (the "Reimbursement
Rate") equal to the "prime rate" as published in the "Money Rates" section of
The Wall Street Journal, as such "prime rate" may change from time to time. Such
interest on any Advance will be payable to the Master Servicer, the Special
Servicer or the Trustee, as the case may be, first, out of Default Interest and
late payment charges collected on the related Mortgage Loan (but only if such
items accrued after such Mortgage Loan became a Specially Serviced Mortgage
Loan) and, second, at any time coinciding with or following the reimbursement of
such Advance, out of any amounts then on deposit in the Certificate Account. To
the extent not offset by Default Interest and/or late payment charges accrued
and actually collected on the related Mortgage Loan while it is a Specially
Serviced Mortgage Loan, interest accrued on outstanding Advances will result in
a reduction in amounts payable on the Certificates.
APPRAISAL REDUCTIONS
Within 60 days (or within such longer period as the Special Servicer is
diligently and in good faith proceeding to obtain such) after the earliest of
(i) the date on which any Mortgage Loan becomes a Modified Mortgage Loan (as
defined below), (ii) the 60th day following the occurrence of any uncured
delinquency in Monthly Payments with respect to any Mortgage Loan, (iii) the
date on which a receiver is appointed and continues in such capacity in respect
of the Mortgaged Property securing any Mortgage Loan, (iv) the date on
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which the borrower under any Mortgage Loan becomes the subject of bankruptcy or
insolvency proceedings, and (v) the date on which a Mortgaged Property securing
any Mortgage Loan becomes an REO Property (each such Mortgage Loan, a "Required
Appraisal Loan"; and each such date, a "Required Appraisal Date"), the Special
Servicer will be required to obtain an appraisal of the related Mortgaged
Property from an independent MAI-designated appraiser, unless such an appraisal
had previously been obtained within the prior twelve months. The cost of such
appraisal will be advanced by the Master Servicer, subject to its right to be
reimbursed therefor as a Servicing Advance. As a result of any such appraisal,
it may be determined that an Appraisal Reduction Amount exists with respect to
the related Required Appraisal Loan. The "Appraisal Reduction Amount" for any
Required Appraisal Loan will, in general, be an amount (determined by the
Special Servicer and verified by the Master Servicer as of the Determination
Date immediately succeeding the later of the date on which the relevant
appraisal is obtained and the earliest relevant Required Appraisal Date and as
of each Determination Date thereafter) equal to the excess, if any, of (a) the
sum of (i) the Stated Principal Balance of such Required Appraisal Loan, (ii) to
the extent not previously advanced by or on behalf of the Master Servicer or the
Trustee, all unpaid interest on the Required Appraisal Loan through the most
recent Due Date prior to such Determination Date at a per annum rate equal to
the sum of the related Net Mortgage Rate and the per annum rate at which the
Trustee Fee is calculated, (iii) all accrued but unpaid Master Servicing Fees
and Special Servicing Fees in respect of such Required Appraisal Loan, (iv) all
related unreimbursed Advances made by or on behalf of the Master Servicer, the
Special Servicer or the Trustee with respect to such Required Appraisal Loan
plus interest accrued thereon at the Reimbursement Rate and (v) all currently
due and unpaid real estate taxes and assessments, insurance premiums and, if
applicable, ground rents in respect of the related Mortgaged Property (net of
any escrow reserves held by the Master Servicer or Special Servicer to cover any
such item), over (b) 90% of an amount equal to (i) the appraised value of the
related Mortgaged Property or REO Property as determined by such appraisal, net
of (ii) the amount of any liens on such property (not otherwise arising out of
the items described in clause (a)(v) above) that are prior to the lien of the
Required Appraisal Loan; provided that, if an appraisal is required to be
obtained as contemplated by the first sentence of this paragraph but has not
been received within the 60-day period contemplated by such sentence, then until
(but just until) such appraisal is obtained the Appraisal Reduction Amount for
the subject Required Appraisal Loan will be deemed to equal 30% of the Stated
Principal Balance of such Required Appraisal Loan (after receipt of such
appraisal, the Appraisal Reduction Amount, if any, will be calculated without
regard to this proviso).
With respect to each Required Appraisal Loan (unless such Mortgage Loan has
become a Corrected Mortgage Loan and has remained current for twelve consecutive
Monthly Payments, and no other Servicing Transfer Event has occurred with
respect thereto during the preceding twelve months, in which case it will cease
to be a Required Appraisal Loan), the Special Servicer is required, within 30
days of each anniversary of such Mortgage Loan having become a Required
Appraisal Loan, to order an update of the prior appraisal (the cost of which
will be advanced by the Master Servicer at the direction of the Special Servicer
and will be reimbursable as a Servicing Advance). Based upon such appraisal, the
Special Servicer is to redetermine and, subject to verification by the Master
Servicer, report to the Trustee and the Master Servicer the Appraisal Reduction
Amount, if any, with respect to such Mortgage Loan.
A "Modified Mortgage Loan" is any Mortgage Loan as to which any Servicing
Transfer Event has occurred and which has been modified by the Special Servicer
in a manner that: (A) affects the amount or timing of any payment of principal
or interest due thereon (other than, or in addition to, bringing current Monthly
Payments with respect to such Mortgage Loan); (B) except as expressly
contemplated by the related Mortgage, results in a release of the lien of the
Mortgage on any material portion of the related Mortgaged Property without a
corresponding principal prepayment in an amount not less than the fair market
value (as is) of the property to be released; or (C) in the good faith and
reasonable judgment of the Special Servicer, otherwise materially impairs the
security for such Mortgage Loan or reduces the likelihood of timely payment of
amounts due thereon.
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REPORTS TO CERTIFICATEHOLDERS; CERTAIN AVAILABLE INFORMATION
Trustee Reports. Based solely on information provided in monthly reports
prepared by the Master Servicer and the Special Servicer and delivered to the
Trustee, on each Distribution Date the Trustee will be required to provide or
make available, either in electronic format or by first-class mail, to the
holders of each Class of REMIC Regular Certificates, the following statements
and reports (collectively, the "Distribution Date Statement") substantially in
the forms set forth in Annex C (although such forms may be subject to change
over time) and substantially containing the information set forth below:
(1) A statement setting forth, among other things: (i) the amount of
distributions, if any, made on such Distribution Date to the holders of
each Class of REMIC Regular Certificates and applied to reduce the
respective Certificate Balances thereof; (ii) the amount of distributions,
if any, made on such Distribution Date to the holders of each Class of
REMIC Regular Certificates allocable to Distributable Certificate Interest
and Prepayment Premiums; (iii) the Available Distribution Amount for such
Distribution Date; (iv) the aggregate amount of P&I Advances made in
respect of the immediately preceding Distribution Date; (v) the aggregate
Stated Principal Balance of the Mortgage Pool outstanding immediately
before and immediately after such Distribution Date; (vi) the number,
aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Pool as of the end of
the Collection Period for the prior Distribution Date; (vii) as of the end
of the Collection Period for the immediately preceding Distribution Date,
the number and aggregate unpaid principal balance of Mortgage Loans (A)
delinquent 30-59 days, (B) delinquent 60-89 days, (C) delinquent 90 days or
more, and (D) as to which foreclosure proceedings have been commenced;
(viii) with respect to any REO Property included in the Trust Fund as of
the end of the Collection Period for such Distribution Date, the principal
balance of the Mortgage Loan as of the date such Mortgage Loan became
delinquent; (ix) the Accrued Certificate Interest and Distributable
Certificate Interest in respect of each Class of REMIC Regular Certificates
for such Distribution Date; (x) the aggregate amount of Distributable
Certificate Interest payable in respect of each Class of REMIC Regular
Certificates on such Distribution Date, including, without limitation, any
Distributable Certificate Interest remaining unpaid from prior Distribution
Dates; (xi) any unpaid Distributable Certificate Interest in respect of
such Class of REMIC Regular Certificates after giving effect to the
distributions made on such Distribution Date; (xii) the Pass-Through Rate
for each Class of REMIC Regular Certificates for such Distribution Date;
(xiii) the Principal Distribution Amount for such Distribution Date,
separately identifying the respective components of such amount; (xiv) the
aggregate of all Realized Losses incurred during the related Collection
Period and, aggregated by type, all Additional Trust Fund Expenses incurred
during the related Collection Period; (xv) the Certificate Balance or
Notional Amount, as the case may be, of each Class of REMIC Regular
Certificates outstanding immediately before and immediately after such
Distribution Date, separately identifying any reduction therein due to the
allocation of Realized Losses and Additional Trust Fund Expenses on such
Distribution Date; (xvi) the aggregate amount of servicing fees paid to the
Master Servicer and the Special Servicer, collectively and separately,
during the Collection Period for the prior Distribution Date; and (xvii) a
brief description of any material waiver, modification or amendment of any
Mortgage Loan entered into by the Master Servicer or Special Servicer
pursuant to the Pooling Agreement during the related Collection Period. In
the case of information furnished pursuant to clauses (i) and (ii) above,
the amounts shall be expressed as a dollar amount in the aggregate for all
Certificates of each applicable Class and per a specified denomination.
(2) A report containing information regarding the Mortgage Loans as of
the close of business on the immediately preceding Determination Date,
which report shall contain certain of the categories of information
regarding the Mortgage Loans set forth in this prospectus supplement in the
tables under the caption "Annex A: Certain Characteristics of the Mortgage
Loans" (calculated, where applicable, on the basis of the most recent
relevant information provided by the borrowers to the Master Servicer or
the Special Servicer and by the Master Servicer or the Special Servicer, as
the case may be, to the Trustee) and such information shall be presented in
a loan-by-loan and tabular format substantially similar to the formats
utilized in this prospectus supplement on Annex A (provided that no
information will be
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provided as to any repair and replacement or other cash reserve and the
only financial information to be reported on an ongoing basis will be
actual expenses, actual revenues and actual net operating income for the
respective Mortgaged Properties and a debt service coverage ratio
calculated on the basis thereof).
Servicer Reports. The Master Servicer is required to deliver to the
Trustee on the third Business Day prior to each Distribution Date, and the
Trustee is to provide or make available, either in electronic format or by
first-class mail to each Certificateholder, and, if requested in writing, any
potential investor in the Certificates, on each Distribution Date, the following
five reports (the "Servicer Reports"), all of which will be made available
electronically (i) to any interested party including the Rating Agencies, the
Underwriter and any party to the Pooling Agreement via the Trustee's Website or,
(ii) to authorized persons identified by the Trustee to the Master Servicer and
parties to the Pooling Agreement, via the Master Servicer's Website, with the
use of a username and a password provided by the Master Servicer to such Person
upon delivery to the Trustee of a certification in the form attached to the
Pooling Agreement; provided that the Rating Agencies, the Underwriter and
parties to the Pooling Agreement will not be required to provide such
certification:
(1) A "Delinquent Loan Status Report" setting forth, among other
things, those Mortgage Loans which, as of the end of the Collection Period
for the related Distribution Date, were delinquent 30-59 days, delinquent
60-89 days, delinquent 90 days or more, current but specially serviced, or
in foreclosure but not REO Property.
(2) An "Historical Loan Modification Report" setting forth, among
other things, those Mortgage Loans which, as of the close of business on
the immediately preceding Determination Date, have been modified pursuant
to the Pooling Agreement (i) during the Collection Period ending on such
Determination Date and (ii) since the Cut-off Date, showing the original
and the revised terms thereof.
(3) An "Historical Loss Report" setting forth, among other things, as
of the close of business on the immediately preceding Determination Date,
(i) the aggregate amount of Liquidation Proceeds received, and liquidation
expenses incurred, both during the Collection Period ending on such
Determination Date and historically, and (ii) the amount of Realized Losses
occurring during such Collection Period and historically, set forth on a
Mortgage Loan-by-Mortgage Loan basis.
(4) A "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 immediately preceding Determination Date, (i) the
acquisition date of such REO Property and (ii) the value of the REO
Property based on the most recent appraisal or other valuation thereof
available to the Master Servicer as of such Determination Date (including
any prepared internally by the Special Servicer).
(5) A "Special Servicer Loan Status Report" setting forth, among other
things, as of the close of business on the immediately preceding
Determination Date, (i) the aggregate principal balance of all Specially
Serviced Mortgage Loans and (ii) a loan-by-loan listing of all Specially
Serviced Mortgage Loans indicating their status, date and reason for
transfer to the Special Servicer; provided however, that such information
may be shown as part of the reports described above and other Commercial
Mortgage Securities Association ("CMSA") form reports in lieu of in a
separate report.
In addition, on the Business Day prior to each Distribution Date, the
Master Servicer will deliver to the Trustee, the Special Servicer and the Rating
Agencies a list of all Mortgage Loans the Master Servicer has determined are in
jeopardy of becoming Specially Serviced Mortgage Loans based on criteria
described in the Pooling Agreement.
None of the Distribution Date Statement or the Servicer Reports will
include any information that the Master Servicer deems to be confidential. 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 prior to the related
Distribution Date. 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 other 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.
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Following the end of each calendar quarter, commencing with the calendar
quarter ended March 31, 2000, within 105 days (or 180 days, in the case of
annual operating information) of receipt by the Master Servicer, as to
Non-Specially Serviced Mortgage Loans, and within 30 days after receipt by the
Special Servicer, as to Specially Serviced Mortgage Loans, of any annual or
quarterly operating statements or rent rolls with respect to any Mortgaged
Property or REO Property, the Master Servicer or the Special Servicer, as
applicable, will, based upon such operating statements or rent rolls prepare
(or, if previously prepared, update) the written analysis of the operations (the
"Operating Statement Analysis Report"), and the Special Servicer will remit each
Operating Statement Analysis Report prepared by it or the related data fields,
together with the underlying operating statements and rent rolls, to the Master
Servicer in an electronic format reasonably acceptable to the Master Servicer.
Certain information in each Operating Statement Analysis Report will be
normalized using standard CMSA methodology as modified from time to time. All
Operating Statement Analysis Reports and worksheets showing computations made to
normalize annual net cash flow and debt service coverage numbers ("Operating
Statement Analysis Worksheets") will be maintained by the Master Servicer with
respect to each Mortgaged Property and REO Property, and the Master Servicer
will forward copies thereof to the Trustee, the Directing Certificateholder,
each Rating Agency requesting such copies and, upon written request any
Certificateholder, or to the extent the Trustee or a beneficial owner of an
Offered Certificate (a "Certificate Owner") has confirmed its ownership interest
in the Certificates held thereby, such Certificate Owner, together with the
related operating statement or rent rolls. Conveyance of notices and other
communications by DTC to Participants, and by Participants to Certificate
Owners, will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time. The Master
Servicer, the Special Servicer, the Trustee, the Depositor, the REMIC
Administrator, the Mortgage Loan Seller and the Certificate Registrar are
required to recognize as Certificateholders only those persons in whose names
the Certificates are registered on the books and records of the Certificate
Registrar.
The Trustee will make available each month, to any interested party, the
Distribution Date Statement (and any additional files containing the same
information in an alternative format) via the Trustee's Website. In addition,
the Trustee will make available to any interested party each month the Servicer
Reports on the Trustee's Website. The Trustee's Website will be located at
"www.ctslink.com/cmbs". The Trustee's fax-on-demand service may be accessed by
calling (301) 815-6610. In addition, the Trustee will also make Mortgage Loan
information as presented in the CMSA loan setup file and CMSA loan periodic
update file format available each month to any Certificateholder, any
Certificate Owner, the Rating Agencies, the parties hereto or any other
interested party via the Trustee's Website. In addition, pursuant to the Pooling
Agreement, the Trustee will make available, as a convenience for interested
parties (and not in furtherance of the distribution of the accompanying
prospectus or the prospectus supplement under the securities laws), the Pooling
Agreement, the accompanying prospectus and the prospectus supplement via the
Trustee's Website. For assistance with the above-referenced services, interested
parties may call (301) 815-6600. The Trustee will make no representations or
warranties as to the accuracy or completeness of such documents and will assume
no responsibility therefor.
In connection with providing access to the Trustee's Website, the Trustee
may require registration and the acceptance of a disclaimer. The Trustee shall
not be liable for the dissemination of information in accordance with the
Pooling Agreement.
For a discussion of certain annual information reports to be furnished by
the Trustee to persons who at any time during the prior calendar year were
holders of the Offered Certificates, see "Description of the
Certificates -- Reports to Certificateholders" in the accompanying prospectus.
Other Information. The Pooling Agreement requires that the Trustee make
available at its offices, during normal business hours, upon reasonable advance
written notice, for review by any holder or Certificate Owner of an Offered
Certificate or any person identified to the Trustee by any such holder or
Certificate Owner as a prospective transferee of an Offered Certificate or any
interest therein, originals or copies of, among other things, the following
items: (a) all officer's certificates delivered to the Trustee since the
Delivery Date as described under "Servicing of the Mortgage Loans -- Evidence as
to Compliance" herein, (b) all accountant's reports delivered to the Trustee
since the Delivery Date as described under "Servicing of the Mortgage
Loans -- Evidence as to Compliance" herein, and (c) the Mortgage Note, Mortgage
and other
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legal documents relating to each Mortgage Loan, including any and all
modifications, waivers and amendments of the terms of a Mortgage Loan entered
into by the Master Servicer or the Special Servicer and delivered to the
Trustee. In addition, the Master Servicer is required to make available, during
normal business hours, upon reasonable advance written notice, for review by any
holder or Certificate Owner of an Offered Certificate or any person identified
to the Master Servicer as a prospective transferee of an Offered Certificate or
any interest therein, originals or copies of any and all documents (in the case
of documents generated by the Special Servicer, to the extent received
therefrom) that constitute the servicing file for each Mortgage Loan, in each
case except to the extent the Master Servicer in its reasonable, good faith
determination believes that any item of information contained in such servicing
file is of a nature that it should be conveyed to all Certificateholders at the
same time, in which case the Master Servicer is required, as soon as reasonably
possible following its receipt of any such item of information, to disclose such
item of information to the Trustee for inclusion by the Trustee along with the
Distribution Date Statement referred to under "-- Reports to Certificateholders;
Certain Available Information -- Trustee Reports" above; provided that, until
the Trustee has either disclosed such information to all Certificateholders
along with the Distribution Date Statement or has properly filed such
information with the Securities and Exchange Commission on behalf of the Trust
under the Securities Exchange Act of 1934, the Master Servicer is entitled to
withhold such item of information from any Certificateholder or Certificate
Owner or prospective transferee of a Certificate or an interest therein; and,
provided, further, that the Master Servicer is not required to make information
contained in any servicing file available to any person to the extent that doing
so is prohibited by applicable law or by any documents related to a Mortgage
Loan.
The Trustee and, subject to the last sentence of the prior paragraph, the
Master Servicer will each make available, upon reasonable advance written notice
and at the expense of the requesting party, originals or copies of the items
referred to in the prior paragraph that are maintained thereby, to
Certificateholders, Certificate Owners and prospective purchasers of
Certificates and interests therein; provided that the Trustee and Master
Servicer may each require (a) in the case of a Certificate Owner, a written
confirmation executed by the requesting person or entity, in a form reasonably
acceptable to the Trustee or Master Servicer, as applicable, generally to the
effect that such person or entity is a beneficial owner of Offered Certificates
and will keep such information confidential, and (b) in the case of a
prospective purchaser, confirmation executed by the requesting person or entity,
in a form reasonably acceptable to the Trustee or Master Servicer, as
applicable, generally to the effect that such person or entity is a prospective
purchaser of Offered Certificates or an interest therein, is requesting the
information solely for use in evaluating a possible investment in such
Certificates and will otherwise keep such information confidential.
Certificateholders, by the acceptance of their Certificates, will be deemed to
have agreed to keep such information confidential.
VOTING RIGHTS
At all times during the term of the Pooling Agreement, 95.0% of the voting
rights for the Certificates (the "Voting Rights") shall be allocated among the
holders of the respective Classes of Sequential Pay Certificates in proportion
to the Certificate Balances of their Certificates and 5.0% of the Voting Rights
shall be allocated to the holders of the Class X Certificates in proportion to
their Notional Amounts. Voting Rights allocated to a Class of Certificateholders
shall be allocated among such Certificateholders in proportion to the percentage
interests in such Class evidenced by their respective Certificates. See
"Description of the Certificates -- Voting Rights" in the accompanying
prospectus. ORIX Real Estate Capital Markets, LLC is the initial holder of one
or more classes of the Non-Offered Certificates, and continues to be the holder
of one or more classes of the Non-Offered Grade Certificates; as such, it is
entitled to Voting Rights.
TERMINATION
The obligations created by the Pooling Agreement will terminate following
the earliest of (i) the final payment (or advance in respect thereof) or other
liquidation of the last Mortgage Loan or related REO Property remaining in the
Trust Fund, and (ii) the purchase of all of the Mortgage Loans and REO
Properties remaining in the Trust Fund by the Master Servicer or by any holder
or holders (other than the Depositor or Mortgage Loan Seller) of Certificates
representing a majority interest in the Controlling Class. Written notice
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of termination of the Pooling Agreement will be given to each Certificateholder,
and the final distribution with respect to each Certificate will be made only
upon surrender and cancellation of such Certificate at the office of the
Certificate Registrar or other location specified in such notice of termination.
Any such purchase by the Master Servicer or the majority holder(s) of the
Controlling Class of all the Mortgage Loans and REO Properties remaining in the
Trust Fund is required to be made at a price equal to (a) the sum of (i) the
aggregate Purchase Price of all the Mortgage Loans then included in the Trust
Fund (other than any Mortgage Loans as to which the related Mortgaged Properties
have become REO Properties) and (ii) the fair market value of all REO Properties
then included in the Trust Fund, as determined by an appraiser mutually agreed
upon by the Master Servicer and the Trustee, minus (b) (solely in the case of a
purchase by the Master Servicer) the aggregate of all amounts payable or
reimbursable to the Master Servicer under the Pooling Agreement. Such purchase
will effect early retirement of the then outstanding Certificates, but the right
of the Master Servicer or the majority holder(s) of the Controlling Class to
effect such termination is subject to the requirement that the then aggregate
Stated Principal Balance of the Mortgage Pool be less than 1.0% of the Initial
Pool Balance. The purchase price paid by the Master Servicer or the majority
holder(s) of the Controlling Class, exclusive of any portion thereof payable or
reimbursable to any person other than the Certificateholders, will constitute
part of the Available Distribution Amount for the final Distribution Date.
THE TRUSTEE
Norwest Bank Minnesota, National Association ("Norwest Bank") will act as
Trustee pursuant to the Pooling Agreement. Norwest Bank, a direct, wholly-owned
subsidiary of Wells Fargo & Company, is a national banking association
originally chartered in 1872 and is engaged in a wide range of activities
typical of a national bank. Norwest Bank's principal office is located at
Norwest Center, Sixth and Marquette, Minneapolis, Minnesota 55479-0113.
Certificate transfer services are conducted at Norwest Bank's offices in
Minneapolis. Norwest Bank otherwise conducts its trustee and securities
administration services, including administration of the Trust Fund, at its
offices in Columbia, Maryland. Such office is located at 11000 Broken Land
Parkway, Columbia, Maryland 21044-3562. In addition, Norwest Bank maintains a
trust office in New York City located at 3 New York Plaza, New York, New York
10004. The Trustee is at all times to be, and will be required to resign if it
fails to be, (i) a corporation, bank or banking association, organized and doing
business under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority and (ii) an institution whose
long-term senior unsecured debt is rated not less than "AA" by Fitch, "A" by DCR
and AA by S&P (or such lower rating as would not result, as confirmed in writing
by each Rating Agency, in a qualification, downgrade or withdrawal of any of the
then current ratings assigned by such Rating Agency to the Certificates). As of
December 31, 1998, Wells Fargo & Company, of which the Trustee is a direct,
wholly-owned subsidiary, had assets of over $200 billion. See "The Pooling and
Servicing Agreements -- The Trustee", "-- Duties of the Trustee", "-- Certain
Matters Regarding the Trustee" and "-- Resignation and Removal of the Trustee"
in the accompanying prospectus.
Pursuant to the Pooling Agreement, the Trustee will be entitled to a
monthly fee (the "Trustee Fee"; and, together with the Master Servicing Fee
(including the Standby Fee), the "Administrative Fees") payable out of general
collections on the Mortgage Loans and any REO Properties.
The Trustee will also have certain duties with respect to REMIC
administration (in such capacity the "REMIC Administrator"). See "Certain
Federal Income Tax Consequences -- REMICs -- Reporting and Other Administrative
Matters" and "The Pooling and Servicing Agreements -- Certain Matters Regarding
the Master Servicer, the Special Servicer, the REMIC Administrator and the
Depositor", "-- Events of Default" and "-- Rights Upon Event of Default" in the
accompanying prospectus.
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YIELD AND MATURITY CONSIDERATIONS
YIELD CONSIDERATIONS
General. The yield on any Offered Certificate will depend on (a) the price
at which such Certificate is purchased by an investor and (b) the rate, timing
and amount of distributions on such Certificate. The rate, timing and amount of
distributions on any Offered Certificate will in turn depend on, among other
things, (v) the Pass-Through Rate for such Certificate, (w) the rate and timing
of principal payments (including principal prepayments) and other principal
collections on or in respect of the Mortgage Loans and the extent to which such
amounts are to be applied or otherwise result in reduction of the Certificate
Balance or Notional Amount of the Class of Certificates to which such
Certificate belongs, (x) the rate, timing and severity of Realized Losses on or
in respect of the Mortgage Loans and of Additional Trust Fund Expenses and
Appraisal Reductions and the extent to which such losses, expenses and
reductions are allocable to or otherwise result in the nonpayment or deferred
payment of interest on, or reduction of the Certificate Balance or Notional
Amount of, the Class of Certificates to which such Certificate belongs, (y) the
timing and severity of any Net Aggregate Prepayment Interest Shortfalls and the
extent to which such shortfalls are allocable in reduction of the Distributable
Certificate Interest payable on the Class of Certificates to which such
Certificate belongs and (z) the extent to which Prepayment Premiums are
collected and, in turn, distributed on the Class of Certificates to which such
Certificate belongs. The yield to maturity on the Class A-1C and Class A-2C
Certificates is sensitive to the rate and timing of Principal Prepayments and
other unscheduled collections on the Mortgage Loans in Loan Group 1 (including
collections made in connection with liquidations of such Mortgage Loans due to
defaults, casualties or condemnations affecting such Mortgage Loans and
purchases of such Mortgage Loans out of the Trust Fund). Similarly, the yield to
maturity on the Class A-2, Class A-3 and Class A-4 Certificates is sensitive to
the rate and timing of Principal Prepayments and other unscheduled collections
on the Mortgage Loans in Loan Group 2 (including collections made in connection
with liquidations of such Mortgage Loans due to defaults, casualties, or
condemnations affecting such Mortgage Loans and purchases of such Mortgage Loans
out of the Trust Fund).
Class X Certificate Pass-Through Rate. The Pass-Through Rate applicable to
the Class X Certificates will be variable and will be calculated based in part
on the weighted average of the Net Mortgage Rates on the Mortgage Loans from
time to time. Accordingly, the yield on such Certificates will be sensitive to
changes in the relative composition of the Mortgage Pool as a result of
scheduled amortization, voluntary prepayments and liquidations of Mortgage Loans
following default. The Pass-Through Rate and yield to maturity of the Class X
Certificates will be adversely affected if Mortgage Loans with relatively higher
Mortgage Rates amortize and/or prepay faster than Mortgage Loans with relatively
lower Mortgage Rates. See "Description of the Certificates -- Pass-Through
Rates" and "Description of the Mortgage Pool" herein and "-- Rate and Timing of
Principal Payments" below.
Rate and Timing of Principal Payments. The yield to holders of the Class X
Certificates will be extremely sensitive to, and the yield to holders of any
other Class of Offered Certificates purchased at a discount or premium will be
affected by, the rate and timing of reductions of the Certificate Balances or
Notional Amount, as the case may be, of such Class of Certificates. As described
herein, the Principal Distribution Amount for each Distribution Date will be
distributable entirely in respect of the Class A Certificates until the related
Certificate Balances thereof are reduced to zero. Following retirement of the
Class A Certificates, the Principal Distribution Amount for each Distribution
Date will be distributable entirely in respect of the other Classes of
Sequential Pay Certificates, sequentially in alphabetical order of Class
designation, in each such case until the related Certificate Balance is reduced
to zero. The Notional Amount of the Class X Certificates will equal the
aggregate Certificate Balances of the Classes of Sequential Pay Certificates
outstanding from time to time. Consequently, the rate and timing of reductions
of the Certificate Balance or Notional Amount, as the case may be, of each Class
of Offered Certificates will depend on the rate and timing of principal payments
on or in respect of the Mortgage Loans, which will in turn be affected by the
amortization schedules thereof, the dates on which any Balloon Payments are due
and the rate and timing of principal prepayments and other unscheduled
collections thereon (including for this purpose,
S-87
<PAGE> 90
collections made in connection with liquidations of Mortgage Loans due to
defaults, casualties or condemnations affecting the Mortgaged Properties, or
purchases of Mortgage Loans out of the Trust Fund). Prepayments and, assuming
the respective stated maturity dates therefor have not occurred, liquidations of
the Mortgage Loans will result in distributions on the Sequential Pay
Certificates of amounts that would otherwise be distributed over the remaining
terms of the Mortgage Loans and will tend to shorten the weighted average lives
of those Certificates. Defaults on the Mortgage Loans, particularly in the case
of Balloon Loans at or near their stated maturity dates, may result in
significant delays in payments of principal on the Mortgage Loans (and,
accordingly, on the Sequential Pay Certificates) while workouts are negotiated
or foreclosures are completed, and such delays will tend to lengthen the
weighted average lives of those Certificates. See "Servicing of the Mortgage
Loans -- Modifications, Waivers, Amendments and Consents" herein and "The
Pooling and Servicing Agreements -- Realization Upon Defaulted Mortgage Loans"
and "Certain Legal Aspects of Mortgage Loans -- Foreclosure" in the accompanying
prospectus.
The extent to which the yield to maturity of any Class of Offered
Certificates may vary from the anticipated yield will depend upon the degree to
which such Certificates are purchased at a discount or premium and when, and to
what degree, payments of principal on or in respect of the Mortgage Loans are
distributed or otherwise result in a reduction of the Certificate Balance or
Notional Amount of such Certificates. An investor should consider, in the case
of any Offered Certificate 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 a Class X Certificate or any other Offered Certificate purchased at
a premium, the risk that a faster 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. In general, the earlier a payment of principal
on or in respect of the Mortgage Loans is distributed or otherwise results in
reduction of the notional amount of a Class X Certificate or the principal
balance of any other Offered Certificate purchased at a discount or premium, the
greater will be the effect on an investor's yield to maturity. As a result, the
effect on an investor's yield of principal payments occurring at a rate higher
(or lower) than the rate anticipated by the investor during any particular
period may not be fully offset by a subsequent like reduction (or increase) in
the rate of principal payments. Investors in the Class X Certificates should
fully consider the risk that an extremely rapid rate of principal payments on
the Mortgage Loans could result in the failure of such investors to fully recoup
their initial investments. Because the rate of principal payments on or in
respect of the Mortgage Loans will depend on future events and a variety of
factors (as described more fully below), no assurance can be given as to such
rate or the rate of principal prepayments in particular. The Depositor is not
aware of any relevant publicly available or authoritative statistics with
respect to the historical prepayment experience of a large group of mortgage
loans comparable to the Mortgage Loans.
Losses and Shortfalls. The yield to holders of the Offered Certificates
will also depend on the extent to which such holders are required to bear the
effects of any losses or shortfalls on the Mortgage Loans. As and to the extent
described herein, Realized Losses and Additional Trust Fund Expenses will be
allocated to the respective Classes of Sequential Pay Certificates (which
allocation will, in general, reduce the amount of interest distributable thereto
in the case of Additional Trust Fund Expenses and reduce the Certificate Balance
thereof in the case of Realized Losses) in the following order: first, to each
Class of Sequential Pay Certificates (other than the Class A Certificates), in
reverse alphabetical order of Class designation, until the Certificate Balance
thereof has been reduced to zero; then, to the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-1C and Class A-2C Certificates, pro rata in accordance with
their respective remaining Certificate Balances, until the remaining Certificate
Balance of each such Class of Certificates has been reduced to zero. Any such
reduction in the Certificate Balance of a Class of Sequential Pay Certificates
will cause a corresponding reduction of the Notional Amount of the Class X
Certificates.
The Net Aggregate Prepayment Interest Shortfall, if any, for each
Distribution Date will be allocated to the respective Classes of REMIC Regular
Certificates (in each case, to reduce the amount of interest otherwise payable
thereon on such Distribution Date) as follows: first, to the respective Classes
of REMIC Regular Certificates (other than the Senior Certificates) sequentially
in reverse alphabetical order of Class designation, in each case up to an amount
equal to the lesser of any remaining unallocated portion of such Net
S-88
<PAGE> 91
Aggregate Prepayment Interest Shortfall and any Accrued Certificate Interest in
respect of such Class of Certificates for such Distribution Date; and,
thereafter, if and to the extent that any portion of such Net Aggregate
Prepayment Interest Shortfall remains unallocated, among the respective Classes
of Senior Certificates, up to, and pro rata in accordance with, the respective
amounts of Accrued Certificate Interest for each such Class of Senior
Certificates for such Distribution Date.
Certain Relevant Factors. The rate and timing of principal payments and
defaults and the severity of losses on or in respect of the Mortgage Loans may
be affected by a number of factors, including, without limitation, prevailing
interest rates, the terms of the Mortgage Loans (for example, Prepayment
Premiums, Lock-out Periods and amortization terms that require Balloon
Payments), the demographics and relative economic vitality of the areas in which
the Mortgaged Properties are located and the general supply and demand for
retail shopping space, rental apartments, hotel rooms, industrial space, health
care facility beds, senior living units or office space, as the case may be, in
such areas, the quality of management of the Mortgaged Properties, the servicing
of the Mortgage Loans, possible changes in tax laws and other opportunities for
investment. See "Risk Factors -- Risks Related to the Mortgage Loans",
"Description of the Mortgage Pool" and "Servicing of the Mortgage Loans" herein
and "The Pooling and Servicing Agreements" and "Yield and Maturity
Considerations -- Yield and Prepayment Considerations" in the accompanying
prospectus.
The rate of prepayment on the Mortgage Loans is likely to be affected by
prevailing market interest rates for mortgage loans of a comparable type, term
and risk level. When the prevailing market interest rate is below the Mortgage
Rate at which a Mortgage Loan accrues interest, a borrower may have an increased
incentive to refinance such Mortgage Loan. Conversely, to the extent prevailing
market interest rates exceed the applicable Mortgage Rate for any Mortgage Loan,
such Mortgage Loan may be less likely to prepay out of certain net cash flow
from the related Mortgaged Property.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions generally, some borrowers may sell
Mortgaged Properties in order to realize their equity therein, to meet cash flow
needs or to make other investments. In addition, some borrowers may be motivated
by federal and state tax laws (which are subject to change) to sell Mortgaged
Properties prior to the exhaustion of tax depreciation benefits.
If a Mortgage Loan is not in a Lock-out Period, any Prepayment Premium in
respect of such Mortgage Loan may not be sufficient economic disincentive to
prevent the related borrower from voluntarily prepaying the loan as part of a
refinancing thereof or a sale of the related Mortgaged Property. See
"Description of the Mortgage Pool -- Certain Terms and Conditions of the
Mortgage Loans" in this prospectus supplement.
The Depositor makes no representation or warranty as to the particular
factors that will affect the rate and timing of prepayments and defaults on the
Mortgage Loans, as to the relative importance of such factors, as to the
percentage of the principal balance of the Mortgage Loans that will be prepaid
or as to which a default will have occurred as of any date or as to the overall
rate of prepayment or default on the Mortgage Loans.
WEIGHTED AVERAGE LIVES
The weighted average life of any Offered Certificate (other than a Class X
Certificate) refers to the average amount of time that will elapse from the date
of its issuance until each dollar to be applied in reduction of the principal
balance of such Certificate is distributed to the investor. For purposes of this
prospectus supplement, the weighted average life of any such Offered Certificate
is determined by (i) multiplying the amount of each principal distribution
thereon by the number of years from the assumed Settlement Date (as defined
below) to the related Distribution Date, (ii) summing the results and (iii)
dividing the sum by the aggregate amount of the reductions in the principal
balance of such Certificate. Accordingly, the weighted average life of any such
Offered Certificate will be influenced by, among other things, the rate at which
principal of the Mortgage Loans is paid or otherwise collected or advanced and
the extent to which such payments, collections and/or advances of principal are
in turn applied in reduction of the Certificate Balance of the Class of
Certificates to which such Offered Certificate belongs. As described herein,
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<PAGE> 92
the Principal Distribution Amount for each Distribution Date will be
distributable entirely in respect of the Class A Certificates until the
Certificate Balances thereof are reduced to zero, and will thereafter be
distributable entirely in respect of the other Classes of Sequential Pay
Certificates, sequentially in alphabetical order of Class designation, in each
such case until the related Certificate Balance is reduced to zero. As a
consequence of the foregoing, the weighted average lives of the Class A
Certificates may be shorter, and the weighted average lives of the other Classes
of Sequential Pay Certificates may be longer, than would otherwise be the case
if the Principal Distribution Amount for each Distribution Date was being
distributed on a pro rata basis among the respective Classes of Sequential Pay
Certificates.
Prepayments on mortgage loans may be measured by a prepayment standard or
model. The model used in this prospectus supplement is the CPR model (as
described in the accompanying prospectus). The columns headed "Scenario 1,"
"Scenario 2," "Scenario 3," "Scenario 4," "Scenario 5" and "Scenario 6" in the
following tables assume that no prepayments are made on any Mortgage Loan during
such Mortgage Loan's Lock-out Period, if any, and, in the case of the Conduit
Mortgage Loans only, during such Mortgage Loan's yield maintenance period, if
any, and are otherwise made on each of the Mortgage Loans at the following CPRs:
<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Portfolio Mortgage Loans............ 0.00% 3.00% 4.50% 6.00% 7.50% 9.00%
Conduit Mortgage Loans.............. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
</TABLE>
There is no assurance, however, that prepayments of the Mortgage Loans (whether
or not in a Lock-out Period or a yield maintenance period) will conform to any
particular CPR, and no representation is made that the Mortgage Loans will
prepay in accordance with the assumptions at any of the CPRs shown or at any
other particular prepayment rate, that all the Mortgage Loans will prepay in
accordance with the assumptions at the same rate or that Mortgage Loans that are
in a Lock-out Period or a yield maintenance period will not prepay as a result
of involuntary liquidations upon default or otherwise. A "yield maintenance
period" is any period during which a Mortgage Loan provides that voluntary
prepayments be accompanied by a Prepayment Premium calculated on the basis of a
yield maintenance formula.
The following tables indicate the percentages of the initial Certificate
Balances of the Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C, Class
B, Class C and Class D Certificates that would be outstanding after each of the
dates shown at various CPRs, and the corresponding weighted average lives of
such Classes of Certificates, under the following assumptions (the "Maturity
Assumptions"): (i) the Mortgage Loans have the characteristics set forth on
Annex A but with balances adjusted to reflect their projected balances as of the
Cut-off Date, (ii) the Pass-Through Rate and the initial Certificate Balance or
Notional Amount, as the case may be, of each Class of Offered Certificates are
as described herein, (iii) the scheduled Monthly Payments for each Mortgage Loan
that accrues interest on the basis of a 360-day year consisting of twelve 30-day
months (a "30/360 Basis"), are based on such Mortgage Loan's Cut-off Date
Balance, calculated remaining amortization term as of the Cut-off Date and
Mortgage Rate as of the Cut-off Date, and the scheduled Monthly Payments for
each Mortgage Loan that accrues interest on the basis of actual number of days
elapsed during the month of accrual in a 360-day year are the actual contractual
Monthly Payments, (iv) there are no delinquencies or losses in respect of the
Mortgage Loans, there are no modifications, extensions, waivers or amendments
affecting the payment by borrowers of principal or interest on the Mortgage
Loans, there are no Appraisal Reduction Amounts with respect to the Mortgage
Loans and there are no casualties or condemnations affecting the Mortgaged
Properties, (v) scheduled Monthly Payments on the Mortgage Loans are timely
received on the first day of each month, commencing in December 1999, (vi) no
voluntary or involuntary prepayments are received as to any Mortgage Loan during
such Mortgage Loan's Lock-out Period ("LOP"), if any, or, in the case of the
Conduit Mortgage Loans, yield maintenance period ("YMP"), if any, otherwise,
prepayments are made on each of the Mortgage Loans at the indicated CPRs set
forth in the tables (without regard to any limitations in such Mortgage Loans on
partial voluntary principal prepayments), (vii) neither the Master Servicer nor
any majority holder(s) of the Controlling Class exercises its or exercise their
right of optional termination described herein, (viii) no Mortgage Loan is
required to be repurchased by the Mortgage Loan Seller, (ix) no Prepayment
Interest
S-90
<PAGE> 93
Shortfalls are incurred and all Prepayment Premiums are collected, (x) there are
no Additional Trust Fund Expenses, (xi) distributions on the Offered
Certificates are made on the 20th day of each month, commencing in December
1999, and (xii) the Offered Certificates are settled on November 30, 1999 (the
"Settlement Date"). To the extent that the Mortgage Loans have characteristics
that differ from those assumed in preparing the tables set forth below, Class
A-2, Class A-3, Class A-4, Class A-1C, Class A-2C, Class B, Class C and Class D
Certificates may mature earlier or later than indicated by the tables. It is
highly 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. 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 Balances (and
weighted average lives) shown in the following tables. Such variations may occur
even if the average prepayment experience of the Mortgage Loans were to conform
to the assumptions and be equal to any of the specified CPRs. Investors are
urged to conduct their own analyses of the rates at which the Mortgage Loans may
be expected to prepay.
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-2 CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
Weighted Average Life (years).......
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-3 CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
Weighted Average Life (years).......
</TABLE>
S-91
<PAGE> 94
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-4 CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
Weighted Average Life (years).......
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-1C CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
Weighted Average Life (years).......
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS A-2C CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
Weighted Average Life (years).......
</TABLE>
S-92
<PAGE> 95
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS B CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
November 20, 2009...................
Weighted Average Life (years).......
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF THE
CLASS C CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
November 20, 2009...................
Weighted Average Life (years).......
</TABLE>
PERCENTAGES OF THE INITIAL CERTIFICATE BALANCE OF
THE CLASS D CERTIFICATES UNDER THE SPECIFIED SCENARIOS
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
CPR PREPAYMENT SCENARIO
---------------------------------------------------------------------------
DATE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5 SCENARIO 6
---- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Delivery Date....................... 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
November 20, 2000...................
November 20, 2001...................
November 20, 2002...................
November 20, 2003...................
November 20, 2004...................
November 20, 2005...................
November 20, 2006...................
November 20, 2007...................
November 20, 2008...................
November 20, 2009...................
Weighted Average Life (years).......
</TABLE>
S-93
<PAGE> 96
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, 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 amortization, 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 corporate bond equivalent ("CBE") basis on the Class X Certificates for the
CPRs specified for each Scenario below based on the Maturity Assumptions, except
that with respect to the collection of Prepayment Premiums it was assumed, as
specifically indicated in a particular table, that 0% or 100% of any Prepayment
Premium is collected in connection with each prepayment as to which such a
Prepayment Premium is applicable. It was further assumed that the purchase price
of the Class X Certificates is as specified below, expressed as a percentage of
the initial Notional Amount of such Certificates, without accrued interest.
<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Portfolio Mortgage Loans
During YMP.............................. 6.00% 6.00% 6.00% 6.00% 6.00%
During Fixed Penalty/Open Period........ 0.00% 25.00% 50.00% 75.00% 100.00%
Conduit Mortgage Loans
During YMP.............................. 0.00% 0.00% 0.00% 0.00% 0.00%
During Fixed Penalty/Open Period........ 0.00% 25.00% 50.00% 75.00% 100.00%
</TABLE>
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.
PRE-TAX YIELD TO MATURITY (CBE)
OF THE CLASS X CERTIFICATES (0% COLLECTION OF PREPAYMENT PREMIUMS)
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
ASSUMED CPR PREPAYMENT SCENARIO
PURCHASE ------------------------------------------------------------------------------------------
PRICE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5
-------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
% % % % % %
</TABLE>
PRE-TAX YIELD TO MATURITY (CBE)
OF THE CLASS X CERTIFICATES (100% COLLECTION OF PREPAYMENT PREMIUMS)
(PREPAYMENTS LOCKED OUT THROUGH LOP ON ALL MORTGAGE LOANS AND YMP ON CONDUIT
MORTGAGE LOANS)
<TABLE>
<CAPTION>
ASSUMED CPR PREPAYMENT SCENARIO
PURCHASE ------------------------------------------------------------------------------------------
PRICE SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4 SCENARIO 5
-------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
% % % % % %
</TABLE>
S-94
<PAGE> 97
USE OF PROCEEDS
Substantially all of the proceeds from the sale of the Offered Certificates
will be used by the Depositor to fund the Trust and enable the Trust's purchase
of the Mortgage Loans from the Mortgage Loan Seller as described under
"Description of the Certificates -- General" in this prospectus supplement, and
to pay certain expenses in connection with the issuance of the Certificates.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
For federal income tax purposes, five separate "real estate mortgage
investment conduit" ("REMIC") elections will be made with respect to designated
portions of the Trust Fund, the resulting REMICs being herein referred to as
"REMIC I", "REMIC II", "REMIC III", "REMIC IIIU" and "REMIC IV", respectively.
The assets of REMIC I include the Mortgage Loans, any REO Properties acquired on
behalf of the Certificateholders and amounts with respect thereto contained in
the Certificate Account, the Interest Reserve Account and the REO Accounts (each
as defined in the accompanying prospectus). The assets of REMIC II, REMIC III,
REMIC IIIU and REMIC IV consist of certain uncertificated "regular interests" in
the numerically preceding REMIC and amounts in the Certificate Account with
respect thereto. The assets of REMIC III will consist of interests relating to
the Class A-1 Certificates and the initial interests in the Class X Certificates
issued on the Trust Formation Date. For federal income tax purposes, (i) the
Offered Certificates evidence the "regular interests" in, and generally will be
treated as debt obligations of, REMIC IV, and (ii) the REMIC Residual
Certificates represent the sole class of "residual interests" in the related
REMICs. Upon issuance of the Offered Certificates, Cadwalader, Wickersham &
Taft, special tax counsel to the Depositor, will deliver its opinion generally
to the effect that, assuming compliance with all provisions of the Pooling
Agreement, for federal income tax purposes, each of REMIC I, REMIC II and REMIC
III will continue to qualify as a REMIC and REMIC IIIU and REMIC IV will qualify
as REMICs under the Code. See "Certain Federal Income Tax
Consequences -- REMICs" in the accompanying prospectus.
DISCOUNT AND PREMIUM; PREPAYMENT PREMIUMS
The Offered Certificates generally will be treated as newly originated debt
instruments originated on the related Startup Day for federal income tax
purposes. The Startup Day of REMIC I, REMIC II and REMIC III is the Trust
Formation Date. The Startup Day of REMIC IIIU and REMIC IV is the Delivery Date.
Beneficial owners of the Offered Certificates will be required to report income
on such regular interests in accordance with the accrual method of accounting.
One or more of the Classes of Offered Certificates may be issued with original
issue discount for federal income tax purposes. See "Certain Federal Income Tax
Consequences -- REMICs -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount" and "-- Premium" in the accompanying
prospectus.
Although unclear for federal income tax purposes, it is anticipated that
the Class X Certificates will be considered to be issued with original issue
discount in an amount equal to the excess of all distributions of interest
expected to be received thereon (assuming the Weighted Average Net Mortgage Rate
changes in accordance with the Prepayment Assumption (as described below)), over
their respective issue prices (including accrued interest, if any). Any
"negative" amounts of original issue discount on the Class X Certificates
attributable to rapid prepayments 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 OID Regulations, as amended on June 12,
1996, may be promulgated with respect to the Certificates. See "Certain Federal
Income Tax Consequences -- REMICs -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount" in the accompanying prospectus. 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
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either increased or decreased accordingly. Any reduction in the income accrual
for a period below zero (a "Negative Adjustment") would be treated by a
Certificateholder as ordinary loss to the extent of prior income accruals and
may 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 Code provisions indicates,
however, that negative amount 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.
For purposes of accruing original issue discount, determining whether such
original issue discount is de minimis and amortizing any premium on the Offered
Certificates the Prepayment Assumption will be 0% CPR as to the Conduit Mortgage
Loans and 6% CPR as to the Portfolio Mortgage Loans. See "Yield and Maturity
Considerations -- Weighted Average Lives" herein. No representation is made as
to the rate, if any, at which the Mortgage Loans will prepay.
Although not free from doubt, it is anticipated that any prepayment
premiums will be treated as ordinary income to the extent allocable to
beneficial owners of the Offered Certificates as such amounts become
distributable to such beneficial owners.
CHARACTERIZATION OF INVESTMENTS IN OFFERED CERTIFICATES
Generally, except to the extent noted below, the Offered Certificates will
be "real estate assets" within the meaning of Section 856(c)(4)(A) of the Code
in the same proportion that the assets of the Trust would be so treated. In
addition, interest (including original issue discount, if any) on the Offered
Certificates will be interest described in Section 856(c)(3)(B) of the Code to
the extent that such Certificates are treated as "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code. If 95% or more of the Mortgage
Loans are treated as assets described in Section 856(c)(4)(A) of the Code, the
Offered Certificates will be treated as such assets in their entirety. The
Offered Certificates will generally only be considered assets described in
Section 7701(a)(19)(C) of the Code to the extent that the Mortgage Loans are
secured by residential property, including residences for persons under health
care. As of the Cut-off Date, 32.1%, 5.3% and 3.2% of the Initial Pool Balance
were Mortgage Loans secured by multifamily properties, health care properties
and mobile home community properties, respectively. Accordingly, an investment
in the Offered Certificates may not be suitable for some thrift institutions.
The Offered Certificates will be treated as "qualified mortgages" for another
REMIC under Section 860G(a)(3)(C) of the Code and as "permitted assets" for a
financial asset securitization investment trust under Section 860L(c) of the
Code. See "Description of the Mortgage Pool" in this prospectus supplement and
"Certain Federal Income Tax Consequences -- REMICs -- Characterization of
Investments in REMIC Certificates" in the accompanying prospectus.
POSSIBLE TAXES ON INCOME FROM FORECLOSURE PROPERTY AND OTHER TAXES
In general, the Special Servicer will be obligated to operate and manage
any Mortgaged Property acquired as REO Property in a manner that would, to the
extent commercially feasible, maximize the Trust's net after-tax proceeds from
such property. After the Special Servicer reviews the operation of such property
and consults with the REMIC Administrator to determine the Trust's federal
income tax reporting position with respect to income it is anticipated that the
Trust would derive from such property, the Special Servicer could determine that
it would not be commercially feasible to manage and operate such property in a
manner that would avoid the imposition of a tax on "net income from foreclosure
property" (generally, income not derived from renting or selling real property)
within the meaning of the REMIC Provisions (an "REO Tax"). To the extent that
income the Trust receives from an REO Property is subject to a tax on "net
income from foreclosure property," such income would be subject to federal tax
at the highest marginal corporate tax rate (currently 35%). The determination as
to whether income from an REO Property would be subject to an REO Tax will
depend on the specific facts and circumstances relating to the management and
operation of each REO Property. These considerations will be of particular
relevance with respect to any health care facilities or hotels that become REO
Property. Any REO Tax imposed on the Trust's income from an REO
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Property would reduce the amount available for distribution to
Certificateholders. Certificateholders are advised to consult their own tax
advisors regarding the possible imposition of REO Taxes in connection with the
operation of commercial REO Properties by REMICs.
REPORTING AND OTHER ADMINISTRATIVE MATTERS
Reporting of interest income, including any original issue discount, if
any, with respect to REMIC Regular Certificates is required annually, and may be
required more frequently under Treasury regulations. These information reports
generally are required to be sent to individual holders of REMIC Regular
Certificates and the IRS; holders of REMIC Regular Certificates that are
corporations, trusts, securities dealers and certain other non-individuals will
be provided interest and original issue discount income information and the
information set forth in the following paragraph upon request in accordance with
the requirements of the applicable regulations. The information must be provided
by the later of 30 days after the end of the quarter for which the information
was requested, or two weeks after the receipt of the request. The REMIC must
also comply with rules requiring a REMIC Regular Certificate issued with
original issue discount to disclose on its face the amount of original issue
discount and the issue date, and requiring such information to be reported to
the IRS. Reporting with respect to the REMIC Residual Certificates, including
income, excess inclusions, investment expenses and relevant information
regarding qualification of the REMIC's assets will be made as required under the
Treasury regulations, generally on a quarterly basis.
As applicable, the REMIC Regular Certificate information reports will
include a statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will include
information required by regulations with respect to computing the accrual of any
market discount. Because exact computation of the accrual of market discount on
a constant yield method would require information relating to the holder's
purchase price that the REMIC Administrator may not have, such regulations only
require that information pertaining to the appropriate proportionate method of
accruing market discount be provided.
For further information regarding the federal income tax consequences of
investing in the Offered Certificates, see "Certain Federal Income Tax
Consequences -- REMICs" in the accompanying prospectus.
CERTAIN 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, including insurance company general
accounts, that is subject to Title I of 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 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 or
whether there exists any statutory or administrative exemption applicable
thereto. Certain fiduciary and prohibited transaction issues arise only if the
assets of the Trust constitute "plan assets" for purposes of Part 4 of Title I
of ERISA and Section 4975 of the Code ("Plan Assets"). Whether the assets of the
Trust will constitute Plan Assets at any time will depend on a number of
factors, including the portion of any Class of Certificates that are held by
"benefit plan investors" (as defined in U.S. Department of Labor Regulation
Section 2510.3-101).
The U.S. Department of Labor issued to NationsBank Corporation (predecessor
in interest to Bank of America Corporation) an individual prohibited transaction
exemption, Prohibited Transaction Exemption ("PTE") 93-31 (the "Exemption"),
which generally exempts from the application of the prohibited transaction
provisions of Sections 406(a) and (b) and 407(a) of ERISA, and the excise taxes
imposed on such prohibited transactions pursuant to Sections 4975(a) and (b) of
the Code, certain transactions, among others, relating to the servicing and
operation of mortgage pools, such as the Mortgage Pool, and the purchase, sale
and holding of mortgage pass-through certificates, such as the Senior
Certificates, underwritten by an Exemption-Favored Party (as hereinafter
defined), provided that certain conditions set forth in the Exemption are
satisfied. "Exemption-Favored Party" shall include (a) Bank of America
Corporation, (b) any person
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directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with Bank of America Corporation (such as
Banc of America Securities LLC), and (c) any member of the underwriting
syndicate or selling group of which a person described in (a) or (b) is a
manager or co-manager with respect to the Class A-2, Class A-3, Class A-4, Class
A-1C, Class A-2C and Class X Certificates (collectively, the "Senior Offered
Certificates").
The Exemption sets forth six general conditions which must be satisfied for
a transaction involving the purchase, sale and holding of a Senior Offered
Certificate to be eligible for exemptive relief thereunder. First, the
acquisition of such Senior Offered Certificate by a Plan must be on terms 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 Senior Offered Certificate must not be subordinated to the rights and
interests evidenced by the other Certificates. Third, such Senior Offered
Certificate at the time of acquisition by the Plan must be rated in one of the
three highest generic rating categories by Moody's Investors Service, Inc.
("Moody's"), Fitch, S&P or DCR. Fourth, the Trustee cannot be an affiliate of
any other member of the "Restricted Group", which (in addition to the Trustee)
consists of any Exemption-Favored Party, the Depositor, the Master Servicer, the
Special Servicer, any sub-servicer, the Mortgage Loan Seller, any borrower with
respect to Mortgage Loans constituting more than 5% of the aggregate unamortized
principal balance of the Mortgage Pool as of the date of initial issuance of the
Certificates and any affiliate of any of the aforementioned persons. Fifth, the
sum of all payments made to and retained by the Exemption-Favored Parties must
represent not more than reasonable compensation for underwriting the Senior
Offered Certificates; the sum of all payments made to and retained by the
Depositor pursuant to the assignment of the Mortgage Loans to the Trust 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, the Special
Servicer and any sub-servicer must represent not more than reasonable
compensation for such person's services under the Pooling Agreement and
reimbursement of such person's reasonable expenses in connection therewith.
Sixth, the investing Plan must be an accredited investor as defined in Rule
501(a)(1) of Regulation D of the Commission under the Securities Act.
Because the Senior Offered Certificates are not subordinated 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 their issuance that each
Class of Senior Offered Certificates be rated not lower than "AAA" by DCR, "AAA"
(or "AAAr" in the case of the Class X Certificates) by S&P, and "AAA" by Fitch.
As of the Delivery Date, the fourth general condition set forth above will be
satisfied with respect to the Senior Offered Certificates. A fiduciary of a Plan
contemplating purchasing a Senior Offered Certificate in the secondary market
must make its own determination that, at the time of such purchase, such
Certificate continues to satisfy the third and fourth general conditions set
forth above. A fiduciary of a Plan contemplating purchasing a Senior Offered
Certificate, whether in the initial issuance of such Certificate or in the
secondary market, must make its own determination that the first and fifth
general conditions set forth above will be satisfied with respect to such
Certificate as of the date of such purchase. A Plan's authorizing fiduciary will
be deemed to make a representation regarding satisfaction of the sixth general
condition set forth above in connection with the purchase of a Senior Offered
Certificate.
The Exemption also requires that the Trust meet the following requirements:
(i) the Trust Fund must consist solely of assets of the type that have been
included in other investment pools; (ii) certificates evidencing interests in
such other investment pools must have been rated in one of the three highest
categories of Fitch, Moody's, S&P or DCR for at least one year prior to the
Plan's acquisition of a Senior Offered Certificate; and (iii) certificates
evidencing interests in such other investment pools must have been purchased by
investors other than Plans for at least one year prior to any Plan's acquisition
of a Senior Offered Certificate. The Depositor has confirmed to its satisfaction
that such requirements have been satisfied as of the date hereof.
If the general conditions of the Exemption are satisfied, the Exemption may
provide an exemption from the restrictions imposed by Sections 406(a) and 407(a)
of ERISA, as well as the excise taxes imposed by Sections 4975(a) and (b) of the
Code by reason of Sections 4975(c)(1)(A) through (D) of the Code, in connection
with (i) the direct or indirect sale, exchange or transfer of Senior Offered
Certificates in the initial
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issuance of Senior Offered Certificates between the Depositor or an
Exemption-Favored Party and a Plan when the Depositor, an Exemption-Favored
Party, the Trustee, the Master Servicer, the Special Servicer, a sub-servicer,
the Mortgage Loan Seller or a borrower is a party in interest (within the
meaning of Section 3(14) of ERISA) or a disqualified person (within the meaning
of Section 4975(e)(2) of the Code) (a "Party in Interest") with respect to the
investing Plan, (ii) the direct or indirect acquisition or disposition in the
secondary market of Senior Offered Certificates by a Plan and (iii) the
continued holding of Senior Offered Certificates by a Plan. However, no
exemption is provided from the restrictions of Sections 406(a)(1)(E), 406(a)(2)
and 407 of ERISA for the acquisition or holding of a Senior Offered Certificate
on behalf of an Excluded Plan (as defined in the next sentence) by any person
who has discretionary authority or renders investment advice with respect to the
assets of such Excluded Plan. For purposes hereof, an "Excluded Plan" is a Plan
sponsored by any member of the Restricted Group.
Moreover, if the general conditions of the Exemption, as well as certain
other specific conditions set forth in the Exemption, are satisfied, the
Exemption may also provide an exemption from the restrictions imposed by
Sections 406(b)(1) and (b)(2) of ERISA, and the excise taxes imposed by Sections
4975(a) and (b) of the Code by reason of Section 4975(c)(1)(E) of the Code, in
connection with (1) the direct or indirect sale, exchange or transfer of Senior
Offered Certificates in the initial issuance of Senior Offered Certificates
between the Depositor or an Exemption-Favored Party and a Plan when the person
who has discretionary authority or renders investment advice with respect to the
investment of Plan assets in such Certificates is (a) a borrower with respect to
5% or less of the fair market value of the Mortgage Pool or (b) an affiliate of
such a person, (2) the direct or indirect acquisition or disposition in the
secondary market of Senior Offered Certificates by a Plan and (3) the continued
holding of Senior Offered Certificates by a Plan.
Further, if the general conditions of the Exemption, as well as certain
other conditions set forth in the Exemption, are satisfied, the Exemption may
provide an exemption from the restrictions imposed by Sections 406(a), 406(b)
and 407(a) of ERISA, and the excise taxes imposed by Sections 4975(a) and (b) of
the Code by reason of Section 4975(c) of the Code, for transactions in
connection with the servicing, management and operation of the Mortgage Pool.
Lastly, if the general conditions of the Exemption are satisfied, the
Exemption also may provide an exemption from the restrictions imposed by
Sections 406(a) and 407(a) of ERISA, and the excise taxes imposed by Sections
4975(a) and (b) of the Code by reason of Sections 4975(c)(1) (A) through (D) of
the Code, if such restrictions are deemed to otherwise apply merely because a
person is deemed to be a Party in Interest with respect to an investing Plan by
virtue of providing services to the Plan (or by virtue of having certain
specified relationships to such a person) solely as a result of the Plan's
ownership of Senior Certificates.
Before purchasing a Senior Offered Certificate, a fiduciary of a Plan
should itself confirm that (i) the Senior Offered Certificates constitute
"certificates" for purposes of the Exemption and (ii) the specific and general
conditions and the other requirements set forth in the Exemption would be
satisfied. In addition to making its own determination as to the availability of
the exemptive relief provided in the Exemption, the Plan fiduciary should
consider the availability of any other prohibited transaction class exemptions.
See "Certain ERISA Considerations" in the accompanying prospectus. There can be
no assurance that any such class exemptions will apply with respect to any
particular Plan investment in the Senior Offered Certificates or, even if it
were deemed to apply, that any exemption would apply to all transactions that
may occur in connection with such investment.
The characteristics of the Class B, Class C and Class D Certificates do not
meet the requirements of the Exemption. Accordingly, the Certificates of those
Classes may not be acquired by a Plan, other than an insurance company general
account, which may be able to rely on Sections I and III of PTCE 95-60 or
Section 401(c) of ERISA, as discussed in "Certain ERISA Considerations --
Insurance Company General Accounts" in the accompanying prospectus.
A governmental plan as defined in Section 3(32) of ERISA is not subject to
Title I of ERISA or Section 4975 of the Code. However, such a governmental plan
may be subject to a federal, state or local law which is, to a material extent,
similar to the foregoing provisions of ERISA or the Code ("Similar Law"). A
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fiduciary of a governmental plan should make its own determination as to the
need for and the availability of any exemptive relief under Similar Law.
Any Plan fiduciary considering whether to purchase an Offered 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.
The sale of Offered Certificates to a Plan is in no respect a
representation by the Depositor or the Placement Agent that this investment
meets all relevant legal requirements with respect to investments by Plans
generally or by any particular Plan, or that this investment is appropriate for
Plans generally or for any particular Plan.
LEGAL INVESTMENT
The Class A-2, Class A-3, Class A-4, Class A-1C, Class A-2C, Class X and
the Class B Certificates will constitute "mortgage related securities" for
purposes of SMMEA, so long as they are rated in one of the two highest rating
categories by one or more Rating Agencies. None of the other Offered
Certificates will constitute "mortgage related securities" within the meaning of
SMMEA. The appropriate characterization of the Offered Certificates under
various legal investment restrictions, and thus the ability of investors subject
to these restrictions to purchase the Offered Certificates, is subject to
significant interpretive uncertainties. Except as to the status of certain
Classes of Offered Certificates as "mortgage related securities," no
representation is made as to the proper characterization of any class of 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 or other restrictions. 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 legal investments for
them or are subject to investment, capital or other restrictions. See "Legal
Investment" in the accompanying prospectus.
METHOD OF DISTRIBUTION
Subject to the terms and conditions set forth in the Underwriting Agreement
between the Depositor and Banc of America Securities LLC (the "Underwriter")
(the "Underwriting Agreement"), the Offered Certificates will be purchased from
the Depositor by the Underwriter upon issuance. The Underwriter is an affiliate
of the Depositor. Proceeds to the Depositor from the sale of the Offered
Certificates, before deducting expenses payable by the Depositor, will be an
amount equal to approximately [ ]% of the initial aggregate Certificate
Balance of the Offered Certificates, plus accrued interest on all the Offered
Certificates, before deducting expenses payable by the Depositor.
The Underwriter has agreed in the Underwriting Agreement to purchase the
aggregate principal balance or notional amount, as the case may be, of each
Class of Offered Certificates.
Distribution of the Offered Certificates will be made by the Underwriter
from time to time in negotiated transactions or otherwise at varying prices to
be determined at the time of sale. The Underwriter may effect such transactions
by selling the Offered Certificates to or through dealers, and such dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Underwriter. In connection with the purchase and sale of
the Offered Certificates, the Underwriter may be deemed to have received
compensation from the Depositor in the form of underwriting discounts. The
Underwriter and any dealers that participate with the Underwriter in the
distribution of the Offered Certificates may be deemed to be underwriters and
any profit on the resale of the Offered Certificates positioned by them may be
deemed to be underwriting discounts and commissions under the Securities Act.
Purchasers of the Offered 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
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with reoffers and sales by them of Offered Certificates. Certificateholders
should consult with their legal advisors in this regard prior to any such
reoffer or sale.
The Depositor also has been advised by the Underwriter that the Underwriter
presently intends to make a market in the Offered Certificates; however, the
Underwriter has no obligation to do so, any market making may be discontinued at
any time and there can be no assurance that an active public market for the
Offered Certificates will develop. See "Risk Factors -- Risks Related to the
Certificates -- Limited Liquidity and Market Value" in this prospectus
supplement and "Risk Factors -- Limited Liquidity of Certificates" in the
accompanying prospectus.
The Depositor has agreed to indemnify the Underwriter and each person, if
any, who controls the Underwriter within the meaning of Section 15 of the
Securities Act against, or make contributions to the Underwriter and the such
controlling person with respect to, certain liabilities, including certain
liabilities under the Securities Act. The Mortgage Loan Seller has agreed to
indemnify the Depositor, its officers and directors, the Underwriter, and each
person, if any, who controls the Depositor or the Underwriter within the meaning
of Section 15 of the Securities Act, with respect to certain liabilities,
including certain liabilities under the Securities Act, relating to certain of
the Mortgage Loans.
LEGAL MATTERS
Certain legal matters will be passed upon for the Depositor and the
Underwriter by Cadwalader, Wickersham & Taft, New York, New York.
RATINGS
It is a condition to their issuance that the Offered Certificates receive
the credit ratings indicated below from Duff & Phelps Credit Rating Co. ("DCR"),
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("S&P") and/or Fitch IBCA, Inc. ("Fitch; and, together with S&P and DCR,
the "Rating Agencies"):
<TABLE>
<CAPTION>
CLASS DCR S&P FITCH
- ----- ---- ---- -----
<S> <C> <C> <C>
Class A-2................................................ AAA AAA AAA
Class A-3................................................ AAA AAA AAA
Class A-4................................................ AAA AAA AAA
Class A-1C............................................... AAA AAA AAA
Class A-2C............................................... AAA AAA AAA
Class X.................................................. AAA AAAr AAA
Class B.................................................. AA AA AA
Class C.................................................. A A A
Class D.................................................. BBB BBB BBB
</TABLE>
S&P assigns the additional symbol 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; however, the absence of an "r" symbol should
not be taken as an indication that a Class will exhibit no volatility or
variability in total return.
The ratings of the Offered Certificates address the likelihood of the
timely receipt by holders thereof of all payments of interest to which they are
entitled on each Distribution Date and, except in the case of the Class X
Certificates, the ultimate receipt by holders thereof of all payments of
principal to which they are entitled by the Distribution Date in May 20, 2031
(the "Rated Final Distribution Date"). The 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 from the
Mortgage Pool is adequate to make payments of principal and/or interest, as
applicable, required under the Offered Certificates. The ratings of the Offered
Certificates do not, however, represent any assessments of (i) the likelihood or
frequency of voluntary
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or involuntary principal prepayments on the Mortgage Loans, (ii) the degree to
which such prepayments might differ from those originally anticipated or (iii)
whether and to what extent Prepayment Premiums will be collected on the Mortgage
Loans in connection with such prepayments or the corresponding effect on yield
to investors or (iv) whether and to what extent Default Interest will be
received or Net Aggregate Prepayment Interest Shortfalls will be realized. Also,
a security rating does not represent any assessment of the yield to maturity
that investors may experience or the possibility that the Class X
Certificateholders might not fully recover their investment in the event of
rapid prepayments and/or other liquidations of the Mortgage Loans (including
both voluntary and involuntary prepayments). In general, the ratings thus
address credit risk and not prepayment risk. As described herein, the amounts
payable with respect to the Class X Certificates consist only of interest (and,
to the extent described herein, may consist of a portion of the Prepayment
Premiums actually collected on the Mortgage Loans). If the entire pool were to
prepay in the initial month, with the result that the Class X Certificateholders
receive only a single month's interest and thus suffer a nearly complete loss of
their investment, all amounts "due" to such Certificateholders will nevertheless
have been paid, and such result is consistent with the ratings received on the
Class X Certificates. The Notional Amounts upon which interest is calculated
with respect to the Class X Certificates are subject to reduction in connection
with each reduction in the Certificate Balance of a Class of Sequential Pay
Certificates, whether as a result of principal payments or the allocation of
Realized Losses. The ratings on the Class X Certificates do not address the
timing or magnitude of reduction of such Notional Amounts, but only the
obligation to pay interest timely on such Notional Amounts as so reduced from
time to time. Accordingly, the ratings on the Class X Certificates should be
evaluated independently from similar ratings on other types of securities.
There is no assurance that any rating assigned to the Offered Certificates
by a Rating Agency will not be lowered, qualified (if applicable) or withdrawn
by such Rating Agency, if, in its judgment, circumstances so warrant. There can
be no assurance as to whether any rating agency not requested to rate the
Offered Certificates will nonetheless issue a rating to any Class thereof and,
if so, what such rating would be. In this regard, we note that S&P considered
the claims-paying ratings of the Environmental Insurer in assigning its ratings
to the Offered Certificates; accordingly, the downgrade, withdrawal or
qualification of the ratings applicable to the Environmental Insurer could have
a corresponding effect on the ratings assigned to one or more Classes of the
Offered Certificates. A rating assigned to any Class of Offered Certificates by
a rating agency that has not been requested by the Depositor to do so may be
lower than the ratings assigned thereto by DCR, S&P and/or Fitch.
The ratings on 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 revision or
withdrawal at any time by the assigning rating agency. See "Risk
Factors -- Limited Nature of Ratings" in the accompanying prospectus.
S-102
<PAGE> 105
INDEX OF PRINCIPAL DEFINITIONS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
30/360 Basis..................... S-36, S-90
30/360 Mortgage Loans............ S-36
Accrued Certificate Interest..... S-75
ACMs............................. S-45
Actual/360 Basis................. S-36
Actual/360 Mortgage Loans........ S-36
Additional Trust Fund Expenses... S-79
Administrative Fee Rate.......... S-70, A-1
Administrative Fees.............. S-86
Advances......................... S-15, S-63
Annual Debt Service.............. A-1
Appraisal Reduction Amount....... S-81
Appraisal Value.................. A-1
Asset Status Report.............. S-59
Assumed Monthly Payment.......... S-76
Available Distribution Amount.... S-12, S-72
Balloon.......................... A-1
Balloon Loan..................... S-37
Balloon Payment.................. S-37
Bank of America Regional
Headquarters................... S-40
Bank of America Regional
Headquarters Loan.............. S-40
Base Interest Fraction........... S-77
Beds............................. A-5
Cash Flow........................ A-1
CBE.............................. S-94
Certificate Balance.............. S-69
Certificate Owner................ S-69, S-84
Certificate Registrar............ S-69
Certificateholders............... S-11
Certificates..................... S-68
Class............................ S-68
Class A Certificates............. S-68
Class X Certificates............. S-68
Club Mira Lago Loan.............. S-41
Code............................. S-33
Collateral Substitution
Deposit........................ S-38
Collection Period................ S-71
Commercial Loan.................. S-35
Commercial Mortgaged Property.... S-35
Conduit Mortgage Loan Schedule... S-52
Conduit Mortgage Loans........... S-9, S-35
Controlling Class................ S-59
Controlling Class
Certificateholder.............. S-59
Corrected Mortgage Loan.......... S-58
Cross-Collateralized Mortgage
Loans.......................... S-35
CMSA............................. S-83
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Cut-off Date..................... S-35
Cut-off Date Balance............. S-9, S-35
Cut-off Date Loan-to-Value
Ratio.......................... A-2
Cut-off Date LTV................. A-2
Cut-off Date LTV Ratio........... A-2
DCR.............................. S-4, S-101
Default Interest................. S-62
Defeasance....................... A-2
Defeasance Lock-Out Period....... S-38
Defeasance Option................ S-38
Definitive Certificate........... S-69
Delinquent Loan Status Report.... S-83
Depositor........................ S-8
Delivery Date.................... S-68
Determination Date............... S-9, S-71
Directing Certificateholder...... S-59
Discount Rate.................... A-2
Distributable Certificate
Interest....................... S-75
Distribution Date................ S-71
Distribution Date Statement...... S-82
DTC.............................. S-15, S-69
Due Date......................... S-36
Emergency Advance................ S-63
Environmental Insurer............ S-57
Environmental Policy............. S-57
ERISA............................ S-97
Excluded Plan.................... S-99
Exemption-Favored Party.......... S-97
Exemption........................ S-97
Expenses......................... A-1
FIRREA........................... S-47
First Amended Pooling
Agreement...................... S-68
First Amendment Date............. S-68
Fitch............................ S-101
Free............................. A-2
Form 8-K......................... S-56
Fully Amortizing................. A-2
GAAP............................. A-2
Grtr............................. A-2
Historical Loan Modification
Report......................... S-83
Historical Loss Report........... S-83
Indian Hills Loan................ S-41
Initial Pool Balance............. S-9, S-35
Int. Rate Diff................... A-2
Interest Reserve Account......... S-79
Interested Person................ S-66
Leasable Square Footage.......... A-4
Liquidation Fee.................. S-62
</TABLE>
S-103
<PAGE> 106
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Liquidation Fee Rate............. S-62
Loan Group....................... S-9
Lock-out Period.................. S-37
LOP.............................. S-90
MAI.............................. S-47
Major Tenants.................... S-43
Master Servicer.................. S-8, S-60
Master Servicer Remittance
Date........................... S-79
Master Servicing Fee............. S-61
Master Servicing Fee Rate........ S-61
Maturity......................... A-4
Maturity Assumptions............. S-90
Maturity Date.................... A-4
Maturity Date Balance............ A-4
Maturity Date Loan-to-Value
Ratio.......................... A-2
Maturity Date LTV................ A-2
Merger........................... S-49
Mobile Home Properties........... S-27
Modified Mortgage Loan........... S-81
Money Market Rate................ A-4
Monthly Discount Rate............ A-3
Monthly Payments................. S-36
Moody's.......................... S-98
Mortgage......................... S-35
Mortgage Loan Seller............. S-8
Mortgage Loans................... S-9, S-35
Mortgage Note.................... S-35
Mortgage Pool.................... S-9
Mortgage Rate.................... S-36
Mortgaged Property............... S-35
Most Recent DSCR................. A-4
Most Recent End Date............. A-4
Most Recent Expenses............. A-4
Most Recent Cash Flow............ A-4
Most Recent Revenues............. A-4
Multifamily Loan................. S-35
Multifamily Mortgaged Property... S-35
NB Owner Trust................... S-51
Negative Adjustment.............. S-96
Net Aggregate Prepayment Interest
Shortfall...................... S-75
Net Mortgage Rate................ S-70
Net Rentable Area(SF)............ A-4
NRSF............................. S-42
Nonrecoverable Advances.......... S-80
Nonrecoverable P&I Advance....... S-80
Nonrecoverable Servicing
Advance........................ S-63
Non-Offered Certificates......... S-12, S-68
Non-Specially Serviced Mortgage
Loan........................... S-61
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Norwest Bank..................... S-86
Notional Amount.................. S-70
Occupancy Percent................ A-4
Occupancy %...................... A-4
Offered Certificates............. S-11, S-68
Olen Properties.................. S-43
Open Period...................... S-37
Operating Statement Analysis
Report......................... S-84
Operating Statement Analysis
Worksheets..................... S-84
Original Cut-off Date............ S-52
Original Pooling Agreement....... S-68
ORIX............................. S-60
Participants..................... S-69
Party in Interest................ S-99
Pass-Through Rate................ S-12
Permitted Encumbrances........... S-52, S-54
Permitted Investments............ S-61
P&I Advance...................... S-15, S-79
Plan............................. S-97
Plan Assets...................... S-97
Pooling Agreement................ S-68
Portfolio Mortgage Loan
Schedule....................... S-54
Portfolio Mortgage Loans......... S-9, S-35
Portfolio Senior Certificate
Principal Distribution
Amount......................... S-76
Pre-Merger Bank of America
Portfolio...................... A-31
Prepayment Interest Excess....... S-61
Prepayment Interest Shortfall.... S-61
Prepayment Premium............... S-37
Prepayment Premium Period........ S-37
Principal Distribution Amount.... S-76
PTE.............................. S-97
Purchase Price................... S-51
Rancho Palisades Apartments...... S-39
Rancho Palisades Apartments
Loan........................... S-39
Rancho Palisades Borrower........ S-39
Rated Final Distribution Date.... S-101
Rating Agencies.................. S-17, S-101
Realized Losses.................. S-78
Record Date...................... S-71
Reimbursement Rate............... S-80
Related Loans.................... A-4
Related Proceeds................. S-63
Release Date..................... S-38
REMIC............................ S-95
REMIC Administrator.............. S-86
REMIC I.......................... S-95
REMIC II......................... S-95
REMIC III........................ S-95
</TABLE>
S-104
<PAGE> 107
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
REMIC IIIU....................... S-95
REMIC IV......................... S-95
REMIC Regular Certificates....... S-68
REMIC Residual Certificates...... S-12, S-68
REO Extension.................... S-66
REO Income....................... S-76
REO Property..................... S-57
REO Status Report................ S-83
REO Tax.......................... S-96
Required Appraisal Date.......... S-81
Required Appraisal Loan.......... S-81
Restricted Group................. S-98
Revenues......................... A-1
Rite Aid......................... S-26
RMS.............................. S-48
Rooms............................ A-5
Senior Certificates.............. S-68
Senior Offered Certificates...... S-98
Sequential Pay Certificates...... S-12, S-68
Servicer Reports................. S-83
Servicing Advances............... S-15, S-63
Servicing Standard............... S-57
Servicing Transfer Event......... S-57
Settlement Date.................. S-91
Similar Law...................... S-99
SMMEA............................ S-16
S&P.............................. S-4, S-101
Special Servicer................. S-8, S-60
Special Servicer Loan Status
Report......................... S-83
Special Servicing Fee............ S-61
Special Servicing Fee Rate....... S-61
Specially Serviced Mortgage
Loan........................... S-57
Standby Fee...................... S-61
Stated Principal Balance......... S-71
Subordinate Certificates......... S-73
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Sub-Servicer..................... S-60
Sub-Servicing Agreement.......... S-60
Sub-Servicing Fee Rate........... A-1
Successor Servicer Retained
Fee............................ S-61
Trailing Cash Flow............... A-5
Trailing Date.................... A-4
Trailing DSCR.................... A-4
Trailing Expenses................ A-5
Trailing Revenues................ A-5
Trust............................ S-68
Trust Formation Date............. S-68
Trust Fund....................... S-68
Trustee Fee...................... S-86
Underwriter...................... S-49, S-100
Underwriting Agreement........... S-100
Underwriting Cash Flow........... A-5
Underwriting Debt Service
Coverage Ratio................. A-5
Underwriting DSCR................ A-5
Units............................ A-5
UPB.............................. A-5
UST.............................. S-45
U/W Cash Flow.................... A-5
U/W DSCR......................... A-5
U/W Expenses..................... A-5
U/W Reserves..................... A-6
U/W Reserves Per Unit............ A-6
U/W Revenues..................... A-5
Voting Rights.................... S-85
Weighted Average Net Mortgage
Rate........................... S-70
Withheld Amount.................. S-79
Workout Fee...................... S-61
Workout Fee Rate................. S-62
YM............................... A-6
YMP.............................. S-90
</TABLE>
S-105
<PAGE> 108
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
The schedule and tables appearing in this Annex A set forth certain
information with respect to the Mortgage Loans and Mortgaged Properties. Unless
otherwise indicated, such information is presented as of the Cut-off Date. The
statistics in such schedule and tables were derived, in many cases, from
information and operating statements furnished by or on behalf of the respective
borrowers. Such information and operating statements were generally unaudited
and have not been independently verified by the Depositor or the Underwriter, or
any of their respective affiliates or any other person.
For purposes of the prospectus supplement, including the schedule and
tables in this Annex A, the indicated terms shall have the following meanings:
1. "Administrative Fee Rate" means the sum of the Master Servicing Fee
Rate (including the per annum rates at which the monthly sub-servicing fee
is payable to the related Sub-Servicer (the "Sub-Servicing Fee Rate") and
the Standby Fee is payable to the Special Servicer), plus the per annum
rate applicable to the calculation of the Trustee Fee.
2. "Annual Debt Service" means, for any Mortgage Loan, twelve times
the amount of the Monthly Payment under such Mortgage Loan as of the
Cut-off Date.
3. "Appraisal Value" means, for any Mortgaged Property, the
appraiser's value as stated in the appraisal available to the Depositor as
of the date specified on the schedule.
4. "Balloon" means Balloon Loan.
5. "Cash Flow" means with respect to any Mortgaged Property, the total
cash flow available for annual debt service on the related Mortgage Loan,
generally calculated as the excess of Revenues over Expenses, capital
expenditures and tenant improvements and leasing commissions.
(i) "Revenues" generally consist of certain revenues received in
respect of a Mortgaged Property, including, for example, (A) for the
Multifamily Mortgaged Properties, rental and other revenues; (B) for the
Commercial Mortgaged Properties (other than the health care related and
hotel Mortgaged Properties), base rent (less mark-to-market adjustments
in some cases), percentage rent, expense reimbursements and other
revenues; (C) for the health care Mortgaged Properties, resident
charges, Medicaid and Medicare payments, and other revenues; (D) for the
hotel and Mortgaged Properties, guest room rates, food and beverage
charges, telephone charges and other revenues.
(ii) "Expenses" generally consist of all expenses incurred for a
Mortgaged Property, including for example, salaries and wages, the costs
or fees of utilities, repairs and maintenance, marketing, insurance,
management, landscaping, security (if provided at the Mortgaged
Property) and the amount of real estate taxes, general and
administrative expenses, ground lease payments, and other costs but
without any deductions for debt service, depreciation and amortization
or capital expenditures therefor. In the case of hotel Mortgaged
Properties, Expenses include, for example, expenses relating to guest
rooms (hotels only), food and beverage costs, telephone bills, and
rental and other expenses, and such operating expenses as general and
administrative, marketing and franchise fees. Examples of expenses in
the case of health care Mortgaged Properties include routine and
ancillary contractual expenses, nursing expenses, dietary expenses,
laundry/housekeeping expenses, activities/social service expenses,
equipment rental expenses and other expenses.
In certain cases, Trailing Cash Flow, Most Recent Cash Flow and/or U/W
Cash Flow have been adjusted by removing certain non-recurring expenses and
revenue or by certain other normalizations. Such Cash Flow does not
necessarily reflect accrual of certain costs such as capital expenditures
and leasing commissions and does not reflect non-cash items such as
depreciation or amortization. In some cases, capital expenditures and
non-recurring items may have been treated by a borrower as an expense
A-1
<PAGE> 109
but were deducted from Trailing Expenses, Most Recent Expenses or U/W
Expenses to reflect normalized Trailing Cash Flow, Most Recent Cash Flow or
U/W Cash Flow, as the case may be. The Depositor has not made any attempt
to verify the accuracy of any information provided by each borrower or to
reflect changes that may have occurred since the date of the information
provided by each borrower for the related Mortgaged Property. Such Cash
Flow was not necessarily determined in accordance with generally accepted
accounting principles ("GAAP"). Such Cash Flow is not a substitute for net
income determined in accordance with GAAP as a measure of the results of a
Mortgaged Property's operations or a substitute for cash flows from
operating activities determined in accordance with GAAP as a measure of
liquidity. Moreover, in certain cases such Cash Flow may reflect
partial-year annualizations.
6. "Cut-off Date Loan-to-Value Ratio", "Cut-off Date LTV Ratio" or
"Cut-off Date LTV" means, with respect to any Mortgage Loan, the Cut-off
Date Balance of such Mortgage Loan divided by the Appraisal Value of the
related Mortgaged Property. "Maturity Date Loan-to-Value Ratio" or
"Maturity Date LTV" means, with respect to any Mortgage Loan, the Maturity
Date Balance, divided by the Appraisal Value of the related Mortgaged
Property.
7. "DEFEASANCE" means, with respect to any Mortgage Loan, that such
Mortgage Loan is subject to a Defeasance Option.
8. "Discount Rate" means, with respect to any prepayment premium
calculation, the yield on the U.S. Treasury issue with a maturity date
closest to the maturity date for the Mortgage Loan being prepaid, or an
interpolation thereof.
9. "FREE" means, with respect to any Mortgage Loan, that such Mortgage
Loan may be voluntarily prepaid without a Prepayment Premium.
10. "Fully Amortizing" means fully amortizing Mortgage Loan.
11. "Grtr" means "the greater of".
12. "Int. Rate Diff." refers to the Interest Rate Differential method
of calculation of a yield maintenance premium (or, in the case of Type 4A
and Type 4B, refers to a present value method of calculation as described
below). The various types of methods applicable to the Mortgage Loans are
described below. For purposes of the Maturity Assumptions, it has been
assumed for all cases that the prepaid amount constitutes a full
prepayment.
Prepayment premiums under Type 1A and Type 1B Interest Rate
Differential methods are generally equal to the product obtained by
multiplying (a) the amount of principal balance being prepaid, times (b)
the difference obtained by (i) in the case of Type 1A, subtracting from the
Mortgage Rate the Discount Rate or (ii) in the case of Type 1B, subtracting
from the Initial Reference Rate set forth on page A-7 the Money Market
Rate, times (c) the present value factor calculated using the following
formula:
(-n)
1-(1+r)
----------------
r
where r is equal to the Discount Rate or the Money Market Rate, as the case
may be (depending on the type of Mortgage Loan as described above), and n
is equal to the number of years (or fraction thereof) remaining between the
prepayment date and the maturity date. (In the case of Loan Number 1202811,
the difference described in clause (b) above is obtained by subtracting
from the Mortgage Rate the Money Market Rate.)
Prepayment premiums under Type 2A, Type 2B and Type 2C Interest Rate
Differential methods are generally calculated as the difference between the
Initial Reference Rate and the Discount Rate times the applicable
Prepayment Fee Factor, times the principal amount of the loan being prepaid
to the extent that the Initial Reference Rate set forth on Page A-7 is
greater than the Discount Rate.
A-2
<PAGE> 110
The Prepayment Factors applicable during particular periods during the
term of a Mortgage Loan are set forth below for each of Type 2A, Type 2B
and Type 2C (linear interpolation should be used for months falling in
between the factor schedules):
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INT. RATE DIFF. (TYPE 2A)
Period............... 0 3 6 9 12 24 36 48 60 84 120 240 360
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
Rate................. 0.00 0.26 0.49 0.71 0.94 1.80 2.70 3.40 4.20 5.60 7.40 11.60 14.00
INT. RATE DIFF. (TYPE
2B)
Period............... 0 12 24 36 48 60 84 120 240 360
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Rate................. 0.00 0.90 1.70 2.40 3.10 3.70 4.70 5.90 7.90 8.60
INT. RATE DIFF. (TYPE
2C)
Period............... 0 3 6 9 12 24 36 48 60 84 120 240 360
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----- -----
Rate................. 0.00 0.21 0.36 0.52 0.67 1.30 1.90 2.50 3.10 4.30 5.90 10.30 13.10
</TABLE>
Prepayment Premiums under Type 3A, Type 3B, Type 3C and Type 3D
Interest Rate Differential methods are generally equal to the product
obtained by multiplying (a) the amount of principal balance being prepaid,
times (b) the difference obtained by (i) in the case of Type 3A (other than
Loan Number 3102282), subtracting from the Mortgage Rate either (A) the
Discount Rate, if the remaining term is more than 5 years, or (B) the Money
Market Rate, if the remaining term of the Mortgage Loan is 5 years or less,
or (iii) in the case of Type 3B, Type 3C, Type 3D and Loan Number 3102282,
subtracting from the Mortgage Rate the Discount Rate, times (c) the present
value factor calculated using the following formula:
(-n)
1-(1+(r+k))
-----------------
r+k
where r is equal to the Discount Rate or the Money Market Rate, as the case
may be (depending on the remaining term of the Mortgage Loan as described
above), n is equal to the number of years (or fraction thereof) remaining
between the prepayment date and the maturity date and k is equal to zero
basis points, if the Money Market Rate is used, and 25 basis points (in the
case of Type 3A), 50 basis points (in the case of Type 3B), 200 basis
points (in the case of Type 3C) or 225 basis points (in the case of Type
3D), if the Discount Rate is used.
Prepayment Premiums under Type 4A and Type 4B are generally equal to
the product of (a) the amount of principal being prepaid (expressed as a
percentage of the principal balance outstanding assuming no prepayments
have been made) and (b) the present value as of the prepayment date of the
remaining scheduled payments of principal and interest from the prepayment
date through the maturity date or Anticipated Repayment Date (including any
Balloon Payment) determined by discounting such payments at (i) in the case
of Type 4A, the "Monthly Discount Rate" and (ii) in the case of Type 4B,
the treasury rate plus 25 basis points, if the remaining term of the
Mortgage Loan is more than 5 years, or the Money Market Rate, if the
remaining term of the Mortgage Loan is 5 years or less, less (for Type 4A
and Type 4B) the amount of principal being prepaid. The term "Monthly
Discount Rate" means the rate which, when compounded monthly, is equivalent
to the Discount Rate or the Money Market Rate, as applicable.
In all cases, a Prepayment Premium will be collected only to the
extent the Interest Rate Differential is positive.
In addition, for purposes of simplification given the complexity of
the applicable formulas in the related loan documents, the discount rate
and interest rate differential for Loan Number 3102282 refers to the
treasury rate plus 25 basis points, and for Loan Number 3036670 refers to
the treasury rate plus 50 basis points. Further, it has been assumed that
no Prepayment Premium will be collected at all with respect to Loan Number
3010717, 3049228, 3024635, 3024643, and 3041589.
A-3
<PAGE> 111
13. "Leasable Square Footage" or "Net Rentable Area (SF)" means, in
the case of a Mortgaged Property operated as a retail center, office
complex or industrial facility, the square footage of the net leasable
area.
14. "Maturity" or "Maturity Date" means, with respect to any Mortgage
Loan, the date specified in the related Mortgage Note as its stated
maturity date.
15. "Maturity Date Balance" means, with respect to any Mortgage Loan,
the balance due at maturity, assuming no prepayments, defaults or
extensions.
16. "Money Market Rate" means, with respect to a Mortgage Loan and for
purposes of the Maturity Assumptions, (a) if the remaining term of the
Mortgage Loan is more than 5 years, the Discount Rate and (b) if the
remaining term of the Mortgage Loan is 5 years or less, the money market
rate quoted by Bank of America, N.A., in its principal office in San
Francisco for certificates of deposit of $100,000. This definition is
solely for purposes for the Maturity Assumptions; the money market rate
applicable to the calculation of a Prepayment Premium for any particular
Mortgage Loan will be determined as required by the applicable loan
documents.
17. "Most Recent DSCR" means, with respect to any Mortgage Loan, (a)
the Most Recent Cash Flow for the related Mortgaged Property, divided by
(b) the Annual Debt Service for such Mortgage Loan.
18. "Most Recent End Date" means, with respect to each Mortgage Loan,
the date indicated on Annex A as the "Most Recent End Date" with respect to
such Mortgage Loan, which date is generally the end date with respect to
the period covered by the latest available annual operating statement
provided by the related borrower.
19. "Most Recent Cash Flow" means, with respect to any Mortgaged
Property, the Cash Flow derived therefrom that was available for debt
service, calculated as Most Recent Revenues less Most Recent Expenses, Most
Recent capital expenditures and Most Recent tenant improvements and leasing
commissions. See also "Cash Flow" above.
(i) "Most Recent Revenues" are the Revenues received (or annualized
or estimated in certain cases) in respect of a Mortgaged Property for
the 12-month period ended as of the Most Recent End Date, based upon the
latest available annual operating statement and other information
furnished by the borrower for its most recently ended fiscal year.
(ii) "Most Recent Expenses" are the Expenses incurred (or
annualized or estimated in certain cases) for a Mortgaged Property for
the 12-month period ended as of the Most Recent End Date, based upon the
latest available annual operating statement and other information
furnished by the borrower for its most recently ended fiscal year.
20. "Occupancy %" or "Occupancy Percent" means the percentage of
Leasable Square Footage or Total Units/Rooms/Pads, as the case may be, of
the Mortgaged Property that was occupied as of a specified date, as
specified by the borrower or as derived from the Mortgaged Property's rent
rolls, which generally are calculated by physical presence or,
alternatively, collected rents as a percentage of potential rental
revenues.
21. "Related Loans" means two or more Mortgage Loans with respect to
which the related Mortgaged Properties are either owned by the same entity
or owned by two or more entities controlled by the same key principals.
22. "Trailing Date" means, with respect to any Mortgage Loan, the date
indicated on Annex A as the "Trailing Date" with respect to such Mortgage
Loan.
23. "Trailing DSCR" means, with respect to any Mortgage Loan, (a) the
Trailing Cash Flow for the related Mortgaged Property, divided by (b) the
Annual Debt Service for such Mortgage Loan.
A-4
<PAGE> 112
24. "Trailing Cash Flow" means, with respect to any Mortgaged
Property, the Cash Flow derived therefrom that was available for debt
service, calculated as Trailing Revenues less Trailing Expenses, Trailing
capital expenditures and Trailing tenant improvements and leasing
commissions. See also "Cash Flow" above.
(i) "Trailing Revenues" are the Revenues received (or annualized or
estimated in certain cases) in respect of a Mortgaged Property for the
12-month period ended on the Trailing Date, based upon operating
statements and other information furnished by the related borrower.
(ii) "Trailing Expenses" are the Expenses incurred (or annualized
or estimated in certain cases) for a Mortgaged Property for the 12-month
period ended on the Trailing Date, based upon operating statements and
other information furnished by the related borrower.
25. "Type 1A", "Type 1B", "Type 2A", "Type 2B", "Type 2C", "Type 3A",
"Type 3B", "Type 3C", "Type 3D", "Type 4A" and "Type 4B": See "Int. Rate
Diff." above in this Annex A.
26. "UPB" means, with respect to any Mortgage Loan, its unpaid
principal balance.
27. "Units" "Rooms" and "Beds" respectively, mean: (i) in the case of
a Mortgaged Property operated as multifamily housing, the number of
apartments, regardless of the size of or number of rooms in such apartment
(referred to in the schedule as "Units"); (ii) in the case of a Mortgaged
Property operated as a hotel, the number of rooms (referred to in the
schedule as "Rooms"); and (iii) in the case of a Mortgaged Property
operated as a health care facility, the number of beds (referred to in the
schedule as "Beds").
28. "U/W DSCR", "Underwriting DSCR" or "Underwriting Debt Service
Coverage Ratio" means, with respect to any Mortgage Loan, (a) the U/W Cash
Flow for the related Mortgaged Property divided by (b) the Annual Debt
Service for such Mortgage Loan.
29. "U/W Cash Flow" or "Underwriting Cash Flow" means, with respect of
any Mortgaged Property, the Cash Flow derived therefrom that was available
for debt service, calculated as U/W Revenues less U/W Expenses, U/W
Reserves and U/W tenant improvements and leasing commissions. See also
"Cash Flow" above.
(i) "U/W Revenues" are the anticipated Revenues in respect of a
Mortgaged Property, generally determined by means of an estimate made at
the origination of such Mortgage Loan. U/W Revenues have generally been
calculated (a) assuming that the occupancy rate for the Mortgaged
Property was consistent with the Mortgaged Property's current or
historical rate, or the relevant market rate, if such rate was less than
the occupancy rate reflected in the most recent rent roll or operating
statements, as the case may be, furnished by the related borrower, and
(b) in the case of retail, office and industrial Mortgaged Properties,
assuming a level of reimbursements from tenants consistent with the
terms of the related leases or historical trends at the Mortgaged
Property, and in certain cases, assuming that a specified percentage of
rent will become defaulted or otherwise uncollectible. In addition, in
the case of retail, office and industrial Mortgaged Properties, upward
adjustments may have been made with respect to such revenues to account
for all or a portion of the rents provided for under any new leases
scheduled to take effect later in the year. Also, in the case of certain
Mortgaged Properties that are operated as nursing home or hotel
properties and are subject to an operating lease with a single operator,
U/W Revenues were calculated based on revenues received by the operator
rather than rental payments received by the related borrower under the
operating lease.
(ii) "U/W Expenses" are the anticipated Expenses in respect of a
Mortgaged Property, generally determined by means of an estimate made at
the origination of such Mortgage Loan. U/W Expenses were generally
assumed to be equal to historical annual expenses reflected in the
operating statements and other information furnished by the borrower,
except that such expenses were generally modified by (a) if there was no
management fee or a below market management fee, assuming that a
management fee was payable with respect to the Mortgaged Property in an
amount
A-5
<PAGE> 113
approximately equal to a percentage of assumed gross revenues for the
year, (b) adjusting certain historical expense items upwards or
downwards to amounts that reflect industry norms for the particular type
of property and/or taking into consideration material changes in the
operating position of the related Mortgaged Property (such as newly
signed leases and market data) and (c) adjusting for non-recurring items
(such as capital expenditures) and tenant improvement and leasing
commissions, if applicable (in the case of certain retail, office and
industrial Mortgaged Properties, adjustments may have been made to
account for tenant improvements and leasing commissions at costs
consistent with historical trends or prevailing market conditions and,
in other cases, operating expenses did not include such costs).
Actual conditions at the Mortgaged Properties will differ, and may
differ substantially, from the assumed conditions used in calculating U/W
Cash Flow. In particular, the assumptions regarding tenant vacancies,
tenant improvements and leasing commissions, future rental rates, future
expenses and other conditions if and to the extent used in calculating U/W
Cash Flow for a Mortgaged Property, may differ substantially from actual
conditions with respect to such Mortgaged Property. There can be no
assurance that the actual costs of reletting and capital improvements will
not exceed those estimated or assumed in connection with the origination or
purchase of the Mortgage Loans.
In most cases, U/W Cash Flow describes the cash flow available after
deductions for capital expenditures such as tenant improvements, leasing
commissions and structural reserves. In those cases where such "reserves"
were so included, no cash may have been actually escrowed. No
representation is made as to the future net cash flow of the properties,
nor is U/W Cash Flow set forth herein intended to represent such future net
cash flow.
30. "U/W Reserves" means, with respect to any Mortgaged Property, the
aggregate amount of on-going reserves (generally for capital improvements
and replacements) assumed to be maintained with respect to such Mortgaged
Property. In each case, actual reserves, if any, may be less than the
amount of U/W Reserves.
31. "U/W Reserves Per Unit" means, with respect to any Mortgaged
Property, (a) the related U/W Reserves, divided by (b) the number of Units,
Leasable Square Feet, Rooms or Beds, as applicable.
32. "YM" means, with respect to any Mortgage Loan, a yield maintenance
premium.
A-6
<PAGE> 114
The table below sets forth the Initial Reference Rate associated with Mortgage
Loans that require an Initial Reference Rate for the computation of prepayment
premiums.
<TABLE>
<CAPTION>
LOAN NUMBER INITIAL REFERENCE RATE
- ----------- ----------------------
<S> <C>
1792761..................................................... 5.54%
1794353..................................................... 5.18%
1794478..................................................... 5.86%
1794569..................................................... 5.42%
1795863..................................................... 5.77%
1796705..................................................... 6.07%
1796796..................................................... 6.13%
1865195..................................................... 4.43%
1865559..................................................... 5.80%
1867084..................................................... 5.66%
3014594..................................................... 5.99%
3022530..................................................... 6.30%
3024635..................................................... 5.42%
3024643..................................................... 5.50%
3032034..................................................... 6.38%
3032406..................................................... 6.04%
3033792..................................................... 6.37%
3039450..................................................... 5.68%
3039914..................................................... 5.99%
3040482..................................................... 5.55%
3041399..................................................... 5.90%
3041589..................................................... 6.15%
3043346..................................................... 5.62%
3043486..................................................... 5.47%
3046208..................................................... 5.49%
3048741..................................................... 5.57%
3049228..................................................... 5.73%
3057932..................................................... 5.51%
3058575..................................................... 5.45%
4538179..................................................... 5.69%
4538229..................................................... 6.64%
4538864..................................................... 6.31%
4539961..................................................... 5.87%
4540332..................................................... 6.15%
4540613..................................................... 6.00%
4540878..................................................... 6.15%
4544128..................................................... 6.40%
4544748..................................................... 6.36%
4544987..................................................... 6.08%
4545786..................................................... 6.13%
4547279..................................................... 6.50%
4547840..................................................... 6.63%
4547972..................................................... 5.41%
4549193..................................................... 5.62%
8317463..................................................... 5.66%
</TABLE>
A-7
<PAGE> 115
<TABLE>
<CAPTION>
Loan
Sequence Number Property Name Property Address
- -------- ------- --------------------------------------------------- ------------------------------------
<S> <C> <C> <C>
C1 51113 Indian Hills Apartments 4550 West Sahara Ave.
C2 51384 Club Mira Lago Apartments 1060 Coral Ridge Drive
Sub-Total Crossed Loans
P3 3055209 Rancho Palisades Apartments 4849 Frankford Road
C4 50372 Gessner Apartments Portfolio 6005, 6425, 6525 South Gessner Road
C5 50389 Sheldon Palms Apartments 8802 Brennan Circle
P6 3102126 Pioneer Ridge Apartments Highway 213 & Meyers Road
C7 51482 South Point Apartments 221 Verot School Road
P8A 3102282 Birnamwood Apartments 3500 NE 17th Drive
P8B 3102282 Southridge Apartments 4954 Liberty Road SE
P8C 3102282 Spring Mountain Apartments 664 Taybin Road NW
P8D 3102282 Hermitage Apartments 1001 Hermitage Way SE
P8 3102282 SIMA Multifamily Portfolio (Roll-Up)
C9 51047 San Michele Apartments 5800 Lake Mead Blvd.
P10 3008489 American River Commons Apartments 2366 American River Drive
C11 50523 Tenaya Palms Apartments 7413 West Russell Road
P12 3010212 Quail Tree Apartments 7100 W Alexander Rd
C13A 51024 L8 - Goldfarb Apartments-107-111 E. Springfield Ave 107-111 E. Springfield Ave.
C13B 51024 L8 - Goldfarb Apartments-405 E. Stoughton St. 405 E. Stoughton St.
C13C 51024 L8 - Goldfarb Apartments-608 E. White St. 608 E. White St.
C13D 51024 L8 - Goldfarb Apartments-402 S. Fifth St. 402 S. Fifth St.
C13E 51024 L8 - Goldfarb Apartments-402 N. Gregory St. 402 N. Gregory St.
C13 51024 L8 - Goldfarb Apartments (Roll-Up)
C14 50822 Woodglen Apartments 1800 E. Aroma Drive
P15 3007648 Saratoga Palms 3850 South Mountain Vista St.
P16 3014594 Walnut Square Apartments Complex 3894-3964 Walnut Avenue, et al
P17 3102233 Crystal Lake Apartments 10500 SE 26th Avenue
P18 3009024 River Park Apartments 2575 West 24th Street
P19 3013216 Warren Coronado Apartments 6230 Indian School Road NE
P20 3047925 Shoreline Plaza Apartments 2500 Dickerson Road
P21A 4540332 Wood River Park Apartments 16510 Centerfield Drive
P21B 4540332 Tudor Park Apartments 4611 Juneau Street
P21C 4540332 Russian Jack Apartments 1540 Russian Jack Drive
P21 4540332 Gold Belt Multifamily Portfolio (Roll-Up)
C22A 50292 Woodside Village Apartments 1889 East State Road 44
C22B 50292 Fayette Apartments 3100 Waterloo Road
C22C 50292 Vantage Point Apartments 2701 Iowa Avenue
C22 50292 Fayette/Vantage Point/Woodside Village (Roll-Up)
P23 3102076 Quail Hill Apartments 12375 Mt. Jefferson Terrace
P24 3040078 Heritage Oaks Apartments 4033 McClain Way
P25 1865195 Trailside Apartments 4801 - 24th Avenue NE
P26 3012580 Oak Park Apartments 1325 Massachusetts Avenue
C27 50402 Veranda Apartments 5704 W. Thomas Rd.
C28 50985 Mansions South Apartments 3507 North Service Road
P29 3013273 Warren Inn Apartments 5000 Denton Highway
P30 3016060 Viking Villas Apartments 1500 East Viking Road
C31 51514 Heritage Trace Apartments 3602 Campbell Road
P32 3018421 Mulberry Hollow Apartments 3540 S. Swenson Street
P33 3011269 Amberwood Garden Apartments 26100 Gading Road
P34 3101144 Barclay Village Apartments 775 Cascade Avenue
P35 3016565 Garden Hill Apartments 31 Lassen Way
P36 4544748 Cedar Meadows Apartments 8560 West Peoria Avenue
P37 3015872 Tamarack Pointe Villas 330 West Central Avenue
<CAPTION>
Loan
Sequence Number Property Name County City
- -------- ------- --------------------------------------------------- ----------------- --------------
<S> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments Clark Las Vegas
C2 51384 Club Mira Lago Apartments Broward Coral Springs
Sub-Total Crossed Loans
P3 3055209 Rancho Palisades Apartments Collin County Dallas
C4 50372 Gessner Apartments Portfolio Harris Houston
C5 50389 Sheldon Palms Apartments Hillsborough Tampa
P6 3102126 Pioneer Ridge Apartments Clackamas Oregon City
C7 51482 South Point Apartments Lafayette Lafayette
P8A 3102282 Birnamwood Apartments Multnomah Gresham
P8B 3102282 Southridge Apartments Marion Salem
P8C 3102282 Spring Mountain Apartments Polk Salem
P8D 3102282 Hermitage Apartments Marion Salem
P8 3102282 SIMA Multifamily Portfolio (Roll-Up)
C9 51047 San Michele Apartments Clark Las Vegas
P10 3008489 American River Commons Apartments Sacramento Sacramento
C11 50523 Tenaya Palms Apartments Clark Las Vegas
P12 3010212 Quail Tree Apartments Clark Las Vegas
C13A 51024 L8 - Goldfarb Apartments-107-111 E. Springfield Ave Champaign Champaign
C13B 51024 L8 - Goldfarb Apartments-405 E. Stoughton St. Champaign Champaign
C13C 51024 L8 - Goldfarb Apartments-608 E. White St. Champaign Champaign
C13D 51024 L8 - Goldfarb Apartments-402 S. Fifth St. Champaign Champaign
C13E 51024 L8 - Goldfarb Apartments-402 N. Gregory St. Champaign Urbana
C13 51024 L8 - Goldfarb Apartments (Roll-Up)
C14 50822 Woodglen Apartments Los Angeles West Covina
P15 3007648 Saratoga Palms Clark Las Vegas
P16 3014594 Walnut Square Apartments Complex Ventura Simi Valley
P17 3102233 Crystal Lake Apartments Clackamas Milwaukie
P18 3009024 River Park Apartments Yuma Yuma
P19 3013216 Warren Coronado Apartments Bernalillo Albuquerque
P20 3047925 Shoreline Plaza Apartments Washoe Reno
P21A 4540332 Wood River Park Apartments NAP Eagle River
P21B 4540332 Tudor Park Apartments NAP Anchorage
P21C 4540332 Russian Jack Apartments NAP Anchorage
P21 4540332 Gold Belt Multifamily Portfolio (Roll-Up)
C22A 50292 Woodside Village Apartments Fayette Connorsville
C22B 50292 Fayette Apartments Fayette Connorsville
C22C 50292 Vantage Point Apartments Fayette Connorsville
C22 50292 Fayette/Vantage Point/Woodside Village (Roll-Up)
P23 3102076 Quail Hill Apartments Clackamas Lake Oswego
P24 3040078 Heritage Oaks Apartments Sacramento Carmichael
P25 1865195 Trailside Apartments King Seattle
P26 3012580 Oak Park Apartments Riverside Riverside
C27 50402 Veranda Apartments Maricopa Phoenix
C28 50985 Mansions South Apartments Cleveland Moore
P29 3013273 Warren Inn Apartments Tarrant Haltom City
P30 3016060 Viking Villas Apartments Clark Las Vegas
C31 51514 Heritage Trace Apartments City Newport News
P32 3018421 Mulberry Hollow Apartments Clark Las Vegas
P33 3011269 Amberwood Garden Apartments Alameda Hayward
P34 3101144 Barclay Village Apartments Clackamas Oregon City
P35 3016565 Garden Hill Apartments Santa Cruz Watsonville
P36 4544748 Cedar Meadows Apartments Maricopa Peoria
P37 3015872 Tamarack Pointe Villas Orange Brea
</TABLE>
<PAGE> 116
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
Admini-
Cut-off Maturity strative Sub-
Property Original Date Date Loan Mortgage Fee Servicing
State Zip Code Type Balance Balance Balance Type Rate Rate(i) Fee Rate
- ----- -------- ----------- ----------- ----------- ----------- ------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NV 89102 Multifamily $23,200,000 $23,032,935 $20,396,360 Balloon 7.251% 0.093% 0.050%
FL 33071 Multifamily 20,840,000 20,689,929 18,321,558 Balloon 7.251% 0.093% 0.050%
----------- ----------- -----------
44,040,000 43,722,864 38,717,918
TX 75287 Multifamily 26,300,000 25,919,852 22,462,056 Balloon 6.720% 0.143% 0.100%
TX 77036 Multifamily 13,385,000 13,279,355 11,759,274 Balloon 7.210% 0.143% 0.100%
FL 33615 Multifamily 12,700,000 12,481,772 11,157,294 Balloon 7.220% 0.103% 0.060%
OR 97034 Multifamily 11,737,500 11,282,875 10,314,052 Balloon 8.000% 0.143% 0.100%
LA 70508 Multifamily 10,200,000 10,139,434 8,880,928 Balloon 6.840% 0.143% 0.100%
OR 97030 Multifamily
OR 97306 Multifamily
OR 97304 Multifamily
OR 97302 Multifamily
9,800,000 9,245,031 7,931,526 Balloon 7.970% 0.143% 0.100%
NV 89108 Multifamily 9,300,000 9,206,339 8,104,834 Balloon 6.900% 0.143% 0.100%
CA 95825 Multifamily 8,500,000 8,104,769 7,309,436 Balloon 8.250% 0.143% 0.100%
NV 89113 Multifamily 6,450,000 6,349,443 5,700,285 Balloon 7.470% 0.163% 0.120%
NV 89129 Multifamily 6,200,000 5,879,127 5,355,994 Balloon 9.750% 0.143% 0.100%
IL 61820 Multifamily
IL 61820 Multifamily
IL 61820 Multifamily
IL 61820 Multifamily
IL 61801 Multifamily
5,192,523 5,136,130 4,485,062 Balloon 6.570% 0.143% 0.100%
CA 91791 Multifamily 5,175,000 5,103,876 4,520,401 Balloon 6.980% 0.143% 0.100%
NV 89121 Multifamily 5,200,000 4,993,571 4,592,336 Balloon 8.250% 0.143% 0.100%
CA 93063 Multifamily 5,000,000 4,839,503 4,207,169 Balloon 8.050% 0.143% 0.100%
OR 97222 Multifamily 5,000,000 4,691,913 4,003,117 Balloon 7.550% 0.143% 0.100%
AZ 85364 Multifamily 4,700,000 4,434,676 4,002,689 Balloon 7.250% 0.143% 0.100%
NM 87110 Multifamily 4,700,000 4,293,120 3,256,808 Balloon 7.990% 0.143% 0.100%
NV 89503 Multifamily 4,300,000 4,197,890 3,449,460 Balloon 7.625% 0.143% 0.100%
AK 99577 Multifamily
AK 99503 Multifamily
AK 99508 Multifamily
4,350,000 4,153,721 3,561,876 Balloon 8.625% 0.143% 0.100%
IN 47331 Multifamily
IN 47331 Multifamily
IN 47331 Multifamily
4,166,653 4,131,865 3,726,537 Balloon 7.740% 0.193% 0.150%
OR 97035 Multifamily 4,350,000 4,075,792 4,016,153 Balloon 7.900% 0.143% 0.100%
CA 95608 Multifamily 4,125,000 4,051,542 3,818,217 Balloon 7.880% 0.143% 0.100%
WA 98105 Multifamily 4,300,000 3,933,631 3,774,925 Balloon 7.250% 0.143% 0.100%
CA 92507 Multifamily 4,000,000 3,839,777 3,673,586 Balloon 7.410% 0.143% 0.100%
AZ 85031 Multifamily 3,560,000 3,500,646 3,389,298 Balloon 7.350% 0.143% 0.100%
OK 73160 Multifamily 3,500,000 3,463,267 2,727,578 Balloon 7.350% 0.143% 0.100%
TX 76117 Multifamily 3,791,800 3,442,710 2,599,993 Balloon 7.650% 0.143% 0.100%
NV 89119 Multifamily 3,500,000 3,380,757 3,064,748 Balloon 7.875% 0.143% 0.100%
VA 23602 Multifamily 3,370,000 3,354,393 2,970,921 Balloon 7.345% 0.143% 0.100%
NV 89109 Multifamily 3,500,000 3,345,337 2,860,856 Balloon 8.370% 0.143% 0.100%
CA 94544 Multifamily 3,470,000 3,326,627 3,008,909 Balloon 7.375% 0.143% 0.100%
OR 97045 Multifamily 3,700,000 3,323,001 2,996,796 Balloon 8.000% 0.143% 0.100%
CA 95076 Multifamily 3,400,000 3,305,139 3,017,257 Balloon 8.500% 0.143% 0.100%
AZ 85345 Multifamily 3,300,000 3,173,500 2,705,835 Balloon 8.500% 0.143% 0.100%
CA 92621 Multifamily 3,037,500 2,952,999 2,706,977 Balloon 8.750% 0.143% 0.100%
<CAPTION>
Net First Interest
Property Mortgage Note Payment Accrual
State Zip Code Type Rate Date Date Method
- ----- -------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NV 89102 Multifamily 7.158% 12/14/98 2/1/99 ACT/360
FL 33071 Multifamily 7.158% 12/14/98 2/1/99 ACT/360
TX 75287 Multifamily 6.577% 6/9/98 8/1/98 30/360
TX 77036 Multifamily 7.067% 12/1/98 1/1/99 ACT/360
FL 33615 Multifamily 7.117% 11/20/97 1/1/98 ACT/360
OR 97034 Multifamily 7.857% 9/8/95 11/1/95 30/360
LA 70508 Multifamily 6.697% 2/18/99 4/1/99 ACT/360
OR 97030 Multifamily
OR 97306 Multifamily
OR 97304 Multifamily
OR 97302 Multifamily
7.827% 12/4/95 2/1/96 30/360
NV 89108 Multifamily 6.757% 9/4/98 11/1/98 ACT/360
CA 95825 Multifamily 8.107% 7/17/95 9/1/95 30/360
NV 89113 Multifamily 7.307% 12/19/97 2/1/98 ACT/360
NV 89129 Multifamily 9.607% 12/5/94 1/5/95 ACT/360
IL 61820 Multifamily
IL 61820 Multifamily
IL 61820 Multifamily
IL 61820 Multifamily
IL 61801 Multifamily
6.427% 9/9/98 11/1/98 ACT/360
CA 91791 Multifamily 6.837% 4/29/98 6/1/98 ACT/360
NV 89121 Multifamily 8.107% 6/5/95 8/1/95 30/360
CA 93063 Multifamily 7.907% 3/1/96 6/1/96 30/360
OR 97222 Multifamily 7.407% 11/1/95 1/1/96 30/360
AZ 85364 Multifamily 7.107% 8/17/95 10/1/95 30/360
NM 87110 Multifamily 7.847% 1/16/96 4/1/96 30/360
NV 89503 Multifamily 7.482% 2/6/98 4/1/98 30/360
AK 99577 Multifamily
AK 99503 Multifamily
AK 99508 Multifamily
8.482% 5/31/96 8/1/96 30/360
IN 47331 Multifamily
IN 47331 Multifamily
IN 47331 Multifamily
7.547% 11/23/98 12/1/98 ACT/360
OR 97035 Multifamily 7.757% 8/30/95 10/1/95 30/360
CA 95608 Multifamily 7.737% 10/1/97 11/15/97 30/360
WA 98105 Multifamily 7.107% 7/30/94 9/1/94 30/360
CA 92507 Multifamily 7.267% 12/19/95 2/1/96 30/360
AZ 85031 Multifamily 7.207% 11/10/97 1/1/98 ACT/360
OK 73160 Multifamily 7.207% 7/29/98 9/1/98 ACT/360
TX 76117 Multifamily 7.507% 1/18/96 3/1/96 30/360
NV 89119 Multifamily 7.732% 4/25/96 6/1/96 30/360
VA 23602 Multifamily 7.202% 3/31/99 5/1/99 ACT/360
NV 89109 Multifamily 8.227% 7/12/96 9/10/96 30/360
CA 94544 Multifamily 7.232% 11/13/95 1/1/96 30/360
OR 97045 Multifamily 7.857% 7/15/93 9/1/93 30/360
CA 95076 Multifamily 8.357% 6/24/96 8/1/96 30/360
AZ 85345 Multifamily 8.357% 10/29/96 1/1/97 30/360
CA 92621 Multifamily 8.607% 5/8/96 7/1/96 30/360
</TABLE>
<PAGE> 117
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS)(ii) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
- -------- -------- ------------- --------- --------- -------- -------------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$158,281 120 360 10 110 1/1/09 Yes(1) Yes(A) 10/1/08
142,180 120 360 10 110 1/1/09 Yes(1) Yes(A) 10/1/08
170,057 120 360 16 104 7/1/08 No No
90,946 120 360 11 109 12/1/08 No No 11/30/02
86,378 120 360 23 97 12/1/07 No No 11/30/01
86,126 120 360 49 71 10/1/05 No No
66,768 120 360 8 112 3/1/09 No No 12/1/08
75,443 120 300 46 74 1/1/06 No No
61,250 120 360 13 107 10/1/08 No No 6/1/08
64,934 120 336 51 69 8/1/05 No No
44,967 120 360 22 98 1/1/08 No No 12/31/01
55,251 120 300 59 61 12/5/04 No No
33,060 120 360 13 107 10/1/08 No No 6/1/08
34,360 120 360 18 102 5/1/08 No No 4/30/02
39,066 120 360 52 68 7/1/05 No No
36,863 144 360 42 102 5/1/08 No No
37,112 120 300 47 73 12/1/05 No No
31,858 120 360 50 70 9/1/05 No No
39,283 120 240 44 76 3/1/06 No No
32,127 120 300 20 100 3/1/08 No No
35,446 120 300 40 80 7/1/06 No No
30,040 110 350 12 98 1/1/08 No No 12/31/01
33,286 60 300 50 10 9/1/00 No No
29,923 84 360 24 60 10/15/04 No No
31,255 84 300 63 21 8/1/01 No No
27,722 84 360 46 38 1/2/03 No No
24,527 60 360 23 37 12/1/02 No No 11/30/99
24,114 180 360 15 165 8/1/13 No No 3/31/13
30,895 120 240 45 75 2/1/06 No No
25,353 120 360 42 78 5/1/06 No No
23,207 120 360 7 113 4/1/09 No No 1/1/09
27,877 120 300 39 81 8/10/06 No No
23,966 120 360 47 73 12/1/05 No No
28,557 120 300 75 45 8/1/03 No No
26,143 120 360 40 80 7/1/06 No No
26,572 120 300 35 85 12/1/06 No No
23,885 120 360 41 79 6/1/06 No No
<CAPTION>
MONTHLY
PAYMENT PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- -------- --------------------------------------- ----------------------
<S> <C> <C>
$158,281 LO(117)/OPEN(3)/DEF NAP
142,180 LO(117)/OPEN(3)/DEF NAP
170,057 YM(120) Int. Rate Diff. (Type 3A)
90,946 LO(48)GTR1%PPMTorYM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
86,378 LO(48)/GRTR1%PPMTorYM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
86,126 $250+YM(120) Int. Rate Diff. (Type 3A)
66,768 LO(117)/OPEN(3)/DEF NAP
75,443 $250+YM(120) Int. Rate Diff. (Type 3A)
61,250 LO(116)/OPEN(4)/DEF NAP
64,934 YM(120) Int. Rate Diff. (Type 3A)
44,967 LO(48)/GRTR1%PPMTorYM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
55,251 $250+YM(60)OPEN(60) Int. Rate Diff. (Type 3C)
33,060 LO(116)/OPEN(4)/DEF NAP
34,360 LO(47)/GRTR1%PPMTorYM(66)/OPEN(7)/DEF Int. Rate Diff. (Type 1A)
39,066 $250+YM(120) Int. Rate Diff. (Type 1A)
36,863 YM(144) Int. Rate Diff. (Type 1B)
37,112 $250+YM(120) Int. Rate Diff. (Type 3A)
31,858 $250+YM(120) Int. Rate Diff. (Type 1A)
39,283 YM(120) Int. Rate Diff. (Type 3A)
32,127 $250+YM(120) Int. Rate Diff. (Type 1A)
35,446 YM(120) Int. Rate Diff. (Type 2A)
30,040 LO(37)/GRTR1%PPMTorYM(66)/OPEN(7) Int. Rate Diff. (Type 1A)
33,286 $250+YM(60) Int. Rate Diff. (Type 3A)
29,923 YM(84) Int. Rate Diff. (Type 3A)
31,255 YM(84) Int. Rate Diff. (Type 2A)
27,722 $250+YM(84) Int. Rate Diff. (Type 1A)
24,527 LO(24)/GRTR1%PPMTorYM(12)/2%(12)/1%(6)/OPEN(6) Int. Rate Diff. (Type 1A)
24,114 LO(175)/OPEN(5)/DEF NAP
30,895 YM(120) Int. Rate Diff. (Type 3A)
25,353 $250+YM(120) Int. Rate Diff. (Type 1A)
23,207 LO(117)/OPEN(3)/DEF NAP
27,877 YM(120) Int. Rate Diff. (Type 3A)
23,966 $250+YM(120) Int. Rate Diff. (Type 1A)
28,557 YM(120) Int. Rate Diff. (Type 3A)
26,143 $250+YM(120) Int. Rate Diff. (Type 1A)
26,572 YM(120) Int. Rate Diff. (Type 2A)
23,885 $250+YM(120) Int. Rate Diff. (Type 1A)
</TABLE>
<PAGE> 118
<TABLE>
<CAPTION>
CUT-OFF TOTAL
DATE UNITS/
SE- LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/ ROOM/
QUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED BED
- ------ -------- ------------- ----------- --------- ------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments $29,000,000 10/5/98 79% 1988 484
C2 51384 Club Mira Lago Apartments 28,000,000 10/8/98 74% 1996 304
===========
57,000,000
P3 3055209 Rancho Palisades Apartments 37,000,000 5/5/98 70% 1991 562
C4 50372 Gessner Apartments Portfolio 21,000,000 10/15/98 63% 1976/1995 810
C5 50389 Sheldon Palms Apartments 16,500,000 1/1/98 76% 1997 312
P6 3102126 Pioneer Ridge Apartments 15,150,000 5/18/95 74% 1993 296
C7 51482 South Point Apartments 12,750,000 1/2/99 80% 1983 384
P8A 3102282 Birnamwood Apartments 1971 201
P8B 3102282 Southridge Apartments 1977 128
P8C 3102282 Spring Mountain Apartments 1979 103
P8D 3102282 Hermitage Apartments 1979 60
P8 3102282 SIMA Multifamily Portfolio (Roll-Up) 14,975,000 10/30/95 62% 492
C9 51047 San Michele Apartments 12,200,000 6/16/98 75% 1997 216
P10 3008489 American River Commons Apartments 13,800,000 6/6/95 59% 1972/1994 300
C11 50523 Tenaya Palms Apartments 8,140,000 10/28/97 78% 1996 136
P12 3010212 Quail Tree Apartments 9,230,000 11/16/94 64% 1994 226
C13A 51024 L8 - Goldfarb Apartments-107-111 E. Springfield Ave 1940 64
C13B 51024 L8 - Goldfarb Apartments-405 E. Stoughton St. 1972 12
C13C 51024 L8 - Goldfarb Apartments-608 E. White St. 1987 12
C13D 51024 L8 - Goldfarb Apartments-402 S. Fifth St. 1987 10
C13E 51024 L8 - Goldfarb Apartments-402 N. Gregory St. 1996 8
C13 51024 L8 - Goldfarb Apartments (Roll-Up) 6,600,000 6/4/98 78% 106
C14 50822 Woodglen Apartments 7,720,000 1/8/98 66% 1979 134
P15 3007648 Saratoga Palms 7,630,000 4/28/95 65% 1989 152
P16 3014594 Walnut Square Apartments Complex 7,400,000 12/7/95 65% 1980 100
P17 3102233 Crystal Lake Apartments 6,540,000 9/25/95 72% 1987 150
P18 3009024 River Park Apartments 6,350,000 7/11/95 70% 1986 176
P19 3013216 Warren Coronado Apartments 12,880,000 9/29/95 33% 1972 506
P20 3047925 Shoreline Plaza Apartments 6,720,000 12/15/97 62% 1978 254
P21A 4540332 Wood River Park Apartments 1985 63
P21B 4540332 Tudor Park Apartments 1986 42
P21C 4540332 Russian Jack Apartments 1985 42
P21 4540332 Gold Belt Multifamily Portfolio (Roll-Up) 5,800,000 10/9/95 72% 147
C22A 50292 Woodside Village Apartments 1973/1982 100
C22B 50292 Fayette Apartments 1971 50
C22C 50292 Vantage Point Apartments 1980 46
C22 50292 Fayette/Vantage Point/Woodside Village (Roll-Up) 6,400,000 12/15/97 65% 196
P23 3102076 Quail Hill Apartments 5,800,000 6/16/95 70% 1976/1994 136
P24 3040078 Heritage Oaks Apartments 6,050,000 8/12/97 67% 1989 110
P25 1865195 Trailside Apartments 6,120,000 6/6/94 64% 1960/1989 120
P26 3012580 Oak Park Apartments 4,860,000 11/8/95 79% 1987/1996 170
C27 50402 Veranda Apartments 4,450,000 10/6/97 79% 1985 156
C28 50985 Mansions South Apartments 5,550,000 5/29/98 62% 1974/1997 146
P29 3013273 Warren Inn Apartments 7,875,000 8/25/95 44% 1983 452
P30 3016060 Viking Villas Apartments 5,750,000 3/6/96 59% 1985 153
C31 51514 Heritage Trace Apartments 4,440,000 2/15/99 76% 1973 200
P32 3018421 Mulberry Hollow Apartments 5,970,000 5/15/96 56% 1973 176
P33 3011269 Amberwood Garden Apartments 4,600,000 8/18/95 72% 1930 73
P34 3101144 Barclay Village Apartments 5,400,000 1/18/93 62% 1987 146
P35 3016565 Garden Hill Apartments 5,000,000 4/24/96 66% 1986 80
P36 4544748 Cedar Meadows Apartments 4,900,000 8/24/96 65% 1985/1996 144
P37 3015872 Tamarack Pointe Villas 3,700,000 3/20/96 80% 1995 48
<CAPTION>
SF/ LOAN
UNIT/ NET BALANCE PER
SE- LOAN ROOM/ RENTABLE SF/UNIT/
QUENCE NUMBER PROPERTY NAME BED AREA (SF) ROOM/BED
- ------ -------- ------------- ----- --------- -----------
<S> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments Units 436,744 $47,589
C2 51384 Club Mira Lago Apartments Units 357,376 68,059
P3 3055209 Rancho Palisades Apartments Units 497,080 46,121
C4 50372 Gessner Apartments Portfolio Units 589,710 16,394
C5 50389 Sheldon Palms Apartments Units 305,832 40,006
P6 3102126 Pioneer Ridge Apartments Units 303,592 38,118
C7 51482 South Point Apartments Units 293,312 26,405
P8A 3102282 Birnamwood Apartments Units 201,440
P8B 3102282 Southridge Apartments Units 90,128
P8C 3102282 Spring Mountain Apartments Units 81,279
P8D 3102282 Hermitage Apartments Units 38,600
P8 3102282 SIMA Multifamily Portfolio (Roll-Up) Units 411,447 18,791
C9 51047 San Michele Apartments Units 172,176 42,622
P10 3008489 American River Commons Apartments Units 257,789 27,016
C11 50523 Tenaya Palms Apartments Units 130,600 46,687
P12 3010212 Quail Tree Apartments Units 117,680 26,014
C13A 51024 L8 - Goldfarb Apartments-107-111 E. Springfield Ave Units 51,370
C13B 51024 L8 - Goldfarb Apartments-405 E. Stoughton St. Units 11,677
C13C 51024 L8 - Goldfarb Apartments-608 E. White St. Units 9,892
C13D 51024 L8 - Goldfarb Apartments-402 S. Fifth St. Units 9,604
C13E 51024 L8 - Goldfarb Apartments-402 N. Gregory St. Units 7,600
C13 51024 L8 - Goldfarb Apartments (Roll-Up) Units 89,598 48,454
C14 50822 Woodglen Apartments Units 111,216 38,089
P15 3007648 Saratoga Palms Units 126,312 32,852
P16 3014594 Walnut Square Apartments Complex Units 118,476 48,395
P17 3102233 Crystal Lake Apartments Units 125,025 31,279
P18 3009024 River Park Apartments Units 136,448 25,197
P19 3013216 Warren Coronado Apartments Units 235,833 8,484
P20 3047925 Shoreline Plaza Apartments Units 100,330 16,527
P21A 4540332 Wood River Park Apartments Units 58,331
P21B 4540332 Tudor Park Apartments Units 26,834
P21C 4540332 Russian Jack Apartments Units 26,856
P21 4540332 Gold Belt Multifamily Portfolio (Roll-Up) Units 112,021 28,257
C22A 50292 Woodside Village Apartments Units 76,364
C22B 50292 Fayette Apartments Units 39,070
C22C 50292 Vantage Point Apartments Units 39,020
C22 50292 Fayette/Vantage Point/Woodside Village (Roll-Up) Units 154,454 21,081
P23 3102076 Quail Hill Apartments Units 99,440 29,969
P24 3040078 Heritage Oaks Apartments Units 88,178 36,832
P25 1865195 Trailside Apartments Units 86,532 32,780
P26 3012580 Oak Park Apartments Units 122,878 22,587
C27 50402 Veranda Apartments Units 95,592 22,440
C28 50985 Mansions South Apartments Units 132,080 23,721
P29 3013273 Warren Inn Apartments Units 208,121 7,617
P30 3016060 Viking Villas Apartments Units 67,907 22,096
C31 51514 Heritage Trace Apartments Units 179,148 16,772
P32 3018421 Mulberry Hollow Apartments Units 171,200 19,008
P33 3011269 Amberwood Garden Apartments Units 62,070 45,570
P34 3101144 Barclay Village Apartments Units 133,626 22,760
P35 3016565 Garden Hill Apartments Units 57,986 41,314
P36 4544748 Cedar Meadows Apartments Units 127,872 22,038
P37 3015872 Tamarack Pointe Villas Units 41,922 61,521
</TABLE>
<PAGE> 119
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W MOST
OCCUPANCY CASH U/W RECENT
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES END
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT DATE
------- ---- -------- -------- --------- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
94% 11/30/98 $3,881,610 $1,282,662 $2,462,460 1.30 $136,488 $282.00 12/31/98
93% 11/30/98 3,635,863 1,394,407 2,165,456 1.27 76,000 250.00 12/31/98
95% 5/4/98 5,038,701 2,423,020 2,475,181 1.21 140,500 250.00 3/31/99
95% 12/31/98 4,025,052 2,190,845 1,628,467 1.49 205,740 254.00 12/31/98
95% 9/30/98 2,202,942 857,718 1,298,424 1.25 46,800 150.00 12/31/98
90% 3/21/99 2,422,404 1,022,588 1,325,816 1.28 74,000 250.00 12/31/98
85% 2/8/99 2,267,387 1,105,966 1,084,621 1.35 76,800 200.00 12/31/98
86% 12/29/98
94% 12/30/98
91% 12/29/98
100% 12/28/98
2,695,369 1,365,304 1,197,015 1.32 133,050 270.43 12/31/98
93% 12/31/98 1,532,554 602,968 897,186 1.22 32,400 150.00 12/31/98
95% 1/31/99 2,160,989 1,059,185 1,026,804 1.32 75,000 250.00 4/30/98
93% 3/23/98 1,095,591 420,131 651,660 1.21 23,800 175.00 12/31/98
99% 2/9/99 1,267,974 454,297 757,677 1.14 56,000 247.79 12/31/98
83% 3/9/99
83% 3/9/99
100% 3/9/99
100% 3/9/99
100% 3/9/99
912,521 329,571 525,381 1.32 57,569 543.10 12/31/98
98% 9/15/98 1,044,580 488,974 515,406 1.25 40,200 300.00 12/31/98
98% 12/20/98 990,253 404,346 547,907 1.17 38,000 250.00 12/31/98
99% 1/27/99 1,119,752 398,869 695,883 1.57 25,000 250.00 12/31/98
95% 2/3/99 1,086,108 499,772 548,836 1.23 37,500 250.00 12/31/98
100% 1/31/99 1,173,541 466,460 663,081 1.73 44,000 250.00 12/31/98
98% 4/20/99 2,079,118 1,181,637 770,981 1.64 126,500 250.00 12/31/98
100% 2/9/99 1,211,331 577,537 570,294 1.48 63,500 250.00 12/31/98
98% 12/25/98
98% 12/25/98
93% 12/25/98
1,186,713 558,001 591,962 1.39 36,750 250.00 12/31/98
90% 12/4/98
98% 12/4/98
99% 12/4/98
975,024 446,335 486,353 1.35 42,336 216.00 12/31/98
96% 4/12/99 1,058,352 399,439 624,913 1.56 34,000 250.00 12/31/98
98% 3/22/99 877,246 368,681 481,065 1.34 27,500 250.00 12/31/98
99% 3/1/99 1,018,722 427,733 560,989 1.50 30,000 250.00 12/31/98
97% 1/24/99 976,392 427,853 497,539 1.50 51,000 300.00 12/31/98
97% 4/20/99 759,949 345,281 372,236 1.26 42,432 272.00 12/31/98
86% 8/4/98 1,198,608 629,389 494,759 1.71 74,460 510.00 12/31/98
NAV NAV 2,101,010 1,195,856 792,154 2.14 113,000 250.00 12/31/98
89% 12/22/98 784,459 336,297 409,912 1.35 38,250 250.00 12/31/98
91% 3/3/99 905,512 507,731 348,181 1.25 49,600 248.00 12/31/98
90% 1/18/99 1,193,125 690,781 458,344 1.37 44,000 250.00 12/31/98
100% 1/1/99 709,386 312,185 378,951 1.32 18,250 250.00 12/31/98
95% 12/28/98 1,030,982 467,040 527,442 1.54 36,500 250.00 12/31/98
100% 2/28/99 774,596 340,611 413,985 1.32 20,000 250.00 12/31/98
94% 2/11/99 920,373 426,405 457,968 1.44 36,000 250.00 12/31/98
100% 2/1/99 525,532 178,727 334,805 1.17 12,000 250.00 12/31/98
<CAPTION>
MOST 2ND
RECENT MOST
OCCUPANCY MOST MOST MOST CASH RECENT
OCCUPANCY AS OF RECENT RECENT RECENT FLOW END
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR DATE
------- -------- -------- -------- --------- ---- ------
<S> <C> <C> <C> <C> <C> <C>
94% 11/30/98 $3,971,327 $1,124,968 $2,743,531 1.44 12/31/97
93% 11/30/98 3,774,827 1,122,659 2,582,838 1.51 12/31/97
95% 5/4/98 5,038,700 2,226,924 2,811,776 1.38 12/31/97
95% 12/31/98 4,017,464 1,915,898 2,071,385 1.90 12/31/97
95% 9/30/98 2,175,105 847,111 1,327,994 1.28 12/31/97
90% 3/21/99 2,422,404 916,490 1,505,914 1.46 12/31/97
85% 2/8/99 2,450,935 1,170,691 1,113,593 1.39 12/31/97
u
86% 12/29/98
94% 12/30/98
91% 12/29/98
100% 12/28/98
2,695,368 1,178,497 1,415,755 1.56
93% 12/31/98 1,458,372 559,767 894,428 1.22
95% 1/31/99 2,160,989 894,627 1,266,362 1.63 4/30/97
93% 3/23/98 1,130,162 392,586 737,576 1.37 12/31/97
99% 2/9/99 1,267,974 414,760 742,364 1.12 12/31/97
83% 3/9/99
83% 3/9/99
100% 3/9/99
100% 3/9/99
100% 3/9/99
907,453 325,763 581,690 1.47 12/31/97
98% 9/15/98 1,088,781 369,351 677,437 1.64 12/31/97
98% 12/20/98 990,253 395,860 559,427 1.19 12/31/97
99% 1/27/99 1,128,446 318,540 809,906 1.83 12/31/97
95% 2/3/99 1,086,109 499,800 484,287 1.09 12/31/97
100% 1/31/99 1,180,903 407,783 773,120 2.02 6/30/97
98% 4/20/99 2,175,477 1,096,000 1,038,049 2.20 12/31/97
100% 2/9/99 1,224,010 502,108 708,910 1.84 12/31/97
98% 12/25/98
98% 12/25/98
93% 12/25/98
1,196,248 545,453 650,795 1.53
90% 12/4/98
98% 12/4/98
99% 12/4/98
950,715 407,918 513,659 1.42 12/31/97
96% 4/12/99 1,058,352 388,466 617,898 1.55 12/31/97
98% 3/22/99 874,032 344,446 529,586 1.47 12/31/97
99% 3/1/99 1,018,722 425,227 593,495 1.58 12/31/97
97% 1/24/99 976,391 411,097 533,656 1.60 12/31/97
97% 4/20/99 799,854 399,997 317,231 1.08 12/31/97
86% 8/4/98 1,203,473 608,848 577,380 2.00 12/31/96
NAV NAV 2,214,035 1,137,943 1,006,402 2.71 12/31/97
89% 12/22/98 795,739 317,670 473,522 1.56 12/31/97
91% 3/3/99 907,805 493,971 353,164 1.27 12/31/97
90% 1/18/99 1,195,250 601,920 593,330 1.77 12/31/97
100% 1/1/99 709,386 305,626 376,683 1.31 12/31/97
95% 12/28/98 1,037,574 441,230 553,739 1.62
100% 2/28/99 789,997 335,273 432,919 1.38 12/31/97
94% 2/11/99 920,374 392,523 527,851 1.66 12/31/97
100% 2/1/99 532,115 166,076 366,039 1.28 12/31/97
</TABLE>
<PAGE> 120
<TABLE>
<CAPTION>
2nd
Most
2nd 2nd 2nd Recent
Occupancy Most Most Most Cash
Occupancy As of Recent Recent Recent Flow
Percent Date Revenues Expenses Cash Flow DSCR
------- ---- -------- -------- --------- ----
<S> <C> <C> <C> <C> <C>
94% 11/30/98 $3,758,660 $1,126,957 $2,547,783 1.34
93% 11/30/98 2,798,507 885,719 1,857,113 1.09
95% 5/4/98 5,052,651 2,238,898 2,570,793 1.26
95% 12/31/98 3,299,726 1,821,607 1,366,071 1.25
95% 9/30/98 1,144,817 566,212 578,605 0.56
90% 3/21/99 2,359,949 1,007,373 1,352,576 1.31
85% 2/8/99 2,388,202 1,128,779 905,965 1.13
86% 12/29/98
94% 12/30/98
91% 12/29/98
100% 12/28/98
93% 12/31/98
95% 1/31/99 2,083,489 887,971 1,195,518 1.53
93% 3/23/98 947,268 437,369 464,311 0.86
99% 2/9/99 1,224,883 235,547 989,336 1.49
83% 3/9/99
83% 3/9/99
100% 3/9/99
100% 3/9/99
100% 3/9/99
836,320 283,783 552,537 1.39
98% 9/15/98 790,605 370,879 90,940 0.22
98% 12/20/98 999,238 405,338 572,504 1.22
99% 1/27/99 1,091,860 335,984 755,876 1.71
95% 2/3/99 1,067,365 453,606 516,272 1.16
100% 1/31/99 1,150,528 352,709 797,819 2.09
98% 4/20/99 2,130,947 1,028,295 1,093,079 2.32
100% 2/9/99 1,196,380 555,997 627,582 1.63
98% 12/25/98
98% 12/25/98
93% 12/25/98
90% 12/4/98
98% 12/4/98
99% 12/4/98
837,567 392,992 444,575 1.23
96% 4/12/99 1,058,895 371,635 618,547 1.55
98% 3/22/99 838,112 357,151 480,961 1.34
99% 3/1/99 980,642 389,179 591,463 1.58
97% 1/24/99 933,898 402,180 516,219 1.55
97% 4/20/99 593,119 279,859 257,229 0.87
86% 8/4/98 703,730 691,297 12,433 0.04
NAV NAV 2,087,369 1,094,194 915,233 2.47
89% 12/22/98 807,312 303,771 494,437 1.63
90% 1/18/99 908,439 487,726 342,776 1.23
91% 3/3/99 1,235,968 981,837 254,131 0.76
95% 12/28/98
100% 1/1/99 670,681 296,480 347,636 1.21
100% 2/28/99 779,707 319,554 441,875 1.41
94% 2/11/99 844,522 413,640 430,882 1.35
100% 2/1/99 521,375 138,542 382,833 1.34
<CAPTION>
Second Second
Largest Largest Second Largest Largest
Largest Tenant Tenant Largest Tenant Tenant
Occupancy Tenant % of Lease Tenant % of Lease
Occupancy As of Leased Total Expira- Second Largest Leased Total Expira-
Percent Date Largest Tenant SF SF tion Tenant SF SF tion
------- ---- -------------- -- -- ---- ------ -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
94% 11/30/98
93% 11/30/98
95% 5/4/98
95% 12/31/98
95% 9/30/98
90% 3/21/99
85% 2/8/99
86% 12/29/98
94% 12/30/98
91% 12/29/98
100% 12/28/98
93% 12/31/98
95% 1/31/99
93% 3/23/98
99% 2/9/99
83% 3/9/99
83% 3/9/99
100% 3/9/99
100% 3/9/99
100% 3/9/99
98% 9/15/98
98% 12/20/98
99% 1/27/99
95% 2/3/99
100% 1/31/99
98% 4/20/99
100% 2/9/99
98% 12/25/98
98% 12/25/98
93% 12/25/98
90% 12/4/98
98% 12/4/98
99% 12/4/98
96% 4/12/99
98% 3/22/99
99% 3/1/99
97% 1/24/99
97% 4/20/99
86% 8/4/98
NAV NAV
89% 12/22/98
90% 1/18/99
91% 3/3/99
95% 12/28/98
100% 1/1/99
100% 2/28/99
94% 2/11/99
100% 2/1/99
</TABLE>
<PAGE> 121
<TABLE>
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS
- ------ -------- -------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C>
P38 3021714 Balfour Place Apartments 2300 Harvard Way
P39 3044039 Desert Garden Apartments 1720 West Bonanza Road
C40 50731 Border City Mills 2 Weaver Street
P41 3014289 Empire Terrace Apartments 12825 60th Lane South
P42 1201383 The Park Manor Apartments 29405 - 29499 Rancho California Road
C43 51082 Cinnamon Tree Apartments 1285 N. Freedom Blvd
C44 51290 Fletcher Valley Apartments 8320-8328 Fanita Dr.
P45 3016037 Sierra Vista Square Apartments 920 Sierra Vista Drive
C46 51462 College Terrace Apartments II 155 College Court
C47 51208 Loma Linda Gardens 2925 North Greenfield Rd.
C48 51279 Silver Tree Apartments 4336 North 35th Ave.
P49 3035128 Warren House Apartments 2269 Eastern Boulevard
C50 51032 Westwood Apartments 7842 Everett Ave
C51 51446 Ross Tower Apartments 1602 N. Ross Street
P52 3010428 Pueblo Village Apartments 1768-1989 Butte Street
C53A 51496 Greenbrier And Village Oaks Apartments-Greenbrier Apts 8535 Greenbrier Drive
C53B 51496 Greenbrier And Village Oaks Apartments-Village Oaks Apts 8011 N. New Braunfels Ave.
C53 51496 Greenbrier And Village Oaks Apartments (Roll-Up)
P54 3036670 Gilman Terrace Apartments II 2572 Gilman Drive West
P55 3034980 Warren House East Apartments 2911 East Indian School Road
C56 51490 Scottsdale Serrento Apartments 8145 East Camelback Road
P57 3012309 Saratoga Palms at Diamond Head 522 North Lamb Boulevard
P58 3034733 Warren House/Terrace II Apts. 1900 and 2000 Reservoir Road
P59 3021334 Weddington Apartments 15370 Weddington Street
C60 51054 Spanish Garden Apartments 3029 North Rockwell Ave.
C61 51517 Camelot West Apartments 2625 N. Andrews Avenue
P62 3019882 Juniper Court Apartments 1803 South Juniper Street
C63 51485 Oceana Apartments 13520 Kornblum Avenue
C64 51477 El Caballero Apartments 13724 Chadron Avenue
C65 51461 College Terrace Apartments I 1155 North Sierra Street
C66 50378 Buckhead Gardens Apts 22, 24, & 43 Peachtree Ave. N.E.
P67 3037876 Warren Village Mobile 6427 Airport Blvd
P68 3037868 Warren Inn (Mobile) 6501 Airport Boulevard
C69 51345 Drake Plaza Apartments 3301 - 3325 Olive Street
P70 3014420 The Courtyard Apartments 1111 South San Jose Street
P71 3016698 Maryland Gardens Apartments 4529 West Ocotillo Road
P72 1796796 Upstairs/Downstairs Apartments 4238 & 4542 18th Avenue NE
C73 50401 Colbath Apartments 4528-4536 Colbath
C74 51031 Stonewood Apartments 7510 East 85th Terrace
P75 3034998 Park Thomas Apartments 1819 East Thomas Road
C76 50995 232 Front Street 232 Front Street
P77 3013232 Autumn Woods Apartments 5151 S. Utica Avenue
P78 3036001 Newport 40 4160 124th Avenue S.E.
P79 2092443 2121-2127 Fillmore Street 2121-2127 Fillmore Street
P80 3015682 Regents Apartments 1260 Havenhurst Drive
C81 51463 Fairview Apartments 1205 24th Street Northwest
C82 51100 Mission Manor Apartments 4125 Thompson
C83 51476 Peach Tree Apartments 1150 N. Wilmington Blvd.
C84 51489 Highland Square Apartments 3937-39,4007-09 Briggs Ave & 3938-40,4008-10 Lewis Ave
C85 51479 Carousel Apartments 2929 Justina Rd.
C86 51505 Casa Del Valle Apartments 349 South Union Road
C87 51270 1346 W. Jarvis Apartments 1346 West Jarvis Ave.
C88 51478 Madison Square Apartments 23035 Madison Street
C89 51486 Kelvin Square Apartments 7248 Kelvin Avenue
C90 51467 Brynwood Apartments 15400 Highway #65 N.E.
C91 51451 Riata Court Apartments 2875 East Sixth Street
C92 51466 Park Place Apartments 201 & 301 17th Avenue N.E.
C93 51464 Countryside Court Apartments 1940-1941 Countryside Drive
C94 51226 Edgewood Apartments 120 5th St. NW
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME COUNTY CITY
- ------ -------- -------------------------------------------------------- ------------ -------------
<S> <C> <C> <C> <C>
P38 3021714 Balfour Place Apartments Washoe Reno
P39 3044039 Desert Garden Apartments Clark Las Vegas
C40 50731 Border City Mills Bristol Fall River
P41 3014289 Empire Terrace Apartments King Seattle
P42 1201383 The Park Manor Apartments Riverside Temecula
C43 51082 Cinnamon Tree Apartments Utah Provo
C44 51290 Fletcher Valley Apartments San Diego Santee
P45 3016037 Sierra Vista Square Apartments Clark County Las Vegas
C46 51462 College Terrace Apartments II Washoe Reno
C47 51208 Loma Linda Gardens Maricopa Phoenix
C48 51279 Silver Tree Apartments Maricopa Phoenix
P49 3035128 Warren House Apartments Montgomery Montgomery
C50 51032 Westwood Apartments Wyandotte Kansas City
C51 51446 Ross Tower Apartments Orange Santa Ana
P52 3010428 Pueblo Village Apartments Elko Wendover
C53A 51496 Greenbrier And Village Oaks Apartments-Greenbrier Apts Bexar San Antonio
C53B 51496 Greenbrier And Village Oaks Apartments-Village Oaks Apts Bexar San Antonio
C53 51496 Greenbrier And Village Oaks Apartments (Roll-Up)
P54 3036670 Gilman Terrace Apartments II King Seattle
P55 3034980 Warren House East Apartments Maricopa Phoenix
C56 51490 Scottsdale Serrento Apartments Maricopa Scottsdale
P57 3012309 Saratoga Palms at Diamond Head Clark Las Vegas
P58 3034733 Warren House/Terrace II Apts. Pulaski Little Rock
P59 3021334 Weddington Apartments Los Angeles Los Angeles
C60 51054 Spanish Garden Apartments Oklahoma Bethany
C61 51517 Camelot West Apartments Broward Wilton Manors
P62 3019882 Juniper Court Apartments Canyon Nampa
C63 51485 Oceana Apartments Los Angeles Hawthorne
C64 51477 El Caballero Apartments Los Angeles Hawthorne
C65 51461 College Terrace Apartments I Washoe Reno
C66 50378 Buckhead Gardens Apts Fulton Atlanta
P67 3037876 Warren Village Mobile Mobile Mobile
P68 3037868 Warren Inn (Mobile) Mobile Mobile
C69 51345 Drake Plaza Apartments St. Charles St. Louis
P70 3014420 The Courtyard Apartments Maricopa Mesa
P71 3016698 Maryland Gardens Apartments Maricopa Glendale
P72 1796796 Upstairs/Downstairs Apartments King Seattle
C73 50401 Colbath Apartments Los Angeles Sherman Oaks
C74 51031 Stonewood Apartments Jackson Kansas City
P75 3034998 Park Thomas Apartments Maricopa Phoenix
C76 50995 232 Front Street New York Manhattan
P77 3013232 Autumn Woods Apartments Tulsa Tulsa
P78 3036001 Newport 40 King Bellevue
P79 2092443 2121-2127 Fillmore Street San Francisco San Francisco
P80 3015682 Regents Apartments Los Angeles W.Hollywood
C81 51463 Fairview Apartments Kandiyohi Willmar
C82 51100 Mission Manor Apartments Wyandotte Kansas City
C83 51476 Peach Tree Apartments Los Angeles Wilmington
C84 51489 Highland Square Apartments Erie Erie
C85 51479 Carousel Apartments Duval Jacksonville
C86 51505 Casa Del Valle Apartments San Joaquin Manteca
C87 51270 1346 W. Jarvis Apartments Cook Chicago
C88 51478 Madison Square Apartments Los Angeles Torrance
C89 51486 Kelvin Square Apartments Los Angeles Los Angeles
C90 51467 Brynwood Apartments Anoka Ham Lake
C91 51451 Riata Court Apartments Pima Tucson
C92 51466 Park Place Apartments Waseca Waseca
C93 51464 Countryside Court Apartments Swift Benson
C94 51226 Edgewood Apartments Itasca Cohasset
</TABLE>
<PAGE> 122
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
ADMINI-
CUT-OFF MATURITY STRATIVE SUB- NET
PROPERTY ORIGINAL DATE DATE LOAN MORTGAGE FEE SERVICING MORTGAGE
STATE ZIP CODE TYPE BALANCE BALANCE BALANCE TYPE RATE RATE(i) FEE RATE RATE
- ----- -------- ----------- ---------- ---------- ---------- ---------- -------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NV 89502 Multifamily $3,000,000 $2,810,496 $2,110,275 Balloon 8.490% 0.143% 0.100% 8.347%
NV 89106 Multifamily 2,870,000 2,795,968 2,309,797 Balloon 7.750% 0.143% 0.100% 7.607%
MA 2720 Multifamily 2,800,000 2,759,241 2,447,001 Balloon 7.010% 0.143% 0.100% 6.867%
WA 98178 Multifamily 2,750,000 2,653,853 2,412,304 Balloon 8.000% 0.143% 0.100% 7.857%
CA 92591 Multifamily 6,000,000 2,568,203 Fully Amortizing 9.125% 0.143% 0.100% 8.982%
UT 84604 Multifamily 2,618,000 2,552,183 1,782,348 Balloon 6.850% 0.143% 0.100% 6.707%
CA 92071 Multifamily 2,520,000 2,491,758 2,168,238 Balloon 6.430% 0.143% 0.100% 6.287%
NV 89109 Multifamily 2,600,000 2,481,634 2,137,194 Balloon 8.625% 0.143% 0.100% 8.482%
NV 89503 Multifamily 2,490,000 2,473,289 2,184,226 Balloon 7.170% 0.143% 0.100% 7.027%
AZ 85016 Multifamily 2,475,000 2,445,682 2,152,916 Balloon 6.836% 0.143% 0.100% 6.693%
AZ 85017 Multifamily 2,400,000 2,372,608 3,060,250 Balloon 6.348% 0.143% 0.100% 6.205%
AL 36101 Multifamily 2,500,000 2,370,344 1,737,782 Balloon 7.940% 0.143% 0.100% 7.797%
KS 66112 Multifamily 2,350,000 2,324,797 2,052,782 Balloon 7.000% 0.143% 0.100% 6.857%
CA 92706 Multifamily 2,300,000 2,273,825 1,858,964 Balloon 7.250% 0.143% 0.100% 7.10700%
NV 89883 Multifamily 2,495,541 2,245,930 2,008,784 Balloon 7.500% 0.143% 0.100% 7.357%
TX 78209 Multifamily
TX 78209 Multifamily
2,250,000 2,226,855 1,563,890 Balloon 7.415% 0.143% 0.100% 7.272%
WA 98102 Multifamily 2,350,000 2,192,324 2,116,444 Balloon 8.875% 0.143% 0.100% 8.732%
AZ 85016 Multifamily 2,200,000 2,085,083 1,523,727 Balloon 7.940% 0.143% 0.100% 7.797%
AZ 85251 Multifamily 2,000,000 1,987,838 1,736,853 Balloon 6.744% 0.143% 0.100% 6.601%
NV 89110 Multifamily 2,050,000 1,928,036 1,644,445 Balloon 7.625% 0.143% 0.100% 7.482%
AR 72227 Multifamily 2,000,000 1,896,276 1,390,227 Balloon 7.940% 0.143% 0.100% 7.797%
CA 91411 Multifamily 1,925,000 1,872,857 1,687,018 Balloon 7.875% 0.143% 0.100% 7.732%
OK 73008 Multifamily 1,900,000 1,869,684 1,225,509 Balloon 7.280% 0.183% 0.140% 7.097%
FL 33311 Multifamily 1,875,000 1,868,496 1,668,610 Balloon 7.710% 0.143% 0.100% 7.567%
ID 83686 Multifamily 1,930,000 1,866,883 1,682,969 Balloon 7.750% 0.143% 0.100% 7.607%
CA 90250 Multifamily 1,880,000 1,866,719 1,639,305 Balloon 6.940% 0.143% 0.100% 6.797%
CA 90250 Multifamily 1,864,000 1,851,207 1,630,885 Balloon 7.070% 0.143% 0.100% 6.927%
NV 89503 Multifamily 1,840,000 1,827,651 1,614,046 Balloon 7.170% 0.143% 0.100% 7.027%
GA 30305 Multifamily 1,840,000 1,810,943 1,631,172 Balloon 7.580% 0.143% 0.100% 7.437%
AL 36608 Multifamily 1,900,000 1,801,315 1,319,508 Balloon 8.030% 0.143% 0.100% 7.887%
AL 36608 Multifamily 1,900,000 1,801,315 1,319,508 Balloon 8.030% 0.143% 0.100% 7.887%
MO 63103 Multifamily 1,800,000 1,788,857 1,412,321 Balloon 7.525% 0.143% 0.100% 7.382%
AZ 85202 Multifamily 1,884,000 1,782,290 1,523,011 Balloon 8.000% 0.143% 0.100% 7.857%
AZ 85301 Multifamily 1,850,000 1,765,068 1,516,908 Balloon 8.500% 0.143% 0.100% 8.357%
WA 98105 Multifamily 1,890,000 1,733,675 1,684,075 Balloon 8.500% 0.143% 0.100% 8.357%
CA 91423 Multifamily 1,750,000 1,718,734 1,530,685 Balloon 7.050% 0.143% 0.100% 6.907%
MO 64138 Multifamily 1,650,000 1,632,305 1,441,315 Balloon 7.000% 0.143% 0.100% 6.857%
AZ 85016 Multifamily 1,700,000 1,611,200 1,177,424 Balloon 7.940% 0.143% 0.100% 7.797%
NY 10038 Multifamily 1,600,000 1,580,492 1,387,078 Balloon 6.710% 0.143% 0.100% 6.567%
OK 74105 Multifamily 1,711,300 1,553,750 1,173,419 Balloon 7.650% 0.143% 0.100% 7.507%
WA 98006 Multifamily 1,260,000 1,551,460 1,157,563 Balloon 8.400% 0.143% 0.100% 8.257%
CA 94115 Multifamily 1,650,000 1,529,674 1,481,386 Balloon 9.000% 0.143% 0.100% 8.857%
CA 90046 Multifamily 1,600,000 1,523,675 1,291,547 Balloon 7.875% 0.143% 0.100% 7.732%
MN 56201 Multifamily 1,476,000 1,467,308 1,324,301 Balloon 8.085% 0.143% 0.100% 7.942%
KS 66103 Multifamily 1,460,000 1,436,874 1,166,089 Balloon 6.850% 0.143% 0.100% 6.707%
CA 90744 Multifamily 1,350,000 1,340,526 1,178,088 Balloon 6.970% 0.143% 0.100% 6.827%
PA 16504 Multifamily 1,200,000 1,195,213 1,083,613 Balloon 8.305% 0.143% 0.100% 8.162%
FL 32277 Multifamily 1,175,000 1,168,297 1,048,835 Balloon 7.875% 0.143% 0.100% 7.732%
CA 95337 Multifamily 1,035,000 1,030,748 922,763 Balloon 7.800% 0.143% 0.100% 7.657%
IL 60626 Multifamily 1,000,000 988,876 869,838 Balloon 6.840% 0.143% 0.100% 6.697%
CA 90505 Multifamily 900,000 893,649 784,876 Balloon 6.945% 0.143% 0.100% 6.802%
CA 91306 Multifamily 900,000 893,500 782,699 Balloon 6.840% 0.143% 0.100% 6.697%
MN 55304 Multifamily 800,000 792,246 663,497 Balloon 8.135% 0.143% 0.100% 7.992%
AZ 85716 Multifamily 770,000 765,105 685,801 Balloon 7.775% 0.143% 0.100% 7.632%
MN 56093 Multifamily 760,000 755,718 684,652 Balloon 8.260% 0.143% 0.100% 8.117%
MN 56215 Multifamily 672,000 665,637 559,289 Balloon 8.260% 0.143% 0.100% 8.117%
MN 55721 Multifamily 650,000 643,714 574,251 Balloon 7.442% 0.143% 0.100% 7.299%
<CAPTION>
FIRST INTEREST
PROPERTY NOTE PAYMENT ACCRUAL
STATE ZIP CODE TYPE DATE DATE METHOD
- ----- -------- ----------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
NV 89502 Multifamily 11/1/96 1/1/97 30/360
NV 89106 Multifamily 12/11/97 2/1/98 30/360
MA 2720 Multifamily 3/20/98 5/1/98 ACT/360
WA 98178 Multifamily 2/29/96 5/1/96 30/360
CA 92591 Multifamily 7/21/94 9/1/94 30/360
UT 84604 Multifamily 9/18/98 11/1/98 ACT/360
CA 92071 Multifamily 9/11/98 11/1/98 ACT/360
NV 89109 Multifamily 4/19/96 7/1/96 30/360
NV 89503 Multifamily 1/11/99 3/1/99 ACT/360
AZ 85016 Multifamily 7/20/98 9/1/98 ACT/360
AZ 85017 Multifamily 9/4/98 11/1/98 ACT/360
AL 36101 Multifamily 8/1/97 10/1/97 ACT/360
KS 66112 Multifamily 8/14/98 10/1/98 ACT/360
CA 92706 Multifamily 12/14/98 2/1/99 ACT/360
NV 89883 Multifamily 11/1/95 12/1/95 30/360
TX 78209 Multifamily
TX 78209 Multifamily
4/16/99 6/1/99 ACT/360
WA 98102 Multifamily 6/25/90 7/1/90 ACT/360
AZ 85016 Multifamily 7/23/97 9/1/97 ACT/360
AZ 85251 Multifamily 2/1/99 4/1/99 ACT/360
NV 89110 Multifamily 12/13/95 2/1/96 30/360
AR 72227 Multifamily 7/23/97 9/1/97 ACT/360
CA 91411 Multifamily 11/22/96 1/1/97 30/360
OK 73008 Multifamily 8/21/98 10/1/98 ACT/360
FL 33311 Multifamily 4/6/99 6/1/99 ACT/360
ID 83686 Multifamily 8/13/96 10/1/96 30/360
CA 90250 Multifamily 1/7/99 3/1/99 ACT/360
CA 90250 Multifamily 1/7/99 3/1/99 ACT/360
NV 89503 Multifamily 1/11/99 3/1/99 ACT/360
GA 30305 Multifamily 11/24/97 1/1/98 ACT/360
AL 36608 Multifamily 8/1/97 10/1/97 30/360
AL 36608 Multifamily 8/1/97 10/1/97 30/360
MO 63103 Multifamily 1/12/99 3/1/99 ACT/360
AZ 85202 Multifamily 3/25/96 5/1/96 30/360
AZ 85301 Multifamily 5/17/96 7/1/96 30/360
WA 98105 Multifamily 3/17/94 5/1/94 30/360
CA 91423 Multifamily 11/14/97 1/1/98 ACT/360
MO 64138 Multifamily 8/14/98 10/1/98 ACT/360
AZ 85016 Multifamily 7/23/97 9/1/97 ACT/360
NY 10038 Multifamily 7/16/98 9/1/98 ACT/360
OK 74105 Multifamily 1/16/96 3/1/96 30/360
WA 98006 Multifamily 1/2/87 3/1/87 30/360
CA 94115 Multifamily 5/27/94 8/1/94 30/360
CA 90046 Multifamily 7/31/96 9/1/96 30/360
MN 56201 Multifamily 12/21/98 2/1/99 ACT/360
KS 66103 Multifamily 9/18/98 11/1/98 ACT/360
CA 90744 Multifamily 1/7/99 3/1/99 ACT/360
PA 16504 Multifamily 2/18/99 4/1/99 ACT/360
FL 32277 Multifamily 1/14/99 3/1/99 ACT/360
CA 95337 Multifamily 3/11/99 5/1/99 ACT/360
IL 60626 Multifamily 8/26/98 10/1/98 ACT/360
CA 90505 Multifamily 1/7/99 3/1/99 ACT/360
CA 91306 Multifamily 1/7/99 3/1/99 ACT/360
MN 55304 Multifamily 12/21/98 2/1/99 ACT/360
AZ 85716 Multifamily 12/21/98 2/1/99 ACT/360
MN 56093 Multifamily 12/21/98 2/1/99 ACT/360
MN 56215 Multifamily 12/21/98 2/1/99 ACT/360
MN 55721 Multifamily 8/5/98 10/1/98 ACT/360
</TABLE>
<PAGE> 123
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS)(II) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
------- -------- ------------- --------- --------- -------- -------------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$26,016 120 240 35 85 12/1/06 No No
21,678 120 300 22 98 1/1/08 No No
18,647 120 360 19 101 4/1/08 No No 3/31/02
20,144 120 360 43 77 4/1/06 No No
88,291 96 96 63 33 8/1/02 No No
20,062 120 240 13 107 10/1/08 No No 5/31/08
15,812 120 360 13 107 10/1/08 No No 8/1/08
21,145 120 300 41 79 6/1/06 No No
16,851 120 360 9 111 2/1/09 No Yes(B) 12/2/08
16,195 120 360 15 105 8/1/08 No No 6/1/08
14,931 120 360 13 107 10/1/08 No No 8/1/08
20,900 119 240 26 93 8/1/07 No No
15,635 120 360 14 106 9/1/08 No Yes(C) 5/1/08
16,625 120 300 10 110 1/1/09 No No 11/1/08
20,120 84 240 48 36 10/31/02 No No
18,009 120 240 6 114 5/1/09 No No 2/1/09
18,698 144 360 113 31 6/1/02 No No 5/31/93
18,423 120 240 27 93 8/1/07 No Yes(D)
12,964 120 360 8 112 3/1/09 No No 12/30/08
15,316 120 300 46 74 1/1/06 No No
16,720 120 240 27 93 8/1/07 No Yes(D)
13,956 120 360 35 85 12/1/06 No Yes(E)
13,770 180 300 14 166 9/1/13 No Yes(F) 4/30/13
13,381 120 360 6 114 5/1/09 No No 2/1/09
13,792 120 360 38 82 9/1/06 No No
12,432 120 360 9 111 2/1/09 No Yes(G) 12/2/08
12,489 120 360 9 111 2/1/09 No Yes(G) 12/2/08
12,452 120 360 9 111 2/1/09 No Yes(B) 12/2/08
12,966 120 360 23 97 12/1/07 No No 11/30/01
15,860 119 240 26 93 8/1/07 No Yes(H)
15,860 119 240 26 93 8/1/07 No Yes(H)
12,617 180 360 9 171 2/1/14 No Yes(C) 11/1/13
14,513 120 300 43 77 4/1/06 No No
14,897 120 300 41 79 6/1/06 No No
15,219 84 300 67 17 4/1/01 No No
11,702 120 360 23 97 12/1/07 No No 11/30/01
10,977 120 360 14 106 9/1/08 No Yes(C) 5/1/08
14,236 120 240 27 93 8/1/07 No Yes(D)
10,335 120 360 15 105 8/1/08 No No 3/31/08
13,944 120 240 45 75 2/1/06 No No
14,215 240 360 153 87 2/1/07 No No 1/31/88
13,847 84 300 64 20 7/1/01 No No
12,215 120 300 39 81 8/1/06 No Yes(E)
10,918 120 360 10 110 1/1/09 No Yes(I) 11/1/08
10,180 120 300 13 107 10/1/08 No No 5/31/08
8,954 120 360 9 111 2/1/09 No Yes(G) 12/2/08
9,062 120 360 8 112 3/1/09 No Yes(I) 12/30/08
8,520 120 360 9 111 2/1/09 No No 11/1/08
7,451 120 360 7 113 4/1/09 No No 1/30/09
6,546 120 360 14 106 9/1/08 No No 7/2/08
5,955 120 360 9 111 2/1/09 No Yes(G) 12/2/08
5,891 120 360 9 111 2/1/09 No Yes(G) 12/2/08
6,246 120 300 10 110 1/1/09 No Yes(I) 11/1/08
5,530 120 360 10 110 1/1/09 No No 11/1/08
5,715 120 360 10 110 1/1/09 No Yes(I) 11/1/08
5,303 120 300 10 110 1/1/09 No Yes(I) 11/1/08
4,519 120 360 14 106 9/1/08 No No 7/2/08
<CAPTION>
PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- -------------------------------------- ----------------------
<S> <C>
YM(120) Int. Rate Diff. (Type 3A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(48)/GRTR1%PPMT or YM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(96) Int. Rate Diff. (Type 1A)
LO(115)/OPEN(5)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
YM(119) Int. Rate Diff. (Type 3A)
LO(116)/OPEN(4)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
$250+YM(84) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
OPEN(24)/LO(12)/GRTR1%PPMT or YM(107)/OPEN(1) Int. Rate Diff. (Type 3B)
YM(120) Int. Rate Diff. (Type 3A)
LO(117)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 3A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(175)/OPEN(5)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(48)/GRTR1%PPMT or YM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
YM(119) Int. Rate Diff. (Type 3A)
YM(119) Int. Rate Diff. (Type 3A)
LO(177)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(84) Int. Rate Diff. (Type 2A)
LO(48)/GRTR1%PPMT or YM(66)/OPEN(6) Int. Rate Diff. (Type 1A)
LO(116)/OPEN(4)/DEF NAP
YM(120) Int. Rate Diff. (Type 3A)
LO(115)/OPEN(5)/DEF NAP
YM(120) Int. Rate Diff. (Type 3A)
(iii) Int. Rate Diff. (Type 1A)
$250+YM(84) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
</TABLE>
<PAGE> 124
<TABLE>
<CAPTION>
CUT-OFF
DATE
LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/
SEQUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED
- -------- ------ ------------- --------- --------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
P38 3021714 Balfour Place Apartments $7,635,000 9/6/96 37% 1973
P39 3044039 Desert Garden Apartments 4,600,000 4/24/97 61% 1975/1996
C40 50731 Border City Mills 3,580,000 11/12/97 77% 1873/1989
P41 3014289 Empire Terrace Apartments 3,830,000 2/6/96 69% 1987
P42 1201383 The Park Manor Apartments 8,500,000 7/6/94 30% 1986
C43 51082 Cinnamon Tree Apartments 3,770,000 6/22/98 68% 1965
C44 51290 Fletcher Valley Apartments 3,150,000 6/29/98 79% 1980
P45 3016037 Sierra Vista Square Apartments 4,950,000 1/18/96 50% 1980/1993
C46 51462 College Terrace Apartments II 3,400,000 9/15/98 73% 1996
C47 51208 Loma Linda Gardens 3,300,000 6/11/98 74% 1970
C48 51279 Silver Tree Apartments 3,000,000 7/7/98 79% 1986
P49 3035128 Warren House Apartments 5,860,700 4/30/97 40% 1979
C50 51032 Westwood Apartments 3,200,000 5/27/98 73% 1960
C51 51446 Ross Tower Apartments 4,000,000 8/7/98 57% 1986
P52 3010428 Pueblo Village Apartments 5,000,000 8/2/95 45% 1988
C53A 51496 Greenbrier And Village Oaks Apartments-Greenbrier Apts 1967
C53B 51496 Greenbrier And Village Oaks Apartments-Village Oaks Apts 1967
C53 51496 Greenbrier And Village Oaks Apartments (Roll-Up) 3,215,000 9/24/98 69%
P54 3036670 Gilman Terrace Apartments II 3,325,000 1/15/90 66% 1990
P55 3034980 Warren House East Apartments 4,300,000 4/2/97 48% 1968
C56 51490 Scottsdale Serrento Apartments 9,090,000 8/14/98 22% 1978
P57 3012309 Saratoga Palms at Diamond Head 2,760,000 11/7/95 70% 1991
P58 3034733 Warren House/Terrace II Apts. 6,000,000 4/16/97 32% 1975
P59 3021334 Weddington Apartments 2,570,000 10/22/96 73% 1972
C60 51054 Spanish Garden Apartments 2,850,000 6/3/98 66% 1968/1997
C61 51517 Camelot West Apartments 2,500,000 2/16/99 75% 1966/1972
P62 3019882 Juniper Court Apartments 2,550,000 7/8/96 73% 1977
C63 51485 Oceana Apartments 2,350,000 10/13/98 79% 1972
C64 51477 El Caballero Apartments 2,330,000 10/13/98 79% 1972
C65 51461 College Terrace Apartments I 2,600,000 9/15/98 70% 1993
C66 50378 Buckhead Gardens Apts 2,300,000 9/24/97 79% 1957/1997
P67 3037876 Warren Village Mobile 4,077,000 5/9/97 44% 1975
P68 3037868 Warren Inn (Mobile) 3,833,000 5/9/97 47% 1984/1992
C69 51345 Drake Plaza Apartments 2,300,000 10/20/98 78% 1905/1988
P70 3014420 The Courtyard Apartments 2,650,000 3/6/96 67% 1973/1995
P71 3016698 Maryland Gardens Apartments 2,880,000 3/18/96 61% 1983
P72 1796796 Upstairs/Downstairs Apartments 2,700,000 1/13/94 64% 1976
C73 50401 Colbath Apartments 2,540,000 8/28/97 68% 1978/1996
C74 51031 Stonewood Apartments 2,450,000 5/27/98 67% 1973/1997
P75 3034998 Park Thomas Apartments 2,900,000 4/2/97 56% 1966/1996
C76 50995 232 Front Street 2,115,000 5/6/98 75% 1900/1997
P77 3013232 Autumn Woods Apartments 2,400,000 8/31/95 65% 1973
P78 3036001 Newport 40 2,590,000 1/7/97 60% 1981
P79 2092443 2121-2127 Fillmore Street 2,950,000 9/27/93 52% 1910/1977
P80 3015682 Regents Apartments 2,200,000 7/23/96 69% 1961
C81 51463 Fairview Apartments 1,845,000 8/2/98 80% 1978
C82 51100 Mission Manor Apartments 1,825,000 8/5/98 79% 1975
C83 51476 Peach Tree Apartments 1,875,000 10/21/98 71% 1987
C84 51489 Highland Square Apartments 1,500,000 9/11/98 80% 1952
C85 51479 Carousel Apartments 1,500,000 11/30/98 78% 1963/1993
C86 51505 Casa Del Valle Apartments 1,535,000 1/28/99 67% 1983
C87 51270 1346 W. Jarvis Apartments 1,250,000 5/8/98 79% 1922
C88 51478 Madison Square Apartments 1,150,000 10/20/98 78% 1969
C89 51486 Kelvin Square Apartments 1,200,000 11/5/98 74% 1977
C90 51467 Brynwood Apartments 1,000,000 9/16/98 79% 1978/1992
C91 51451 Riata Court Apartments 1,175,000 9/15/98 65% 1997
C92 51466 Park Place Apartments 960,000 9/9/98 79% 1977
C93 51464 Countryside Court Apartments 840,000 9/2/98 79% 1978
C94 51226 Edgewood Apartments 890,000 7/1/98 72% 1997
<CAPTION>
TOTAL SF/ LOAN
UNITS/ UNIT/ NET BALANCE PER
LOAN ROOM/ ROOM/ RENTABLE SF/UNIT/
SEQUENCE NUMBER PROPERTY NAME BED BED AREA (SF) ROOM/BED
- -------- ------ ------------- --- --- --------- -----------
<S> <C> <C> <S> <C> <C> <C>
P38 3021714 Balfour Place Apartments 220 Units 200,964 $ 12,775
P39 3044039 Desert Garden Apartments 148 Units 109,400 18,892
C40 50731 Border City Mills 106 Units 102,367 26,031
P41 3014289 Empire Terrace Apartments 94 Units 74,592 28,232
P42 1201383 The Park Manor Apartments 400 Units 269,800 6,421
C43 51082 Cinnamon Tree Apartments 65 Units 66,184 39,264
C44 51290 Fletcher Valley Apartments 72 Units 44,856 34,608
P45 3016037 Sierra Vista Square Apartments 174 Units 77,850 14,262
C46 51462 College Terrace Apartments II 22 Units 26,400 112,422
C47 51208 Loma Linda Gardens 130 Units 93,084 18,813
C48 51279 Silver Tree Apartments 98 Units 59,152 24,210
P49 3035128 Warren House Apartments 244 Units 126,320 9,715
C50 51032 Westwood Apartments 168 Units 144,720 13,838
C51 51446 Ross Tower Apartments 105 Units 74,690 21,655
P52 3010428 Pueblo Village Apartments 124 Units 88,600 18,112
C53A 51496 Greenbrier And Village Oaks Apartments-Greenbrier Apts 63 Units 52,900
C53B 51496 Greenbrier And Village Oaks Apartments-Village Oaks Apts 64 Units 51,750
C53 51496 Greenbrier And Village Oaks Apartments (Roll-Up) 127 Units 104,650 17,534
P54 3036670 Gilman Terrace Apartments II 42 Units 37,725 52,198
P55 3034980 Warren House East Apartments 257 Units 135,101 8,113
C56 51490 Scottsdale Serrento Apartments 188 Units 149,374 10,574
P57 3012309 Saratoga Palms at Diamond Head 56 Units 47,536 34,429
P58 3034733 Warren House/Terrace II Apts. 223 Units 114,215 8,503
P59 3021334 Weddington Apartments 50 Units 38,736 37,457
C60 51054 Spanish Garden Apartments 70 Units 55,800 26,710
C61 51517 Camelot West Apartments 67 Units 51,276 27,888
P62 3019882 Juniper Court Apartments 96 Units 72,000 19,447
C63 51485 Oceana Apartments 81 Units 46,404 23,046
C64 51477 El Caballero Apartments 84 Units 44,598 22,038
C65 51461 College Terrace Apartments I 19 Units 21,683 96,192
C66 50378 Buckhead Gardens Apts 50 Units 31,800 36,219
P67 3037876 Warren Village Mobile 196 Units 239,340 9,190
P68 3037868 Warren Inn (Mobile) 226 Units 88,060 7,970
C69 51345 Drake Plaza Apartments 85 Units 63,375 21,045
P70 3014420 The Courtyard Apartments 112 Units 62,944 15,913
P71 3016698 Maryland Gardens Apartments 120 Units 84,808 14,709
P72 1796796 Upstairs/Downstairs Apartments 19 Units 30,024 91,246
C73 50401 Colbath Apartments 22 Units 28,866 78,124
C74 51031 Stonewood Apartments 87 Units 76,024 18,762
P75 3034998 Park Thomas Apartments 193 Units 75,598 8,348
C76 50995 232 Front Street 8 Units 8,704 197,562
P77 3013232 Autumn Woods Apartments 120 Units 99,936 12,948
P78 3036001 Newport 40 40 Units 36,088 38,787
P79 2092443 2121-2127 Fillmore Street 16 Units 13,612 95,605
P80 3015682 Regents Apartments 34 Units 37,331 44,814
C81 51463 Fairview Apartments 72 Units 49,000 20,379
C82 51100 Mission Manor Apartments 96 Units 66,135 14,967
C83 51476 Peach Tree Apartments 89 Units 42,800 15,062
C84 51489 Highland Square Apartments 56 Units 42,000 21,343
C85 51479 Carousel Apartments 92 Units 76,480 12,699
C86 51505 Casa Del Valle Apartments 45 Units 30,936 22,906
C87 51270 1346 W. Jarvis Apartments 34 Units 27,800 29,085
C88 51478 Madison Square Apartments 16 Units 15,083 55,853
C89 51486 Kelvin Square Apartments 41 Units 22,877 21,793
C90 51467 Brynwood Apartments 50 Units 20,590 15,845
C91 51451 Riata Court Apartments 16 Units 15,120 47,819
C92 51466 Park Place Apartments 48 Units 29,080 15,744
C93 51464 Countryside Court Apartments 34 Units 29,300 19,578
C94 51226 Edgewood Apartments 18 Units 15,552 35,762
</TABLE>
<PAGE> 125
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W MOST
OCCUPANCY CASH U/W RECENT MOST
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES END RECENT
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT DATE REVENUES
------- ---- -------- -------- --------- ---- -------- -------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
93% 12/31/98 $1,450,834 $664,958 $ 730,876 2.34 $ 55,000 $250.00 12/31/98 $1,450,834
100% 2/2/99 760,731 335,126 388,605 1.49 37,000 250.00 1/30/99 806,045
98% 12/1/98 797,651 491,542 279,609 1.25 26,500 250.00 12/31/98 814,972
99% 12/31/98 701,248 310,868 366,880 1.52 23,500 250.00 12/31/98 701,248
97% 3/1/99 1,991,264 606,896 1,284,368 1.21 100,000 250.00 12/31/98 1,991,264
99% 1/20/99 564,944 228,623 313,031 1.30 23,290 358.31 12/31/98 641,583
100% 7/31/98 453,491 196,780 242,311 1.28 14,400 200.00 12/31/98 440,579
87% 1/27/99 869,234 516,328 309,406 1.22 43,500 250.00 12/31/98 869,030
99% 12/1/98 338,730 79,336 252,794 1.25 6,600 300.00 12/31/98 329,099
95% 12/22/98 764,656 489,661 242,495 1.25 32,500 250.00 12/31/98 758,858
100% 1/31/99 502,271 234,837 238,328 1.33 29,106 297.00 12/31/98 488,055
92% 1/14/97 1,446,412 751,260 634,152 2.53 61,000 250.00 12/31/98 1,515,678
98% 2/25/99 758,295 481,015 235,280 1.25 42,000 250.00 12/31/98 792,830
100% 11/30/98 660,258 269,745 358,115 1.80 32,398 308.55 12/31/98 700,452
69% 2/9/99 580,610 268,276 281,334 1.17 31,000 250.00 12/31/98 621,083
98% 2/1/99
95% 2/1/99
695,987 371,646 291,541 1.35 32,800 258.27 12/31/98 652,470
98% 2/1/99 394,805 137,463 245,792 1.10 11,550 275.00 6/30/98 394,805
96% 1/14/97 1,153,447 764,571 324,626 1.47 64,250 250.00 12/31/98 1,212,214
95% 7/30/98 1,371,055 557,867 759,563 4.88 53,625 285.24 12/31/98 1,349,819
100% 2/9/99 386,250 168,309 203,941 1.11 14,000 250.00 12/31/98 386,251
95% 1/14/97 1,063,012 555,186 452,076 2.25 55,750 250.00 12/31/98 1,120,356
98% 1/1/99 381,027 164,698 203,829 1.22 12,500 250.00 12/31/98 381,028
89% 8/4/98 732,492 343,696 360,796 2.18 28,000 400.00 12/31/98 650,818
94% 3/29/99 454,887 237,557 201,920 1.26 15,410 230.00 12/31/98 480,658
99% 12/31/98 451,047 214,205 212,842 1.29 24,000 250.00 12/31/98 451,047
95% 11/2/98 464,236 216,311 227,464 1.52 20,461 252.60 12/31/98 472,658
98% 11/12/98 468,645 210,411 232,474 1.55 25,760 306.67 12/31/98 472,065
100% 12/1/98 269,802 77,166 186,936 1.25 5,700 300.00 12/31/98 270,474
98% 12/31/98 371,706 162,269 201,937 1.30 7,500 150.00 12/31/98 371,362
98% 1/14/97 1,067,553 558,759 459,794 2.42 49,000 250.00 12/31/98 1,119,143
76% 1/14/97 1,309,289 627,567 625,222 3.29 56,500 250.00 12/31/98 1,377,959
97% 12/28/98 416,388 202,264 189,995 1.25 24,129 283.87 12/31/98 398,639
100% 1/1/99 483,241 236,458 218,783 1.26 28,000 250.00 12/31/98 483,241
99% 5/30/98 614,460 290,381 294,079 1.65 30,000 250.00 12/31/98 645,510
100% 3/1/99 441,047 180,016 251,531 1.38 9,500 500.00 12/31/98 441,048
100% 12/29/98 293,370 102,943 185,917 1.32 4,510 205.00 12/31/98 305,977
96% 2/25/99 432,372 245,119 165,503 1.26 21,750 250.00 12/31/98 437,641
100% 1/14/97 827,188 545,062 233,876 1.37 48,250 250.00 12/31/98 869,366
100% 7/1/98 222,551 41,209 179,742 1.45 1,600 200.00 12/31/98 204,099
98% 2/1/99 535,333 258,033 247,300 1.48 30,000 250.00 12/31/98 558,810
100% 3/25/99 377,551 136,094 231,457 1.36 10,000 250.00 12/31/98 377,551
100% 1/29/99 393,440 104,801 276,513 1.66 5,156 322.25 12/31/98 404,846
100% 1/1/99 331,097 138,759 183,838 1.25 8,500 250.00 12/31/98 331,097
89% 9/1/98 367,076 169,271 179,805 1.37 18,000 250.00 12/31/98 372,427
96% 8/11/98 429,178 242,067 160,999 1.32 26,112 272.00 12/31/98 425,447
97% 11/12/98 425,470 240,943 164,250 1.53 20,277 227.83 12/31/98 441,649
95% 12/1/98 295,043 142,490 136,454 1.25 16,099 287.48 12/31/98 297,697
96% 1/5/99 387,965 237,148 127,817 1.25 23,000 250.00 12/31/98 380,972
100% 3/12/99 249,887 119,865 118,772 1.33 11,250 250.00 12/31/98 249,972
97% 3/17/99 225,666 106,886 106,693 1.36 12,087 355.50 12/31/98 212,509
96% 11/12/98 169,706 61,075 101,147 1.42 7,484 467.75 12/31/98 174,901
100% 11/12/98 221,005 90,507 118,886 1.68 11,612 283.22 12/31/98 235,162
100% 11/1/98 269,808 138,896 118,412 1.58 12,500 250.00 12/31/98 275,930
94% 2/9/99 149,040 50,512 93,728 1.41 4,800 300.00 12/31/98 134,516
83% 3/1/99 182,442 84,408 86,034 1.25 12,000 250.00 12/31/98 208,230
94% 10/31/98 145,398 51,343 85,555 1.34 8,500 250.00 12/31/98 142,890
94% 1/14/99 121,298 45,208 72,130 1.33 3,960 220.00
<CAPTION>
MOST 2ND
RECENT MOST
MOST MOST CASH RECENT
RECENT RECENT FLOW END
EXPENSES CASH FLOW DSCR DATE
-------- ---------- ---- ----
<S> <C> <C> <C>
$628,999 $ 720,378 2.31
295,521 510,524 1.96 7/31/97
445,699 346,422 1.55 12/31/97
276,927 378,466 1.57 12/31/97
445,333 1,545,931 1.46 12/31/97
299,919 341,664 1.42 12/31/97
203,109 216,641 1.14 12/31/97
504,092 364,938 1.44 12/31/97
77,506 251,593 1.24
470,939 237,468 1.22 12/31/97
227,736 235,803 1.32 12/31/97
676,136 814,175 3.25 12/31/97
457,590 335,240 1.79 12/31/97
214,869 485,583 2.43 12/31/97
238,246 382,837 1.59 12/31/97
317,258 271,596 1.26 12/31/97
116,682 278,123 1.24 12/31/97
718,430 446,748 2.02 12/31/97
519,819 704,626 4.53 12/31/97
165,237 221,014 1.20 12/31/97
503,224 617,132 3.08 12/31/97
161,918 200,319 1.20 12/31/97
285,799 365,019 2.21
207,152 246,782 1.54 12/31/97
194,497 208,218 1.26 12/31/97
166,532 300,645 2.02 12/31/97
158,876 288,314 1.92 12/31/97
76,942 193,532 1.30 12/31/97
140,170 228,558 1.47 12/31/97
524,659 586,846 3.08 12/31/97
558,275 774,791 4.07 12/31/97
198,116 200,523 1.32
236,832 174,210 1.00 12/31/97
259,658 360,802 2.02
168,051 272,997 1.49 12/31/97
87,767 199,062 1.42 12/31/97
238,783 198,858 1.51 12/31/97
495,401 345,193 2.02 12/31/97
34,713 169,386 1.37
237,602 307,759 1.84 12/31/97
127,932 249,619 1.46 12/31/97
94,582 310,264 1.87 12/31/97
106,929 153,682 1.05 12/31/97
164,679 207,748 1.59 12/31/97
243,632 54,272 0.44 12/31/97
209,159 223,770 2.08 12/31/97
117,871 165,426 1.52 12/31/97
245,107 135,865 1.33 12/31/97
111,457 123,745 1.38 12/31/97
99,225 102,074 1.30
42,160 119,742 1.68 12/31/97
73,395 157,662 2.23 12/31/97
131,750 144,180 1.92 12/31/97
29,498 105,018 1.58 12/31/97
83,057 125,173 1.83 12/31/97
49,293 93,597 1.47 12/31/97
</TABLE>
<PAGE> 126
<TABLE>
<CAPTION>
2ND SECOND SECOND
MOST LARGEST LARGEST SECOND LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA- SECOND LARGEST LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION TENANT SF SF TION
-------- -------- --------- ---- -------------- -- -- ---- ------ -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 770,639 $233,171 $ 537,468 2.07
732,951 507,519 215,368 0.96
649,185 289,305 346,005 1.43
1,633,941 426,907 1,207,034 1.14
537,944 220,389 247,757 1.03
425,181 173,364 218,552 1.15
877,889 491,765 386,124 1.52
652,534 473,888 177,926 0.92
445,083 205,798 239,285 1.34
1,481,362 755,399 699,595 2.79
643,168 372,333 -643,146 -3.43
508,274 233,852 261,644 1.31
716,118 271,610 444,508 1.84
665,636 344,692 259,296 1.20
374,690 121,653 253,037 1.13 Jeff Rizzuto, David O'Leary 1,800 5% 6/30/00 Michael Felicetty 1,300 3% MTM
1,168,071 724,560 402,316 1.82
1,318,904 511,357 671,721 4.32
294,940 128,074 148,232 0.81
1,053,477 524,063 529,414 2.64
363,800 149,896 165,848 0.99
459,445 218,241 189,652 1.18
432,855 219,460 166,707 1.01
451,235 175,494 261,120 1.75
455,617 162,949 270,334 1.80
277,720 64,977 212,743 1.42
269,854 121,750 -251,627 -1.62
1,081,154 552,819 513,956 2.70
1,376,815 476,478 871,035 4.58
473,716 217,032 215,201 1.24
409,218 151,576 257,642 1.41
182,083 78,436 99,951 0.71
266,024 178,238 87,786 0.67
807,735 493,203 285,838 1.67
541,506 252,929 263,220 1.57
342,007 123,875 218,132 1.28
381,201 92,931 288,270 1.73 Pastry Associates 1,717 13% 9/30/00 Cielo Boutique, Inc. 1,475 11% 6/30/01
321,636 117,566 163,269 1.11
271,046 117,019 121,027 0.92
314,646 200,881 -18,124 -0.15
425,676 211,779 197,274 1.84
297,140 135,278 161,862 1.49
356,905 198,628 96,374 0.94
253,444 118,898 134,546 1.50
158,389 35,372 117,124 1.64
221,938 85,639 128,332 1.82
272,908 138,297 134,611 1.80
23,796 3,739 20,057 1.21
172,705 44,856 127,849 1.86
141,127 44,574 96,553 1.52
</TABLE>
<PAGE> 127
<TABLE>
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS COUNTY CITY
- ------ ------ ------------- ---------------- ------ ----
<S> <C> <C> <C> <C> <C>
C95 51420 Evergreen Apartments 1337 24th St., NW Kandiyohi Willmar
C96 51487 Crenshire Villa Apartments 810 Crenshaw Blvd. Los Angeles Los Angeles
C97 51459 Highlander Apartments 801 E. 2nd Street Meeker Litchfield
C98 51441 Village Apartments 6434 East Cave Creek Road Maricopa Cave Creek
C99 51278 South Hill Village Shopping Center 120-31st Ave. SE Pierce Puyallup
C100A 51321 SLJ Realty Portfolio-Raritan NJ Routes 28 & 202, Somerville Circle Somerset Raritan
C100B 51321 SLJ Realty Portfolio-Jamaica NY 162-24 Jamaica Avenue Queens Jamaica
C100C 51321 SLJ Realty Portfolio-Fulton St 376 Fulton Street Kings Brooklyn
C100D 51321 SLJ Realty Portfolio-Union NJ 2706 Route 22 E Union Union
C100E 51321 SLJ Realty Portfolio-Flatbush Ave 2600 Flatbush Avenue Kings Brooklyn
C100 51321 SLJ Realty Portfolio (Roll-Up)
P101 3023470 De Anza Country Shopping Center 7700-7840 & 7720 Limonite Avenue Riverside Riverside
C102 50233 Summerhill Plaza Shopping Center 7501-7581 West Lake Mead Boulevard Clark Las Vegas
P103 3011459 Downtown Centre 876-894 Marsh St.& 879-899 Higuera St. San Luis Obispo San Luis Obispo
P104 1200963 Las Posas Plaza 98 Daily Drive Ventura Camarillo
C105 50791 K-Mart Plaza - Durham, NC 2004 Avondale Drive Durham Durham
C106 51292 Mesa Shores Shopping Center 2154 East Baseline Road Maricopa Mesa
P107 3016292 Bouquet Canyon Plaza 26501-26547 Bouquet Canyon Road Los Angeles Santa Carita
P108 3019775 Home Depot/Parkside Center Lots 1&2 Sierra Executive Centre Unit 3 Washoe Reno
C109 51044 University Plaza Shopping Center 3429-3519 University Ave. Peoria Peoria
C110 51330 Woodlawn Shopping Center 8700 Richmond Highway Fairfax Alexandria
P111 3011889 Sante Fe Springs Promenade 11442-11570 E. Telegraph Road Los Angeles Santa Fe Springs
P112 3008539 H. K. Valley Shopping Center 17607-17643 Sherman Way Los Angeles Reseda
P113 3021508 Best Buy Plaza 3900 Tyler Street Riverside Riverside
C114 51163 Town & Country Plaza 13714-13820 SW 152nd St. Dade Miami
C115 51162 Miller West Plaza 14702-14792 SW 56th St. Dade Miami
C116 51171 Third Street Plaza Shopping Center 1170 Third St. South Collier Naples
C117 50976 Pine Lake Plaza 10400 Griffin Road Broward Cooper City
C118 51498 Glenwood Crossings Shopping Center 2701 18th Street Kenosha Kenosha
C119 50991 Monterey Plaza Shopping Center 201 Southwest Monterey Rd. Martin Stuart
C120 50885 Paducah Towne Center 3200 Irvin Cobb Drive McCracken Paducah
C121 50154 Dolphin Plaza Shopping Center 17161-17239 NW 27th Ave. Dade Miami
C122 50311 University Square Shopping Center 3136 E. Tenth Street Pitt Greenville
C123A 51144 Tri State # 1 3220 North Main Street Tarrant Fort Worth
C123B 51144 Tri State # 3 6900 Camp Bowie Boulevard Tarrant Fort Worth
C123 51144 Tri State # 1 & # 3 (Roll-Up)
P124 4549193 Barkley Village 2915-2950 Newmarket Street Whatcom Bellingham
C125 50916 Royal Oaks of Bloomingdale 3210 Lithia Pinecrest Rd Hillsborough Brandon
P126 1201300 McGrath Court Retail Center 7051-7095 Clairemont Mesa Boulevard San Diego San Diego
C127 51306 Best Buy Building 19929 Rinaldi Street Los Angeles Northridge
P128 3021920 Foothill Ranch Marketplace 26741, 26761, 26771, 26781 & 26795 Orange Foothill Ranch
Portola Parkway
P129 3041399 Ironwood Square - Phase III 202-206 Ironwood Drive Kootenai County Coeur D'Alene
C130 51437 Shops At England Run 736 Warrenton Road (Highway 17) Stafford Fredericksburg
C131 51484 Fairfield Square Shopping Center 2831 South Main Street Guilford High Point
P132 3009370 Greentree Village Shopping Center 1800 South Milton Rd. Coconino County Flagstaff
C133 51449 Perimeter Oaks Shopping Center 3262-3274 Inner Perimeter Drive Lowndes Valdosta
C134 51327 Gower-Gulch Center 6100 - 6134 West Sunset Blvd Los Angeles Los Angeles
P135 3009040 Willow Glen Plaza 1120-1130 Bird Avenue Santa Clara San Jose
P136 3054277 SRO Center 3904, 3908, 3920 Meridian Street Whatcom Bellingham
C137 51052 Tukwila Park Shopping Center 640-690 Strander Blvd. King Tukwila
C138 51516 Rite Aid-Alpine 1661 Alpine Blvd. San Diego Alpine
C139 51216 San Miguel Plaza 3003 S. St. Francis Drive at Zia Road Santa Fe Santa Fe
C140 51335 Kids "R" Us 2745 NE 193rd Street Dade Aventura
C141 51450 Brea Village Shopping Center 1001-1039 E. Imperial Highway Orange Brea
C142 51002 Spring Hope Commons Shopping Center 603 E. Nash St. Nash Spring Hope
C143 51005 Warren Corners Shopping Center U.S.Highway 158 Warren Warrenton
C144 51508 500 State Street 500 - 510 State Street Santa Barbara Santa Barbara
</TABLE>
<PAGE> 128
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
ADMINI-
CUT-OFF MATURITY STRATIVE SUB-
ZIP PROPERTY ORIGINAL DATE DATE LOAN MORTGAGE FEE SERVICING
STATE CODE TYPE BALANCE BALANCE BALANCE TYPE RATE RATE(I) FEE RATE
- ----- ---- ---- ------- ------- ------- ---- ---- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MN 56201 Multifamily $ 615,000 $ 608,972 $ 509,199 Balloon 8.075% 0.143% 0.100%
CA 90005 Multifamily 600,000 597,390 532,134 Balloon 7.585% 0.143% 0.100%
MN 55355 Multifamily 552,000 546,773 459,417 Balloon 8.260% 0.143% 0.100%
AZ 85331 Multifamily 500,000 484,756 Fully Amortizing 7.650% 0.143% 0.100%
WA 98374 Retail 12,750,000 12,615,460 11,051,113 Balloon 6.697% 0.143% 0.100%
NJ 8896 Retail
NY 11432 Office
NY 11201 Retail
NJ 7083 Retail
NY 11234 Retail
12,000,000 11,881,525 9,774,186 Balloon 7.515% 0.143% 0.100%
CA 92509 Retail 12,000,000 11,389,244 9,770,004 Balloon 7.980% 0.143% 0.100%
NV 89106 Retail 11,500,000 11,339,680 10,279,762 Balloon 7.940% 0.148% 0.105%
CA 93401 Retail 11,500,000 10,803,864 9,195,028 Balloon 7.500% 0.143% 0.100%
CA 93010 Retail 12,000,000 10,650,301 5,347,640 Balloon 9.040% 0.143% 0.100%
NC 27704 Retail 9,800,000 9,672,179 8,609,609 Balloon 7.200% 0.143% 0.100%
AZ 85204 Retail 8,588,000 8,503,499 7,504,121 Balloon 7.000% 0.143% 0.100%
CA 91355 Retail 8,360,000 7,970,562 6,869,483 Balloon 8.590% 0.143% 0.100%
NV 89502 Retail 8,187,568 7,601,005 6,686,697 Balloon 7.450% 0.143% 0.100%
IL 61604 Retail 7,300,000 7,216,567 6,329,413 Balloon 6.720% 0.143% 0.100%
VA 22309 Retail 6,575,000 6,534,062 5,815,799 Balloon 7.500% 0.143% 0.100%
CA 90670 Retail 6,720,000 6,349,575 5,483,685 Balloon 8.375% 0.143% 0.100%
CA 91406 Retail 6,200,000 5,851,749 5,128,612 Balloon 8.875% 0.143% 0.100%
CA 92504 Retail 6,200,000 5,825,728 4,434,685 Balloon 9.125% 0.143% 0.100%
FL 33177 Retail 5,500,000 5,399,525 2,340,971 Balloon 7.275% 0.143% 0.100%
FL 33185 Retail 5,300,000 5,203,179 2,255,844 Balloon 7.275% 0.143% 0.100%
FL 34102 Retail 5,000,000 4,956,739 4,395,803 Balloon 7.250% 0.143% 0.100%
FL 33328 Retail 5,000,000 4,947,155 4,332,947 Balloon 6.690% 0.143% 0.100%
WI 53140 Retail 4,827,000 4,806,900 4,463,035 Balloon 7.750% 0.143% 0.100%
FL 34994 Retail 4,500,000 4,447,646 3,949,192 Balloon 7.160% 0.143% 0.100%
KY 42003 Retail 4,450,000 4,407,633 3,902,589 Balloon 7.140% 0.143% 0.100%
FL 33056 Retail 4,415,400 4,349,016 4,143,674 Balloon 8.140% 0.143% 0.100%
NC 27858 Retail 4,381,403 4,348,981 3,490,520 Balloon 7.780% 0.143% 0.100%
TX 76106 Retail
TX 76107 Retail
4,250,000 4,215,163 3,718,364 Balloon 7.050% 0.143% 0.100%
WA 98226 Retail 4,200,000 4,125,299 3,433,443 Balloon 8.375% 0.143% 0.100%
FL 33511 Retail 4,160,000 4,108,761 3,627,925 Balloon 6.920% 0.143% 0.100%
CA 92111 Retail 4,900,000 3,941,168 Fully Amortizing 10.250% 0.143% 0.100%
CA 91326 Retail 3,915,000 3,884,266 3,408,386 Balloon 6.875% 0.143% 0.100%
CA 92610 Retail 4,300,000 3,817,327 Fully Amortizing 8.575% 0.143% 0.100%
ID 83814 Retail 3,600,000 3,510,625 2,915,826 Balloon 8.000% 0.143% 0.100%
VA 22406 Retail 3,525,000 3,501,765 3,098,459 Balloon 7.250% 0.143% 0.100%
NC 27263 Retail 3,400,000 3,380,071 3,026,580 Balloon 7.760% 0.143% 0.100%
AZ 86001 Retail 3,300,000 3,112,348 2,713,884 Balloon 8.625% 0.143% 0.100%
GA 30320 Retail 3,000,000 2,981,390 2,678,366 Balloon 7.875% 0.143% 0.100%
CA 90028 Retail 3,000,000 2,972,495 2,620,493 Balloon 7.000% 0.143% 0.100%
CA 95125 Retail 3,150,000 2,967,640 2,582,843 Balloon 8.500% 0.143% 0.100%
WA 98226 Retail 3,000,000 2,949,586 2,394,250 Balloon 7.430% 0.143% 0.100%
WA 98188 Retail 2,950,000 2,901,838 2,377,283 Balloon 7.150% 0.143% 0.100%
CA 91903 Retail 2,800,000 2,788,187 2,490,370 Balloon 7.701% 0.143% 0.100%
NM 87505 Retail 2,800,000 2,769,706 2,460,406 Balloon 7.223% 0.143% 0.100%
FL 33180 Retail 2,775,000 2,712,787 1,723,084 Balloon 7.250% 0.143% 0.100%
CA 92821 Retail 2,700,000 2,683,251 2,410,530 Balloon 7.875% 0.143% 0.100%
NC 27882 Retail 2,700,000 2,652,093 2,143,629 Balloon 6.670% 0.143% 0.100%
NC 27589 Retail 2,550,000 2,505,524 2,030,931 Balloon 6.770% 0.143% 0.100%
CA 93101 Retail 2,473,500 2,464,700 2,196,370 Balloon 7.620% 0.143% 0.100%
<CAPTION>
NET FIRST INTEREST
ZIP PROPERTY MORTGAGE NOTE PAYMENT ACCRUAL
STATE CODE TYPE RATE DATE DATE METHOD
----- ---- ---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
MN 56201 Multifamily 7.932% 12/11/98 2/1/99 ACT/360
CA 90005 Multifamily 7.442% 3/1/99 5/1/99 ACT/360
MN 55355 Multifamily 8.117% 12/21/98 2/1/99 ACT/360
AZ 85331 Multifamily 7.507% 12/16/98 2/1/99 ACT/360
WA 98374 Retail 6.554% 8/31/98 11/1/98 ACT/360
NJ 8896 Retail
NY 11432 Office
NY 11201 Retail
NJ 7083 Retail
NY 11234 Retail
7.372% 1/14/99 3/1/99 ACT/360
CA 92509 Retail 7.837% 6/18/96 8/10/96 ACT/360
NV 89106 Retail 7.792% 12/30/97 2/1/98 ACT/360
CA 93401 Retail 7.357% 11/8/95 2/1/96 30/360
CA 93010 Retail 8.897% 7/1/94 11/15/94 30/360
NC 27704 Retail 7.057% 4/30/98 6/1/98 ACT/360
AZ 85204 Retail 6.857% 9/15/98 11/1/98 ACT/360
CA 91355 Retail 8.447% 6/8/95 7/1/95 30/360
NV 89502 Retail 7.307% 9/1/95 10/15/95 ACT/360
IL 61604 Retail 6.577% 8/26/98 10/1/98 ACT/360
VA 22309 Retail 7.357% 1/4/99 3/1/99 ACT/360
CA 90670 Retail 8.232% 12/7/95 2/1/96 30/360
CA 91406 Retail 8.732% 7/19/95 9/1/95 30/360
CA 92504 Retail 8.982% 11/15/96 1/1/97 30/360
FL 33177 Retail 7.132% 12/11/98 2/1/99 ACT/360
FL 33185 Retail 7.132% 12/11/98 2/1/99 ACT/360
FL 34102 Retail 7.107% 10/30/98 12/1/98 ACT/360
FL 33328 Retail 6.547% 9/1/98 11/1/98 ACT/360
WI 53140 Retail 7.607% 3/12/99 5/1/99 ACT/360
FL 34994 Retail 7.017% 6/30/98 8/1/98 ACT/360
KY 42003 Retail 6.997% 9/11/98 11/1/98 ACT/360
FL 33056 Retail 7.997% 9/19/97 11/1/97 ACT/360
NC 27858 Retail 7.637% 12/11/98 1/1/99 ACT/360
TX 76106 Retail
TX 76107 Retail
6.907% 11/2/98 1/1/99 ACT/360
WA 98226 Retail 8.232% 5/9/96 6/1/96 30/360
FL 33511 Retail 6.777% 6/24/98 8/1/98 ACT/360
CA 92111 Retail 10.107% 6/30/94 9/1/94 30/360
CA 91326 Retail 6.732% 12/8/98 2/1/99 ACT/360
CA 92610 Retail 8.432% 11/1/96 12/1/96 30/360
ID 83814 Retail 7.857% 12/10/97 2/1/98 30/360
VA 22406 Retail 7.107% 1/4/99 3/1/99 ACT/360
NC 27263 Retail 7.617% 1/29/99 3/1/99 ACT/360
AZ 86001 Retail 8.482% 8/29/95 10/1/95 30/360
GA 30320 Retail 7.732% 12/23/98 2/1/99 ACT/360
CA 90028 Retail 6.857% 9/23/98 12/1/98 ACT/360
CA 95125 Retail 8.357% 8/22/95 10/1/95 30/360
WA 98226 Retail 7.287% 7/27/98 10/1/98 30/360
WA 98188 Retail 7.007% 8/31/98 10/1/98 ACT/360
CA 91903 Retail 7.558% 3/31/99 5/1/99 ACT/360
NM 87505 Retail 7.080% 7/24/98 9/1/98 ACT/360
FL 33180 Retail 7.107% 12/29/98 2/1/99 ACT/360
CA 92821 Retail 7.732% 11/20/98 2/1/99 ACT/360
NC 27882 Retail 6.527% 8/31/98 10/1/98 ACT/360
NC 27589 Retail 6.627% 8/31/98 10/1/98 ACT/360
CA 93101 Retail 7.477% 4/19/99 6/1/99 ACT/360
</TABLE>
<PAGE> 129
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS)(II) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
- ------- -------- ------------ -------- -------- ---- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,777 120 300 10 110 1/1/09 No Yes(I) 11/1/08
4,230 120 360 7 113 4/1/09 No No 1/30/09
4,356 120 300 10 110 1/1/09 No Yes(I) 11/1/08
4,710 180 180 10 170 1/1/14 No No 11/1/13
82,248 120 360 13 107 10/1/08 No No 8/1/08
88,796 120 300 9 111 2/1/09 No No 11/1/08
92,153 121 300 40 81 8/10/06 No No
83,902 120 360 22 98 1/1/08 No No 12/31/01
84,984 120 300 46 74 1/1/06 No No
108,276 180 240 60 120 10/15/09 No No
66,521 120 360 18 102 5/1/08 No Yes(J) 4/30/02
57,136 120 360 13 107 10/1/08 No No 6/2/08
67,825 131 300 53 78 5/1/06 No Yes(K)
61,836 106 279 49 57 7/15/04 No No
47,202 120 360 14 106 9/1/08 No No 4/30/08
45,973 120 360 9 111 2/1/09 No Yes(L) 9/30/08
53,451 120 300 46 74 1/1/06 No No
51,501 120 300 51 69 8/1/05 No No
56,191 120 240 35 85 12/1/06 No No
43,554 180 240 10 170 1/1/14 No Yes(M) 9/1/13
41,970 180 240 10 170 1/1/14 No Yes(M) 9/1/13
34,109 120 360 12 108 11/1/08 No No 7/1/08
32,231 120 360 13 107 10/1/08 No No 5/31/08
34,581 92 360 7 85 12/31/06 No No 9/30/06
30,424 120 360 16 104 7/1/08 No No 2/29/08
30,026 120 360 13 107 10/1/08 No No 10/1/02
32,831 84 360 25 59 10/1/04 No No 9/30/00
31,685 171 351 11 160 3/1/13 No No 2/28/06
28,418 120 360 11 109 12/1/08 No Yes(F) 8/31/08
33,466 145 300 42 103 6/1/08 No No
27,453 120 360 16 104 7/1/08 No Yes(J) 6/30/02
53,408 180 180 63 117 8/1/09 No No
25,719 120 360 10 110 1/1/09 No Yes(N) 10/2/08
42,533 180 180 36 144 11/1/11 No No 10/31/99
27,785 120 300 22 98 1/1/08 No No
24,047 120 360 9 111 2/1/09 No Yes(L) 9/30/08
24,382 120 360 9 111 2/1/09 No No 11/1/08
26,851 120 300 50 70 9/1/05 No No
21,752 120 360 10 110 1/1/09 No No 10/1/08
19,959 120 360 12 108 11/1/08 No No 9/1/08
25,365 120 300 50 70 9/1/05 No No
22,033 120 300 14 106 9/1/08 No No
21,133 120 300 14 106 9/1/08 No No 4/30/08
19,965 120 360 7 113 4/1/09 No No 2/1/09
19,050 120 360 15 105 8/1/08 No No 6/1/08
23,037 120 216 10 110 1/1/09 No No 10/1/08
19,577 120 360 10 110 1/1/09 No Yes(O) 11/1/08
18,518 120 300 14 106 9/1/08 No Yes(P) 4/30/08
17,650 120 300 14 106 9/1/08 No Yes(P) 4/30/08
17,499 120 360 6 114 5/1/09 No No 3/1/09
<CAPTION>
PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- --------------------------------------- ----------------------
<S> <C>
LO(118)/OPEN(2)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(178)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
YM(121) Int. Rate Diff. (Type 3A)
LO(47)/GRTR1%PPMTorYM(66)/OPEN(7) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 3A)
YM(180) Int. Rate Diff. (Type 3A)
LO(47)/GRTR1%PPMTorYM(66)/OPEN(7)/DEF Int. Rate Diff. (Type 1A)
LO(116)/OPEN(4)/DEF NAP
OPEN(11)/YM(120) Int. Rate Diff. (Type 3A)
$250+YM(106) Int. Rate Diff. (Type 1A)
LO(115)/OPEN(5)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(176)/OPEN(4)/DEF NAP
LO(176)/OPEN(4)/DEF NAP
LO(116)/OPEN(4)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
LO(89)/OPEN(3)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
LO(48)/GRTR1%PPMTorYM(66)/OPEN(6)/DEF Int. Rate Diff. (Type 1A)
LO(35)/GRTR1%PPMTorYM(42)/OPEN(7) Int. Rate Diff. (Type 1A)
LO(86)/GRTR1%PPMTorYM(78)/OPEN(7) Int. Rate Diff. (Type 1A)
LO(116)/OPEN(4)/DEF NAP
OPEN(25)/YM(120) Int. Rate Diff. (Type 2A)
LO(47)/GRTR1%PPMTorYM(66)/OPEN(7)/DEF Int. Rate Diff. (Type 1A)
$250+YM(180) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
LO(36)/$250+YM(142)/OPEN(2) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 2A)
LO(115)/OPEN(5)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
$500+YM(120) Int. Rate Diff. (Type 1A)
LO(115)/OPEN(5)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
LO(115)/OPEN(5)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
</TABLE>
<PAGE> 130
<TABLE>
<CAPTION>
CUT-OFF TOTAL SF/
DATE UNITS/ UNIT/
SE- LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/ ROOM/ ROOM/
QUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED BED BED
- ------ ------ -------------- ----- ---- ----- --------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
C95 51420 Evergreen Apartments $ 1,080,000 9/2/98 56% 1973 37 Units
C96 51487 Crenshire Villa Apartments 1,080,000 10/2/98 55% 1991 17 Units
C97 51459 Highlander Apartments 690,000 9/2/98 79% 1978 24 Units
C98 51441 Village Apartments 1,850,000 10/9/98 26% 1984 48 Units
C99 51278 South Hill Village Shopping Center 17,000,000 7/16/98 74% 1995 141,997 SF
C100A 51321 SLJ Realty Portfolio-Raritan NJ 1991 27,843 SF
C100B 51321 SLJ Realty Portfolio-Jamaica NY 1930 36,250 SF
C100C 51321 SLJ Realty Portfolio-Fulton St 1920 16,830 SF
C100D 51321 SLJ Realty Portfolio-Union NJ 1986 11,800 SF
C100E 51321 SLJ Realty Portfolio-Flatbush Ave 1965 10,800 SF
C100 51321 SLJ Realty Portfolio (Roll-Up) 17,600,000 7/28/98 68% 103,523 SF
P101 3023470 De Anza Country Shopping Center 15,600,000 4/11/96 73% 1979 223,742 SF
C102 50233 Summerhill Plaza Shopping Center 16,300,000 12/18/97 70% 1997 91,339 SF
P103 3011459 Downtown Centre 14,500,000 9/26/95 75% 1993 81,064 SF
P104 1200963 Las Posas Plaza 16,180,000 6/12/94 66% 1966/1987 128,028 SF
C105 50791 K-Mart Plaza - Durham, NC 11,800,000 1/31/98 82% 1971/1991 234,478 SF
C106 51292 Mesa Shores Shopping Center 10,735,000 8/1/98 79% 1984 107,379 SF
P107 3016292 Bouquet Canyon Plaza 12,000,000 4/11/95 66% 1995 101,800 SF
P108 3019775 Home Depot/Parkside Center 10,900,000 2/1/95 70% 1993 114,943 SF
C109 51044 University Plaza Shopping Center 9,150,000 6/24/98 79% 1966/1989 130,195 SF
C110 51330 Woodlawn Shopping Center 8,500,000 10/21/98 77% 1973/1998 109,690 SF
P111 3011889 Sante Fe Springs Promenade 9,600,000 10/2/95 66% 1952/1992 114,446 SF
P112 3008539 H. K. Valley Shopping Center 9,000,000 6/1/95 65% 1994 68,793 SF
P113 3021508 Best Buy Plaza 8,500,000 9/1/96 69% 1995 88,508 SF
C114 51163 Town & Country Plaza 8,800,000 9/15/98 61% 1991 94,180 SF
C115 51162 Miller West Plaza 7,800,000 9/15/98 67% 1990 87,722 SF
C116 51171 Third Street Plaza Shopping Center 6,700,000 8/1/98 74% 1989 53,779 SF
C117 50976 Pine Lake Plaza 6,950,000 6/4/98 71% 1988/1998 106,107 SF
C118 51498 Glenwood Crossings Shopping Center 6,250,000 12/1/98 77% 1992 77,594 SF
C119 50991 Monterey Plaza Shopping Center 5,800,000 4/3/98 77% 1976/1997 102,090 SF
C120 50885 Paducah Towne Center 6,100,000 3/13/98 72% 1970/1995 126,110 SF
C121 50154 Dolphin Plaza Shopping Center 6,360,000 6/20/97 68% 1991 96,191 SF
C122 50311 University Square Shopping Center 5,500,000 8/22/97 79% 1987/1997 67,893 SF
C123A 51144 Tri State # 1 1964/1996 102,385 SF
C123B 51144 Tri State # 3 1964/1997 45,490 SF
C123 51144 Tri State # 1 & # 3 (Roll-Up) 5,700,000 8/1/98 74% 147,875 SF
P124 4549193 Barkley Village 5,600,000 2/1/98 74% 1996 44,233 SF
C125 50916 Royal Oaks of Bloomingdale 5,200,000 5/2/98 79% 1989 89,272 SF
P126 1201300 McGrath Court Retail Center 7,670,000 6/15/94 51% 1991 48,736 SF
C127 51306 Best Buy Building 5,200,000 11/10/98 75% 1998 45,174 SF
P128 3021920 Foothill Ranch Marketplace 8,250,000 2/1/97 46% 1993 42,086 SF
P129 3041399 Ironwood Square - Phase III 5,300,000 12/1/97 66% 1996 43,914 SF
C130 51437 Shops At England Run 4,700,000 10/23/98 75% 1993 59,850 SF
C131 51484 Fairfield Square Shopping Center 4,550,000 12/18/98 74% 1966/1994 70,809 SF
P132 3009370 Greentree Village Shopping Center 4,650,000 7/5/95 67% 1979 51,200 SF
C133 51449 Perimeter Oaks Shopping Center 4,000,000 11/18/98 75% 1998 34,700 SF
C134 51327 Gower-Gulch Center 4,700,000 7/28/95 63% 1976/1997 35,415 SF
P135 3009040 Willow Glen Plaza 4,200,000 7/17/98 71% 1990 27,820 SF
P136 3054277 SRO Center 4,590,000 6/2/98 64% 1990 42,389 SF
C137 51052 Tukwila Park Shopping Center 3,790,000 7/6/98 77% 1985 29,979 SF
C138 51516 Rite Aid-Alpine 3,550,000 1/1/99 79% 1999 16,320 SF
C139 51216 San Miguel Plaza 3,500,000 11/5/98 79% 1998 26,600 SF
C140 51335 Kids "R" Us 3,700,000 10/26/98 73% 1991 27,600 SF
C141 51450 Brea Village Shopping Center 4,400,000 9/25/98 61% 1978 40,964 SF
C142 51002 Spring Hope Commons Shopping Center 3,400,000 6/1/98 78% 1997 47,950 SF
C143 51005 Warren Corners Shopping Center 3,130,000 6/1/98 80% 1997 45,400 SF
C144 51508 500 State Street 3,650,000 10/1/98 68% 1927/1989 17,937 SF
<CAPTION>
LOAN
NET BALANCE PER
RENTABLE SF/UNIT/
AREA (SF) ROOM/BED
- --------- --------
<S> <C>
31,450 $16,495
14,050 35,141
19,000 22,782
33,600 10,099
141,997 89
27,843
36,250
16,830
11,800
10,800
103,523 115
223,742 51
91,339 124
81,064 133
128,028 83
234,478 41
107,379 79
101,800 78
114,943 66
130,195 55
109,690 60
114,446 55
68,793 85
88,508 66
94,180 57
87,722 59
53,779 92
106,107 47
77,594 62
102,090 44
126,110 35
96,191 45
67,893 64
102,385
45,490
147,875 29
44,233 93
89,272 46
48,736 81
45,174 86
42,086 91
43,914 80
59,850 59
70,809 48
51,200 61
34,700 86
35,415 84
27,820 107
42,389 70
29,979 97
16,320 171
26,600 104
27,600 98
40,964 66
47,950 55
45,400 55
17,937 137
</TABLE>
<PAGE> 131
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W
OCCUPANCY CASH U/W
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES
PRESENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT
------- ---- -------- -------- --------- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
73% 11/18/98 $ 228,845 $ 115,592 $ 104,003 1.81 $ 9,250 $ 250.00
100% 12/31/98 150,228 56,928 89,050 1.75 4,250 250.00
100% 11/2/98 113,781 38,269 67,512 1.29 8,000 333.33
100% 10/1/98 288,601 159,324 114,877 2.03 14,400 300.00
100% 8/20/98 2,034,581 532,683 1,441,118 1.46 14,200 0.10
100% 9/30/98
100% 9/30/98
100% 9/30/98
100% 9/30/98
100% 9/30/98
2,222,745 709,214 1,390,648 1.31 15,686 0.15
90% 12/31/98 1,919,712 424,778 1,355,110 1.23 55,936 0.25
98% 12/31/98 1,827,435 346,292 1,423,314 1.41 10,961 0.12
100% 1/1/99 1,769,455 478,793 1,210,247 1.19 16,213 0.20
100% 2/12/99 2,291,904 542,411 1,636,934 1.26 32,007 0.25
99% 3/24/99 1,420,687 360,175 1,001,972 1.26 23,448 0.10
89% 12/1/98 1,379,785 347,829 961,097 1.40 19,035 0.18
85% 12/31/98 1,400,214 349,728 984,781 1.21 20,360 0.20
100% 2/1/99 1,289,605 258,196 959,887 1.29 22,989 0.20
98% 9/11/98 1,078,008 284,445 706,108 1.25 42,964 0.33
89% 2/4/99 921,252 159,108 700,267 1.27 21,938 0.20
96% 3/1/99 1,292,993 350,930 846,058 1.32 28,612 0.25
100% 4/1/99 1,193,532 364,565 766,379 1.24 17,198 0.25
100% 12/31/98 998,020 178,258 772,366 1.15 17,702 0.20
100% 12/4/98 1,183,117 405,868 715,654 1.37 18,838 0.20
100% 11/30/98 1,053,766 367,570 632,806 1.26 17,544 0.20
92% 9/30/98 1,189,648 635,640 512,399 1.25 14,251 0.26
95% 9/30/98 919,812 355,112 517,067 1.34 15,916 0.15
100% 12/31/98 760,403 227,505 499,390 1.20 15,519 0.20
95% 3/26/99 773,911 242,323 483,380 1.32 15,314 0.15
99% 12/1/98 791,672 235,677 488,559 1.36 18,917 0.15
88% 2/28/99 924,421 353,008 520,785 1.32 14,388 0.15
100% 12/7/98 631,101 94,139 520,974 1.37 10,182 0.15
100% 6/1/99
93% 6/1/99
718,908 225,292 426,294 1.25 27,204 0.18
98% 5/20/99 698,035 175,807 491,963 1.23 8,847 0.20
93% 3/1/99 735,396 283,786 422,692 1.28 8,927 0.10
93% 3/1/99 1,077,072 281,287 753,697 1.18 9,747 0.20
100% 11/18/98 495,516 88,919 386,106 1.25 6,770 0.15
100% 1/25/99 1,151,128 323,727 788,384 1.54 8,417 0.20
100% 3/24/99 564,124 128,858 405,415 1.22 8,783 0.20
94% 11/18/98 546,089 123,065 385,630 1.34 11,970 0.20
96% 12/31/98 508,378 104,323 375,956 1.29 14,162 0.20
100% 1/1/99 646,600 202,277 403,506 1.25 12,800 0.25
100% 12/18/98 425,560 81,217 326,530 1.25 3,470 0.10
98% 9/11/98 650,220 257,123 350,884 1.47 17,708 0.50
100% 2/11/99 511,166 138,354 354,144 1.16 5,564 0.20
100% 12/31/98 490,133 130,366 335,083 1.27 8,478 0.20
95% 9/2/98 476,146 119,987 322,085 1.27 7,495 0.25
100% 1/28/99 319,133 9,383 308,743 1.29 1,007 0.06
100% 12/31/98 363,412 62,416 288,100 1.26 2,660 0.10
100% 12/10/98 356,927 7,157 348,390 1.26 1,380 0.05
98% 3/1/99 517,234 139,320 325,783 1.39 10,241 0.25
100% 11/1/98 386,346 72,579 296,823 1.34 7,193 0.15
100% 4/1/99 341,442 56,552 269,481 1.27 6,810 0.15
100% 10/6/98 382,556 104,614 262,503 1.25 4,484 0.25
<CAPTION>
MOST 2nd
MOST RECENT MOST
RECENT MOST MOST MOST CASH RECENT
END RECENT RECENT RECENT FLOW END
DATE REVENUES EXPENSES CASH FLOW DSCR DATE
---- -------- -------- --------- ---- ------
<S> <C> <C> <C> <C> <C>
12/31/98 $ 226,684 $ 137,662 $ 89,022 1.55 12/31/97
12/31/98 156,234 45,946 105,988 2.09 12/31/97
12/31/98 114,759 35,578 79,181 1.51 12/31/97
12/31/98 301,203 130,330 170,873 3.02 12/31/97
12/31/98 1,971,861 212,070 1,656,352 1.68 12/31/97
12/31/98 2,511,841 553,346 1,958,495 1.84 12/31/97
12/31/98 2,142,081 414,442 1,700,041 1.54 12/31/97
12/31/98 1,829,603 333,574 1,462,533 1.45
12/31/98 1,953,606 391,774 1,561,832 1.53 12/31/97
12/31/98 2,467,200 534,176 1,933,024 1.49 12/31/97
12/31/98 854,434 265,544 559,835 0.70 12/31/97
12/31/98 891,623 340,840 513,761 0.75
12/31/98 1,443,681 376,828 1,066,853 1.31 12/31/97
12/31/98 1,249,421 194,805 1,054,616 1.42 12/31/97
12/31/98 1,031,205 253,658 753,487 1.33 12/31/97
12/31/98 837,869 111,460 726,409 1.32 12/31/97
12/31/98 1,282,608 286,520 996,088 1.55 12/31/97
12/31/98 1,379,246 332,353 1,046,893 1.69 12/31/97
12/31/98 998,010 128,357 869,653 1.29
12/31/98 1,272,660 545,861 724,128 1.39 12/31/97
12/31/98 1,206,220 459,237 746,983 1.48 12/31/97
12/31/98 1,175,597 615,807 512,759 1.25 12/31/97
12/31/98 685,207 190,703 415,322 1.07 12/31/97
12/31/98 793,770 205,067 586,825 1.41 12/31/97
12/31/98 807,082 257,256 -3,432 -0.01 12/31/97
12/31/98 812,610 210,461 602,149 1.67 12/31/97
12/31/98 909,483 315,524 593,959 1.51 12/31/97
12/31/97 276,840 80,253 196,587 0.52 12/31/96
12/31/98 740,765 249,861 377,339 1.11 12/31/97
12/31/98 657,966 172,643 485,323 1.21
12/31/97 661,862 277,053 370,873 1.13 12/31/96
12/31/98 1,077,072 279,859 797,213 1.24
12/31/98 1,262,341 300,931 953,755 1.87 12/31/97
12/31/98 660,259 188,022 472,237 1.42 12/31/97
12/31/98 631,206 101,063 530,143 1.84 12/31/97
12/31/98 529,033 100,113 428,920 1.47 12/31/97
12/31/98 718,444 188,837 499,019 1.55 12/31/97
12/31/98 698,311 252,112 390,471 1.63 12/31/97
12/31/98 506,918 108,530 398,388 1.31 12/31/97
12/31/98 554,038 125,961 378,324 1.43 12/31/97
12/31/98 455,487 119,057 319,094 1.26 12/31/97
12/31/98 322,356 10,171 312,185 1.13 12/31/97
12/31/98 589,761 113,941 449,214 1.91 12/31/97
12/31/98 304,014 66,318 236,630 1.12 12/31/97
12/31/98 418,055 100,740 287,612 1.37 12/31/97
</TABLE>
<PAGE> 132
<TABLE>
<CAPTION>
2ND
MOST LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
-------- -------- --------- ---- -------------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 243,641 $ 161,492 $ 82,149 1.43
153,895 51,423 93,738 1.85
108,498 34,084 47,014 0.90
295,902 106,585 130,242 2.30
1,756,668 443,977 1,227,218 1.24 G.I. Joes, Inc. 52,300 37% 9/30/17
The Wiz 27,843 100% 12/31/00
New York City 25,879 71% 6/30/05
The Wiz 16,830 100% 12/31/07
Party City 11,800 100% 8/31/06
Sam Ash 10,000 93% 6/30/03
2,365,169 388,576 1,976,593 1.86 The Wiz 27,843 27% 12/31/00
2,070,302 390,712 1,654,446 1.50 K-Mart 88,596 40% 10/31/06
Gold's Gym 32,000 35% 12/31/12
1,573,271 7,448 1,565,823 1.54 DTC Cinema 27,500 34% 12/31/09
2,481,156 562,254 1,918,902 1.48 Ralphs Grocery Company 28,845 23% 5/31/07
1,057,739 401,490 656,249 0.82 K-Mart 94,500 40% 8/31/03
Michael's Arts & Crafts 20,000 19% 4/30/13
1,467,109 298,068 847,941 1.04 Best Buy 45,000 44% 1/31/11
1,268,163 142,215 1,106,958 1.49 Home Depot USA, Inc. 104,543 91% 1/31/14
963,904 265,978 696,742 1.23 Flemings (Thompsons Food Basket) 59,500 46% 4/30/12
820,226 107,025 706,080 1.28 Food Lion 33,000 30% 5/31/16
1,204,513 267,441 937,072 1.46 Jax Market 20,884 18% 10/31/12
1,140,403 346,442 793,961 1.28 H. K. Market 30,868 45% 12/31/06
Best Buys 58,420 66% 1/31/16
1,218,231 521,721 681,509 1.30 Sedano's Supermarket 22,632 24% 2/1/13
1,079,891 325,562 754,329 1.50 Sedano Super Market 23,000 26% 6/30/00
1,223,794 565,058 593,037 1.45 Prudential Bache 6,056 11% 6/30/00
538,640 169,843 357,660 0.92 Albertson's 53,653 51% 5/19/18
837,932 240,548 594,654 1.43 Sentry Super Saver 45,000 58% 12/31/06
655,451 266,186 -222,290 -0.61 Gold's Gym Fitness 31,640 31% 9/30/01
666,325 232,090 434,235 1.21 Silk Tree Factory 36,093 29% 8/31/06
867,568 388,365 479,204 1.22 Winn Dixie 46,440 48% 5/22/11
276,994 59,136 217,858 0.57 Food Lion 42,600 63% 12/18/16
Winn Dixie 41,719 41% 9/27/10
Big Lots 23,300 51% 1/31/03
501,612 130,769 344,312 1.01 Winn Dixie 41,719 28% 9/27/10
Merrill Lynch 5,579 12% 3/1/07
590,498 243,856 302,729 0.92 Winn Dixie 46,422 52% 1/17/10
Soup and Salad Systems 8,500 17% 8/31/11
Best Buy 45,174 100% 11/19/18
1,177,171 320,553 757,618 1.48 Blockbuster Videos, Inc. 5,000 12% 9/30/06
402,046 172,849 229,197 0.69 Staples 23,964 55% 2/29/12
644,930 112,107 531,623 1.84 Food Lion 33,000 55% 12/14/13
563,548 95,249 463,614 1.58 Food Lion 34,456 49% 8/23/14
713,553 215,923 497,630 1.54 Greentree Three Theaters 12,708 25% 8/16/03
Fashion Bug 7,000 20% 9/30/08
435,707 203,373 232,334 0.97 Rite Aid 16,520 47% 5/31/07
512,117 106,282 405,835 1.33 Walgreens Corporation 14,000 50% 7/31/30
549,201 135,647 398,720 1.51 Ross Stores, Inc. 26,630 63% 1/31/01
395,070 115,501 279,569 1.10 Southland Corp (7-11) 3,425 11% 3/31/06
Rite Aid 16,320 100% 12/31/18
Office Max 23,500 88% 9/15/13
318,852 3,689 315,163 1.14 Kids 'R' Us 27,600 100% 1/31/17
537,396 110,712 418,869 1.78 N.O.C. Sports Rehabilitation 4,500 11% 12/31/01
Food Lion 29,000 60% 4/30/18
77,677 8,691 66,986 1.27 Food Lion 29,000 64% 9/16/17
407,903 99,012 308,391 1.47 English Learning Center 8,000 45% 8/31/01
<CAPTION>
SECOND SECOND
SECOND LARGEST LARGEST
LARGEST TENANT TENANT
TENANT % OF LEASE
SECOND LARGEST LEASED TOTAL EXPIRA-
TENANT SF SF TION
- -------------- ------ ------- --------
<S> <C> <C> <C>
Office Depot 32,383 23% 9/30/10
DynCorp Property Management 6,250 17% 6/30/03
Sovereign Motors 800 7% 12/31/03
New York City 25,879 25% 6/30/05
Family Fitness Center 18,000 8% 5/31/11
Dolphin Court Salon 7,507 8% 5/31/08
Barnes and Noble 17,474 22% 6/30/05
Las Posas Emporium Hallmark 8,236 6% 11/30/01
Winn Dixie 49,770 21% 5/1/18
Gold's Gym 27,792 26% 2/28/09
Petco 20,000 20% 1/31/06
Tower Records 10,400 9% 6/1/15
Dunham's Sports 33,800 26% 1/31/09
Shops of Mt. Vernon 10,917 10% 9/30/00
Griffith Drugs 11,250 10% 10/31/01
Korea Garden Restaurant 3,983 6% 3/31/03
Office Depot 30,088 34% 9/30/11
Sedano's Pharmacy 7,260 8% 2/1/13
Blockbuster Video 7,545 9% 7/31/00
Samples of Naples, Inc 3,500 7% 12/31/01
Churchill's Restaurant 5,850 6% 4/30/06
Walgreens 12,544 16% 11/30/12
Realtor Association 7,095 7% 12/31/04
Consolidated 26,875 21% 1/31/07
Foot Locker (Venator) 6,720 7% 1/31/08
Revco Discount Drug Centers, Inc. 10,722 16% 10/31/17
Family Dollar 10,125 10% 12/31/03
Hancock Fabrics 13,000 29% 2/28/08
Big Lots 23,300 16% 1/31/03
Mutual Travel, Inc. 3,600 8% 12/1/02
Rite Aid 6,720 8% 1/14/00
Wunderland 5,345 11% 6/30/00
Crown Pacific Physicians A.M.C 4,000 10% 3/31/01
Mongolian Barbecue 3,250 7% 11/20/01
CVS Drugstore (REVCO) 8,450 14% 12/3/03
Kerr Drug 8,640 12% 11/22/04
Mountain Sports 6,020 12% 12/31/99
The Craft Store 7,000 20% 9/30/03
Amagi Restaurant 4,800 14% 1/31/02
The Yung Fashion 2,830 10% NAV
Village Lighting 5,110 12% NAV
Express Station Hobbies 3,320 11% 3/31/03
GNC 1,581 6% 9/15/03
Macbeth Stained Glass 3,000 7% 2/28/01
Dollar General 7,500 16% 2/28/03
Dollar General 7,200 16% 7/31/02
Something's Fishy 4,647 26% 6/30/14
</TABLE>
<PAGE> 133
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS
- ------ ------ ------------- ----------------
<S> <C> <C> <C>
C145 51507 Arts Industria Center 415 S. Cedros Ave.
C146 51494 Harbor Place 602-666 South Harbor Blvd.
P147 3046620 Victory Plaza Shopping Center 13003-13075 Victory Blvd
C148 51389 Towne Point Shopping Center 3921 Twin Pines Rd
P149 3033792 Las Vegas Discount Golf & Tennis 4211 Paradise Road
C150 51510 NationsBank Branch - Ft. Lauderdale 1745 E. Sunrise Blvd.
C151 51333 OfficeMax Building - Phoenix, AZ 9th Street and Bell Road
C152 50864 Hardin Village Shopping Center 2960 Eldorado Parkway
P153 3022746 Barnes & Noble Booksellers 1400 Biddle Road
P154 1201185 Dollinger Central 201-11 Central Avenue
P155 1794569 Salmon Creek Shopping Center 12919 N.E. Highway 99
P156 3013471 Petrini's Rheem Valley Shopping Center 594 Moraga Road
P157 3041589 Mission Village Center 32151 Camino Capistrano
C158 51140 Maple Wood Plaza 850 Lake Ave.
P159 3056140 Crossroads at Hacienda Shopping Center 4501 Hopyard Road
P160 3056132 Crossroads at Hacienda Shopping Center 4747 Hopyard Road
P161 3051141 Barnsdall Square Shopping Center 1607-1637 N. Vermont Ave. & 4730-4738 Hollywood Blvd.
P162 3000932 Wild West Shopping Center 115-159 West Shaw Avenue
C163 51276 Western Dental Plaza 1124 West Olive Ave
C164 51475 Northome Shopping Center 1550 West Larpenteur Avenue
C165 51492 KMS Retail Center 550 West Bell Road
C166 51361 Harbor Plaza Shopping Center 11315 South Figueroa Street
C167 51370 Harding Atlantic Shopping Center 6151-6191 Atlantic Ave.
C168 51439 Towne Square Shopping Center 901 N. Pecos Rd.
C169 51469 Arlington Square 3243-3297 Arlington Avenue
C170 51483 Sag Harbor Shopping Cove 64-82 Main Street
C171 51468 Victoria Village Shopping Center 7270 Victoria Park Lane
C172 51432 Prince & Fairview Shopping Center 901-935 West Prince Rd
C173 51452 El Camino Retail 1615 North El Camino Real
C174 51433 Clothestime Retail Building 630 Irving Street
P175A 3011970 Crockett Container Corporation 9211 Norwalk Boulevard
P175B 3011970 Crockett Container Corporation 6211 Descanso Circle
P175C 3011970 Crockett Container Corporation 120 East Ross Street
P175 3011970 Crockett Industrial Portfolio (Roll-Up)
C176 50919 1/2 Price Distribution Center 9202 F Street
P177 3000908 Charter Business Park 3641-3851 Charter Park Drive
C178 51187 Tyco Warehouse 750 Central Avenue
P179 3038361 Lakepoint/Ignacio Business Park 90 and 105 Digital Drive
P180 3021458 San Tomas Business Centre 2060 Walsh Avenue
C181 50944 7777 West Side Ave. 7777 West Side Ave.
P182 3033032 Zidell Valve Corporation 10600 Corporate Drive
C183 51186 Nokia Office Warehouse Building 975 West NASA Blvd.
P184 2088680 Amdahl Building 415 Oakmead Parkway
P185 3032760 Bancroft Building 0690 S.W. Bancroft Street
P186 3000890 Jersey Business Park 10700 Jersey Boulevard
P187 3054947 Condor Pacific Industries 31829 La Tienda Drive
P188 3023538 Vista Paints 2000-2040 E. Orangethorpe Avenue
C189A 51448 Santoli Commerce Center-Phase I 5525 South Valley View Blvd. & 3855 West Diablo Drive
C189B 51448 Santoli Commerce Center-Phase II 5585 South Valley View Blvd.
C189 51448 Santoli Commerce Center (Roll-Up)
P190 3006681 Trojan Battery Company 12380 Clark Street
P191 3011426 4240 Hollis Street 4240 Hollis Street
P192 3032406 Airport Office Park 2000 South Frontage Road
P193 3011921 Fabrica International Building 2801 Pullman Street
P194 4540878 Performance Radiator 2705 & 2619 South Tacoma Way & 3016 South Fife St.
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME COUNTY CITY
- ------ ------ ------------- ------ ----
<S> <C> <C> <C> <C>
C145 51507 Arts Industria Center San Diego Solana Beach
C146 51494 Harbor Place Orange Santa Ana
P147 3046620 Victory Plaza Shopping Center Los Angeles N. Hollywood
C148 51389 Towne Point Shopping Center Not Applicable Portsmouth
P149 3033792 Las Vegas Discount Golf & Tennis Clark Las Vegas
C150 51510 NationsBank Branch - Ft. Lauderdale Broward Ft. Lauderdale
C151 51333 OfficeMax Building - Phoenix, AZ Maricopa Phoenix
C152 50864 Hardin Village Shopping Center Collin McKinney
P153 3022746 Barnes & Noble Booksellers Jackson Medford
P154 1201185 Dollinger Central Los Angeles Glendale
P155 1794569 Salmon Creek Shopping Center Clark Vancouver
P156 3013471 Petrini's Rheem Valley Shopping Center Contra Costa Moraga
P157 3041589 Mission Village Center Orange San Juan Capistrano
C158 51140 Maple Wood Plaza Monroe Rochester
P159 3056140 Crossroads at Hacienda Shopping Center Alameda Pleasanton
P160 3056132 Crossroads at Hacienda Shopping Center Alameda Pleasanton
P161 3051141 Barnsdall Square Shopping Center Los Angeles Hollywood
P162 3000932 Wild West Shopping Center Fresno Clovis
C163 51276 Western Dental Plaza Merced Merced
C164 51475 Northome Shopping Center Ramsey Falco Heights
C165 51492 KMS Retail Center Maricopa Phoenix
C166 51361 Harbor Plaza Shopping Center Los Angeles Los Angeles
C167 51370 Harding Atlantic Shopping Center Los Angeles Long Beach
C168 51439 Towne Square Shopping Center Clark Las Vegas
C169 51469 Arlington Square Riverside Riverside
C170 51483 Sag Harbor Shopping Cove Suffolk Sag Harbor
C171 51468 Victoria Village Shopping Center San Bernadino Rancho Cucamonga
C172 51432 Prince & Fairview Shopping Center Pima Tucson
C173 51452 El Camino Retail Orange San Clemente
C174 51433 Clothestime Retail Building San Francisco San Francisco
P175A 3011970 Crockett Container Corporation Los Angeles Santa Fe Springs
P175B 3011970 Crockett Container Corporation Orange Buena Park
P175C 3011970 Crockett Container Corporation Imperial El Centro
P175 3011970 Crockett Industrial Portfolio (Roll-Up)
C176 50919 1/2 Price Distribution Center Douglas Omaha
P177 3000908 Charter Business Park Santa Clara San Jose
C178 51187 Tyco Warehouse Will University Park
P179 3038361 Lakepoint/Ignacio Business Park Marin Novato
P180 3021458 San Tomas Business Centre Santa Clara Santa Clara
C181 50944 7777 West Side Ave. Hudson North Bergen
P182 3033032 Zidell Valve Corporation Fort Bend County Stafford
C183 51186 Nokia Office Warehouse Building Brevard Melbourne
P184 2088680 Amdahl Building Santa Clara Sunnyvale
P185 3032760 Bancroft Building Multnomah Portland
P186 3000890 Jersey Business Park San Bernardino Rancho Cucamonga
P187 3054947 Condor Pacific Industries Los Angeles Westlake Village
P188 3023538 Vista Paints Orange Fullerton
C189A 51448 Santoli Commerce Center-Phase I
C189B 51448 Santoli Commerce Center-Phase II Clark Las Vegas
C189 51448 Santoli Commerce Center (Roll-Up) Clark Las Vegas
P190 3006681 Trojan Battery Company Los Angeles Santa Fe Springs
P191 3011426 4240 Hollis Street Alameda Emeryville
P192 3032406 Airport Office Park NAP Anchorage
P193 3011921 Fabrica International Building Orange Santa Ana
P194 4540878 Performance Radiator Pierce Tacoma
</TABLE>
<PAGE> 134
<TABLE>
<CAPTION>
ZIP PROPERTY CUT-OFF MATURITY
STATE CODE TYPE ORIGINAL DATE DATE LOAN
- ----- ---- ---- BALANCE BALANCE BALANCE TYPE
------- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C>
CA 92075 Retail $2,469,000 $2,454,437 $2,022,280 Balloon
CA 92704 Retail 2,300,000 2,288,972 2,045,252 Balloon
CA 91606 Retail 2,300,000 2,253,046 1,874,498 Balloon
VA 23703 Retail 2,300,000 2,233,839 2,019,705 Balloon
NV 89102 Retail 2,250,000 2,236,197 1,897,051 Balloon
FL 33304 Retail 2,240,000 2,218,388 1,367,706 Balloon
AZ 85022 Retail 2,137,500 2,121,651 1,873,124 Balloon
TX 75070 Retail 2,135,000 2,111,884 1,875,915 Balloon
OR 77504 Retail 2,275,000 2,047,048 Fully Amortizing
CA 91203 Retail 2,100,000 1,962,801 1,761,460 Balloon
WA 98665 Retail 1,875,000 1,781,589 1,782,090 Balloon
CA 94556 Retail 1,866,000 1,746,605 1,537,406 Balloon
CA 92807 Retail 1,866,000 1,693,997 Fully Amortizing
NY 14613 Retail 1,725,000 1,681,310 740,012 Balloon
CA 94588 Retail 1,750,000 1,681,310 Fully Amortizing
CA 94588 Retail 1,750,000 1,656,837 Fully Amortizing
CA 90027 Retail 1,750,000 1,650,198 1,233,727 Balloon
CA 93612 Retail 1,850,000 1,611,075 1,312,350 Balloon
CA 95340 Retail 1,627,500 1,526,052 1,418,007 Balloon
MN 55113 Retail 1,540,000 1,037,220 1,272,089 Balloon
AZ 85023 Retail 1,494,800 957,815 1,232,098 Balloon
CA 90061 Retail 1,045,000 934,228 933,000 Balloon
CA 90805 Retail 965,000 925,386 861,575 Balloon
NV 89101 Retail 950,000 826,803 673,205 Balloon
CA 92506 Retail 931,000 800,441 833,455 Balloon
NY 11963 Retail 834,360 592,374 689,207 Balloon
CA 91739 Retail 805,000 544,407 724,858 Balloon
AZ 85705 Retail 610,000 317,179 Fully Amortizing
CA 92672 Retail 550,000 452,794 Balloon
CA 94122 Retail 320,000 265,452 Balloon
CA 90670 Industrial
CA 90620 Industrial
CA 92243 Industrial
8,500,000 8,008,575 6,904,165 Balloon
NE 68127 Industrial 6,750,000 6,638,970 5,493,172 Balloon
CA 95136 Industrial 6,000,000 5,673,177 5,104,374 Balloon
IL 60466 Industrial 5,430,000 5,391,487 4,781,693 Balloon
CA 94949 Industrial 5,200,000 4,695,505 4,584,882 Balloon
CA 94050 Industrial 4,700,000 4,527,345 3,863,924 Balloon
NJ 7047 Industrial 4,550,000 4,469,988 3,593,206 Balloon
TX 77477 Industrial 4,000,000 3,935,724 3,174,340 Balloon
FL 32901 Industrial 3,704,000 3,661,847 3,082,961 Balloon
CA 94088 Industrial 3,825,000 3,594,687 3,433,615 Balloon
OR 97201 Industrial 3,700,000 3,550,038 2,536,656 Balloon
CA 91730 Industrial 3,562,500 3,321,504 2,930,882 Balloon
CA 91362 Industrial 3,500,000 3,306,552 Fully Amortizing
CA 92631 Industrial 3,300,000 3,113,462 2,673,957 Balloon
NV 89118 Industrial
NV 89118 Industrial
3,119,000 3,097,311 2,752,432 Balloon
CA 90670 Industrial 3,700,000 3,061,696 Fully Amortizing
CA 94608 Industrial 3,200,000 3,021,178 2,847,331 Balloon
AK 99501 Industrial 3,000,000 2,921,269 2,444,998 Balloon
CA 92705 Industrial 3,000,000 2,819,675 2,631,739 Balloon
WA 98409 Industrial 2,750,000 2,638,271 2,233,506 Balloon
<CAPTION>
ADMINI-
STRATIVE SUB- NET FIRST INTEREST
ZIP PROPERTY MORTGAGE FEE SERVICING MORTGAGE NOTE PAYMENT ACCRUAL
STATE CODE TYPE RATE RATE(I) FEE RATE DATE DATE DATE METHOD
- ----- ---- ---- ---- ------- -------- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CA 92075 Retail 7.670% 0.143% 0.100% 7.527% 4/13/99 6/1/99 ACT/360
CA 92704 Retail 7.660% 0.143% 0.100% 7.517% 1/21/99 4/1/99 ACT/360
CA 91606 Retail 8.250% 0.143% 0.100% 8.107% 1/13/97 5/1/98 30/360
VA 23703 Retail 7.920% 0.143% 0.100% 7.777% 12/16/98 2/1/99 ACT/360
NV 89102 Retail 8.750% 0.143% 0.100% 8.607% 6/20/97 8/1/97 30/360
FL 33304 Retail 7.500% 0.143% 0.100% 7.357% 4/29/99 6/1/99 ACT/360
AZ 85022 Retail 7.125% 0.143% 0.100% 6.982% 12/11/98 2/1/99 ACT/360
TX 75070 Retail 7.220% 0.143% 0.100% 7.077% 7/23/98 9/1/98 ACT/360
OR 77504 Retail 8.780% 0.143% 0.100% 8.637% 1/2/97 3/1/97 30/360
CA 91203 Retail 9.500% 0.143% 0.100% 9.357% 7/25/94 10/1/94 30/360
WA 98665 Retail 8.500% 0.143% 0.100% 8.357% 10/7/93 12/1/93 30/360
CA 94556 Retail 8.500% 0.143% 0.100% 8.357% 2/14/96 4/1/96 30/360
CA 92807 Retail 8.800% 0.143% 0.100% 8.657% 10/10/97 2/1/98 30/360
NY 14613 Retail 7.400% 0.143% 0.100% 7.257% 12/22/98 2/1/99 ACT/360
CA 94588 Retail 7.220% 0.143% 0.100% 7.077% 8/18/98 12/1/98 30/360
CA 94588 Retail 7.220% 0.143% 0.100% 7.077% 8/18/98 12/1/98 30/360
CA 90027 Retail 8.625% 0.143% 0.100% 8.482% 3/13/98 5/1/98 ACT/360
CA 93612 Retail 8.750% 0.143% 0.100% 8.607% 12/27/94 3/1/95 30/360
CA 95340 Retail 6.891% 0.143% 0.100% 6.748% 9/1/98 11/1/98 ACT/360
MN 55113 Retail 8.000% 0.143% 0.100% 7.857% 1/4/99 3/1/99 ACT/360
AZ 85023 Retail 7.900% 0.143% 0.100% 7.757% 3/16/99 5/1/99 ACT/360
CA 90061 Retail 7.875% 0.143% 0.100% 7.732% 10/21/98 12/1/98 ACT/360
CA 90805 Retail 7.875% 0.143% 0.100% 7.732% 10/27/98 12/1/98 ACT/360
NV 89101 Retail 8.000% 0.143% 0.100% 7.857% 12/18/98 2/1/99 ACT/360
CA 92506 Retail 7.990% 0.143% 0.100% 7.847% 12/1/98 2/1/99 ACT/360
NY 11963 Retail 8.000% 0.143% 0.100% 7.857% 1/22/99 3/1/99 ACT/360
CA 91739 Retail 8.240% 0.143% 0.100% 8.097% 12/1/98 2/1/99 ACT/360
AZ 85705 Retail 8.000% 0.143% 0.100% 7.857% 12/31/98 2/1/99 ACT/360
CA 92672 Retail 7.875% 0.143% 0.100% 7.732% 12/16/98 2/1/99 ACT/360
CA 94122 Retail 8.150% 0.143% 0.100% 8.007% 1/13/99 3/1/99 ACT/360
CA 90670 Industrial
CA 90620 Industrial
CA 92243 Industrial
8.000% 0.143% 0.100% 7.857% 10/20/95 1/1/96 30/360
NE 68127 Industrial 7.470% 0.143% 0.100% 7.327% 7/15/98 9/1/98 ACT/360
CA 95136 Industrial 10.180% 0.143% 0.100% 10.037% 12/21/94 2/1/95 30/360
IL 60466 Industrial 7.316% 0.143% 0.100% 7.173% 12/30/98 2/1/99 ACT/360
CA 94949 Industrial 7.875% 0.143% 0.100% 7.732% 3/1/94 4/1/94 30/360
CA 94050 Industrial 8.625% 0.143% 0.100% 8.482% 12/16/96 2/1/97 30/360
NJ 7047 Industrial 7.260% 0.143% 0.100% 7.117% 8/26/98 10/1/98 ACT/360
TX 77477 Industrial 7.220% 0.143% 0.100% 7.077% 9/21/98 11/1/98 30/360
FL 32901 Industrial 7.250% 0.143% 0.100% 7.107% 12/18/98 2/1/99 ACT/360
CA 94088 Industrial 9.130% 0.143% 0.100% 8.987% 11/16/92 2/1/93 30/360
OR 97201 Industrial 7.470% 0.143% 0.100% 7.327% 12/22/97 2/15/98 30/360
CA 91730 Industrial 8.625% 0.143% 0.100% 8.482% 12/23/94 2/1/95 30/360
CA 91362 Industrial 7.210% 0.143% 0.100% 7.067% 5/14/98 7/1/98 30/360
CA 92631 Industrial 7.750% 0.143% 0.100% 7.607% 4/5/96 6/10/96 ACT/360
NV 89118 Industrial
NV 89118 Industrial
7.400% 0.143% 0.100% 7.257% 12/24/98 2/1/99 ACT/360
CA 90670 Industrial 9.225% 0.143% 0.100% 9.082% 4/4/95 6/1/95 30/360
CA 94608 Industrial 8.410% 0.143% 0.100% 8.267% 9/29/95 12/1/95 30/360
AK 99501 Industrial 8.250% 0.143% 0.100% 8.107% 10/1/97 12/1/97 30/360
CA 92705 Industrial 7.550% 0.143% 0.100% 7.407% 11/21/95 2/1/96 30/360
WA 98409 Industrial 8.110% 0.143% 0.100% 7.967% 6/13/96 7/1/96 30/360
</TABLE>
<PAGE> 135
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS)(ii) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
- -------- -------- ------------- --------- --------- ---------- -------------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$18,520 120 300 6 114 05/01/2009 No No 02/01/2009
16,335 120 360 8 112 03/01/2009 No Yes(O) 12/30/2008
18,134 120 300 19 101 04/01/2008 No No
16,384 117 360 10 107 10/01/2008 No No 05/31/2008
18,909 120 300 28 92 07/01/2007 No No
17,856 147 246 6 141 08/01/2011 No No 05/01/2011
14,401 120 360 10 110 01/01/2009 No Yes(N) 10/02/2008
14,521 120 360 15 105 08/01/2008 No No 07/31/2001
22,778 180 180 33 147 02/01/2012 No No
18,348 120 300 62 58 09/01/2004 No Yes(K)
16,105 84 300 72 12 11/01/2000 No Yes(Q)
15,098 120 300 44 76 03/01/2006 No No
18,705 180 180 22 158 01/01/2013 No No
13,791 180 240 10 170 01/01/2014 No No 09/01/2013
15,946 180 180 12 168 11/01/2013 No Yes(R)
15,946 180 180 12 168 11/01/2013 No Yes(R)
17,290 84 180 19 65 04/01/2005 No No
16,362 120 240 57 63 02/01/2005 No No
10,709 120 360 13 107 10/01/2008 No No 08/01/2008
11,886 120 300 9 111 02/01/2009 No No 12/02/2008
11,438 120 300 7 113 04/01/2009 No No 01/01/2009
7,577 120 360 12 108 11/01/2008 No Yes(S) 09/01/2008
6,997 120 360 12 108 11/01/2008 No Yes(S) 09/01/2008
7,946 120 240 10 110 01/01/2009 No No 11/01/2008
6,825 120 360 10 110 01/01/2009 No Yes(T) 11/01/2008
6,440 120 300 9 111 02/01/2009 No No 11/01/2008
6,042 120 360 10 110 01/01/2009 No Yes(T) 11/01/2008
5,829 180 180 10 170 01/01/2014 No No 11/01/2013
4,200 120 300 10 110 01/01/2009 No No 11/01/2008
2,502 120 300 9 111 02/01/2009 No No 12/02/2008
65,604 119 300 47 72 11/01/2005 No No
49,750 120 300 15 105 08/01/2008 No No 03/31/2008
55,285 120 300 58 62 01/01/2005 No No
37,286 120 360 10 110 01/01/2009 No No 10/01/2008
39,705 81 300 68 13 11/30/2000 No No
38,230 120 300 34 86 01/01/2007 No No
33,408 120 288 14 106 09/01/2008 No No 05/01/2008
28,835 120 300 13 107 10/01/2008 No No
26,773 109 300 10 99 02/01/2008 No No 11/01/2007
31,135 120 360 82 38 01/01/2003 No No
29,739 120 240 21 99 01/01/2008 No No
28,998 120 300 58 62 01/01/2005 No No
31,871 180 180 17 163 06/01/2013 No No
24,803 120 300 42 78 05/10/2006 No No
21,595 120 360 10 110 01/01/2009 No No 10/01/2008
38,025 180 180 54 126 05/01/2010 No No
25,573 84 300 48 36 11/01/2002 No No
23,654 120 300 24 96 11/01/2007 No No
22,267 84 300 46 38 01/01/2003 No No
21,426 126 300 41 85 12/01/2006 No No
<CAPTION>
MONTHLY
PAYMENT PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- ------- --------------------------------------- ----------------------
<S> <C> <C>
$18,520 LO(117)/OPEN(3)/DEF NAP
16,335 LO(117)/OPEN(3)/DEF NAP
18,134 $250+YM(120) Int. Rate Diff. (Type 1A)
16,384 LO(112)/OPEN(5)/DEF NAP
18,909 YM(120) Int. Rate Diff. (Type 1B)
17,856 LO(144)/OPEN(3)/DEF NAP
14,401 LO(117)/OPEN(3)/DEF NAP
14,521 (iv) Int. Rate Diff. (Type 1A)
22,778 $250+YM(180) Int. Rate Diff. (Type 1A)
18,348 YM(120) Int. Rate Diff. (Type 3A)
16,105 YM(84) Int. Rate Diff. (Type 2B)
15,098 $250+YM(120) Int. Rate Diff. (Type 1A)
18,705 YM(180) Int. Rate Diff. (Type 1B)
13,791 LO(176)/OPEN(4)/DEF NAP
15,946 YM(180) Int. Rate Diff. (Type 3A)
15,946 YM(180) Int. Rate Diff. (Type 3A)
17,290 YM(84) Int. Rate Diff. (Type 3A)
16,362 $250+YM(120) Int. Rate Diff. (Type 1A)
10,709 LO(118)/OPEN(2)/DEF NAP
11,886 LO(118)/OPEN(2)/DEF NAP
11,438 LO(117)/OPEN(3)/DEF NAP
7,577 LO(118)/OPEN(2)/DEF NAP
6,997 LO(118)/OPEN(2)/DEF NAP
7,946 LO(118)/OPEN(2)/DEF NAP
6,825 LO(118)/OPEN(2)/DEF NAP
6,440 LO(117)/OPEN(3)/DEF NAP
6,042 LO(118)/OPEN(2)/DEF NAP
5,829 LO(178)/OPEN(2)/DEF NAP
4,200 LO(118)/OPEN(2)/DEF NAP
2,502 LO(118)/OPEN(2)/DEF NAP
65,604 $250+YM(117)/OPEN(2) Int. Rate Diff. (Type 1A)
49,750 LO(115)/OPEN(5)/DEF NAP
55,285 $250+YM(120) Int. Rate Diff. (Type 1A)
37,286 LO(117)/OPEN(3)/DEF NAP
39,705 YM(81) Int. Rate Diff. (Type 3A)
38,230 $250+YM(120) Int. Rate Diff. (Type 1A)
33,408 LO(116)/OPEN(4)/DEF NAP
28,835 YM(120) Int. Rate Diff. (Type 1A)
26,773 LO(106)/OPEN(3)/DEF NAP
31,135 YM(120) Int. Rate Diff. (Type 3A)
29,739 $250+YM(120) Int. Rate Diff. (Type 1A)
28,998 $250+YM(120) Int. Rate Diff. (Type 1A)
31,871 YM(180) Int. Rate Diff. (Type 3A)
24,803 YM(120) Int. Rate Diff. (Type 3A)
21,595 LO(118)/OPEN(2)/DEF NAP
38,025 YM(180) Int. Rate Diff. (Type 3A)
25,573 $250+YM(84) Int. Rate Diff. (Type 1A)
23,654 YM(120) Int. Rate Diff. (Type 2A)
22,267 YM(84) Int. Rate Diff. (Type 3A)
21,426 OPEN(6)/YM(120) Int. Rate Diff. (Type 2A)
</TABLE>
<PAGE> 136
<TABLE>
<CAPTION>
CUT-OFF TOTAL
DATE UNITS/
SE- LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/ ROOM/
QUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED BED
- ------ ------ ------------- ----------- --------- ------- ----------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
C145 51507 Arts Industria Center $ 3,650,000 2/10/99 67% 1998 18,200
C146 51494 Harbor Place 3,300,000 9/26/98 69% 1980 31,571
P147 3046620 Victory Plaza Shopping Center 5,000,000 9/16/97 45% 1977/1996 104,165
C148 51389 Towne Point Shopping Center 3,000,000 8/26/98 75% 1988 59,027
P149 3033792 Las Vegas Discount Golf & Tennis 2,900,000 4/14/97 77% 1997 12,928
C150 51510 NationsBank Branch - Ft. Lauderdale 2,800,000 2/22/99 79% 1991 5,270
C151 51333 OfficeMax Building - Phoenix, AZ 2,850,000 12/1/98 74% 1998 23,952
C152 50864 Hardin Village Shopping Center 2,850,000 3/20/98 74% 1997 18,960
P153 3022746 Barnes & Noble Booksellers 3,750,000 12/3/96 55% 1996 24,915
P154 1201185 Dollinger Central 2,720,000 6/1/94 72% 1993 12,338
P155 1794569 Salmon Creek Shopping Center 3,263,000 7/15/93 56% 1980 49,410
P156 3013471 Petrini's Rheem Valley Shopping Center 2,500,000 12/27/95 71% 1986 39,254
P157 3041589 Mission Village Center 4,100,000 8/21/97 43% 1973/1998 39,480
C158 51140 Maple Wood Plaza 2,325,000 12/1/98 73% 1990/1998 25,842
P159 3056140 Crossroads at Hacienda Shopping Center 2,800,000 7/8/98 60% 1989 9,740
P160 3056132 Crossroads at Hacienda Shopping Center 2,600,000 7/8/98 65% 1989 11,048
P161 3051141 Barnsdall Square Shopping Center 5,400,000 8/1/97 31% 1964 41,205
P162 3000932 Wild West Shopping Center 2,560,000 10/17/94 64% 1982/1995 38,425
C163 51276 Western Dental Plaza 2,170,000 7/22/98 74% 1980/1997 12,257
C164 51475 Northome Shopping Center 2,200,000 9/29/98 69% 1946/1968 61,542
C165 51492 KMS Retail Center 2,200,000 1/15/99 67% 1998 12,000
C166 51361 Harbor Plaza Shopping Center 1,650,000 5/25/98 63% 1989 10,325
C167 51370 Harding Atlantic Shopping Center 1,290,000 5/20/98 74% 1989 13,796
C168 51439 Towne Square Shopping Center 1,980,000 10/15/98 47% 1985 21,739
C169 51469 Arlington Square 1,330,000 6/30/98 70% 1977 19,958
C170 51483 Sag Harbor Shopping Cove 1,200,000 9/1/98 69% 1979 5,654
C171 51468 Victoria Village Shopping Center 1,150,000 7/11/98 70% 1990 13,342
C172 51432 Prince & Fairview Shopping Center 1,300,000 9/22/98 46% 1979 26,710
C173 51452 El Camino Retail 975,000 10/15/98 56% 1977/1992 10,464
C174 51433 Clothestime Retail Building 690,000 8/21/98 46% 1913 2,470
P175A 3011970 Crockett Container Corporation 1979 197,690
P175B 3011970 Crockett Container Corporation 1975 123,485
P175C 3011970 Crockett Container Corporation 1965 136,900
P175 3011970 Crockett Industrial Portfolio (Roll-Up) 12,730,000 7/6/95 63% 458,075
C176 50919 1/2 Price Distribution Center 9,350,000 4/3/98 71% 1972/1984 266,371
P177 3000908 Charter Business Park 12,000,000 2/1/99 47% 1987 133,435
C178 51187 Tyco Warehouse 7,000,000 3/1/99 77% 1981/1998 186,560
P179 3038361 Lakepoint/Ignacio Business Park 7,780,000 11/5/93 60% 1993 73,179
P180 3021458 San Tomas Business Centre 6,150,000 10/31/96 74% 1975 78,945
C181 50944 7777 West Side Ave. 6,160,000 7/1/98 73% 1968/1969 126,630
P182 3033032 Zidell Valve Corporation 5,900,000 6/17/98 67% 1995 182,303
C183 51186 Nokia Office Warehouse Building 4,630,000 7/22/98 79% 1998 60,000
P184 2088680 Amdahl Building 5,100,000 9/15/92 70% 1977/1988 60,000
P185 3032760 Bancroft Building 5,900,000 9/2/97 60% 1966/1997 57,319
P186 3000890 Jersey Business Park 4,750,000 11/23/94 70% 1988 107,568
P187 3054947 Condor Pacific Industries 6,250,000 4/13/98 53% 1970/1993 72,000
P188 3023538 Vista Paints 4,980,000 2/8/96 63% 1981 134,984
C189A 51448 Santoli Commerce Center-Phase I 1996 34,200
C189B 51448 Santoli Commerce Center-Phase II 1998 34,364
C189 51448 Santoli Commerce Center (Roll-Up) 4,775,000 10/23/98 65% 68,564
P190 3006681 Trojan Battery Company 5,770,000 1/19/95 53% 1982 161,450
P191 3011426 4240 Hollis Street 4,650,000 7/26/95 65% 1930's/1988 55,537
P192 3032406 Airport Office Park 5,010,000 9/12/97 58% 1984 56,463
P193 3011921 Fabrica International Building 4,015,000 8/24/95 70% 1978 106,524
P194 4540878 Performance Radiator 3,715,000 8/31/96 71% 1996 73,147
<CAPTION>
SF/ LOAN
UNIT/ NET BALANCE PER
SE- LOAN ROOM/ RENTABLE SF/UNIT/
QUENCE NUMBER PROPERTY NAME BED AREA (SF) ROOM/BED
- ------ -------- ------------- ----- --------- -----------
<S> <C> <C> <C> <C> <C>
C145 51507 Arts Industria Center SF 18,200 $135
C146 51494 Harbor Place SF 31,571 73
P147 3046620 Victory Plaza Shopping Center SF 104,165 22
C148 51389 Towne Point Shopping Center SF 59,027 38
P149 3033792 Las Vegas Discount Golf & Tennis SF 12,928 173
C150 51510 NationsBank Branch - Ft. Lauderdale SF 5,270 421
C151 51333 OfficeMax Building - Phoenix, AZ SF 23,952 89
C152 50864 Hardin Village Shopping Center SF 18,960 111
P153 3022746 Barnes & Noble Booksellers SF 24,915 82
P154 1201185 Dollinger Central SF 12,338 159
P155 1794569 Salmon Creek Shopping Center SF 49,410 37
P156 3013471 Petrini's Rheem Valley Shopping Center SF 39,254 45
P157 3041589 Mission Village Center SF 39,480 44
C158 51140 Maple Wood Plaza SF 25,842 66
P159 3056140 Crossroads at Hacienda Shopping Center SF 9,740 173
P160 3056132 Crossroads at Hacienda Shopping Center SF 11,048 152
P161 3051141 Barnsdall Square Shopping Center SF 41,205 40
P162 3000932 Wild West Shopping Center SF 38,425 43
C163 51276 Western Dental Plaza SF 12,257 131
C164 51475 Northome Shopping Center SF 61,542 25
C165 51492 KMS Retail Center SF 12,000 124
C166 51361 Harbor Plaza Shopping Center SF 10,325 100
C167 51370 Harding Atlantic Shopping Center SF 13,796 69
C168 51439 Towne Square Shopping Center SF 21,739 43
C169 51469 Arlington Square SF 19,958 46
C170 51483 Sag Harbor Shopping Cove SF 5,654 146
C171 51468 Victoria Village Shopping Center SF 13,342 60
C172 51432 Prince & Fairview Shopping Center SF 26,710 22
C173 51452 El Camino Retail SF 10,464 52
C174 51433 Clothestime Retail Building SF 2,470 128
P175A 3011970 Crockett Container Corporation SF 197,690
P175B 3011970 Crockett Container Corporation SF 123,485
P175C 3011970 Crockett Container Corporation SF 136,900
P176 3011970 Crockett Industrial Portfolio (Roll-Up) SF 458,075 17
C177 50919 1/2 Price Distribution Center SF 266,371 25
P178 3000908 Charter Business Park SF 133,435 43
C178 51187 Tyco Warehouse SF 186,560 29
P179 3038361 Lakepoint/Ignacio Business Park SF 73,179 64
P180 3021458 San Tomas Business Centre SF 78,945 57
C181 50944 7777 West Side Ave. SF 126,630 35
P182 3033032 Zidell Valve Corporation SF 182,303 22
C183 51186 Nokia Office Warehouse Building SF 60,000 61
P184 2088680 Amdahl Building SF 60,000 60
P185 3032760 Bancroft Building SF 57,319 62
P186 3000890 Jersey Business Park SF 107,568 31
P187 3054947 Condor Pacific Industries SF 72,000 46
P188 3023538 Vista Paints SF 134,984 23
C189A 51448 Santoli Commerce Center-Phase I SF 34,200
C189B 51448 Santoli Commerce Center-Phase II SF 34,364
C189 51448 Santoli Commerce Center (Roll-Up) SF 68,564 45
P190 3006681 Trojan Battery Company SF 161,450 19
P191 3011426 4240 Hollis Street SF 55,537 54
P192 3032406 Airport Office Park SF 56,463 52
P193 3011921 Fabrica International Building SF 106,524 26
P194 4540878 Performance Radiator SF 73,147 36
</TABLE>
<PAGE> 137
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W MOST
OCCUPANCY CASH U/W RECENT
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES END
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT DATE
- --------- --------- -------- -------- --------- ---- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
100% 3/11/99 $ 425,034 $104,979 $ 289,705 1.30 $2,730 $0.15
96% 3/1/99 375,122 100,130 251,300 1.28 5,124 0.16 12/31/98
100% 12/1/98 799,652 224,192 505,634 2.32 26,041 0.25 12/31/98
100% 11/24/98 373,648 95,987 246,327 1.25 14,629 0.25 12/31/97
100% 12/31/98 359,830 51,734 293,237 1.29 2,586 0.20
100% 3/17/99 295,080 7,167 287,386 1.34 527 0.10 12/31/98
100% 4/1/99 283,292 61,412 210,144 1.22 2,395 0.10
100% 3/1/99 348,004 94,026 237,830 1.36 2,844 0.15
100% 2/11/99 367,482 18,374 333,075 1.22 4,983 0.20 12/31/98
100% 2/2/99 330,794 71,885 245,868 1.12 2,468 0.20 12/31/98
98% 10/1/98 465,416 121,776 314,989 1.63 12,353 0.25 9/30/98
100% 3/8/99 352,555 109,308 222,415 1.23 9,814 0.25 12/31/98
98% 1/1/99 627,139 231,215 366,155 1.63 9,870 0.25 12/31/98
93% 12/1/98 295,371 71,340 207,238 1.25 5,725 0.22 12/31/98
100% 2/22/99 244,753 12,238 223,239 1.17 1,948 0.20
100% 2/22/99 234,853 11,743 213,529 1.12 2,210 0.20
100% 2/8/99 659,521 226,842 399,312 1.92 10,301 0.25 12/31/98
84% 1/31/99 407,978 109,004 270,718 1.38 9,606 0.25 12/31/98
100% 6/5/98 236,326 49,019 175,505 1.37 3,160 0.26
93% 11/30/98 455,067 204,743 192,752 1.35 18,563 0.30 12/31/97
100% 5/31/99 242,288 62,132 171,578 1.25 3,100 0.26
92% 12/31/98 190,642 57,828 122,561 1.35 3,607 0.35 12/31/98
93% 1/28/99 194,538 57,865 126,535 1.51 2,763 0.20 12/31/98
96% 10/31/98 276,909 92,995 162,189 1.70 3,261 0.15 12/31/98
80% 3/17/99 219,175 79,346 120,877 1.48 4,660 0.23 12/31/98
100% 11/2/98 166,162 58,941 99,897 1.29 1,256 0.22 12/31/98
93% 10/16/98 160,888 52,791 94,364 1.30 1,819 0.14 12/31/98
100% 9/30/98 182,644 68,748 91,011 1.30 6,669 0.25 12/31/98
100% 3/15/99 117,993 43,195 63,345 1.26 2,093 0.20 12/31/98
100% 1/13/99 54,527 13,522 38,393 1.28 371 0.15 12/31/97
100% 2/17/99
100% 2/17/99
100% 2/17/99
1,611,772 80,589 1,293,418 1.64 91,615 0.20
100% 1/30/99 903,727 49,478 760,123 1.27 53,314 0.20
100% 4/1/99 1,319,269 308,877 909,569 1.37 26,687 0.20 12/31/98
100% 3/1/99 685,450 29,891 608,919 1.36 46,640 0.25
100% 11/16/98 1,174,882 387,535 686,576 1.44 14,636 0.20 12/31/98
99% 2/8/99 1,148,913 488,668 552,474 1.20 15,789 0.20 12/31/98
100% 8/26/98 839,097 303,300 529,465 1.32 6,332 0.05 12/31/98
100% 2/28/97 513,000 25,650 428,312 1.24 27,345 0.15 12/31/98
100% 2/1/98 454,800 59,292 391,308 1.22 4,200 0.07 12/31/98
100% 12/1/87 523,797 26,190 459,282 1.23 12,000 0.20 12/31/98
100% 3/26/99 704,102 155,120 487,747 1.37 11,464 0.20 12/31/98
94% 1/1/99 699,925 191,504 447,486 1.29 21,514 0.20 12/31/98
100% 2/1/98 628,959 31,448 548,124 1.43 14,400 0.20 1/30/99
100% 12/31/98 496,620 24,831 393,793 1.32 26,997 0.20
97% 12/4/98
100% 12/4/98
521,928 101,922 388,836 1.50 6,856 0.10 12/31/98
100% 4/19/99 697,464 34,873 582,132 1.28 32,290 0.20
91% 3/3/99 649,516 152,449 452,261 1.47 11,107 0.20 12/31/98
100% 4/6/99 696,075 149,571 461,392 1.63 12,846 0.23 12/31/98
100% 8/24/95 435,471 23,169 350,922 1.31 21,305 0.20 12/31/98
100% 3/19/99 396,310 41,162 323,474 1.26 10,972 0.15 12/31/98
<CAPTION>
MOST 2ND
RECENT MOST
OCCUPANCY MOST MOST MOST CASH RECENT
OCCUPANCY AS OF RECENT RECENT RECENT FLOW END
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR DATE
- --------- --------- -------- -------- --------- ------ ------
<S> <C> <C> <C> <C> <C> <C>
100% 3/11/99
96% 3/1/99 $ 398,178 $ 87,670 $297,068 1.52 12/31/97
100% 12/1/98 835,094 202,226 606,344 2.79 12/31/97
100% 12/31/98 399,437 77,992 313,878 1.60 12/31/96
100% 11/24/98
100% 3/17/99 248,760 3,560 245,200 1.14 12/31/97
100% 4/1/99
100% 3/1/99
100% 2/11/99 367,482 367,482 1.34 12/31/97
100% 2/2/99 367,968 66,163 301,805 1.37 12/31/97
98% 10/1/98 504,237 98,505 405,732 2.10
100% 3/8/99 396,861 103,560 293,301 1.62 12/31/97
98% 1/1/99 682,058 232,020 442,514 1.97 12/31/97
93% 12/1/98 219,432 53,694 162,246 0.98 12/31/97
100% 2/22/99
100% 2/22/99
100% 2/8/99 571,016 207,910 359,210 1.73 12/31/97
84% 1/31/99 409,050 103,499 305,551 1.56 12/31/97
100% 6/5/98
93% 11/30/98 452,494 239,759 81,412 0.57 12/31/96
100% 5/31/99
92% 12/31/98 239,712 29,344 210,368 2.31
93% 1/28/99 181,420 38,253 121,438 1.45 12/31/97
96% 10/31/98 286,487 62,758 220,609 2.31 12/31/97
80% 3/17/99 192,670 96,911 93,609 1.14 12/31/97
100% 11/2/98 165,760 52,630 111,430 1.44
93% 10/16/98 192,491 53,150 139,342 1.92 12/31/97
100% 9/30/98 201,650 76,768 123,725 1.77 12/31/97
100% 3/15/99 155,749 30,053 124,851 2.48 12/31/97
100% 1/13/99 50,433 4,321 46,112 1.54 12/31/96
100% 2/17/99
100% 2/17/99
100% 2/17/99
100% 1/30/99
100% 4/1/99 1,340,127 290,282 1,049,845 1.58 12/31/97
100% 3/1/99
100% 11/16/98 1,251,286 380,635 842,719 1.77
99% 2/8/99 1,192,799 437,518 755,281 1.65 12/31/97
100% 8/26/98 741,055 741,055 1.85
100% 2/28/97 540,000 540,000 1.56 12/31/97
100% 2/1/98 446,512 61,719 384,793 1.20
100% 12/1/87 581,997 581,997 1.56
100% 3/26/99 623,885 126,617 497,268 1.39 12/31/97
94% 1/1/99 693,509 178,608 480,022 1.38 12/31/97
100% 2/1/98 649,080 649,080 1.70 12/31/97
100% 12/31/98
97% 12/4/98
100% 12/4/98
464,503 101,221 353,471 1.36 12/31/97
100% 4/19/99
91% 3/3/99 644,836 142,130 394,028 1.28 12/31/97
100% 4/6/99 731,631 144,105 543,544 1.91 8/31/97
100% 8/24/95 458,391 1,395 456,996 1.71
100% 3/19/99 423,984 24,711 399,273 1.55 12/31/97
</TABLE>
<PAGE> 138
<TABLE>
<CAPTION>
2ND
MOST LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
-------- -------- --------- ---- -------------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Sassaby/Estee Lauder 4,900 27% 11/30/02
$ 421,283 $ 79,344 $ 341,939 1.74 Furniture City 7,100 22% 11/30/02
816,029 199,718 602,561 2.77 Lucky's Grocery Store 31,117 30% 11/30/02
365,966 118,685 242,113 1.23 Food Lion 29,000 50% 9/30/08
Las Vegas Discount Golf/Tennis 12,928 100% NAP
248,790 3,744 245,046 1.14 NationsBank 5,270 100% 7/31/11
Office Max 23,952 100% 1/31/14
Partyland 4,250 22% 5/31/03
367,482 367,482 1.34 Barnes & Noble 24,915 100% 4/30/11
365,752 72,075 293,677 1.33 Busybody 4,000 32% NAV
Salmon Creek Thriftway #636 25,497 52% 1/31/00
364,062 100,100 263,962 1.46 Apple Market 29,654 76% 2/18/11
653,002 216,342 430,841 1.92 Thrifty/Payless (Ground Lease) 5/1/08
208,343 47,186 161,157 0.97 Eckerd Drug 12,272 47% 6/30/10
Sweet Tomatoes 7,907 81% 2/28/10
Blockbuster Video 6,722 61% 8/31/00
563,965 142,713 415,024 2.00 Rite Aid 15,180 37% 12/4/13
394,282 98,018 296,264 1.51 Golden Corral 8,400 22% 11/4/11
Western Dental Services, Inc. 3,741 31% 7/31/13
451,118 207,430 207,974 1.46 Falcon Bowl 11,417 19% 6/30/01
Hollywood Video 6,480 54% 1/5/09
Chief Auto Parts 4,000 39% 5/31/04
107,205 31,665 75,540 0.90 Mini Market 2,505 18% 8/31/07
275,092 79,211 177,940 1.87 Point After Lounge 4,600 21% 2/28/03
214,493 74,296 140,197 1.71 Dentists Office 2,108 11% 10/31/03
Java Nation 1,197 21% 4/30/00
168,866 50,513 108,928 1.50 Mr. C's Pizza 3,240 24% 9/30/02
192,013 57,657 132,699 1.90 Auto Zone 7,000 26% 1/31/01
78,497 32,404 43,917 0.87 Ocean Hair & Nails 1,548 16% 9/30/00
50,847 4,926 45,921 1.53 Clothestime 2,470 100% 5/31/01
Inland Paperboard & Packaging 197,690 100% 8/31/05
Inland Paperboard & Packaging 123,485 100% 8/31/05
Inland Paperboard & Packaging 136,900 100% 8/31/05
Inland Paperboard & Packaging 197,690 43% 8/31/05
1/2 Price 185,570 70% 2/28/13
1,317,795 298,374 1,019,421 1.54 Fox Factory 27,727 21% 7/31/00
Grinnell Corporation 186,560 100% 10/27/13
Harding Lawson Assoc. 65,184 89% 10/3/03
1,112,051 404,092 681,045 1.48 MACS Lab 5,918 8% 4/30/00
Production Resource Group 126,630 100% 7/31/12
540,000 540,000 1.56 Zidell Valve Corporation 182,303 100% 2/28/07
Nokia Mobile Phones, Inc. 60,000 100% 2/17/08
Amdahl Corporation 60,000 100% 2/28/03
496,697 131,494 365,203 1.02 Group Mackenzie 25,091 44% 4/30/03
660,469 173,334 449,473 1.29 Cal Trans 5,568 5% 10/31/00
420,000 420,000 1.10 Condor Pacific Industries 72,000 100% 1/31/13
Vista Paint Corporation 134,984 100% 2/28/06
Har-Bro Construction 4,200 12% 2/28/00
Office Furniture Outlet 17,182 50% 4/30/03
278,728 68,490 204,286 0.79 Office Furniture Outlet 17,182 25% 4/30/03
Trojan Battery Co. 161,450 100% NAP
739,139 118,834 619,200 2.02 Semifreddi Bakery 19,800 36% 2/28/05
746,495 136,371 610,124 2.15 University of Alaska NAV NAV NAV
Fabrica International 106,524 100% 10/31/99
402,809 16,855 385,954 1.50 Performance Radiator Warehouse NAV NAV 9/14/01
<CAPTION>
SECOND SECOND
SECOND LARGEST LARGEST
LARGEST TENANT TENANT
TENANT % OF LEASE
SECOND LARGEST LEASED TOTAL EXPIRA-
TENANT SF SF TION
-------------- ------- ------- -------
<C> <C> <C> <C>
McCulley Group 2,590 14% 11/30/03
McDonalds Corp 4,156 13% 5/8/06
Sav-On Drug Store 25,500 24% 7/21/02
Landmark Communications 11,339 19% 12/11/03
Rice Lovers 3,000 16% 2/28/03
Barbeques Galore 3,500 28% 6/30/01
Round Table Pizza 3,651 7% 9/30/00
Linda Evans 6,000 15% 11/30/99
Pic-N-Sav 14,850 38% 1/1/05
Rent-Way, Inc 6,000 23% 3/31/05
Una Mas Restaurants, Inc. 1,833 19% 4/1/03
Copymat of Pleasanton 1,851 17% 1/31/00
Robert Beyda 3,850 9% 3/1/00
Tuesday Morning 6,000 16% 1/15/04
Leslie's Pools 3,001 24% 10/31/03
Stone Fabrics 7,520 12% 1/31/02
Leslie's Pool Mart 3,600 30% 11/30/09
A & D Mini Mart 2,500 24% 1/31/08
Laundromat 2,400 17% 3/31/12
7-Eleven Southland Corp. 2,939 14% 5/31/01
JK Kim Tae Kwon Do 2,080 10% 6/12/02
Harbor Music Shoppe 1,008 18% 3/31/03
Village Mini-Mart 1,850 14% 6/30/03
Iron Traditions 4,060 15% NAV
Jeannes Carpet 1,420 14% MTM
Inland Paperboard & Packaging 136,900 30% 8/31/05
Coleman Powermate 81,000 30% 3/1/03
Dynatec 5,087 4% 10/31/99
Womack International 5,790 8% 12/15/00
Helio Medical Supplies 5,458 7% NAV
Entercom Inc. 13,668 24% 9/30/12
Jack Freeman 2,916 3% 5/31/01
Apple Vending 2,200 6% 3/31/00
Superior Moulding 8,591 25% 1/11/02
Superior Moulding 8,591 13% 1/11/02
W.W. Grainger 15,040 27% 11/7/99
Kennecott Minerals 7,450 13% 8/31/00
Performance Radiator Shop NAV NAV 9/30/07
</TABLE>
<PAGE> 139
<TABLE>
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS COUNTY CITY
- ------ ------ ------------- ---------------- ------ ----
<S> <C> <C> <C> <C> <C>
P195 2093268 Valley North Business Park 2401,2501 W. Behrend Drive Maricopa Phoenix
C196 51392 325 Exterior Street 325 Exterior Street Bronx Bronx
P197 3057932 Northwestern Polytechnic University 105-119 Fourier Avenue Alameda Fremont
P198 1204346 Warner Fairview Business Park 2300 - 2320 S. Fairview, et al. Orange Santa Ana
P199 3009883 Industry West Industrial Park 200-272 South 5th Avenue Los Angeles Industry
C200 51326 Hampton Commerce Center 1323 W. Pembroke Ave. and 5, 6 & 10 Hampton City Hampton
Lockwood Drive
P201 3025343 4880 West Rosecrans Avenue 4880 West Rosecrans Avenue Los Angeles Hawthorne
P202 3058575 Ledtronics 23105 Kashiwa Court Los Angeles Torrance
P203A 3034873 Whitman Road Warehouses 2355 Whitman Road Contra Costa Concord
P203B 3034873 Whitman Road Warehouses 2350 Whitman Road Contra Costa Concord
P203 3034873 Hofmann Industrial Portfolio
(Roll-Up)
P204 3014958 Avioan Business Center 1865-1963 Del Amo Boulevard Los Angeles Torrance
P205 1201136 Valencia Industrial Center 25371-95 Rye Canyon Road Los Angeles Santa Clarita
C206 51194 Van Nuys Airport Business Center 16735-45 Saticoy St. Los Angeles Los Angeles
P207 3011632 Seaview Business Park 1010-1060 Calle Cordillera Orange San Clemente
C208 51247 Technology Drive Industrial 170 Technology Dr. Orange Irvine
C209 51280 1400 Dell Avenue Building 1400 Dell Ave. Santa Clara Campbell
P210 3032786 Tromley Industrial Building 12505 S.W. Herman Road Washington Tualatin
C211 51337 2500-2520 Park Central 2500-2520 Park Central Boulevard Dekalb Decatur
P212 4538179 Coeur d'Alenes Co. & Stock Steel East 3900 Broadway Avenue Spokane Spokane
Metal Fabrication Bldg
P213 3021284 250 W. Artesia Boulevard 250 W. Artesia Boulevard Los Angeles Compton
P214 2034692 1-31 North Salsipuedes Street 1-31 North Salsipuedes Street Santa Barbara Santa Barbara
P215 3007127 14402 Franklin Avenue 14402 Franklin Avenue Orange Tustin
P216 4538229 Puget Sound Tire Building 402 & 412 Lund Road King Auburn
P217 3039914 Span-O-Matic, Inc. 825 Columbia Street Orange Brea
P218 3009974 Watt-Eighty Business Park 3325-3437 Myrtle Avenue Sacramento North Highlands
P219 4538864 Slope Indicator Company 3450 Monte Villa Parkway Snohomish Bothell
P220 1795863 Newport Shores Office/Warehouse 3220, 3240, 3260 118th Avenue S.E. King Bellvue
P221 1201326 6231, 6241 Yarrow Drive 6231, 6241 Yarrow Drive San Diego Carlsbad
P222 3006491 25620 Rye Canyon Road 25620 Rye Canyon Road Los Angeles Santa Clarita
P223 3039450 Ross Industrial Park 1050 N.W. Maryland Avenue Lewis Chehalis
P224 3074754 Chicago Avenue Business Center 2023 & 2025 Chicago Avenue Riverside Riverside
C225 51193 Walmar Industrial Center 5600-5760 Ayala Avenue Los Angeles Irwindale
P226 3001211 View Engineering, Inc. 1650 - 1720 Voyager Drive Ventura Simi Valley
P227 3101367 Montgomery Ward Distribution Warehouse 5905 N Marine Drive Multnomah Portland
P228 4547279 Freshmark Foods Building 22613 76th Avenue South King Kent
C229 51454 Airpark Trade Center 15023 N 73rd St. Maricopa Scottsdale
C230 51470 Raintree Commerce Center 8150 E. Raintree Dr. Maricopa Scottsdale
C231 51314 Huntwood Ave. Light Industrial 25377 & 25385 Huntwood Ave. Alameda Hayward
C232 51506 North American Cable Building 227 S. River Street Kane Aurora
C233 51438 One Industrial Building 1 Industrial Street San Francisco San Francisco
C234 51503 Bank of America Regional Headquarters 10850 White Rock Rd. Sacramento Rancho Cordova
C235 51332 101 Ygnacio Plaza 101 Ygnacio Valley Road Contra Costa Walnut Creek
C236 50987 Three Palms Center 2141-2151 Alternate A1A Palm Beach Jupiter
P237 3012937 Waterfront Plaza 500 Airport Boulevard San Mateo Burlingame
P238 3026820 Water Court Office Buildings 850-920 Hampshire Road Ventura Thousand Oaks
P239 3054939 Executive Park 6753-6773 West Charleston Boulevard Clark Las Vegas
P240 1202811 300 Hamilton Building 300 Hamilton Avenue Santa Clara Palo Alto
C241 51040 Journal Square Plaza I 1 Journal Square Plaza Hudson Jersey City
P242 4539961 Lakes Medical Plaza 11311 Bridgeport Way SW Pierce Tacoma
P243 1203637 High Bluff - Del Mar 12555 High Bluff Drive San Diego San Diego
P244 4547972 Percival Plaza 606 & 626 Columbia Street, & 601 N. Thurston Olympia
Capital Way
P245 1794478 Richland Medical Center & Pharmacy NE Corner of Swift Blvd & Goethels Ave Benton Richland
P246 3007754 12700 Ventura Boulevard 12700 Ventura Boulevard Los Angeles Studio City
C247 51019 2002 Avenue U 2002 Avenue U Kings Brooklyn
P248 3038502 American Radio Systems Building 1071 West Shaw Avenue Fresno Fresno
C249 51037 Double Eagle Office Building 101 East Town Place St. Johns St. Augustine
P250 3010717 Riverpark 6122-6166 West Sahara Avenue Clark County Las Vegas
C251 51168 Village Square Office Building 9510 West Sahara Ave Clark Las Vegas
</TABLE>
<PAGE> 140
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
ADMINI-
CUT-OFF MATURITY STRATIVE SUB-
ZIP PROPERTY ORIGINAL DATE DATE LOAN MORTGAGE FEE SERVICING
STATE CODE TYPE BALANCE BALANCE BALANCE TYPE RATE RATE(1) FEE RATE
- ----- ---- -------- -------- ------- -------- ---- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AZ 85027 Industrial $ 2,800,000 $ 2,583,121 $ 2,509,891 Balloon 8.250% 0.143% 0.100%
NY 10451 Industrial 2,500,000 2,474,151 1,899,282 Balloon 7.250% 0.143% 0.100%
CA 94539 Industrial 2,500,000 2,470,359 2,185,455 Balloon 7.750% 0.143% 0.100%
CA 92074 Industrial 2,600,000 2,417,479 2,143,266 Balloon 8.750% 0.143% 0.100%
CA 91746 Industrial 2,520,000 2,382,583 2,248,218 Balloon 8.580% 0.143% 0.100%
VA 23661 Industrial 2,400,000 2,362,593 1,961,521 Balloon 7.725% 0.143% 0.100%
CA 90250 Industrial 2,400,000 2,306,434 1,911,643 Balloon 7.250% 0.143% 0.100%
CA 90505 Industrial 2,137,500 2,110,893 1,858,572 Balloon 7.500% 0.143% 0.100%
CA 94518 Industrial
CA 94518 Industrial
2,175,000 2,101,786 1,940,587 Balloon 8.460% 0.143% 0.100%
CA 90501 Industrial 2,250,000 2,079,843 1,602,982 Balloon 8.750% 0.143% 0.100%
CA 91355 Industrial 2,200,000 2,061,268 1,996,131 Balloon 9.750% 0.143% 0.100%
CA 91406 Industrial 2,050,000 2,027,315 1,796,967 Balloon 7.128% 0.143% 0.100%
CA 92674 Industrial 2,100,000 1,987,706 1,720,076 Balloon 8.500% 0.143% 0.100%
CA 92618 Industrial 2,000,000 1,977,111 1,733,805 Balloon 6.714% 0.143% 0.100%
CA 95008 Industrial 2,000,000 1,966,902 1,584,723 Balloon 6.598% 0.143% 0.100%
OR 97062 Industrial 2,000,000 1,946,297 1,611,688 Balloon 7.800% 0.143% 0.100%
GA 30035 Industrial 1,880,000 1,868,338 1,678,444 Balloon 7.875% 0.143% 0.100%
WA 99202 Industrial 1,950,000 1,831,579 1,372,995 Balloon 8.500% 0.143% 0.100%
CA 90220 Industrial 1,900,000 1,822,481 1,555,918 Balloon 8.500% 0.143% 0.100%
CA 93101 Industrial 1,870,000 1,782,029 1,367,612 Balloon 9.875% 0.143% 0.100%
CA 92680 Industrial 1,875,000 1,770,403 1,528,123 Balloon 8.250% 0.143% 0.100%
WA 98001 Industrial 1,800,000 1,721,083 1,493,213 Balloon 9.000% 0.143% 0.100%
CA 92621 Industrial 1,745,000 1,712,955 1,659,951 Balloon 7.950% 0.143% 0.100%
CA 95660 Industrial 1,850,000 1,683,958 1,296,907 Balloon 8.375% 0.143% 0.100%
WA 98021 Industrial 1,761,000 1,674,855 1,448,227 Balloon 8.625% 0.143% 0.100%
WA 98005 Industrial 1,813,200 1,665,481 1,621,852 Balloon 8.750% 0.143% 0.100%
CA 92009 Industrial 1,800,000 1,658,064 1,598,268 Balloon 8.250% 0.143% 0.100%
CA 91355 Industrial 1,700,000 1,601,763 1,410,256 Balloon 9.000% 0.143% 0.100%
WA 98532 Industrial 1,625,000 1,591,286 1,332,394 Balloon 8.500% 0.143% 0.100%
CA 92507 Industrial 1,625,000 1,561,963 Fully Amortizing 7.230% 0.143% 0.100%
CA 91706 Industrial 1,535,000 1,517,719 1,351,827 Balloon 7.296% 0.143% 0.100%
CA 93063 Industrial 1,593,750 1,511,212 1,507,516 Balloon 10.375% 0.143% 0.100%
OR 97217 Industrial 2,750,000 1,475,213 Fully Amortizing 7.690% 0.143% 0.100%
WA 98035 Industrial 1,600,000 1,441,783 Fully Amortizing 8.500% 0.143% 0.100%
AZ 85260 Industrial 1,187,544 1,180,402 1,063,371 Balloon 8.000% 0.143% 0.100%
AZ 85260 Industrial 1,014,350 1,008,249 908,287 Balloon 8.000% 0.143% 0.100%
CA 94544 Industrial 975,000 961,939 791,036 Balloon 7.375% 0.143% 0.100%
IL 60506 Industrial 731,000 724,837 532,178 Balloon 8.770% 0.143% 0.100%
CA 94124 Industrial 500,000 495,031 413,105 Balloon 8.000% 0.143% 0.100%
CA 95670 Office 24,550,000 24,328,468 18,341,279 Balloon 7.040% 0.143% 0.100%
CA 94596 Office 10,500,000 10,406,468 9,201,605 Balloon 7.125% 0.143% 0.100%
FL 33477 Office 9,000,000 8,910,198 7,851,702 Balloon 6.940% 0.143% 0.100%
CA 94010 Office 7,600,000 7,219,871 7,064,064 Balloon 8.625% 0.143% 0.100%
CA 91360 Office 7,200,000 6,665,557 3,589,425 Balloon 7.740% 0.143% 0.100%
NV 89102 Office 6,510,000 6,377,337 5,205,185 Balloon 7.500% 0.143% 0.100%
CA 94301 Office 6,800,000 5,992,063 5,623,061 Balloon 8.900% 0.143% 0.100%
NJ 7306 Office 5,575,000 5,512,138 4,841,575 Balloon 6.780% 0.113% 0.070%
WA 98499 Office 4,830,000 4,388,649 4,111,791 Balloon 7.625% 0.143% 0.100%
CA 92130 Office 4,550,000 4,094,146 3,861,474 Balloon 10.375% 0.143% 0.100%
WA 98501 Office 3,678,550 3,573,079 2,949,997 Balloon 7.600% 0.143% 0.100%
WA 99352 Office 4,200,000 3,510,575 3,093,449 Balloon 8.000% 0.143% 0.100%
CA 91604 Office 3,475,000 3,160,770 2,878,907 Balloon 9.000% 0.143% 0.100%
NY 11229 Office 3,000,000 2,969,140 2,632,846 Balloon 7.180% 0.143% 0.100%
CA 93711 Office 3,000,000 2,916,557 2,439,579 Balloon 8.160% 0.143% 0.100%
FL 32092 Office 2,724,800 2,697,167 2,372,737 Balloon 6.870% 0.143% 0.100%
NV 89102 Office 2,800,000 2,584,121 2,488,217 Balloon 8.000% 0.143% 0.100%
NV 89117 Office 2,587,500 2,568,026 2,263,647 Balloon 7.060% 0.143% 0.100%
<CAPTION>
NET FIRST INTEREST
ZIP PROPERTY MORTGAGE NOTE PAYMENT ACCRUAL
STATE CODE TYPE RATE DATE DATE METHOD
----- ---- -------- -------- ---- ------- --------
<S> <C> <C> <C> <C> <C> <C>
AZ 85027 Industrial 8.107% 6/28/94 8/1/94 ACT/360
NY 10451 Industrial 7.107% 1/15/99 3/1/99 ACT/360
CA 94539 Industrial 7.607% 6/10/98 8/1/98 30/360
CA 92074 Industrial 8.607% 10/4/94 12/1/94 30/360
CA 91746 Industrial 8.437% 9/21/95 12/1/95 30/360
VA 23661 Industrial 7.582% 1/5/99 3/1/99 ACT/360
CA 90250 Industrial 7.107% 2/7/97 4/1/97 30/360
CA 90505 Industrial 7.357% 6/23/98 8/1/98 30/360
CA 94518 Industrial
CA 94518 Industrial
8.317% 3/7/97 4/1/97 30/360
CA 90501 Industrial 8.607% 3/28/96 5/1/96 30/360
CA 91355 Industrial 9.607% 8/8/94 10/1/94 30/360
CA 91406 Industrial 6.985% 6/10/98 9/1/98 ACT/360
CA 92674 Industrial 8.357% 12/8/95 2/1/96 30/360
CA 92618 Industrial 6.571% 8/4/98 10/1/98 ACT/360
CA 95008 Industrial 6.455% 9/8/98 11/1/98 ACT/360
OR 97062 Industrial 7.657% 11/12/97 1/1/98 30/360
GA 30035 Industrial 7.732% 12/17/98 2/1/99 ACT/360
WA 99202 Industrial 8.357% 11/12/96 12/1/96 30/360
CA 90220 Industrial 8.357% 10/15/96 12/1/96 30/360
CA 93101 Industrial 9.732% 3/10/97 5/1/97 30/360
CA 92680 Industrial 8.107% 11/20/95 1/1/96 30/360
WA 98001 Industrial 8.857% 5/31/95 7/1/95 30/360
CA 92621 Industrial 7.807% 9/26/97 11/1/97 30/360
CA 95660 Industrial 8.232% 11/20/95 1/1/96 30/360
WA 98021 Industrial 8.482% 8/29/95 10/1/95 30/360
WA 98005 Industrial 8.607% 1/31/94 4/1/94 30/360
CA 92009 Industrial 8.107% 7/25/94 9/1/94 30/360
CA 91355 Industrial 8.857% 5/12/95 7/1/95 30/360
WA 98532 Industrial 8.357% 2/24/98 4/1/98 30/360
CA 92507 Industrial 7.087% 10/15/98 12/1/98 30/360
CA 91706 Industrial 7.153% 6/23/98 8/1/98 ACT/360
CA 93063 Industrial 10.232% 1/18/95 3/1/95 30/360
OR 97217 Industrial 7.547% 3/21/94 5/1/94 30/360
WA 98035 Industrial 8.357% 2/18/97 4/1/97 30/360
AZ 85260 Industrial 7.857% 12/18/98 2/1/99 ACT/360
AZ 85260 Industrial 7.857% 12/22/98 2/1/99 ACT/360
CA 94544 Industrial 7.232% 9/16/98 12/1/98 ACT/360
IL 60506 Industrial 8.627% 4/19/99 6/1/99 ACT/360
CA 94124 Industrial 7.857% 12/14/98 2/1/99 ACT/360
CA 95670 Office 6.897% 2/23/99 4/1/99 ACT/360
CA 94596 Office 6.982% 10/5/98 12/1/98 ACT/360
FL 33477 Office 6.797% 9/2/98 11/1/98 ACT/360
CA 94010 Office 8.482% 2/8/96 4/1/96 30/360
CA 91360 Office 7.597% 3/3/97 5/1/97 30/360
NV 89102 Office 7.357% 5/19/98 7/1/98 30/360
CA 94301 Office 8.757% 8/19/94 10/1/94 30/360
NJ 7306 Office 6.667% 8/27/98 10/1/98 ACT/360
WA 98499 Office 7.482% 10/16/95 12/1/95 30/360
CA 92130 Office 10.232% 9/16/94 11/1/94 30/360
WA 98501 Office 7.457% 10/1/97 12/1/97 30/360
WA 99352 Office 7.857% 11/1/94 1/1/95 30/360
CA 91604 Office 8.857% 8/11/95 10/1/95 30/360
NY 11229 Office 7.037% 8/20/98 10/1/98 ACT/360
CA 93711 Office 8.017% 9/15/97 11/1/97 30/360
FL 32092 Office 6.727% 9/8/98 11/1/98 ACT/360
NV 89102 Office 7.857% 7/18/94 9/1/94 30/360
NV 89117 Office 6.917% 12/31/98 2/1/99 ACT/360
</TABLE>
<PAGE> 141
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS) (II) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
- ------- -------- ------------- -------- -------- ---- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 22,077 82 300 64 18 5/1/01 No No
18,070 140 300 9 131 10/1/10 No No 7/1/10
17,910 120 360 16 104 7/1/08 No No
21,364 120 300 60 60 11/1/04 No No
20,428 84 300 48 36 11/1/02 No No
19,666 84 240 9 75 2/1/06 No No 11/1/05
17,397 120 300 32 88 3/1/07 No No
14,946 120 360 16 104 7/1/08 No No
17,455 84 300 32 52 3/1/04 No No
19,883 120 240 43 77 4/1/06 No No
19,605 84 300 62 22 9/1/01 No No
13,815 120 360 15 105 8/1/08 No No 5/2/08
16,892 120 300 46 74 1/1/06 No No
12,924 120 360 14 106 9/1/08 No No 7/2/08
13,627 120 300 13 107 10/1/08 No No 8/1/08
15,172 120 300 23 97 12/1/07 No No
13,631 120 360 10 110 1/1/09 No No 10/1/08
16,925 122 240 36 86 1/1/07 No No
15,280 120 300 36 84 11/1/06 No No
17,891 120 240 31 89 4/1/07 No No
14,783 120 300 47 73 12/1/05 No No
15,106 131 300 53 78 5/1/06 No No
12,743 60 360 25 35 10/1/02 No No
15,909 120 240 47 73 12/1/05 No No
14,329 126 300 50 76 3/1/06 No No
14,907 84 300 68 16 3/1/01 No No
14,198 84 300 63 21 8/1/01 No No
14,266 120 300 53 67 6/1/05 No No
13,085 120 300 20 100 3/1/08 No No
14,816 180 180 12 168 11/1/13 No No
10,519 120 360 16 104 7/1/08 No No 3/2/08
14,906 60 300 57 3 2/1/00 No No
32,916 121 121 67 54 5/1/04 No No
15,756 180 180 32 148 3/1/12 No No
8,714 120 360 10 110 1/1/09 No Yes(U) 11/1/08
7,443 120 360 10 110 1/1/09 No Yes(U) 11/1/08
7,126 120 300 12 108 11/1/08 No No 9/1/08
6,469 120 240 6 114 5/1/09 No No 3/1/09
3,859 120 300 10 110 1/1/09 No No 11/1/08
174,141 143 300 8 135 2/1/11 No No 12/2/10
70,740 120 360 12 108 11/1/08 No No 9/1/08
59,515 120 360 13 107 10/1/08 No No 6/1/08
61,767 60 300 44 16 3/1/01 No No
61,807 144 216 31 113 4/1/09 No No
48,108 120 300 17 103 6/1/08 No No
60,745 84 240 62 22 9/1/01 No No
36,271 120 360 14 106 9/1/08 No No 4/30/08
34,974 84 300 48 36 11/1/02 No No
45,045 84 240 61 23 10/1/01 No No
27,432 120 300 24 96 11/1/07 No No
29,318 118 300 59 59 9/30/04 No No
31,265 84 240 50 34 9/1/02 No No
20,323 120 360 14 106 9/1/08 No No 2/28/08
23,473 120 300 25 95 10/1/07 No No
17,891 120 360 13 107 10/1/08 No No 5/31/08
21,726 84 300 63 21 8/1/01 No No
17,319 120 360 10 110 1/1/09 No No 10/1/08
<CAPTION>
PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- --------------------------------------- ----------------------
<S> <C>
YM(82) Int. Rate Diff. (Type 3A)
LO(137)/OPEN(3)/DEF NAP
YM(120) Int. Rate Diff. (Type 1B)
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(84) Int. Rate Diff. (Type 3A)
LO(81)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 1B)
$250+YM(84) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(84) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
OPEN(2)/YM(120) Int. Rate Diff. (Type 2A)
YM(120) Int. Rate Diff. (Type 3A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
OPEN(11)/YM(120) Int. Rate Diff. (Type 2A)
YM(60) Int. Rate Diff. (Type 1B)
$250+YM(120) Int. Rate Diff. (Type 1A)
OPEN(6)/YM(120) Int. Rate Diff. (Type 2A)
YM(84) Int. Rate Diff. (Type 2A)
$250+YM(84) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 2A)
YM(180) Int. Rate Diff. (Type 3A)
LO(116)/OPEN(4)/DEF NAP
$250+YM(60) Int. Rate Diff. (Type 1A)
YM(121) Int. Rate Diff. (Type 3A)
YM(180) Int. Rate Diff. (Type 2C)
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(141)/OPEN(2)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(116)/OPEN(4)/DEF NAP
$250+YM(60) Int. Rate Diff. (Type 1A)
YM(144) Int. Rate Diff. (Type 3A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(84) Int. Rate Diff. (Type 1A)
LO(115)/OPEN(5)/DEF NAP
YM(84) Int. Rate Diff. (Type 2A)
$250+YM(84) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 2A)
YM(118) Int. Rate Diff. (Type 2B)
$250+YM(84) Int. Rate Diff. (Type 1A)
LO(113)/OPEN(7)/DEF NAP
YM(120) Int. Rate Diff. (Type 3A)
LO(115)/OPEN(5)/DEF NAP
$2000+YM(84) Int. Rate Diff. (Type 3D)
LO(117)/OPEN(3)/DEF NAP
</TABLE>
<PAGE> 142
<TABLE>
<CAPTION>
CUT-OFF TOTAL
DATE UNITS/
SE- LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/ ROOM/
QUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED BED
- ------ ------ ------------- ----- ---- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
P195 2093268 Valley North Business Park $ 4,000,000 4/6/94 65% 1981/1992 143,880
C196 51392 325 Exterior Street 3,400,000 11/27/98 73% 1930/1987 29,562
P197 3057932 Northwestern Polytechnic University 3,300,000 3/12/98 75% 1986 36,328
P198 1204346 Warner Fairview Business Park 3,800,000 8/25/94 64% 1978 129,172
P199 3009883 Industry West Industrial Park 3,450,000 8/16/95 69% 1988 87,229
C200 51326 Hampton Commerce Center 3,460,000 10/27/98 68% 1983/1996 78,600
P201 3025343 4880 West Rosecrans Avenue 3,310,000 12/3/96 70% 1979 83,154
P202 3058575 Ledtronics 2,850,000 6/5/98 74% 1980 63,660
P203A 3034873 Whitman Road Warehouses 1976 38,209
P203B 3034873 Whitman Road Warehouses 1974 44,690
P203 3034873 Hofmann Industrial Portfolio (Roll-Up) 3,570,000 1/30/97 59% 82,899
P204 3014958 Avioan Business Center 3,720,000 3/9/96 56% 1988 64,949
P205 1201136 Valencia Industrial Center 3,210,000 6/28/94 64% 1979 81,809
C206 51194 Van Nuys Airport Business Center 2,950,000 2/11/98 69% 1989 47,910
P207 3011632 Seaview Business Park 2,900,000 11/1/95 69% 1991 53,720
C208 51247 Technology Drive Industrial 3,850,000 6/22/98 51% 1990 51,232
C209 51280 1400 Dell Avenue Building 2,950,000 7/31/98 67% 1974 24,039
P210 3032786 Tromley Industrial Building 3,000,000 9/15/97 65% 1986 73,800
C211 51337 2500-2520 Park Central 2,550,000 11/23/98 73% 1975 113,520
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. 2,600,000 11/1/96 70% 1966/1996 93,337
P213 3021284 250 W. Artesia Boulevard 2,620,000 5/2/96 70% 1985 72,164
P214 2034692 1-31 North Salsipuedes Street 5,300,000 1/17/97 34% 1930 208,382
P215 3007127 14402 Franklin Avenue 4,950,000 8/31/98 36% 1979 75,600
P216 4538229 Puget Sound Tire Building 2,600,000 12/1/95 66% 1995 58,795
P217 3039914 Span-O-Matic, Inc. 2,800,000 9/23/97 61% 1989 50,331
P218 3009974 Watt-Eighty Business Park 2,800,000 9/21/95 60% 1987 62,621
P219 4538864 Slope Indicator Company 3,535,000 1/1/96 47% 1995 36,890
P220 1795863 Newport Shores Office/Warehouse 2,620,000 12/14/93 64% 1988 29,219
P221 1201326 6231, 6241 Yarrow Drive 2,500,000 6/17/94 66% 1977 80,340
P222 3006491 25620 Rye Canyon Road 2,360,000 3/16/95 68% 1991 49,825
P223 3039450 Ross Industrial Park 2,100,000 12/1/97 76% 1997 35,040
P224 3074754 Chicago Avenue Business Center 2,500,000 9/14/98 62% 1986 77,251
C225 51193 Walmar Industrial Center 2,150,000 3/9/98 71% 1986 55,230
P226 3001211 View Engineering, Inc. 1,875,000 12/8/94 81% 1982 40,799
P227 3101367 Montgomery Ward Distribution Warehouse 6,600,000 12/21/93 22% 1979 299,732
P228 4547279 Freshmark Foods Building 2,160,000 2/11/97 67% 1985/1987 42,932
C229 51454 Airpark Trade Center 1,800,000 9/14/98 66% 1985 26,367
C230 51470 Raintree Commerce Center 1,400,000 10/15/98 72% 1985 16,112
C231 51314 Huntwood Ave. Light Industrial 1,580,000 8/7/98 61% 1961 44,056
C232 51506 North American Cable Building 1,035,000 12/18/98 70% 1921/1970 89,092
C233 51438 One Industrial Building 980,000 10/26/98 51% 1989 9,290
C234 51503 Bank of America Regional Headquarters 31,000,000 12/15/98 78% 1997 187,875
C235 51332 101 Ygnacio Plaza 14,000,000 3/22/99 74% 1986 77,700
C236 50987 Three Palms Center 11,850,000 9/1/98 75% 1990 86,324
P237 3012937 Waterfront Plaza 11,300,000 12/6/95 64% 1978/1994 98,610
P238 3026820 Water Court Office Buildings 11,900,000 12/27/96 56% 1971/1990 168,322
P239 3054939 Executive Park 9,300,000 4/2/98 69% 1987 50,981
P240 1202811 300 Hamilton Building 9,300,000 5/27/94 64% 1964/1983 35,546
C241 51040 Journal Square Plaza I 7,000,000 7/2/98 79% 1984 52,600
P242 4539961 Lakes Medical Plaza 5,350,000 6/1/96 82% 1989 38,128
P243 1203637 High Bluff - Del Mar 6,600,000 7/19/94 62% 1987 72,706
P244 4547972 Percival Plaza 4,970,000 5/14/97 72% 1950 51,332
P245 1794478 Richland Medical Center & Pharmacy 5,500,000 9/1/94 64% 1994 35,971
P246 3007754 12700 Ventura Boulevard 4,950,000 6/30/95 64% 1988 46,899
C247 51019 2002 Avenue U 4,000,000 6/23/98 74% 1996/1997 17,529
P248 3038502 American Radio Systems Building 4,250,000 9/15/97 69% 1974/1997 34,807
C249 51037 Double Eagle Office Building 4,325,000 6/1/98 62% 1997 31,166
P250 3010717 Riverpark 4,830,000 2/29/96 54% 1990 35,357
C251 51168 Village Square Office Building 3,450,000 11/1/98 74% 1997 19,779
<CAPTION>
SF/ LOAN
UNIT/ NET BALANCE PER
ROOM/ RENTABLE SF/UNIT/
BED AREA (SF) ROOM/BED
--- --------- --------
<S> <C> <C>
SF 143,880 $18
SF 29,562 84
SF 36,328 68
SF 129,172 19
SF 87,229 27
SF 78,600 30
SF 83,154 28
SF 63,660 33
SF 38,209
SF 44,690
SF 82,899 25
SF 64,949 32
SF 81,809 25
SF 47,910 42
SF 53,720 37
SF 51,232 39
SF 24,039 82
SF 73,800 26
SF 113,520 16
SF 93,337 20
SF 72,164 25
SF 208,382 9
SF 75,600 23
SF 58,795 29
SF 50,331 34
SF 62,621 27
SF 36,890 45
SF 29,219 57
SF 80,340 21
SF 49,825 32
SF 35,040 45
SF 77,251 20
SF 55,230 27
SF 40,799 37
SF 299,732 5
SF 42,932 34
SF 26,367 45
SF 16,112 63
SF 44,056 22
SF 89,092 8
SF 9,290 53
SF 187,875 129
SF 77,700 134
SF 86,324 103
SF 98,610 73
SF 168,322 40
SF 50,981 125
SF 35,546 169
SF 52,600 105
SF 38,128 115
SF 72,706 56
SF 51,332 70
SF 35,971 98
SF 46,899 67
SF 17,529 169
SF 34,807 84
SF 31,166 87
SF 35,357 73
SF 19,779 130
</TABLE>
<PAGE> 143
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W MOST
OCCUPANCY CASH U/W RECENT
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES END
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT DATE
------- ---- -------- -------- --------- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
100% 1/1/99 $928,208 $361,183 $493,253 1.86 $28,776 $0.20 12/31/98
100% 11/30/98 290,000 12,178 271,910 1.25 5,912 0.20
100% 2/10/99 384,174 103,396 256,947 1.20 7,673 0.21 12/31/97
96% 2/1/99 837,245 381,369 392,376 1.53 25,834 0.20 12/31/98
98% 1/12/99 587,256 156,279 390,058 1.59 17,446 0.20 12/31/98
100% 12/10/98 427,087 62,583 316,220 1.34 15,720 0.20 12/31/98
100% 2/12/99 341,269 47,259 251,335 1.20 16,631 0.20 12/31/98
100% 5/15/98 312,062 15,603 254,698 1.42 12,732 0.20 12/31/98
96% 2/12/99
100% 2/12/99
400,509 120,904 240,278 1.15 16,580 0.20 12/31/98
100% 12/31/98 442,048 101,033 305,521 1.28 12,990 0.20 12/31/98
100% 6/1/98 508,273 172,031 296,460 1.26 16,362 0.20 12/31/97
100% 2/9/99 382,005 135,960 215,469 1.30 11,498 0.24 12/31/98
98% 3/1/99 545,432 176,881 334,433 1.65 8,058 0.15 12/31/98
100% 4/26/99 329,480 79,269 232,327 1.50 7,685 0.15 12/31/98
100% 3/11/99 293,465 44,219 231,203 1.41 3,606 0.15 12/31/98
100% 2/9/99 274,050 13,874 224,733 1.23 14,760 0.20 12/31/98
100% 12/10/98 383,017 113,765 215,420 1.32 22,704 0.20 12/31/98
100% 2/2/99 672,026 33,601 573,766 2.83 18,667 0.20
100% 3/29/99 342,779 18,065 287,144 1.57 14,433 0.20 12/31/98
100% 2/1/99 1,113,966 294,078 555,731 2.59 41,676 0.20 12/31/98
100% 12/31/98 253,109 14,160 196,987 1.11 15,120 0.20 12/31/98
100% 2/3/99 250,800 12,540 212,285 1.17 8,819 0.15
100% 2/20/99 257,440 12,872 219,371 1.43 10,066 0.20 12/31/98
87% 12/28/98 504,548 168,276 249,047 1.30 15,655 0.25 12/31/98
100% 12/31/98 228,042 11,402 190,950 1.11 6,101 0.17
100% 1/18/99 361,519 98,666 245,139 1.37 5,844 0.20 12/31/98
66% 5/6/99 366,798 83,649 239,219 1.40 16,068 0.20 12/31/98
100% 2/9/99 322,654 72,764 225,152 1.32 7,474 0.15 12/31/98
86% 2/10/99 256,490 62,933 177,073 1.13 5,256 0.15
82% 3/1/99 398,321 154,567 207,650 1.17 15,450 0.20 12/31/98
100% 3/11/99 282,393 71,231 176,528 1.40 5,502 0.10 12/31/98
100% 4/18/99 297,669 14,883 239,086 1.34 8,160 0.20 12/31/98
100% 10/27/78 595,563 30,602 447,949 1.13 59,946 0.20
100% 1/20/98 293,577 52,876 218,541 1.16 8,586 0.20 12/31/98
95% 2/1/99 218,988 59,770 135,935 1.30 5,273 0.20 12/31/98
100% 10/1/98 180,526 55,402 115,329 1.29 1,740 0.11 12/31/98
100% 9/15/98 167,099 39,776 113,197 1.32 6,608 0.15 12/31/98
100% 4/22/99 185,283 46,759 98,731 1.27 22,273 0.25 12/31/98
100% 12/2/98 89,650 19,556 62,628 1.35 1,394 0.15 12/31/98
100% 2/17/99 4,099,066 1,326,623 2,526,702 1.21 18,788 0.10
100% 3/1/99 2,019,274 889,706 1,015,027 1.20 11,655 0.15 12/31/98
90% 7/31/98 1,586,093 544,057 906,716 1.27 19,855 0.23 12/31/98
99% 1/1/99 2,180,006 739,433 1,192,272 1.61 24,653 0.25 11/30/98
98% 12/31/98 2,550,823 921,274 1,282,053 1.73 40,664 0.24 12/31/98
100% 12/1/98 1,094,497 348,225 639,074 1.11 12,745 0.25 12/31/98
100% 2/8/99 1,393,246 398,921 893,559 1.23 8,887 0.25 12/31/98
100% 8/24/98 1,138,488 535,533 554,700 1.27 15,780 0.30 12/31/98
85% 2/1/99 813,733 242,369 489,406 1.17 9,532 0.25 12/31/98
94% 12/31/98 1,478,336 452,048 864,285 1.60 18,177 0.25 12/31/98
85% 1/25/99 784,498 286,782 404,924 1.23 10,831 0.21 12/31/98
100% 2/22/99 788,495 286,579 434,542 1.24 7,194 0.20 12/31/98
100% 2/25/99 893,673 386,195 430,692 1.15 11,725 0.25 12/31/98
100% 7/30/98 523,448 179,776 324,864 1.33 2,629 0.15 12/31/98
100% 3/11/97 462,222 49,979 403,541 1.43 8,702 0.25 6/30/98
100% 3/19/99 504,914 184,536 268,369 1.25 4,675 0.15 12/31/98
65% 1/1/99 583,802 142,532 377,339 1.45 7,071 0.20 12/31/98
100% 12/11/98 394,682 108,352 260,021 1.25 4,005 0.20
<CAPTION>
MOST 2ND
RECENT MOST
MOST MOST MOST CASH RECENT
RECENT RECENT RECENT FLOW END
REVENUES EXPENSES CASH FLOW DSCR DATE
-------- -------- --------- ---- ----
<S> <C> <C> <C> <C>
$1,034,063 $351,997 $682,066 2.57 12/31/97
351,501 62,687 284,631 1.32
847,865 371,375 476,490 1.86 12/31/97
623,006 130,954 457,135 1.86 12/31/97
409,286 6,879 387,973 1.64 12/31/97
329,285 28,618 300,667 1.44 12/31/97
366,684 366,684 2.04
378,930 85,571 209,890 1.00 12/31/97
482,789 68,877 413,912 1.73 12/31/97
375,125 142,347 229,631 0.98
424,120 137,665 258,977 1.56 12/31/97
546,704 150,961 387,022 1.91 12/31/97
230,000 24,651 205,349 1.32 12/31/97
327,251 32,657 266,860 1.63 12/31/97
303,600 303,600 1.67 12/31/97
384,466 93,485 272,917 1.67 12/31/97
651,385 651,385 3.55 12/31/97
1,183,460 252,832 898,135 4.18 12/31/97
281,232 281,232 1.59 12/31/97
261,648 261,648 1.71 12/31/97
513,075 170,633 252,511 1.32 12/31/97
394,791 87,206 251,530 1.41 12/31/97
459,024 75,415 306,448 1.80 12/31/97
350,512 42,561 295,502 1.73 12/31/97
397,346 124,784 258,699 1.46 12/31/97
301,151 101,940 199,211 1.58 12/31/96
592,600 824 591,776 1.50 12/31/97
317,308 35,671 281,637 1.49 12/31/97
218,345 71,657 141,925 1.36 12/31/97
172,148 54,540 88,271 0.99 12/31/97
171,565 25,065 146,500 1.71 12/31/97
129,287 129,287 1.67 12/31/97
94,368 15,647 78,721 1.70 12/31/97
2,068,993 850,665 1,218,328 1.44 12/31/97
1,470,299 500,462 947,407 1.33 12/31/97
1,954,420 624,781 1,052,514 1.42 12/31/97
2,532,570 807,482 1,532,494 2.07 12/31/97
1,192,136 413,701 757,563 1.31 12/31/97
1,471,270 346,779 1,124,491 1.54 12/31/97
1,115,587 416,872 548,715 1.26 12/31/97
844,658 216,579 628,079 1.50 12/31/97
1,593,475 417,822 1,056,774 1.96 12/31/97
788,953 270,971 517,982 1.57 12/31/97
881,762 249,875 631,887 1.80 12/31/97
981,265 380,446 600,819 1.60 12/31/97
469,442 141,482 303,864 1.25 12/31/97
459,308 40,735 418,573 1.49
545,203 140,687 404,516 1.88
692,181 138,353 553,828 2.12 12/31/97
</TABLE>
<PAGE> 144
<TABLE>
<CAPTION>
2ND
MOST LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
-------- -------- --------- ---- -------------- -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$930,753 $344,415 $586,338 2.21 AG Communication Systems 21,750 15% 12/31/99
Bell Atlantic 29,562 100% 10/31/10
Northwestern Polytechnic Univ. 18,158 50% 5/31/02
877,503 346,868 530,635 2.07 Dataman 10,230 8% NAV
574,858 145,876 389,300 1.59 Ley Grand Foods 9,816 11% 6/30/01
409,307 6,907 387,775 1.64 Eastern Aluminum 27,500 35% 4/30/02
491,155 33,460 447,695 2.14 Ancra International 83,154 100% 11/30/06
LEDtronics Inc. 63,660 100% 6/30/03
Dal-Tile Corporation 9,722 25% 12/31/99
American Medical Response 12,960 29% 8/31/03
368,043 107,096 260,947 1.25 American Medical Response 12,960 16% 8/31/03
447,050 81,299 336,976 1.41 Hermach 10,914 17% 9/30/00
Electrofilm 43,000 53% 2/29/00
419,693 116,947 263,196 1.59 Assert, Inc. 9,880 21% 11/30/04
524,496 155,419 361,276 1.78 Datacom Support Co. 4,320 8% 1/31/00
180,000 815 179,185 1.16 Sitag International 51,232 100% 9/1/08
210,829 26,866 166,442 1.02 San Jose Mercury 12,536 52% 1/31/07
62,245 167 62,078 0.34 Tromley Industrial Holdings 73,800 100% 10/31/05
303,984 78,652 223,415 1.37 Noss Company 20,310 18% 10/31/00
The Coeur d' Alenes Company 93,337 100% NAP
539,194 899 538,295 2.94 TBC Worldwide/KHH (owner) 72,164 100% NAP
1,068,858 320,430 662,948 3.09 Calvary Chapel 37,409 18% 5/14/01
281,232 3,009 278,223 1.57 Pairgain Technologies 75,600 100% 2/29/00
Sound Tire, Inc. 58,795 100% 11/30/07
261,648 261,648 1.71 Span-O-Matic 39,687 79% 12/31/01
483,402 158,608 275,057 1.44 Sonitrol 9,750 16% 9/30/03
Slope Indicator Co. 36,890 100% NAP
364,606 86,556 278,050 1.55 EISI 11,395 39% 12/31/02
456,805 81,117 372,261 2.18 Fire Protection Products 14,136 18% 3/31/05
260,969 52,963 164,560 0.96 Air Packaging Technologies 17,280 35% 5/31/00
Ross Corporation 12,117 35% 2/1/08
350,836 130,353 208,911 1.18 Ikon Office Solutions 11,554 15% 9/30/01
241,216 57,416 183,800 1.46 Clever Choice 8,100 15% 4/30/01
View Engineering, Inc. 40,799 100% NAP
581,449 216 581,233 1.47 Montgomery Ward & Co. 299,732 100% 5/31/09
277,312 37,085 240,227 1.27 Freshmark Foods Corporation 42,932 100% 3/31/00
175,422 52,386 110,446 1.06 Hacienda Lighting 10,774 41% 6/30/00
160,648 34,408 121,389 1.48 NEA Auto Group 7,033 44% 11/30/03
172,639 23,604 149,035 1.74 Playhouse Import/Export, Inc. 24,056 55% 2/28/16
116,089 13,749 102,340 1.32 North American Cable 72,352 81% 2/28/02
85,831 8,616 77,215 1.67 Winchester Pacific Batteries 7,090 76% 12/14/23
Bank of America 187,875 100% 2/23/11
1,890,981 764,151 1,126,830 1.33 Morrision & Foerster 16,345 21% 5/14/01
1,377,086 511,801 828,788 1.16 World Gym 11,997 14% 11/30/04
1,797,593 690,063 1,085,133 1.46 Pacific Gateway Exchange 12,579 13% 12/31/03
2,178,775 901,440 797,490 1.08 SG Hauser Associates, Inc. 18,243 11% 8/31/05
1,159,435 316,570 813,894 1.41 Metro Administration et al 23,994 47% 2/28/00
1,481,715 364,101 1,110,362 1.52 Gray Cary Ware 18,222 51% 6/30/05
1,110,000 396,156 713,844 1.64 Maher Terminals 28,000 53% NAV
799,388 225,169 574,219 1.37 The Lakewood Clinic 10,613 28% 12/31/07
1,371,823 395,621 730,064 1.35 Alphascribe Express 8,310 11% 9/30/02
836,436 251,897 584,539 1.78 Environmental Systems 9,245 18% 2/28/01
797,291 268,350 528,941 1.50 Mathias Lam 3,990 11% NAV
954,207 359,053 595,154 1.59 MTM Entertainment 32,650 70% 4/1/04
303,594 76,428 227,166 0.93 Rite Aid 7,781 44% 6/25/11
CBS Radio (American Radio Sys) 34,807 100% 7/14/12
VAW 6,336 20% 5/31/03
680,095 139,283 540,812 2.07 Mediversal 6,258 18% 12/31/03
Triple 5 Ntl Dvlp Corp 8,069 41% 8/1/03
<CAPTION>
2ND SECOND SECOND
MOST SECOND LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW SECOND LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
-------- -------- --------- ---- -------------- -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$930,753 $344,415 $586,338 2.21 MOD-A-CAN, Inc. 15,200 11% 4/30/02
Advis, Inc. 9,100 25% 12/14/00
877,503 346,868 530,635 2.07 Tapes II 10,230 8% 12/31/01
574,858 145,876 389,300 1.59 RP Custom Woodworking 6,100 7% 4/30/01
409,307 6,907 387,775 1.64 TexTech 20,200 26% 11/30/00
491,155 33,460 447,695 2.14
CompuMail Information Systems 8,415 22% 2/28/00
Bank of the West 9,920 22% 12/31/99
368,043 107,096 260,947 1.25 Bank of the West 9,920 12% 12/31/99
447,050 81,299 336,976 1.41 NMTV 10,914 17% 12/1/99
Kross 24,822 30% 1/31/00
419,693 116,947 263,196 1.59 Anbarfam, Navid 5,200 11% 12/31/00
524,496 155,419 361,276 1.78 First Internet Media Corp 3,484 6% MTM
180,000 815 179,185 1.16
210,829 26,866 166,442 1.02 Sales Away 6,853 29% 12/31/05
62,245 167 62,078 0.34
303,984 78,652 223,415 1.37 Phoenix Machine & Tool 12,000 11% 6/30/03
539,194 899 538,295 2.94
1,068,858 320,430 662,948 3.09 Downtown Mini Storage I 21,593 10% 5/15/03
281,232 3,009 278,223 1.57
261,648 261,648 1.71 Ray Frank 10,644 21% MTM
483,402 158,608 275,057 1.44 Energy Savers Home Improvement 4,950 8% 12/31/01
364,606 86,556 278,050 1.55 Foushee & Assoc. 9,930 34% 3/31/04
456,805 81,117 372,261 2.18 Next Nutrition, Inc. 12,554 16% 2/28/01
260,969 52,963 164,560 0.96 TV Fanfare Publications 14,140 28% 4/30/00
Vancouver Bolt 6,000 17% 7/1/03
350,836 130,353 208,911 1.18 G & S Teletronics, Inc. 5,440 7% 12/31/99
581,449 216 581,233 1.47
241,216 57,416 183,800 1.46 The Circle, Inc. 6,120 11% 3/31/00
277,312 37,085 240,227 1.27
175,422 52,386 110,446 1.06 Vista Del Oro Construction 4,738 18% 6/30/00
160,648 34,408 121,389 1.48 Offroad Unlimited 6,000 37% 6/30/00
172,639 23,604 149,035 1.74 Office Magic 20,000 45% 6/30/01
116,089 13,749 102,340 1.32 Hollywood Casino 16,740 19% 10/31/08
85,831 8,616 77,215 1.67 Product Development Corp. 2,200 24% NAV
1,890,981 764,151 1,126,830 1.33 Yorkshire Foods, Inc. 7,700 10% 7/31/00
1,377,086 511,801 828,788 1.16 Belcan Corp 7,208 8% 8/31/03
1,797,593 690,063 1,085,133 1.46 Meta Group 9,431 10% 12/31/01
2,178,775 901,440 797,490 1.08 Greenery Suites 12,658 8% 12/31/02
1,159,435 316,570 813,894 1.41 Pentacore Engineering, Inc. 15,876 31% NAV
1,481,715 364,101 1,110,362 1.52 Gray Cary Ware 6,477 18% 9/30/01
1,110,000 396,156 713,844 1.64 Pinnacle Health 14,000 27% 12/31/04
799,388 225,169 574,219 1.37 St. Clare Hospital 7,207 19% 8/31/09
1,371,823 395,621 730,064 1.35 Trigild Corporation 5,254 7% 12/31/99
836,436 251,897 584,539 1.78 Economic & Engineering 5,669 11% 5/31/03
797,291 268,350 528,941 1.50 S. K. Wadhwa 3,623 10% NAV
954,207 359,053 595,154 1.59 Energy Productions, Inc. 12,099 26% 11/30/99
303,594 76,428 227,166 0.93 Interstate Mgmt Corp. 3,767 21% 11/30/06
Vistana Corp 4,821 15% 1/31/01
680,095 139,283 540,812 2.07 I.V. Therapies 4,800 14% 12/31/03
Timothy R Titolo 3,428 17% 12/29/02
</TABLE>
<PAGE> 145
<TABLE>
<CAPTION>
SE- LOAN
QUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS COUNTY CITY
- ------ ------- --------------------------------------------- -------------------------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
C252 50903 Grove Office Plaza 515 Grove St. Camden Haddon Heights
C253 51493 Stanford Coastside Medical Clinic 225 South Cabrillo Highway San Mateo Half Moon Bay
P254 3046208 3330 West Desert Inn Road 3330 West Desert Inn Road Clark County Las Vegas
C255 50826 Golf Course Plaza 11480 Sunset Hills Road Fairfax Reston
P256 3001096 2220 Lynn Road 2220 Lynn Road Ventura Thousand Oaks
P257 2091932 Century Center Office Building 26522 La Alameda Orange Mission Viejo
P258 3049228 Alta Mesa Professional Center #333 333 El Dorado Street Monterey Monterey
C259 50963 16 East 41st Street Office Building 16 East 41st St. New York New York
C260 51222 Greenfield Road Office Building 1420 North Greenfield Rd Maricopa Gilbert
P261 3007713 San Clemente Professional Center 647 Camino De Los Mares Orange San Clemente
P262 1794353 The Doyle Building 119 Pine Street/1527 Second Avenue King Seattle
P263 4544987 Colorado Professional Park 552 & 554 North Colorado Street Benton Kennewick
P264 2053130 Courthouse Square 1000-1050 Fourth Street Marin San Rafael
P265 3043346 881 Fremont Ave. 881 Frement Ave. Santa Clara Los Altos
P266 3022530 300 University Avenue 300 University Avenue Sacramento Sacramento
C267 51214 Byrd Building 319 First Ave N Hennepin Minneapolis
C268 50972 Duke Medical Office 2609 North Duke Street Durham Durham
C269 51229 5240 North 16th Street Building 5240 North 16th Street Maricopa Phoenix
C270 51488 Scripps Crest Building 9845 Erma Road San Diego San Diego
C271 51474 Clocktower Center 2195 Colorado Highway 83 Douglas Franktown
C272 51369 East Mississippi Professional Office Building 11275 E. Mississippi Ave. Arapahoe Aurora
C273 51000 U.S. Fish and Wildlife Center 6669 Short Lane Gloucester Gloucester
C274 51272 Bethany Medical Plaza 2200 West Bethany Home Road Maricopa Phoenix
P275 4547840 The Weatherly Inn 6016 N. Highland Parkway Pierce Tacoma
C276 50330 Powell Valley Assisted Living Center 4001 SE 182nd Avenue Multnomah Gresham
C277 51501 Hamilton Plaza Nursing Home 56 Hamilton Avenue Passaic Passaic
C278 51500 Iliff Rehab and Nursing Center 8000 Iliff Drive Fairfax Dunn Loring
P279 3101599 Olympics West Retirement Center 929 Trosper Road Thurston County Tumwater
P280 4545786 Merrill Gardens at Northgate 11501 15th Avenue NE King Seattle
C281 50946 Chateau Marymoor Retirement & Asst.
Living Community 4585 West Sammamish Pkwy, NE King Redmond
C282 50803 Fairfield Manor Nursing Home 5303 Bermuda Road St. Louis St. Louis
P283 3048741 Hearthstone Cottage of Ellensburg 802 Mountain View Avenue Kittitas Ellensburg
P284 1865559 Carson Oaks 6725 Inglewood Avenue San Joaquin Stockton
P285 4544128 Life Care Center of Escondido 1980 Felicita Road San Diego Escondido
C286 51499 Park Manor Nursing Home 23 Park Place Essex Bloomfield
P287 3032034 Highline Convalescent Center 609 Highline Drive Douglas East Wenatchee
P288 3009594 Valley Village Mobile Home Park 6401 Country Club Drive Sonoma Rohnert Park
P289 3012291 Cordovan Mobile Home Estates 10035 Mills Station Road Sacramento Sacramento
P290 3022969 Mesa Village Mobile Home Park 2701 E. Allred Avenue Maricopa Mesa
P291 3009545 Village Green Mobile Home Park 2902 South 84th Street Pierce Tacoma
P292 3009586 Orcutt Ranch Mobile Home Park 295 N. Broadway Santa Barbara Orcutt
P293 3009636 Town & Country Mobile Home Park 1600 East Clark Avenue Santa Barbara Orcutt
P294 3025335 Blue Sky Mobile Home Park 4800 Ocotillo Road Maricopa Glendale
P295 1796705 Meadowbrook Mobile Home Estate 7610 West Nob Hill Boulevard Yakima Yakima
P296 3102456 Springbrook Estates Manufactured
Home Park Phase I 1000 Springbrook Road Yamhill Newberg
P297 3043486 College Place Mobile Home Park 31600 126th Avenue SE King Auburn
P298 3015435 Silverado Estates 2900 West Superstition Boulevard Pinal Apache Junction
P299 3012705 Sierra Vista Mobile Home Park 825 East Grangeville Boulevard King Hanford
C300 51418 Deep Valley Mobile Home Park 2101 South State Street Mendocino Ukiah
P301 3015526 E-Z Storage Pico 11470 Tennessee Avenue Los Angeles Los Angeles
P302 3015500 E-Z Storage Desoto 9420 De Soto Ave. Los Angeles Chatsworth
P303 3015518 E-Z Storage Van Nuys 5823 Peach Ave. Los Angeles Van Nuys
P304 3000239 America's Best Self Storage 380 Crenshaw Boulevard Los Angeles Torrance
P305 3009263 Save-Most Self Storage 23772 Via Fabricante Orange Mission Viejo
C306A 51411 Pantego American Storage-Pantego TX 2020 W. Pioneer Parkway Tarrant Pantego
C306B 51411 Arkansas Lane Self Storage-Pantego, TX 2101 West Arkansas Lane Tarrant Pantego
C306 51411 Pantego Amer. Stor. & Arkansas Lane
Self Stor. (Roll-Up)
P307 3012887 Aim All Storage 25093 Bay Ave. Riverside Moreno Valley
</TABLE>
<PAGE> 146
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
ADMINI-
CUT-OFF MATURITY STRATIVE SUB- NET
ZIP PROPERTY ORIGINAL DATE DATE LOAN MORTGAGE FEE SERVICING MORTGAGE
STATE CODE TYPE BALANCE BALANCE BALANCE TYPE RATE RATE(i) FEE RATE RATE
- ----- ------ ----------- ---------- ---------- ---------- ---------------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NJ 8035 Office $2,480,000 $2,432,322 $2,009,873 Balloon 7.330% 0.143% 0.100% 7.187%
CA 94019 Office 2,325,000 2,305,642 1,952,795 Balloon 7.460% 0.143% 0.100% 7.317%
NV 89102 Office 2,100,000 2,048,463 1,690,097 Balloon 7.750% 0.143% 0.100% 7.607%
VA 22090 Office 2,000,000 1,976,409 1,775,325 Balloon 7.610% 0.143% 0.100% 7.467%
CA 91360 Office 2,075,000 1,960,203 1,750,502 Balloon 9.770% 0.143% 0.100% 9.627%
CA 92691 Office 2,200,000 1,910,158 1,817,181 Balloon 8.840% 0.143% 0.100% 8.697%
CA 93940 Office 2,000,000 1,880,961 Fully Amortizing 7.750% 0.143% 0.100% 7.607%
NY 10017 Office 1,900,000 1,879,133 1,666,859 Balloon 7.160% 0.143% 0.100% 7.017%
AZ 85234 Office 1,875,000 1,855,558 1,655,015 Balloon 7.400% 0.143% 0.100% 7.257%
CA 92673 Office 1,960,000 1,849,316 1,759,707 Balloon 9.000% 0.143% 0.100% 8.857%
WA 98101 Office 2,100,000 1,766,193 1,719,201 Balloon 8.375% 0.143% 0.100% 8.232%
WA 99336 Office 1,700,000 1,628,988 1,385,206 Balloon 8.375% 0.143% 0.100% 8.232%
CA 94901 Office 4,400,000 1,625,049 Fully Amortizing 8.625% 0.143% 0.100% 8.482%
CA 94022 Office 1,600,000 1,576,889 1,404,525 Balloon 7.950% 0.143% 0.100% 7.807%
CA 95825 Office 1,600,000 1,565,323 1,419,885 Balloon 8.500% 0.143% 0.100% 8.357%
MN 55401 Office 1,522,500 1,505,632 1,334,404 Balloon 7.123% 0.143% 0.100% 6.980%
NC 27704 Office 1,400,000 1,383,120 1,123,518 Balloon 6.920% 0.143% 0.100% 6.777%
AZ 85016 Office 1,220,000 1,208,838 1,074,515 Balloon 7.307% 0.143% 0.100% 7.164%
CA 92131 Office 1,209,000 1,203,898 1,075,280 Balloon 7.700% 0.143% 0.100% 7.557%
CO 80116 Office 1,050,000 1,040,643 869,544 Balloon 8.090% 0.143% 0.100% 7.947%
CO 80012 Office 1,000,000 991,348 879,161 Balloon 7.250% 0.143% 0.100% 7.107%
VA 23061 Office 950,000 934,458 841,587 Balloon 7.500% 0.293% 0.250% 7.207%
AZ 85015 Office 665,000 659,313 597,957 Balloon 8.167% 0.143% 0.100% 8.024%
WA 98406 Health Care 9,500,000 9,209,455 7,761,415 Balloon 8.350% 0.143% 0.100% 8.207%
OR 97030 Health Care 8,500,000 8,306,850 7,120,230 Balloon 8.505% 0.243% 0.200% 8.262%
NJ 7055 Health Care 5,500,000 5,466,445 4,672,743 Balloon 8.960% 0.143% 0.100% 8.817%
VA 22027 Health Care 5,330,000 5,294,072 4,472,210 Balloon 8.500% 0.143% 0.100% 8.357%
WA 98502 Health Care 5,800,000 5,213,459 3,983,274 Balloon 9.875% 0.143% 0.100% 9.732%
WA 98125 Health Care 5,275,000 5,072,121 4,312,118 Balloon 8.260% 0.143% 0.100% 8.117%
WA 98052 Health Care 4,350,000 4,275,898 3,556,160 Balloon 7.610% 0.143% 0.100% 7.467%
MO 63121 Health Care 4,000,000 3,941,671 3,317,118 Balloon 8.120% 0.143% 0.100% 7.977%
WA 98926 Health Care 3,450,000 3,373,897 2,776,587 Balloon 7.750% 0.143% 0.100% 7.607%
CA 95207 Health Care 3,430,000 2,791,330 2,260,594 Balloon 7.900% 0.143% 0.100% 7.757%
CA 92025 Health Care 2,900,000 2,733,472 2,055,503 Balloon 8.750% 0.143% 0.100% 8.607%
NJ 7003 Health Care 1,900,000 1,887,490 1,599,046 Balloon 8.610% 0.143% 0.100% 8.467%
WA 98802 Health Care 1,825,000 1,776,617 1,501,240 Balloon 8.750% 0.143% 0.100% 8.607%
CA 94928 Mobile Home 8,400,000 7,884,360 6,760,379 Balloon 7.750% 0.143% 0.100% 7.607%
CA 95827 Mobile Home 4,200,000 3,950,205 3,369,239 Balloon 7.625% 0.143% 0.100% 7.482%
AZ 85204 Mobile Home 3,750,000 3,612,899 3,065,574 Balloon 8.375% 0.143% 0.100% 8.232%
WA 98409 Mobile Home 3,360,000 3,150,085 2,957,672 Balloon 7.625% 0.143% 0.100% 7.482%
CA 93455 Mobile Home 3,000,000 2,820,290 2,414,424 Balloon 7.750% 0.143% 0.100% 7.607%
CA 93455 Mobile Home 2,870,000 2,690,697 2,302,313 Balloon 7.625% 0.143% 0.100% 7.482%
AZ 85301 Mobile Home 2,200,000 2,126,392 1,803,889 Balloon 8.500% 0.143% 0.100% 8.357%
WA 98908 Mobile Home 2,450,000 2,115,185 1,698,074 Balloon 7.875% 0.143% 0.100% 7.732%
OR 97132 Mobile Home 1,868,000 1,766,501 1,509,168 Balloon 7.900% 0.143% 0.100% 7.757%
WA 98002 Mobile Home 1,600,000 1,556,246 1,277,032 Balloon 7.370% 0.143% 0.100% 7.227%
AZ 85220 Mobile Home 1,600,000 1,516,488 1,296,785 Balloon 8.125% 0.143% 0.100% 7.982%
CA 93230 Mobile Home 1,575,000 1,481,327 1,263,465 Balloon 7.625% 0.143% 0.100% 7.482%
CA 95482 Mobile Home 970,000 961,214 801,250 Balloon 8.000% 0.143% 0.100% 7.857%
CA 90064 Mini Storage 3,320,000 3,107,310 2,927,202 Balloon 8.570% 0.143% 0.100% 8.427%
CA 91311 Mini Storage 3,214,000 3,014,672 2,858,778 Balloon 8.540% 0.143% 0.100% 8.397%
CA 91411 Mini Storage 2,977,000 2,813,023 2,659,993 Balloon 8.680% 0.143% 0.100% 8.537%
CA 90503 Mini Storage 3,400,000 2,721,988 Fully Amortizing 8.250% 0.143% 0.100% 8.107%
CA 92691 Mini Storage 2,320,000 2,190,425 1,913,547 Balloon 8.750% 0.143% 0.100% 8.607%
TX 76013 Mini Storage
TX 76013 Mini Storage
1,732,500 1,719,544 1,433,371 Balloon 8.000% 0.143% 0.100% 7.857%
CA 92553 Mini Storage 1,750,000 1,653,073 1,421,854 Balloon 8.125% 0.143% 0.100% 7.982%
<CAPTION>
FIRST INTEREST
ZIP PROPERTY NOTE PAYMENT ACCRUAL
STATE CODE TYPE DATE DATE METHOD
- ----- ------ ----------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
NJ 8035 Office 5/27/98 7/1/98 ACT/360
CA 94019 Office 2/4/99 4/1/99 ACT/360
NV 89102 Office 1/6/98 3/1/98 30/360
VA 22090 Office 4/27/98 6/1/98 ACT/360
CA 91360 Office 2/1/95 4/1/95 30/360
CA 92691 Office 3/15/94 5/1/94 30/360
CA 93940 Office 3/19/98 5/1/98 30/360
NY 10017 Office 7/16/98 9/1/98 ACT/360
AZ 85234 Office 7/20/98 9/1/98 ACT/360
CA 92673 Office 6/26/95 8/1/95 30/360
WA 98101 Office 7/12/93 9/1/93 30/360
WA 99336 Office 9/3/96 12/1/96 30/360
CA 94901 Office 11/15/74 4/1/75 30/360
CA 94022 Office 2/6/98 4/1/98 30/360
CA 95825 Office 2/19/97 4/1/97 30/360
MN 55401 Office 7/29/98 9/1/98 ACT/360
NC 27704 Office 12/15/98 2/1/99 ACT/360
AZ 85016 Office 9/1/98 11/1/98 ACT/360
CA 92131 Office 3/29/99 5/1/99 ACT/360
CO 80116 Office 1/6/99 3/1/99 ACT/360
CO 80012 Office 10/29/98 12/1/98 ACT/360
VA 23061 Office 7/24/98 9/1/98 ACT/360
AZ 85015 Office 7/17/98 9/1/98 ACT/360
WA 98406 Health Care 5/30/97 8/1/97 30/360
OR 97030 Health Care 10/7/97 12/1/97 ACT/360
NJ 7055 Health Care 2/25/99 4/1/99 ACT/360
VA 22027 Health Care 2/25/99 4/1/99 ACT/360
WA 98502 Health Care 12/6/94 1/1/95 30/360
WA 98125 Health Care 11/26/96 2/1/97 30/360
WA 98052 Health Care 6/30/98 8/1/98 ACT/360
MO 63121 Health Care 7/2/98 9/1/98 ACT/360
WA 98926 Health Care 3/13/98 5/1/98 30/360
CA 95207 Health Care 8/24/94 10/1/94 30/360
CA 92025 Health Care 1/27/97 3/1/97 30/360
NJ 7003 Health Care 2/25/99 4/1/99 ACT/360
WA 98802 Health Care 8/7/97 10/1/97 30/360
CA 94928 Mobile Home 10/13/95 12/1/95 30/360
CA 95827 Mobile Home 12/21/95 2/1/96 30/360
AZ 85204 Mobile Home 1/2/97 3/1/97 30/360
WA 98409 Mobile Home 9/25/95 11/1/95 30/360
CA 93455 Mobile Home 11/14/95 1/1/96 30/360
CA 93455 Mobile Home 9/25/95 12/1/95 30/360
AZ 85301 Mobile Home 3/3/97 5/1/97 30/360
WA 98908 Mobile Home 4/12/94 7/1/94 30/360
OR 97132 Mobile Home 2/27/96 4/1/96 30/360
WA 98002 Mobile Home 1/30/98 3/10/98 ACT/360
AZ 85220 Mobile Home 4/12/96 6/1/96 30/360
CA 93230 Mobile Home 12/13/95 2/1/96 30/360
CA 95482 Mobile Home 1/11/99 3/1/99 ACT/360
CA 90064 Mini Storage 9/8/95 10/1/95 30/360
CA 91311 Mini Storage 6/27/95 8/1/95 30/360
CA 91411 Mini Storage 9/14/95 11/1/95 30/360
CA 90503 Mini Storage 11/30/94 2/1/95 30/360
CA 92691 Mini Storage 8/21/95 10/1/95 30/360
TX 76013 Mini Storage
TX 76013 Mini Storage
1/19/99 4/1/99 ACT/360
CA 92553 Mini Storage 12/22/95 2/1/96 30/360
</TABLE>
<PAGE> 147
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS) (II) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
- ------- -------- ------------- -------- -------- ---- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$18,054 120 300 17 103 6/1/08 No No 1/31/08
17,121 108 300 8 100 3/1/08 No No 12/1/07
15,862 120 300 21 99 2/1/08 No No
14,135 120 360 18 102 5/1/08 No No 4/30/03
18,520 120 300 56 64 3/1/05 No No
19,568 84 240 67 17 4/1/01 No No
18,826 180 180 19 161 4/1/13 No No
12,846 120 360 15 105 8/1/08 No No 3/31/08
12,982 120 360 15 105 8/1/08 No No 6/1/08
16,448 84 300 52 32 7/1/02 No No
18,058 84 240 75 9 8/1/00 No No
13,547 120 300 36 84 11/1/06 No No
34,326 355 355 296 59 10/1/04 No No
11,685 120 360 20 100 3/1/08 No No
12,303 120 360 32 88 3/1/07 No No
10,255 120 360 15 105 8/1/08 No No 6/1/08
9,824 119 300 10 109 12/1/08 No No 6/1/08
8,370 120 360 13 107 10/1/08 No No 8/1/08
8,620 120 360 7 113 4/1/09 No No 1/1/09
8,167 120 300 9 111 2/1/09 No No 12/2/08
6,822 120 360 12 108 11/1/08 No No 7/3/08
7,020 84 300 15 69 8/1/05 No No 7/31/01
4,957 120 360 15 105 8/1/08 No No 6/1/08
75,539 120 300 28 92 7/1/07 No No
68,473 120 300 24 96 11/1/07 No No 10/31/01
46,005 120 300 8 112 3/1/09 No Yes(V) 12/1/08
42,919 120 300 8 112 3/1/09 No Yes(V) 12/1/08
55,492 132 240 59 73 12/1/05 No No
41,626 119 300 34 85 12/1/06 No Yes(W)
32,458 120 300 16 104 7/1/08 No No 2/29/08
31,191 120 300 15 105 8/1/08 No No 7/31/02
26,059 120 300 19 101 4/1/08 No No
26,080 120 300 62 58 9/1/04 No Yes(W)
25,628 120 240 33 87 2/1/07 No No
15,440 120 300 8 112 3/1/09 No Yes(V) 12/1/08
15,004 121 300 26 95 10/1/07 No No
63,448 120 300 48 72 11/1/05 No Yes(X)
31,380 120 300 46 74 1/1/06 No Yes(Y)
29,881 120 300 33 87 2/1/07 No Yes(Z)
25,104 84 300 49 35 10/1/02 No No
22,660 120 300 47 73 12/1/05 No Yes(X)
21,443 120 300 48 72 11/1/05 No Yes(Y)
17,715 120 300 31 89 4/1/07 No Yes(Z)
20,342 120 240 65 55 6/1/04 No No
14,294 120 300 44 76 3/1/06 No No
11,773 120 300 21 99 2/10/08 No No
12,451 120 300 42 78 5/1/06 No No
11,767 120 300 46 74 1/1/06 No No
7,487 120 300 9 111 2/1/09 No No 12/2/08
26,890 85 300 50 35 10/1/02 No Yes(AA) 9/30/97
25,967 84 300 52 32 6/30/02 No Yes(AA) 6/30/97
24,334 84 300 49 35 10/1/02 No Yes(AA) 9/30/97
33,033 180 180 58 122 1/1/10 No No
19,074 120 300 50 70 9/1/05 No No
13,372 120 300 8 112 3/1/09 No Yes(AB) 12/30/08
13,652 120 300 46 74 1/1/06 No No
<CAPTION>
PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
- --------------------------------------- ----------------------
<S> <C>
LO(116)/OPEN(4)/DEF NAP
LO(105)/OPEN(3)/DEF NAP
YM(120) Int. Rate Diff. (Type 1B)
LO(59)/GRTR1%PPMTorYM(54)/OPEN(7) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 3A)
YM(84) Int. Rate Diff. (Type 3A)
YM(180) Int. Rate Diff. (Type 1B)
LO(115)/OPEN(5)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
$250+YM(84) Int. Rate Diff. (Type 1A)
YM(84) Int. Rate Diff. (Type 2B)
YM(120) Int. Rate Diff. (Type 2A)
PARTIAL OPEN(120)/DECL. PNLTY(96)/1%(139) NAP
YM(120) Int. Rate Diff. (Type 1B)
YM(120) Int. Rate Diff. (Type 1B)
LO(118)/OPEN(2)/DEF NAP
LO(113)/OPEN(6)/DEF NAP
LO(118)/OPEN(2)/DEF NAP
LO(117)/OPEN(3) NAP
LO(118)/OPEN(2)/DEF NAP
LO(116)/OPEN(4)/DEF NAP
LO(35)/GRTR1%PPMTorYM(42)/OPEN(7)DEF Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
YM(120) Int. Rate Diff. (Type 2A)
LO(47)/GRTR1%PPMTorYM(66)/OPEN(7) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
LO(117)/OPEN(3)/DEF NAP
YM(132) Int. Rate Diff. (Type 3A)
YM(119) Int. Rate Diff. (Type 2A)
LO(115)/OPEN(5)/DEF NAP
LO(47)/GRTR1%PPMTorYM(66)/OPEN(7) Int. Rate Diff. (Type 1A)
YM(116)/OPEN(4) Int. Rate Diff. (Type 2A)
OPEN(24)/YM(96) Int. Rate Diff. (Type 2A)
YM(120) Int. Rate Diff. (Type 2A)
LO(117)/OPEN(3)/DEF NAP
YM(117)/OPEN(4) Int. Rate Diff. (Type 2A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(84) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 2A)
$250+YM(120) Int. Rate Diff. (Type 1A)
YM(120) Int. Rate Diff. (Type 2A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(118)/OPEN(2)/DEF NAP
LO(24)/$250+YM(59)/OPEN(2) Int. Rate Diff. (Type 1A)
LO(24)/$250+YM(58)/OPEN(2) Int. Rate Diff. (Type 1A)
LO(24)/$250+YM(58)/OPEN(2) Int. Rate Diff. (Type 1A)
YM(180) Int. Rate Diff. (Type 1A)
$250+YM(120) Int. Rate Diff. (Type 1A)
LO(117)/OPEN(3)/DEF NAP
$250+YM(120) Int. Rate Diff. (Type 1A)
</TABLE>
<PAGE> 148
<TABLE>
<CAPTION>
CUT-OFF TOTAL
DATE UNITS/
SE- LOAN APPRAISAL APPRAISAL LTV YEAR BUILT/ ROOM/
QUENCE NUMBER PROPERTY NAME VALUE DATE RATIO RENOVATED BED
- ------ ------ ------------- ----- ---- ----- --------- ---
<S> <C> <C> <C> <C> <C> <C> <C>
C252 50903 Grove Office Plaza $ 3,175,000 4/16/98 77% 1961/1990 45,116
C253 51493 Stanford Coastside Medical Clinic 4,000,000 12/1/98 58% 1979/1997 15,304
P254 3046208 3330 West Desert Inn Road 2,840,000 12/8/97 72% 1989 39,470
C255 50826 Golf Course Plaza 3,200,000 1/20/98 62% 1976 32,338
P256 3001096 2220 Lynn Road 5,100,000 11/21/94 38% 1967 26,898
P257 2091932 Century Center Office Building 4,300,000 1/13/94 44% 1986 53,508
P258 3049228 Alta Mesa Professional Center #333 2,735,000 2/17/98 69% 1972 13,055
C259 50963 16 East 41st Street Office Building 2,420,000 5/7/98 78% 1900/1997 11,300
C260 51222 Greenfield Road Office Building 2,550,000 9/1/98 73% 1998 15,574
P261 3007713 San Clemente Professional Center 2,800,000 3/22/95 66% 1973/1995 35,244
P262 1794353 The Doyle Building 2,500,000 2/1/93 71% 1919/1988 30,307
P263 4544987 Colorado Professional Park 2,420,000 7/24/96 67% 1994 25,297
P264 2053130 Courthouse Square 6,772,081(v) NAP(v) 24% 1974/1995 95,285
P265 3043346 881 Fremont Ave. 2,150,000 1/27/98 73% 1972 10,600
P266 3022530 300 University Avenue 2,250,000 11/14/96 70% 1975/1996 27,194
C267 51214 Byrd Building 2,030,000 6/23/98 74% 1889/1998 22,090
C268 50972 Duke Medical Office 1,770,000 12/1/98 78% 1998 11,392
C269 51229 5240 North 16th Street Building 1,525,000 6/16/98 79% 1978 16,023
C270 51488 Scripps Crest Building 2,325,000 11/24/98 52% 1982/1985 30,574
C271 51474 Clocktower Center 1,520,000 10/21/98 68% 1972/1982 23,896
C272 51369 East Mississippi Professional Office Building 1,520,000 7/29/98 65% 1974/1994 36,694
C273 51000 U.S. Fish and Wildlife Center 1,350,000 5/28/98 69% 1997 10,392
C274 51272 Bethany Medical Plaza 950,000 5/19/98 69% 1973/1994 15,091
P275 4547840 The Weatherly Inn 14,400,000 4/26/97 64% 1989/1995 164
C276 50330 Powell Valley Assisted Living Center 11,600,000 7/15/97 72% 1988/1997 146
C277 51501 Hamilton Plaza Nursing Home 8,300,000 12/29/98 66% 1985 120
C278 51500 Iliff Rehab and Nursing Center 8,200,000 12/30/98 65% 1950/1998 120
P279 3101599 Olympics West Retirement Center 10,365,000 7/18/94 50% 1978 200
P280 4545786 Merrill Gardens at Northgate 7,250,000 11/13/96 70% 1962/1993 122
C281 50946 Chateau Marymoor Retirement & Asst. Living Community 5,800,000 3/11/98 74% 1997 59
C282 50803 Fairfield Manor Nursing Home 6,000,000 1/5/98 66% 1957/1996 126
P283 3048741 Hearthstone Cottage of Ellensburg 6,750,000 5/14/97 50% 1988 94
P284 1865559 Carson Oaks 4,750,000 10/15/95 59% 1988 76
P285 4544128 Life Care Center of Escondido 4,300,000 7/18/96 64% 1986 120
C286 51499 Park Manor Nursing Home 4,500,000 12/29/98 42% 1896/1993 56
P287 3032034 Highline Convalescent Center 4,100,000 3/11/97 43% 1956/1993 100
P288 3009594 Valley Village Mobile Home Park 12,700,000 9/7/95 62% 1974 285
P289 3012291 Cordovan Mobile Home Estates 5,750,000 12/11/95 69% 1968 177
P290 3022969 Mesa Village Mobile Home Park 5,000,000 12/11/96 72% 1964 201
P291 3009545 Village Green Mobile Home Park 4,800,000 8/21/95 66% 1967 167
P292 3009586 Orcutt Ranch Mobile Home Park 4,335,000 8/29/95 65% 1950 220
P293 3009636 Town & Country Mobile Home Park 4,100,000 8/29/95 66% 1958 185
P294 3025335 Blue Sky Mobile Home Park 3,200,000 1/6/97 66% 1970 160
P295 1796705 Meadowbrook Mobile Home Estate 3,865,000 3/7/94 55% 1977 244
P296 3102456 Springbrook Estates Manufactured Home Park Phase I 2,440,000 12/27/95 72% 1995 125
P297 3043486 College Place Mobile Home Park 6,300,000 1/1/98 25% 1987 167
P298 3015435 Silverado Estates 2,840,000 3/26/96 53% 1983 129
P299 3012705 Sierra Vista Mobile Home Park 2,440,000 12/4/95 61% 1972 109
C300 51418 Deep Valley Mobile Home Park 1,430,000 9/28/98 67% 1945 78
P301 3015526 E-Z Storage Pico 5,200,000 5/10/95 60% 1952/1983 51,590
P302 3015500 E-Z Storage Desoto 5,450,000 4/7/95 55% 1987 89,895
P303 3015518 E-Z Storage Van Nuys 5,900,000 5/26/95 48% 1979 76,970
P304 3000239 America's Best Self Storage 6,550,000 10/12/94 42% 1988 93,390
P305 3009263 Save-Most Self Storage 3,700,000 6/9/95 59% 1977 59,909
C306A 51411 Pantego American Storage-Pantego TX 1973 70,191
C306B 51411 Arkansas Lane Self Storage-Pantego, TX 1974 24,479
C306 51411 Pantego Amer. Stor. & Arkansas Lane Self Stor. (Roll-Up) 2,475,000 9/24/98 69% 94,670
P307 3012887 Aim All Storage 2,690,000 10/10/95 61% 1994 82,964
<CAPTION>
SF/ LOAN
UNIT/ NET BALANCE PER
ROOM/ RENTABLE SF/UNIT/
BED AREA (SF) ROOM/BED
--- --------- --------
<S> <C> <C>
SF 45,116 $ 54
SF 15,304 151
SF 39,470 52
SF 32,338 61
SF 26,898 73
SF 53,508 36
SF 13,055 144
SF 11,300 166
SF 15,574 119
SF 35,244 52
SF 30,307 58
SF 25,297 64
SF 95,285 17
SF 10,600 149
SF 27,194 58
SF 22,090 68
SF 11,392 121
SF 16,023 75
SF 30,574 39
SF 23,896 44
SF 36,694 27
SF 10,392 90
SF 15,091 44
Beds 66,524 56,155
Beds 49,500 56,896
Beds 39,464 45,554
Beds 42,831 44,117
Beds 66,352 26,067
Beds 57,000 41,575
Beds 27,588 72,473
Beds 41,351 31,283
Beds 81,412 35,893
Beds 62,730 36,728
Beds 39,156 22,779
Beds 18,735 33,705
Beds 34,550 17,766
Pads 27,664
Pads 22,318
Pads 17,975
Pads 18,863
Pads 12,820
Pads 14,544
Pads 13,290
Pads 8,669
Pads 14,132
Pads 9,319
Pads 11,756
Pads 13,590
Pads 12,323
SF 51,590 60
SF 89,895 34
SF 76,970 37
SF 93,390 29
SF 59,909 37
SF 70,191
SF 24,479
SF 94,670 18
SF 82,964 20
</TABLE>
<PAGE> 149
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGE LOANS
<TABLE>
<CAPTION>
U/W MOST
OCCUPANCY CASH U/W RECENT MOST MOST
OCCUPANCY AS OF U/W U/W U/W FLOW U/W RESERVES END RECENT RECENT
PERCENT DATE REVENUES EXPENSES CASH FLOW DSCR RESERVES PER UNIT DATE REVENUES EXPENSES
------- ---- -------- -------- --------- ---- -------- -------- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
100% 9/1/98 $ 549,955 $ 198,216 $ 274,086 1.27 $ 8,873 $ 0.20 12/31/97 $ 512,915 $ 174,137
100% 12/23/98 405,565 63,064 322,715 1.57 3,834 0.25 12/30/98 418,108 58,667
100% 1/31/99 270,000 13,500 230,450 1.21 7,894 0.20 12/31/98 297,275
100% 6/30/98 443,923 151,257 231,367 1.36 6,456 0.20 12/31/98 455,148 139,713
85% 2/26/99 716,403 298,667 350,707 1.58 6,725 0.25 12/31/98 733,381 272,684
95% 2/22/99 942,397 410,832 420,227 1.79 13,377 0.25 12/31/98 938,921 385,993
100% 3/22/99 311,882 24,584 256,075 1.13 3,264 0.25 12/31/98 328,297 15,766
100% 6/23/98 330,941 115,345 196,527 1.27 1,883 0.17 12/31/98 335,184 102,179
100% 1/15/99 218,620 11,945 186,526 1.20 3,894 0.25
87% 12/1/98 480,406 199,013 218,655 1.11 8,811 0.25 12/31/98 480,406 198,951
100% 3/26/99 530,604 183,753 294,911 1.36 7,577 0.25 12/31/98 596,698 245,498
100% 3/8/99 345,279 108,844 190,635 1.17 5,059 0.20 12/31/98 381,179 87,706
95% 1/1/99 1,979,781 1,016,878 744,929 1.81 23,821 0.25 12/31/98 2,008,692 841,844
100% 2/13/99 269,195 65,637 180,756 1.29 2,650 0.25 12/31/98 151,829 31,411
94% 2/8/99 422,816 160,819 206,445 1.40 6,799 0.25 12/31/98 444,067 150,710
100% 7/27/98 330,487 115,048 194,158 1.58 3,983 0.18
100% 2/1/99 218,157 66,923 148,956 1.26 2,278 0.20
100% 5/1/98 273,296 112,686 133,541 1.33 5,115 0.32 12/31/98 275,855 121,829
95% 3/10/99 346,777 137,455 144,848 1.40 5,195 0.17 12/31/98 366,643 141,224
95% 12/16/98 232,533 72,058 133,453 1.36 6,320 0.26 12/31/98 216,619 74,433
94% 3/2/99 377,418 226,193 106,442 1.30 14,333 0.39 12/31/97 329,130 217,772
100% 6/24/98 159,502 40,364 117,579 1.40 1,559 0.15 12/31/98 174,498 38,597
100% 4/23/98 146,479 43,063 84,451 1.42 3,015 0.20 12/31/98 158,530 39,223
96% 8/31/98 5,005,664 3,537,104 1,387,392 1.53 41,000 250.00 8/31/98 5,344,224 3,538,697
94% 12/31/98 3,346,878 2,252,096 1,058,282 1.29 36,500 250.00 12/31/98 2,763,205 1,732,032
95% 1/12/99 6,387,079 5,630,733 726,346 1.32 30,000 250.00 12/31/97 6,248,991 5,504,452
87% 1/26/99 7,812,875 6,952,291 830,584 1.61 30,000 250.00 12/31/97 7,530,587 6,823,511
92% 1/1/99 3,112,785 2,140,653 912,132 1.37 60,000 300.00 12/31/98 3,114,222 2,063,952
93% 3/19/99 1,940,585 1,142,969 761,016 1.52 36,600 300.00 9/30/98 1,940,584 1,087,025
100% 12/31/98 1,463,938 930,936 514,444 1.32 18,558 314.54 12/31/98 1,518,917 992,231
80% 12/31/98 3,668,262 3,134,765 501,997 1.34 31,500 250.00 12/31/98 3,647,536 2,959,341
98% 12/31/98 2,735,834 1,813,999 893,635 2.86 28,200 300.00 12/31/98 2,973,334 1,713,207
96% 3/19/99 1,427,785 952,064 452,921 1.45 22,800 300.00 9/30/98 1,551,550 859,131
100% 7/31/98 381,109 19,055 352,265 1.15 9,789 81.58
82% 1/28/99 2,626,832 2,326,506 286,326 1.55 14,000 250.00 12/31/97 2,161,040 1,827,510
98% 12/31/98 4,789,584 3,928,406 830,878 4.61 30,300 303.00 12/31/98 4,789,584 3,787,795
100% 2/1/99 1,579,690 591,357 940,942 1.24 47,391 166.28 12/31/98 1,608,239 498,307
99% 2/1/99 928,346 447,315 453,181 1.20 27,850 157.34 12/31/98 940,057 444,647
99% 4/2/99 804,553 341,734 438,682 1.22 24,137 120.08 11/30/98 804,553 339,575
99% 1/14/99 820,450 372,129 423,707 1.41 24,614 147.39 12/31/98 855,691 336,388
99% 2/5/99 707,497 342,357 343,915 1.26 21,225 96.48 12/31/98 707,497 315,135
97% 2/1/99 654,913 306,142 329,124 1.28 19,647 106.20 12/31/98 660,906 281,333
92% 12/23/98 452,506 178,540 260,391 1.22 13,575 84.84 11/30/98 452,506 176,695
100% 12/31/98 653,676 147,547 486,519 1.99 19,610 80.37 12/31/98 662,832 113,663
100% 2/28/99 553,295 198,697 337,996 1.97 16,602 132.82 12/31/98 331,613 115,540
100% 2/1/99 669,750 233,434 416,223 2.95 20,093 120.32 12/31/98 771,296 209,112
100% 11/16/98 358,613 137,909 209,946 1.41 10,758 83.40 12/31/98 369,350 109,211
87% 2/1/99 430,528 241,747 175,865 1.25 12,916 118.50 12/31/98 437,736 220,029
97% 12/1/98 248,405 126,099 117,566 1.31 4,740 60.77 12/31/98 231,400 107,966
93% 2/1/99 963,996 400,152 553,896 1.72 9,948 0.19 12/31/98 982,908 404,183
96% 2/1/99 852,431 407,812 431,135 1.38 13,484 0.15 12/31/98 882,436 409,967
100% 2/1/99 988,830 389,324 583,416 2.00 16,090 0.21 12/31/98 1,058,074 393,757
94% 12/31/98 1,018,094 480,590 518,337 1.31 19,167 0.21 12/31/98 1,115,430 458,239
88% 2/14/99 659,160 199,369 448,097 1.96 11,694 0.20 12/31/98 671,255 158,849
97% 10/27/98
97% 10/27/98
473,189 233,244 225,744 1.41 14,201 0.15 12/31/98 532,188 189,262
99% 12/31/98 500,803 167,568 320,790 1.96 12,445 0.15 12/31/98 500,803 165,138
<CAPTION>
MOST 2ND
RECENT MOST
MOST CASH RECENT
RECENT FLOW END
CASH FLOW DSCR DATE
--------- ---- ----
<S> <C> <C>
$ 314,778 1.45 12/31/96
359,441 1.75
297,275 1.56 12/31/97
306,305 1.81 12/31/97
460,697 2.07 12/31/97
375,442 1.60 12/31/97
312,531 1.38 12/31/97
233,005 1.51
263,077 1.33 12/31/97
351,200 1.62 12/31/97
293,473 1.81 12/31/97
1,072,083 2.60 12/31/97
120,418 0.86
278,395 1.89 12/31/97
154,026 1.53 12/31/97
217,920 2.11 12/31/97
142,186 1.45
111,358 1.36 12/31/96
134,967 1.60 12/31/97
119,307 2.01 12/31/97
1,669,579 1.84 12/31/97
1,031,173 1.26 12/31/97
744,539 1.35 12/31/96
707,076 1.37 12/31/96
1,050,270 1.58 12/31/97
853,559 1.71 12/31/97
526,686 1.35
688,195 1.84 12/31/97
1,260,127 4.03
692,419 2.21 12/31/97
333,530 1.80 12/31/96
1,001,789 5.56
1,109,932 1.46 12/31/97
495,410 1.32 12/31/97
464,978 1.30 11/30/97
519,303 1.72 12/31/97
392,362 1.44 12/31/97
379,573 1.48 12/31/97
275,811 1.30 11/30/97
549,169 2.25
182,073 1.06
562,184 3.98 12/31/97
260,139 1.74 12/31/97
102,878 0.73 12/31/97
122,134 1.36 12/31/97
578,725 1.79 12/31/97
472,469 1.52 12/31/97
664,317 2.28 6/30/97
657,191 1.66 12/31/97
512,406 2.24 12/31/97
336,726 2.10 12/31/97
335,665 2.05 12/31/97
</TABLE>
<PAGE> 150
<TABLE>
<CAPTION>
2ND
MOST LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
-------- -------- --------- ---- -------------- -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 493,804 $ 177,148 $ 304,656 1.41 N.J. American Water Company 17,264 38% 2/28/01
UCSF/Stanford Health Care 11,317 78% 2/1/08
265,300 265,300 1.39 Paul Steelman Interiors, Inc. 39,470 100% NAP
282,274 118,335 (37,904) (0.22) A of CE 7,170 22% 7/31/01
736,707 298,261 438,446 1.97 Drs. Johnson/Green/Hess 2,630 10% NAV
904,439 357,550 562,983 2.40 Paine Webber-Mission 7,611 14% 1/25/04
320,293 2,214 318,079 1.41 333 El Dorado 13,055 100% NAP
Yasu Maeda 2,500 22% 5/30/09
Realty Executives 8,090 52% 5/31/08
453,244 191,572 233,707 1.18 Sidelines 6,073 17% 1/14/06
473,088 138,992 334,096 1.54 Hewitt/Isley 8,507 28% 2/28/03
348,523 90,887 257,636 1.58 Tri-City Kidney 5,107 20% 7/31/01
1,880,324 956,668 857,288 2.08 Bank of America 9,940 10% 1/12/05
Suite A3 4,307 41% 1/31/02
411,997 159,941 252,045 1.71 Total Renal Care/Chilean Fruit 14,837 55% 2/28/01
Kaminski Asset Management 4,400 19% 3/31/02
University Affiliated Physicians, Inc. 11,392 100% 11/30/08
208,111 101,964 106,125 1.06 Progressive Insurance 5,098 32% 12/31/02
337,894 125,247 200,271 1.94 Mental Health Systems, Inc. 6,080 20% 10/31/02
Leevers Supermarkets 5,896 25% 12/31/09
294,619 207,220 87,399 1.07 United Cerebral Palsy 4,832 13% MTM
168,690 36,856 131,834 1.56 US Fish & Wildlife 10,392 100% 3/6/07
96,315 29,705 66,610 1.34 Arizona Othodontics Specialists 3,717 25% 8/30/00
4,964,901 3,257,514 1,637,072 1.81
2,463,859 1,421,368 1,042,491 1.27
5,250,996 4,544,140 706,856 1.28
7,904,422 6,459,830 1,444,592 2.80
3,046,777 1,911,273 1,135,504 1.71
1,882,552 1,098,727 783,825 1.57
3,045,400 2,566,178 479,222 1.28
1,460,678 963,724 496,954 1.59
1,659,060 1,496,762 162,298 0.88
1,336,033 424,819 911,214 1.20
899,523 402,680 496,843 1.32
706,763 273,111 433,652 1.21
834,594 344,306 490,288 1.63
783,651 274,322 509,329 1.87
623,446 299,945 323,501 1.26
324,946 119,577 205,369 0.97
740,311 218,188 522,123 3.70
359,011 117,652 241,359 1.62
407,505 230,710 176,795 1.25
247,299 108,747 138,552 1.54
956,614 382,270 574,344 1.78
795,093 383,389 411,704 1.32
1,040,089 382,245 657,844 2.25
1,050,105 461,228 588,877 1.49
607,187 161,086 446,101 1.95
505,433 190,204 315,229 1.96
480,889 149,514 331,375 2.02
<CAPTION>
SECOND SECOND
SECOND LARGEST LARGEST
LARGEST TENANT TENANT
TENANT % OF LEASE
SECOND LARGEST LEASED TOTAL EXPIRA-
TENANT SF SF TION
------ -- -- ----
<S> <C> <C> <C>
Pennoni Association 5,726 13% 12/31/05
City of San Mateo 3,987 26% 2/28/08
SoltecOne 7,170 22% 1/14/02
Gabriel Tenembaum, MD 1,933 7% 10/31/01
The Pillsbury Company 7,350 14% 3/31/03
Arc Publishing 1,500 13% 11/30/03
Security Title 3,790 24% 5/31/03
PJHM 4,190 12% 12/31/99
Passport (Retail) 3,805 13% 12/31/03
Farmers Insurance Company 3,933 16% 12/31/00
Western Pension 6,462 7% 11/30/02
Suite B5 3,343 32% 11/30/01
Capital Nephrology/NW (Owner) 8,116 30% 2/28/01
Mann & Associates 4,400 19% 7/31/03
Arrington Watkins Architects, LLC 3,260 20% 6/30/02
TMAD Engineers 5,537 18% 5/31/03
Franktown Foods 4,200 18% NAV
Berkley Home Health Care 2,414 7% 1/31/02
Surety Recovery and Consulting Services, 2,537 17% 11/30/00
</TABLE>
<PAGE> 151
<TABLE>
<CAPTION>
LOAN
SEQUENCE NUMBER PROPERTY NAME PROPERTY ADDRESS COUNTY CITY
-- ------ ------------- ---------------- ------ ----
<S> <C> <C> <C> <C> <C>
C308 51427 Stor-A-Lot 1441N. Baxter Street Orange Anaheim
C309 51017 A-Safe Mini Storage 4249 Miller Road Muscogee Columbus
P310 3021862 Castro Valley Storage 2489 Grove Way Alameda Castro Valley
C311 51083 Plaza 303 - All Storage Self-Storage 425 Pioneer Parkway Dallas Grand Prairie
P312 8317463 Broadway Public Storage II 3501 South Lindsay Street Ada Boise
P313 3019114 Buffalo Mini-Storage 3925 S. Buffalo Drive Clark Las Vegas
C314 51206 Discount Storage 9620 I Avenue San Bernardino Hesperia
C315 51252 American Self Storage 2137 Steel Rd San Bernardino Colton
C316 51364 Industrial Blvd Self-Storage 27911 Industrial Boulevard Alameda Hayward
C317 51440 LaSoto Business Park 1920 N. Beckley Rd. Dallas Lancaster
C318 51416 DeSoto Preferred Storage 601 South Beckley Avenue Dallas DeSoto
P319 3024635 Folsom Lake Ford 12755 Folsom Boulevard Sacramento Folsom
P320 3103405 Act III Theatre 200 N. 26th Avenue Washington Cornelius
P321A 1867084 Juanita Bay Athletic 11450 98th Avenue NE King Kirkland
P321B 1867084 Pine Lake Club 2930 228th Avenue SE King Issauah
P321 1867084 Oskoui Health Club Portfolio (Roll-Up)
P322 3024643 Folsom Lake Toyota 12747 Folsom Boulevard Sacramento Folsom
P323 3040482 Bellevue Auto Center 620 116th Avenue NE King Bellevue
P324 3022993 L.A. Fitness Sports Club 5536 West Bell Road Maricopa Glendale
P325 1792761 University Volkswagon 4724 Roosevelt Way N.E. King Seattle
P326 3011822 Las Vegas Athletic Club 5200 West Sahara Avenue Clark County Las Vegas
P327 3005691 Lynnwood Auto Center 21609 - 21619 Highway 99 North Snohomish Lynnwood
P328 4540613 Inn at the Market 86 Pine Street King Seattle
P329 2092120 Best Western Anaheim Inn 1630 S. Harbor Boulevard Orange Anaheim
P330 3006723 670 West 17th Street 670 West 17th Street Orange Costa Mesa
- -----------------------------------------------------------------------------------------------------------------------------------
Totals/Weighted Average 330 Loans
===================================================================================================================================
</TABLE>
(i) Administrative Fee Rate includes the Sub-Servicing Fee Rate.
(ii) For Mortgage Loans which accrue interest on the basis of actual days
elapsed each calendar month and a 360-day year or a 365-day year, the
amortization term is the term over which the Mortgage Loans would
amortize if interest accrued and was paid on the basis of a 360-day yr.
consisting of twelve 30-day months. The actual amortization would be
longer.
(iii) LO(12)/GRTR1%PPMTorYM(47)/OPEN(1)/LO(12)/GRTR1%PPMTorYM(47)/OPEN(1)/
$250+YM(120)
(iv) LO(35)/GRTR1%PPMTorYM(48)/3%(12)/2%(12)/1%(6)/OPEN(7)
(v) Due to the absence of an appraisal, the Issuer established an Appraised
Value by utilizing an 11% capitalization rate with the Underwritten
Cash Flow.
<PAGE> 152
<TABLE>
<CAPTION>
CUT-OFF MATURITY
ZIP PROPERTY ORIGINAL DATE DATE LOAN
STATE CODE TYPE BALANCE BALANCE BALANCE TYPE
- ----- ---- ---- -------- ------- ------- ----
<S> <C> <C> <C> <C> <C> <C>
CA 92806 Mini Storage $ 1,642,574 $ 1,632,097 $ 1,473,846 Balloon
GA 31909 Mini Storage 1,600,000 1,584,923 1,257,396 Balloon
CA 94546 Mini Storage 1,650,000 1,554,183 1,177,526 Balloon
TX 75051 Mini Storage 1,550,000 1,534,698 1,207,790 Balloon
ID 83706 Mini Storage 1,800,000 1,521,997 1,266,538 Balloon
NV 89117 Mini Storage 1,750,000 1,010,199 820,141 Balloon
CA 92345 Mini Storage 1,000,000 989,638 882,742 Balloon
CA 92324 Mini Storage 1,000,000 989,433 874,986 Balloon
CA 94545 Mini Storage 785,000 778,973 698,765 Balloon
TX 75134 Mini Storage 780,000 772,248 644,442 Balloon
TX 75115 Mini Storage 565,000 560,032 475,292 Balloon
CA 95630 Special Purpose 7,125,000 6,396,531 Fully Amortizing
OR 97113 Special Purpose 3,922,500 3,568,413 Fully Amortizing
WA 98034 Special Purpose
WA 98027 Special Purpose
3,700,000 3,416,527 2,669,403 Balloon
CA 95630 Special Purpose 3,307,266 3,117,393 Fully Amortizing
WA 98004 Special Purpose 3,077,549 2,865,842 2,505,549 Balloon
AZ 85308 Special Purpose 3,150,000 2,816,606 Fully Amortizing
WA 98105 Special Purpose 2,500,000 2,077,429 1,779,393 Balloon
NV 89102 Special Purpose 2,000,000 1,892,374 1,782,090 Balloon
WA 98036 Special Purpose 1,980,245 1,876,325 1,416,988 Balloon
WA 98104 Hotel 7,570,000 6,293,442 4,849,390 Balloon
CA 92802 Hotel 2,550,800 2,247,467 2,132,153 Balloon
CA 92627 Mixed Use 4,000,000 3,775,967 3,346,079 Balloon
- -----------------------------------------------------------------------------------------------------------
$ 1,167,620,477 $ 1,115,186,748 $ 909,257,857
===========================================================================================================
<CAPTION>
ADMIN-
STRATIVE SUB- NET FIRST INTEREST
MORTGAGE FEE SERVICING MORTGAGE NOTE PAYMENT ACCRUAL
RATE RATE(I) FEE RATE RATE DATE DATE METHOD
---- ------- -------- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
8.070% 0.143% 0.100% 7.927% 12/1/98 1/1/99 ACT/360
7.550% 0.143% 0.100% 7.407% 8/5/98 10/1/98 ACT/360
9.000% 0.143% 0.100% 8.857% 12/16/96 2/1/97 30/360
7.355% 0.193% 0.150% 7.162% 8/31/98 10/1/98 ACT/360
8.500% 0.143% 0.100% 8.357% 8/18/93 10/1/93 30/360
8.510% 0.143% 0.100% 8.367% 3/8/95 4/1/95 ACT/360
7.403% 0.143% 0.100% 7.260% 7/20/98 9/1/98 ACT/360
7.064% 0.143% 0.100% 6.921% 8/26/98 10/1/98 ACT/360
7.750% 0.143% 0.100% 7.607% 10/24/98 12/1/98 ACT/360
8.000% 0.143% 0.100% 7.857% 12/11/98 2/1/99 ACT/360
8.650% 0.143% 0.100% 8.507% 12/30/98 2/1/99 ACT/360
8.250% 0.143% 0.100% 8.107% 1/8/97 3/1/97 30/360
8.750% 0.143% 0.100% 8.607% 4/17/97 6/1/97 30/360
9.375% 0.143% 0.100% 9.232% 3/8/95 4/1/95 30/360
7.270% 0.143% 0.100% 7.127% 7/10/98 10/1/98 30/360
7.375% 0.143% 0.100% 7.232% 1/4/96 2/1/96 30/360
8.500% 0.143% 0.100% 8.357% 12/19/96 2/1/97 30/360
9.375% 0.143% 0.100% 9.232% 1/29/93 4/1/93 30/360
8.500% 0.143% 0.100% 8.357% 11/20/95 1/1/96 30/360
8.875% 0.143% 0.100% 8.732% 5/19/97 6/1/97 30/360
8.750% 0.143% 0.100% 8.607% 2/29/96 4/1/96 30/360
9.490% 0.143% 0.100% 9.347% 5/9/94 7/1/94 30/360
9.375% 0.143% 0.100% 9.232% 4/19/95 6/1/95 30/360
===============================================================================================
7.804% 7.663%
===============================================================================================
</TABLE>
<PAGE> 153
<TABLE>
<CAPTION>
ORIGINAL ORIGINAL REMAINING
TERM TO AMORTIZATION TERM TO CROSS- LOCKOUT
MONTHLY MATURITY TERM SEASONING MATURITY MATURITY COLLATERALIZED RELATED EXPIRATION
PAYMENT (MONTHS) (MONTHS)(II) (MONTHS) (MONTHS) DATE LOANS LOANS DATE
------- -------- ------------ -------- -------- ---- ----- ----- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 12,133 120 360 11 109 12/1/08 No No 9/1/08
11,242 180 360 14 166 9/1/13 No No 5/1/13
14,840 120 240 34 86 1/1/07 No No 6/15/98
10,684 180 360 14 166 9/1/13 No Yes(F) 4/30/13
15,621 120 240 74 46 9/1/03 No No
17,187 75 180 56 19 5/23/01 No No
6,926 120 360 15 105 8/1/08 No No 6/1/08
6,696 120 360 14 106 9/1/08 No No 7/2/08
5,624 120 360 12 108 11/1/08 No No 9/1/08
6,020 120 300 10 110 1/1/09 No Yes(AB) 11/1/20
4,607 120 300 10 110 1/1/09 No Yes(AB) 11/1/08
69,281 180 180 33 147 2/1/12 No Yes(AC)
39,203 180 180 30 150 5/1/12 No No
34,187 131 240 56 75 2/1/06 No No
32,221 161 161 14 147 2/1/12 No Yes(AC)
22,910 104 285 46 58 9/1/04 No No
31,019 180 180 34 146 1/1/12 No No
22,796 120 240 80 40 3/1/03 No No
16,105 84 300 47 37 12/1/02 No No
17,658 118 240 30 88 3/1/07 No No
60,425 120 240 44 76 2/28/06 No No
23,760 84 240 65 19 6/1/01 No No
34,601 120 300 54 66 5/1/05 No No
- ----------------------------------------------------------------------------------------------------------
$ 8,934,298 122 312 29 93
==========================================================================================================
<CAPTION>
MONTHLY
PAYMENT PREPAYMENT PENALTY DESCRIPTION (MONTHS) YIELD MAINTENANCE TYPE
------- --------------------------------------- ----------------------
$12,133 LO(117)/OPEN(3)/DEF NAP
11,242 LO(176)/OPEN(4)/DEF NAP
14,840 LO(18)/$250+YM(102) Int. Rate Diff. (Type 1A)
10,684 LO(175)/OPEN(5)/DEF NAP
15,621 YM(120) Int. Rate Diff. (Type 2B)
17,187 OPEN(75) NAP
6,926 LO(118)/OPEN(2)/DEF NAP
6,696 LO(118)/OPEN(2)/DEF NAP
5,624 LO(118)/OPEN(2)/DEF NAP
6,020 LO(118)/OPEN(2)/DEF NAP
4,607 LO(118)/OPEN(2)/DEF NAP
69,281 YM(180) Int. Rate Diff. (Type 1B)
39,203 $250+YM(180) Int. Rate Diff. (Type 1A)
34,187 OPEN(11)/YM(120) Int. Rate Diff. (Type 2A)
32,221 YM(161) Int. Rate Diff. (Type 1B)
22,910 YM(104) Int. Rate Diff. (Type 2A)
31,019 $250+YM(180) Int. Rate Diff. (Type 1A)
22,796 YM(120) Int. Rate Diff. (Type 2B)
16,105 $250+YM(84) Int. Rate Diff. (Type 1A)
17,658 $250+YM(118) Int. Rate Diff. (Type 1A)
60,425 YM(120) Int. Rate Diff. (Type 2A)
23,760 YM(84) Int. Rate Diff. (Type 3A)
34,601 $250+YM(120) Int. Rate Diff. (Type 1A)
- ----------------------------------------------------------------------------------------
$ 8,934,298
========================================================================================
</TABLE>
<PAGE> 154
<TABLE>
<CAPTION>
CUT-OFF
DATE
SE- LOAN APPRAISAL APPRAISAL LTV
QUENCE NUMBER PROPERTY NAME VALUE DATE RATE
- ------ ------ ------------- ----- ---- ----
<S> <C> <C> <C> <C> <C>
C308 51427 Stor-A-Lot $ 2,300,000 10/22/98 71%
C309 51017 A-Safe Mini Storage 2,100,000 6/2/98 75%
P310 3021862 Castro Valley Storage 2,750,000 11/13/96 57%
C311 51083 Plaza 303 - All Storage Self-Storage 2,440,000 7/6/98 63%
P312 8317463 Broadway Public Storage II 2,670,000 6/4/93 57%
P313 3019114 Buffalo Mini-Storage 3,420,000 7/1/95 30%
C314 51206 Discount Storage 1,700,000 5/15/98 58%
C315 51252 American Self Storage 1,450,000 7/17/98 68%
C316 51364 Industrial Blvd Self-Storage 1,050,000 8/11/98 74%
C317 51440 LaSoto Business Park 1,200,000 9/24/98 64%
C318 51416 DeSoto Preferred Storage 800,000 9/24/98 70%
P319 3024635 Folsom Lake Ford 10,910,000 10/31/96 59%
P320 3103405 Act III Theatre 5,230,000 3/10/97 68%
P321A 1867084 Juanita Bay Athletic
P321B 1867084 Pine Lake Club
P321 1867084 Oskoui Health Club Portfolio (Roll-Up) 4,830,000 12/2/94 71%
P322 3024643 Folsom Lake Toyota 5,600,000 10/31/96 56%
P323 3040482 Bellevue Auto Center 4,700,000 5/25/88 61%
P324 3022993 L.A. Fitness Sports Club 5,100,000 11/8/96 55%
P325 1792761 University Volkswagon 4,537,000 9/1/92 46%
P326 3011822 Las Vegas Athletic Club 2,840,000 10/20/95 67%
P327 3005691 Lynnwood Auto Center 2,880,000 3/14/97 65%
P328 4540613 Inn at the Market 11,800,000 8/1/95 53%
P329 2092120 Best Western Anaheim Inn 3,800,000 2/14/94 59%
P330 3006723 670 West 17th Street 5,400,000 2/23/95 70%
- -----------------------------------------------------------------------------------------------------------
Totals/Weighted Average 67%
===========================================================================================================
<CAPTION>
TOTAL SF/ LOAN
UNITS/ UNIT/ NET BALANCE PER
SE- LOAN YEAR BUILT/ ROOM/ ROOM/ RENTABLE SF/UNIT/
QUENCE NUMBER RENOVATED BED BED AREA (SF) ROOM/BED
- ------ ------ --------- --- --- --------- --------
<S> <C> <C> <C> <C> <C> <C>
C308 51427 1988 36,720 SF 36,720 $ 44
C309 51017 1997 52,525 SF 52,525 30
P310 3021862 1987 40,290 SF 40,290 39
C311 51083 1997 49,571 SF 49,571 31
P312 8317463 1991 175,992 SF 175,992 9
P313 3019114 1995 68,014 SF 68,014 15
C314 51206 1990/1996 56,729 SF 56,729 17
C315 51252 1985 43,256 SF 43,256 23
C316 51364 1985/1997 12,394 SF 12,394 63
C317 51440 1985 46,278 SF 46,278 17
C318 51416 1986 29,775 SF 29,775 19
P319 3024635 1994 81,344 SF 81,344 79
P320 3103405 1996 38,253 SF 38,253 93
P321A 1867084 1981/1995 28,939 SF 28,939
P321B 1867084 1995 36,960 SF 36,960
P321 1867084 65,899 SF 65,899 52
P322 3024643 1994 40,070 SF 40,070 78
P323 3040482 1962/1984 37,850 SF 37,850 76
P324 3022993 1996 41,000 SF 41,000 69
P325 1792761 1928/1985 48,590 SF 48,590 43
P326 3011822 1981/1994 40,000 SF 40,000 47
P327 3005691 1986 21,412 SF 21,412 88
P328 4540613 1985 70 Rooms 71,150 89,906
P329 2092120 1984/1994 88 Rooms 32,000 25,539
P330 3006723 1974 107,084 SF 107,084 35
- ------------------------------------------------------------------------------------------------
================================================================================================
</TABLE>
<PAGE> 155
ANNEX A
CERTAIN CHARACTERISTICS OF THE MORTGAGES LOANS
<TABLE>
<CAPTION>
U/W Most
Occupancy Cash U/W Recent
Occupancy As of U/W U/W U/W Flow U/W Reserves End
Percent Date Revenues Expenses Cash Flow DSCR Reserves Per Unit Date
------- ---- -------- -------- --------- ---- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
96% 10/31/98 $ 329,217 $ 134,753 $ 189,272 1.30 $ 5,192 $ 0.14 12/31/97
87% 5/8/98 309,902 109,054 192,969 1.43 7,879 0.15 12/31/98
91% 1/30/99 517,691 195,871 315,776 1.77 6,044 0.15 12/31/98
100% 6/30/98 320,004 132,535 181,531 1.42 5,938 0.12 12/31/98
98% 4/18/99 540,471 157,526 356,546 1.90 26,399 0.15 12/31/98
96% 12/31/98 611,887 251,505 347,909 1.69 12,473 0.18 12/31/98
97% 12/31/98 223,841 64,248 153,920 1.85 5,673 0.10 12/31/98
89% 11/30/98 226,936 102,560 119,435 1.49 4,941 0.11
88% 11/30/98 167,482 75,566 90,057 1.33 1,859 0.15 12/31/97
95% 10/27/98 242,363 120,207 117,526 1.63 4,630 0.10 12/31/98
98% 2/26/99 155,261 82,616 69,650 1.26 2,995 0.10 12/31/98
100% 3/5/99 1,143,420 57,635 1,013,491 1.22 16,269 0.20 12/31/98
100% 1/15/97 542,048 10,841 523,556 1.11 7,651 0.20 12/31/98
100% 12/31/98
100% 12/31/98
812,100 40,605 689,912 1.68 16,475 0.25 12/31/98
100% 3/5/99 570,997 29,014 506,371 1.31 8,014 0.20 12/31/98
100% 3/30/99 533,367 82,733 420,460 1.53 9,463 0.25 12/31/98
100% 12/31/98 533,992 21,961 476,631 1.28 8,200 0.20 12/31/98
100% 4/14/98 456,000 22,800 389,201 1.42 12,148 0.25 12/31/97
100% 4/12/99 287,280 8,618 241,397 1.25 10,000 0.25 12/31/98
100% 2/19/99 343,521 71,261 255,912 1.21 5,353 0.25 12/31/98
90% 12/1/98 4,332,837 2,993,217 1,122,978 1.55 216,642 3,094.89 12/31/98
83% 12/31/98 1,797,525 1,191,913 515,736 1.81 89,876 1,021.32 12/31/98
95% 2/12/99 901,083 259,478 600,922 1.45 18,667 0.17 12/31/98
- ---------------------------------------------------------------------------------------------------------------------------
1.38
===========================================================================================================================
<CAPTION>
Most 2nd
Recent Most
Occupancy Most Most Most Cash Recent
Occupancy As of Recent Recent Recent Flow End
Percent Date Revenues Expenses Cash Flow DSCR Date
- --------- ------- -------- --------- --------- ---- -------
<S> <C> <C> <C> <C> <C> <C>
96% 10/31/98 $ 321,835 $ 118,799 $ 203,036 1.39 12/31/96
87% 5/8/98 339,506 96,403 243,103 1.80
91% 1/30/99 517,691 192,392 325,299 1.83 12/31/97
100% 6/30/98 323,117 133,733 187,090 1.46
98% 4/18/99 568,917 122,534 446,383 2.38 12/31/97
96% 12/31/98 611,887 208,043 403,844 1.96 12/31/97
97% 12/31/98 240,360 36,002 204,358 2.46 12/31/97
89% 11/30/98
88% 11/30/98 159,102 53,193 105,909 1.57 12/31/96
95% 10/27/98 274,190 88,185 163,925 2.27 12/31/97
98% 2/26/99 174,479 71,736 102,743 1.86 12/31/97
100% 3/5/99 1,203,600 464 1,203,136 1.45 12/31/97
100% 1/15/97 531,420 531,420 1.13 12/31/97
100% 12/31/98
100% 12/31/98
854,842 42,742 795,625 1.94 12/31/97
100% 3/5/99 644,400 464 643,936 1.67 12/31/97
100% 3/30/99 560,823 74,065 486,758 1.77 12/31/97
100% 12/31/98 562,083 3,907 558,176 1.50 12/31/97
100% 4/14/98 474,216 474,216 1.73
100% 4/12/99 302,400 302,400 1.56 12/31/97
100% 2/19/99 376,522 67,995 308,527 1.46 12/31/97
90% 12/1/98 4,381,150 2,788,964 1,592,186 2.20
83% 12/31/98 1,948,049 1,272,615 675,434 2.37 12/31/97
95% 2/12/99 950,512 198,462 752,050 1.81 12/31/97
- ------------------------------------------------------------------------------------------------------------------------
=======================================================================================================================
</TABLE>
<PAGE> 156
<TABLE>
<CAPTION>
2ND
MOST LARGEST LARGEST
2ND 2ND 2ND RECENT LARGEST TENANT TENANT
MOST MOST MOST CASH TENANT % OF LEASE
RECENT RECENT RECENT FLOW LEASED TOTAL EXPIRA-
REVENUES EXPENSES CASH FLOW DSCR LARGEST TENANT SF SF TION
---------- ---------- ---------- ------ -------------- -- -- ----
<S> <C> <C> <C> <C> <C> <C> <C>
$ 284,295 $ 101,899 $ 182,396 1.25
497,205 156,302 340,903 1.91
564,980 102,870 462,110 2.47
509,427 187,868 321,559 1.56
201,400 24,971 176,429 2.12
151,273 55,645 95,628 1.42
264,181 106,442 157,739 2.18
168,325 62,691 105,634 1.91
1,203,600 446 1,203,154 1.45 Folsom Lake Ford 81,344 100% 1/1/13
390,750 390,750 0.83 Eastgate Theatre dba Act III 38,253 100% 3/27/22
Columbia Athletic Clubs, Inc. 28,939 100% NAP
Club Sport L.L.C. 36,960 100% NAP
1,045,224 1,045,224 2.55 Club Sport L.L.C. 36,960 56% NAP
644,400 446 643,954 1.67 Folsom Lake Toyota 40,070 100% 1/1/13
530,276 78,698 451,578 1.64 Bellevue Mitsubishi 32,850 87% 6/30/08
544,805 6,519 538,286 1.45 L.A. Fitness Sports Club 41,000 100% 9/9/11
Freeway Motors, Inc. 48,590 100% 2/28/03
302,400 302,400 1.56 Las Vegas Athletic Club 40,000 100% 6/30/04
355,232 68,047 287,185 1.36 Big O Tires 4,450 21% 5/31/06
Campagne Restaurant 4,110 6% 12/15/07
1,983,927 1,239,728 716,117 2.51
895,112 204,976 690,136 1.66 Hoag Hospital 10,000 9% MTM
- ------------------------------------------------------------------------------------------------------------------
==================================================================================================================
<CAPTION>
SECOND SECOND
SECOND LARGEST LARGEST
LARGEST TENANT TENANT
TENANT % OF LEASE
SECOND LARGEST LEASED TOTAL EXPIRA-
TENANT SF SF TION
------ -- -- ----
<S> <C> <C> <C>
Columbia Athletic Clubs, Inc. 28,939 44% NAP
Bellevue Buick-Pontiac 5,000 13% 6/30/08
Pro-Auto 4,222 20% 4/30/13
Bacco Restaurant 1,070 2% 7/31/00
Rypinski Family Trust 5,000 5% MTM
- -------------------------------------------------------------------
===================================================================
</TABLE>
<PAGE> 157
PREPAYMENT LOCK-OUT/PREPAYMENT ANALYSIS
BASED ON OUTSTANDING PRINCIPAL BALANCE(1)
ALL MORTGAGE LOANS
<TABLE>
<CAPTION>
NOV-1999 NOV-2000 NOV-2001 NOV-2002 NOV-2003 NOV-2004 NOV-2005
--------- --------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out....................................... 46.72% 48.24% 50.93% 46.95% 47.76% 50.78% 56.13%
Yield Maintenance................................ 53.05% 51.04% 48.09% 52.08% 51.69% 48.71% 43.29%
3%............................................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.29%
2%............................................... 0.00% 0.00% 0.36% 0.00% 0.00% 0.00% 0.00%
1%............................................... 0.15% 0.12% 0.09% 0.07% 0.03% 0.00% 0.00%
No Penalty....................................... 0.09% 0.60% 0.52% 0.90% 0.52% 0.51% 0.29%
--------- --------- ------- ------- ------- ------- -------
Total............................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
========= ========= ======= ======= ======= ======= =======
Total Beginning Balance (in millions)(20) $1,115.19 $1,051.76 $962.07 $889.83 $830.91 $768.71 $679.32
Percent of Initial Balance....................... 100.00% 94.31% 86.27% 79.79% 74.51% 68.93% 60.92%
<CAPTION>
NOV-2006 NOV-2007 NOV-2008 NOV-2009 NOV-2010 NOV-2011 NOV-2012
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out....................................... 63.93% 71.05% 42.07% 80.59% 83.49% 75.65% 78.61%
Yield Maintenance................................ 34.95% 17.61% 7.86% 19.41% 16.51% 24.35% 2.15%
3%............................................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2%............................................... 0.34% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1%............................................... 0.00% 0.38% 0.00% 0.00% 0.00% 0.00% 0.00%
No Penalty....................................... 0.78% 10.96% 50.07% 0.00% 0.00% 0.00% 19.24%
------- ------- ------- ------ ------ ------ ------
Total............................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
======= ======= ======= ====== ====== ====== ======
Total Beginning Balance (in millions)(20) $571.43 $498.60 $233.65 $49.71 $43.52 $20.40 $18.27
Percent of Initial Balance....................... 51.24% 44.71% 20.95% 4.46% 3.90% 1.83% 1.64%
<CAPTION>
NOV-2013
--------
<S> <C>
Locked Out....................................... 0.00%
Yield Maintenance................................ 0.00%
3%............................................... 0.00%
2%............................................... 0.00%
1%............................................... 0.00%
No Penalty....................................... 100.00%
------
Total............................................ 100.0%
======
Total Beginning Balance (in millions)(20) $ 6.86
Percent of Initial Balance....................... 0.61%
</TABLE>
(1) Prepayment provisions in effect as a percentage of outstanding loan balances
as of the indicated date assuming no prepayments on the Mortgage Loans,
except that 6% CPR was assumed in the case of the Portfolio Mortgage Loans
after the expiration of the applicable Lock-Out Period, if any.
(2) As of the Cut-off Date.
A-8
<PAGE> 158
PREPAYMENT LOCK-OUT/PREPAYMENT ANALYSIS
BASED ON OUTSTANDING PRINCIPAL BALANCE(1)
CONDUIT MORTGAGE LOANS
<TABLE>
<CAPTION>
NOV-1999 NOV-2000 NOV-2001 NOV-2002 NOV-2003 NOV-2004 NOV-2005
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out......................................... 100.0% 98.49% 96.31% 83.23% 80.79% 81.46% 81.14%
Yield Maintenance.................................. 0.00% 1.51% 3.01% 16.09% 19.21% 18.54% 18.02%
3%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.42%
2%................................................. 0.00% 0.00% 0.67% 0.00% 0.00% 0.00% 0.00%
1%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
No Penalty......................................... 0.00% 0.00% 0.00% 0.68% 0.00% 0.00% 0.42%
------- ------- ------- ------- ------- ------- -------
Total.............................................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
======= ======= ======= ======= ======= ======= =======
Total Beginning Balance (in millions)(2)........... $520.99 $515.17 $508.79 $501.92 $491.18 $479.23 $469.93
Percent of Initial Balance......................... 100.00% 98.88% 97.66% 96.34% 94.28% 91.98% 90.20%
<CAPTION>
NOV-2006 NOV-2007 NOV-2008 NOV-2009 NOV-2010 NOV-2011 NOV-2012
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out......................................... 79.60% 80.93% 44.85% 91.36% 90.75% 81.03% 80.34%
Yield Maintenance.................................. 19.01% 6.15% 1.76% 8.64% 9.25% 18.97% 0.00%
3%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2%................................................. 0.42% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1%................................................. 0.00% 0.43% 0.00% 0.00% 0.00% 0.00% 0.00%
No Penalty......................................... 0.97% 12.48% 53.38% 0.00% 0.00% 0.00% 19.66%
------- ------- ------- ------ ------ ------ ------
Total.............................................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
======= ======= ======= ====== ====== ====== ======
Total Beginning Balance (in millions)(2)........... $458.94 $437.74 $219.16 $43.86 $40.04 $19.05 $17.88
Percent of Initial Balance......................... 88.09% 84.02% 42.07% 8.42% 7.69% 3.66% 3.43%
<CAPTION>
NOV-2013
--------
<S> <C>
Locked Out......................................... 0.00%
Yield Maintenance.................................. 0.00%
3%................................................. 0.00%
2%................................................. 0.00%
1%................................................. 0.00%
No Penalty......................................... 100.00%
------
Total.............................................. 100.00%
======
Total Beginning Balance (in millions)(2)........... $ 6.86
Percent of Initial Balance......................... 1.32%
</TABLE>
(1) Prepayment provisions in effect as a percentage of outstanding loan balances
as of the indicated date assuming no prepayments on the Conduit Mortgage
Loans.
(2) As of the Cut-off Date.
A-9
<PAGE> 159
PREPAYMENT LOCK-OUT/PREPAYMENT ANALYSIS
BASED ON OUTSTANDING PRINCIPAL BALANCE(1)
PORTFOLIO MORTGAGE LOANS
<TABLE>
<CAPTION>
NOV-1999 NOV-2000 NOV-2001 NOV-2002 NOV-2003 NOV-2004 NOV-2005
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out......................................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Yield Maintenance.................................. 99.56% 98.59% 98.69% 98.65% 98.66% 98.64% 100.00%
3%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1%................................................. 0.27% 0.24% 0.20% 0.15% 0.08% 0.00% 0.00%
No Penalty......................................... 0.17% 1.17% 1.11% 1.20% 1.26% 1.36% 0.00%
------- ------- ------- ------- ------- ------- -------
Total.............................................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
======= ======= ======= ======= ======= ======= =======
Total Beginning Balance (in millions)(2)........... $594.20 $536.59 $453.28 $387.91 $339.73 $289.48 $209.40
Percent of Initial Balance......................... 100.00% 90.30% 76.28% 65.28% 57.17% 48.72% 35.24%
<CAPTION>
NOV-2006 NOV-2007 NOV-2008 NOV-2009 NOV-2010 NOV-2011 NOV-2012
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Locked Out......................................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Yield Maintenance.................................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
3%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
2%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
1%................................................. 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
No Penalty......................................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
------- ------ ------ ------ ------ ------ ------
Total.............................................. 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
======= ====== ====== ====== ====== ====== ======
Total Beginning Balance (in millions)(2)........... $112.48 $60.86 $14.49 $ 5.86 $ 3.48 $ 1.35 $ 0.39
Percent of Initial Balance......................... 18.93% 10.24% 2.44% 0.99% 0.59% 0.23% 0.07%
<CAPTION>
NOV-2013
--------
<S> <C>
Locked Out......................................... 0.00%
Yield Maintenance.................................. 0.00%
3%................................................. 0.00%
2%................................................. 0.00%
1%................................................. 0.00%
No Penalty......................................... 0.00%
------
Total.............................................. 0.00%
======
Total Beginning Balance (in millions)(2)........... $ 0.00
Percent of Initial Balance......................... 0.00%
</TABLE>
(1) Prepayment provisions in effect as a percentage of outstanding loan balances
as of the indicated date assuming 6% CPR in the case of the Portfolio
Mortgage Loans after the expiration of the applicable Lock-Out Period, if
any.
(2) As of the Cut-off Date.
A-10
<PAGE> 160
PROPERTY TYPE -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE MIN/MAX AVERAGE
MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING UNDERWRITING CUT-OFF DATE
PROPERTY TYPE PROPERTIES PROPERTIES BALANCE BALANCE DSCR DSCR LTV RATIO
------------- ---------- ---------- -------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Multifamily.......... 110 31.2% $ 358,476,019 32.1% 1.40x 1.10/4.88x 68.0%
Retail............... 80 22.7% 292,716,561 26.2% 1.31x 1.12/2.32x 70.3%
Industrial........... 63 17.8% 150,966,724 13.5% 1.39x 1.11/2.83x 64.7%
Office............... 42 11.9% 147,560,008 13.2% 1.32x 1.11/1.81x 69.3%
Health Care.......... 13 3.7% 59,342,777 5.3% 1.59x 1.15/4.61x 63.0%
Mobile Home.......... 13 3.7% 35,631,889 3.2% 1.42x 1.20/2.95x 63.1%
Mini Storage......... 19 5.4% 30,148,455 2.7% 1.62x 1.26/2.00x 58.3%
Special Purpose...... 10 2.8% 28,027,440 2.5% 1.33x 1.11/1.68x 60.9%
Hotel................ 2 0.6% 8,540,909 0.8% 1.62x 1.55/1.81x 54.9%
Mixed Use............ 1 0.3% 3,775,967 0.3% 1.45x 1.45/1.45x 69.9%
--- ----- -------------- ----- ---- --------- ----
Total/Wtd Avg........ 353 100.0% $1,115,186,748 100.0% 1.38x 1.10/4.88x 67.4%
=== ===== ============== ===== ==== ========= ====
<CAPTION>
WEIGHTED
MIN/MAX AVERAGE
CUT-OFF DATE MORTGAGE
PROPERTY TYPE LTV RATIO RATE
------------- ------------ --------
<S> <C> <C>
Multifamily.......... 21.9/79.8% 7.539%
Retail............... 30.7/82.0% 7.734%
Industrial........... 22.4/80.6% 8.092%
Office............... 24.0/82.0% 7.696%
Health Care.......... 41.9/73.7% 8.482%
Mobile Home.......... 24.7/72.4% 7.840%
Mini Storage......... 29.5/75.5% 8.257%
Special Purpose...... 45.8/70.7% 8.420%
Hotel................ 53.3/59.1% 8.945%
Mixed Use............ 69.9/69.9% 9.375%
--------- -----
Total/Wtd Avg........ 21.9/82.0% 7.804%
========= =====
</TABLE>
CUT-OFF DATE BALANCES -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
CUT-OFF DATE MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
BALANCES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- -------------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
$317,179 -- $999,999.... 32 9.7% $ 24,353,436 2.2% 1.45x 66.5% 7.759%
$1,000,000 -- $1,999,999... 101 30.6% 166,731,110 15.0% 1.55x 62.5% 8.010%
$2,000,000 -- $2,999,999... 76 23.0% 189,680,353 17.0% 1.40x 65.2% 7.815%
$3,000,000 -- $3,999,999... 43 13.0% 148,473,817 13.3% 1.40x 64.9% 8.040%
$4,000,000 -- $4,999,999... 26 7.9% 115,028,417 10.3% 1.36x 69.7% 7.776%
$5,000,000 -- $7,499,999... 25 7.6% 148,055,631 13.3% 1.33x 66.4% 8.115%
$7,500,000 -- $9,999,999... 12 3.6% 102,622,821 9.2% 1.33x 69.3% 7.726%
$10,000,000 -- $14,999,999... 11 3.3% 126,269,977 11.3% 1.32x 71.8% 7.536%
$20,000,000 -- $25,919,852... 4 1.2% 93,971,185 8.4% 1.24x 75.4% 7.050%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg............... 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
A-11
<PAGE> 161
GEOGRAPHIC DISTRIBUTION(1) -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MORTGAGED MORTGAGED CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
PROPERTY LOCATION PROPERTIES PROPERTIES BALANCE BALANCE DSCR LTV RATIO RATE
----------------- ---------- ---------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
CA................... 132 37.4% $ 399,756,342 35.8% 1.37x 64.8% 8.127%
Los Angeles........ 37 10.5% 96,108,911 8.6% 1.41x 63.7% 8.087%
Sacramento......... 8 2.3% 53,198,189 4.8% 1.25x 69.3% 7.576%
Orange............. 21 5.9% 48,070,771 4.3% 1.48x 60.7% 8.317%
Riverside.......... 7 2.0% 27,763,374 2.5% 1.30x 67.5% 8.214%
Santa Clara........ 7 2.0% 26,298,703 2.4% 1.26x 64.5% 8.886%
Ventura............ 5 1.4% 25,626,776 2.3% 1.47x 62.0% 8.649%
San Diego.......... 8 2.3% 21,365,130 1.9% 1.33x 64.8% 8.709%
Alameda............ 8 2.3% 15,475,879 1.4% 1.34x 66.9% 7.785%
Contra Costa....... 4 1.1% 14,289,842 1.3% 1.19x 71.7% 7.493%
San Luis Obispo.... 1 0.3% 10,803,864 1.0% 1.19x 74.5% 7.500%
Other Counties..... 26 7.4% 60,754,904 5.4% 1.44x 61.9% 8.079%
NV................... 27 7.6% 118,634,985 10.6% 1.32x 68.4% 7.723%
WA................... 37 10.5% 116,180,280 10.4% 1.53x 64.9% 8.087%
FL................... 16 4.5% 89,820,903 8.1% 1.28x 73.1% 7.223%
AZ................... 27 7.6% 60,790,914 5.5% 1.50x 67.2% 7.692%
TX................... 14 4.0% 59,718,065 5.4% 1.36x 66.9% 7.070%
OR................... 15 4.2% 55,278,972 5.0% 1.33x 66.7% 8.050%
VA................... 8 2.3% 26,193,949 2.3% 1.36x 71.5% 7.713%
NJ................... 7 2.0% 25,979,179 2.3% 1.32x 69.4% 7.681%
NC................... 6 1.7% 23,941,967 2.1% 1.29x 79.5% 7.265%
IL................... 9 2.5% 19,457,897 1.7% 1.31x 77.8% 6.928%
NY................... 9 2.5% 17,094,443 1.5% 1.31x 71.8% 7.317%
LA................... 1 0.3% 10,139,434 0.9% 1.35x 79.5% 6.840%
MN................... 9 2.5% 8,512,053 0.8% 1.43x 74.4% 7.895%
GA................... 4 1.1% 8,245,594 0.7% 1.31x 75.4% 7.748%
MO................... 3 0.8% 7,362,832 0.7% 1.30x 68.8% 7.727%
AK................... 4 1.1% 7,074,990 0.6% 1.49x 66.1% 8.470%
NM................... 2 0.6% 7,062,826 0.6% 1.49x 51.3% 7.689%
ID................... 3 0.8% 6,899,505 0.6% 1.39x 66.1% 8.043%
OK................... 3 0.8% 6,886,701 0.6% 1.79x 63.8% 7.399%
NE................... 1 0.3% 6,638,970 0.6% 1.27x 71.0% 7.470%
AL................... 3 0.8% 5,972,973 0.5% 2.73x 43.5% 7.994%
WI................... 1 0.3% 4,806,900 0.4% 1.20x 76.9% 7.750%
KY................... 1 0.3% 4,407,633 0.4% 1.36x 72.3% 7.140%
IN................... 3 0.8% 4,131,865 0.4% 1.35x 64.6% 7.740%
KS................... 2 0.6% 3,761,671 0.3% 1.28x 75.0% 6.943%
MA................... 1 0.3% 2,759,241 0.2% 1.25x 77.1% 7.010%
UT................... 1 0.3% 2,552,183 0.2% 1.30x 67.7% 6.850%
CO................... 2 0.6% 2,031,991 0.2% 1.33x 66.9% 7.680%
AR................... 1 0.3% 1,896,276 0.2% 2.25x 31.6% 7.940%
PA................... 1 0.3% 1,195,213 0.1% 1.25x 79.7% 8.305%
--- ----- -------------- ----- ---- ---- -----
Total/Weighted
Average............ 353 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
- ---------------
(1) States or counties in which the respective Mortgaged Properties are located.
For Mortgage Loans secured by multiple properties, the Cut-Off Date Balance
is allocated.
A-12
<PAGE> 162
UNDERWRITING DEBT SERVICE COVERAGE RATIO -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
UNDERWRITING MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
DSCRS LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1.10x -- 1.19x....... 29 8.8% $ 87,982,085 7.9% 1.15x 65.8% 8.395%
1.20x -- 1.24x....... 36 10.9% 196,698,985 17.6% 1.22x 70.3% 7.677%
1.25x -- 1.29x....... 74 22.4% 260,634,848 23.4% 1.27x 72.6% 7.558%
1.30x -- 1.34x....... 48 14.5% 164,293,679 14.7% 1.32x 69.8% 7.633%
1.35x -- 1.39x....... 30 9.1% 89,292,897 8.0% 1.37x 65.9% 7.975%
1.40x -- 1.49x....... 37 11.2% 115,674,650 10.4% 1.44x 66.3% 7.607%
1.50x -- 1.59x....... 25 7.6% 76,088,188 6.8% 1.54x 63.7% 8.013%
1.60x -- 1.69x....... 15 4.5% 46,771,388 4.2% 1.63x 59.0% 8.587%
1.70x -- 1.79x....... 8 2.4% 22,666,768 2.0% 1.73x 58.9% 7.884%
1.80x -- 1.89x....... 6 1.8% 10,328,073 0.9% 1.82x 54.2% 8.267%
1.90x -- 1.99x....... 6 1.8% 10,904,017 1.0% 1.95x 56.2% 8.294%
2.00x -- 2.99x....... 13 3.9% 28,285,400 2.5% 2.42x 44.4% 8.119%
3.00x -- 4.88x....... 3 0.9% 5,565,769 0.5% 4.28x 36.9% 7.801%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
ASSUMED DEBT SERVICE COVERAGE RATIO(1) -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
RANGE OF MORTGAGE MORTGAGE CUT-OFF DATE POOL ASSUMED CUT-OFF DATE MORTGAGE
ASSUMED DSCRS LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1.12x -- 1.19x....... 19 5.8% $ 101,110,797 9.1% 1.16x 72.9% 6.903%
1.20x -- 1.24x....... 18 5.5% 123,090,241 11.0% 1.22x 76.4% 7.162%
1.25x -- 1.29x....... 25 7.6% 93,655,151 8.4% 1.27x 75.5% 7.312%
1.30x -- 1.34x....... 32 9.7% 101,586,895 9.1% 1.32x 74.2% 7.420%
1.35x -- 1.39x....... 31 9.4% 86,388,551 7.7% 1.37x 68.2% 7.682%
1.40x -- 1.49x....... 55 16.7% 177,471,967 15.9% 1.44x 67.4% 7.880%
1.50x -- 1.59x....... 33 10.0% 104,553,432 9.4% 1.54x 67.6% 8.290%
1.60x -- 1.69x....... 19 5.8% 53,992,490 4.8% 1.64x 63.5% 8.109%
1.70x -- 1.79x....... 22 6.7% 62,091,710 5.6% 1.74x 63.3% 8.269%
1.80x -- 1.89x....... 15 4.5% 52,938,475 4.7% 1.85x 61.9% 8.656%
1.90x -- 1.99x....... 13 3.9% 41,276,601 3.7% 1.93x 61.5% 8.226%
2.00x -- 2.99x....... 34 10.3% 89,260,099 8.0% 2.33x 51.8% 8.724%
3.00x -- 5.88x....... 14 4.2% 27,770,339 2.5% 3.94x 38.2% 8.237%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.57x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
- ---------------
(1) Assumed DSCR is the ratio of the Underwriting Cash Flow to a Debt Service
payment based on an 8.5% constant.
A-13
<PAGE> 163
CUT-OFF DATE LOAN-TO-VALUE RATIO -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
CUT-OFF DATE MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
LTV RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
21.87% -- 29.9%...... 6 1.8% $ 8,139,301 0.7% 2.65x 24.1% 7.684%
30.0 % -- 49.9%...... 28 8.5% 62,679,760 5.6% 1.85x 41.7% 8.591%
50.0 % -- 59.9%...... 41 12.4% 110,798,975 9.9% 1.51x 55.5% 8.347%
60.0 % -- 64.9%...... 51 15.5% 179,668,921 16.1% 1.42x 62.9% 8.032%
65.0 % -- 69.9%...... 77 23.3% 236,531,721 21.2% 1.31x 67.4% 8.057%
70.0 % -- 74.9%...... 72 21.8% 281,030,489 25.2% 1.30x 72.7% 7.546%
75.0 % -- 79.9%...... 51 15.5% 218,260,017 19.6% 1.29x 78.0% 7.203%
80.0 % -- 82.03%..... 4 1.2% 18,077,564 1.6% 1.24x 81.6% 7.509%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
MATURITY DATE LOAN-TO-VALUE RATIO -- ALL LOANS
<TABLE>
<CAPTION>
WEIGHTED
% OF WEIGHTED AVERAGE WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE MATURITY AVERAGE
MATURITY DATE MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING DATE MORTGAGE
LTV RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
0.00% -- 24.9%...... 26 7.9% $ 59,641,642 5.3% 1.51x 2.9% 8.284%
25.0 % -- 49.9%...... 60 18.2% 153,645,114 13.8% 1.63x 39.3% 8.225%
50.0 % -- 59.9%...... 97 29.4% 341,314,418 30.6% 1.37x 56.0% 7.980%
60.0 % -- 64.9%...... 68 20.6% 237,777,181 21.3% 1.32x 62.1% 7.810%
65.0 % -- 69.9%...... 62 18.8% 248,906,533 22.3% 1.31x 67.0% 7.268%
70.0 % -- 74.9%...... 13 3.9% 60,661,574 5.4% 1.27x 71.0% 7.457%
75.0 % -- 80.40%..... 4 1.2% 13,240,284 1.2% 1.31x 76.7% 7.804%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 55.7% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
A-14
<PAGE> 164
MORTGAGE RATES -- ALL LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
MORTGAGE MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
RATES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- -------------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
6.348% -- 6.499%....... 2 0.6% $ 4,864,366 0.4% 1.30x 79.1% 6.390%
6.500% -- 6.999%....... 29 8.8% 133,479,507 12.0% 1.36x 73.1% 6.791%
7.000% -- 7.249%....... 32 9.7% 143,312,515 12.9% 1.30x 73.5% 7.127%
7.250% -- 7.499%....... 42 12.7% 169,885,396 15.2% 1.36x 71.1% 7.320%
7.500% -- 7.749%....... 37 11.2% 121,197,567 10.9% 1.33x 67.8% 7.592%
7.750% -- 7.999%....... 45 13.6% 134,991,710 12.1% 1.43x 65.0% 7.869%
8.000% -- 8.499%....... 61 18.5% 162,292,314 14.6% 1.45x 63.7% 8.184%
8.500% -- 8.999%....... 57 17.3% 162,449,988 14.6% 1.45x 62.4% 8.648%
9.000% -- 9.499%....... 15 4.5% 48,634,793 4.4% 1.33x 62.5% 9.148%
9.500% -- 9.999%....... 6 1.8% 18,858,888 1.7% 1.40x 55.5% 9.772%
10.000% -- 10.375%...... 4 1.2% 15,219,703 1.4% 1.38x 55.6% 10.270%
--- ----- -------------- ----- ---- ---- ------
Total/Wtg Avg........... 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== ======
</TABLE>
ORIGINAL TERM TO MATURITY -- ALL LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
ORIGINAL TERM NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
TO MATURITY MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- -------------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
60..................... 5 1.5% $ 18,020,477 1.6% 1.49x 69.3% 8.296%
61 -- 83.............. 3 0.9% 8,288,826 0.7% 1.60x 57.9% 8.069%
84..................... 31 9.4% 83,029,009 7.4% 1.42x 63.4% 8.385%
85 -- 99.............. 3 0.9% 10,482,413 0.9% 1.36x 60.4% 8.330%
100 -- 119.............. 14 4.2% 48,626,087 4.4% 1.57x 64.4% 7.799%
120..................... 227 68.8% 774,209,133 69.4% 1.36x 68.8% 7.662%
121 -- 139.............. 10 3.0% 39,107,409 3.5% 1.50x 63.5% 8.608%
140 -- 179.............. 9 2.7% 54,310,064 4.9% 1.33x 72.2% 7.492%
180..................... 26 7.9% 75,936,820 6.8% 1.33x 60.0% 8.185%
240..................... 1 0.3% 1,551,460 0.1% 1.36x 59.9% 8.400%
355..................... 1 0.3% 1,625,049 0.1% 1.81x 24.0% 8.625%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........... 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
ORIGINAL AMORTIZATION TERM (1) -- ALL LOANS
<TABLE>
<CAPTION>
ORIGINAL % OF WEIGHTED WEIGHTED WEIGHTED
AMORTIZATION NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
TERM MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
96 -- 179................. 3 0.9% $ 7,160,808 0.6% 1.24x 39.7% 8.022%
180........................ 19 5.8% 45,415,425 4.1% 1.31x 53.8% 8.426%
181 -- 239................. 2 0.6% 9,378,344 0.8% 1.59x 61.0% 7.598%
240........................ 42 12.7% 122,035,425 10.9% 1.56x 57.6% 8.493%
241 -- 299................. 4 1.2% 17,155,224 1.5% 1.34x 70.2% 7.394%
300........................ 134 40.6% 436,498,983 39.1% 1.39x 66.5% 8.071%
301 -- 359................. 4 1.2% 18,210,664 1.6% 1.38x 61.8% 8.056%
360........................ 122 37.0% 459,331,874 41.2% 1.33x 72.9% 7.313%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg.............. 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
- ---------------
(1) For Mortgage Loans which accrue interest on the basis of actual days elapsed
during each calendar month and a 360-day year, except for Loan Number 51441
which uses the actual amortization term, the amortization term is the term
in which the loan would amortize if interest paid on the basis of a 30-day
month and a 360-day year. The actual amortization term would be longer.
A-15
<PAGE> 165
REMAINING TERM TO MATURITY -- ALL LOANS
<TABLE>
<CAPTION>
RANGE OF
REMAINING NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
TERMS TO OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MATURITY MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- -------------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
3 -- 19............ 12 3.6% $ 32,237,481 2.9% 1.58x 62.4% 8.525%
20 -- 39............ 25 7.6% 73,107,125 6.6% 1.38x 63.9% 8.419%
40 -- 59............ 13 3.9% 37,320,229 3.3% 1.41x 59.7% 8.058%
60 -- 79............ 56 17.0% 209,352,534 18.8% 1.37x 63.1% 8.319%
80 -- 99............ 52 15.8% 180,107,901 16.2% 1.47x 66.5% 8.087%
100 -- 109........... 76 23.0% 285,382,517 25.6% 1.34x 71.9% 7.136%
110 -- 119........... 66 20.0% 189,195,929 17.0% 1.39x 70.8% 7.582%
120 -- 139........... 5 1.5% 43,236,604 3.9% 1.24x 70.9% 7.776%
140 -- 159........... 9 2.7% 27,170,094 2.4% 1.30x 58.2% 8.302%
160 -- 171........... 16 4.8% 38,076,335 3.4% 1.39x 65.4% 7.399%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
REMAINING STATED AMORTIZATION TERMS -- ALL LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
REMAINING AMORT LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
- --------------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
33 -- 149........... 13 3.9% $ 36,040,203 3.2% 1.31x 48.5% 8.624%
150 -- 174........... 14 4.2% 25,436,856 2.3% 1.41x 55.5% 8.154%
175 -- 199........... 17 5.2% 66,798,427 6.0% 1.50x 57.2% 8.755%
200 -- 224........... 16 4.8% 37,793,628 3.4% 1.78x 55.3% 8.364%
225 -- 249........... 39 11.8% 118,373,825 10.6% 1.35x 63.7% 8.385%
250 -- 274........... 54 16.4% 195,525,285 17.5% 1.40x 66.5% 8.117%
275 -- 299........... 56 17.0% 174,744,276 15.7% 1.38x 68.3% 7.697%
300 -- 324........... 11 3.3% 46,876,661 4.2% 1.38x 70.6% 7.932%
325 -- 349........... 68 20.6% 274,894,435 24.7% 1.32x 72.8% 7.150%
350 -- 354........... 42 12.7% 138,703,152 12.4% 1.36x 74.2% 7.371%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
SEASONING -- ALL LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
SEASONING MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
6 -- 12............ 95 28.8% $ 295,124,237 26.5% 1.35x 71.6% 7.432%
13 -- 24............ 86 26.1% 320,860,119 28.8% 1.35x 71.0% 7.245%
25 -- 36............ 37 11.2% 108,741,172 9.8% 1.57x 60.9% 8.388%
37 -- 48............ 49 14.8% 178,996,098 16.1% 1.38x 65.0% 8.021%
49 -- 60............ 35 10.6% 140,451,903 12.6% 1.35x 63.2% 8.671%
61 -- 72............ 20 6.1% 53,361,078 4.8% 1.45x 57.6% 8.739%
73 -- 84............ 5 1.5% 12,283,307 1.1% 1.45x 62.2% 8.679%
85 -- 120........... 1 0.3% 2,192,324 0.2% 1.10x 65.9% 8.875%
121 -- 160........... 1 0.3% 1,551,460 0.1% 1.36x 59.9% 8.400%
161 -- 296........... 1 0.3% 1,625,049 0.1% 1.81x 24.0% 8.625%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
A-16
<PAGE> 166
YEAR OF MORTGAGE ORIGINATION -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF-DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
ORIGINATION LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
----------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1974................. 1 0.3% $ 1,625,049 0.1% 1.81x 24.0% 8.625%
1987................. 1 0.3% 1,551,460 0.1% 1.36x 59.9% 8.400%
1990................. 1 0.3% 2,192,324 0.2% 1.10x 65.9% 8.875%
1992................. 1 0.3% 3,594,687 0.3% 1.23x 70.5% 9.130%
1993................. 5 1.5% 10,507,426 0.9% 1.55x 58.3% 8.494%
1994................. 28 8.5% 92,580,079 8.3% 1.38x 58.4% 8.949%
1995................. 49 14.8% 190,279,903 17.1% 1.35x 65.8% 8.161%
1996................. 38 11.5% 124,883,502 11.2% 1.46x 63.2% 8.314%
1997................. 41 12.4% 143,844,499 12.9% 1.48x 64.5% 8.033%
1998................. 122 37.0% 411,380,996 36.9% 1.34x 71.4% 7.204%
1999................. 43 13.0% 132,746,822 11.9% 1.37x 71.9% 7.503%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
YEAR OF MORTGAGE MATURITY -- ALL LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
MATURITY LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- -------------- ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000................. 5 1.5% $ 13,867,509 1.2% 1.48x 66.2% 8.300%
2001................. 14 4.2% 40,222,938 3.6% 1.52x 60.8% 8.757%
2002................. 15 4.5% 41,000,020 3.7% 1.37x 62.6% 8.302%
2003................. 6 1.8% 17,176,566 1.5% 1.45x 66.4% 8.241%
2004................. 13 3.9% 42,745,949 3.8% 1.35x 61.8% 8.238%
2005................. 25 7.6% 101,602,444 9.1% 1.36x 63.1% 8.390%
2006................. 43 13.0% 150,637,284 13.5% 1.38x 64.9% 8.208%
2007................. 28 8.5% 85,928,384 7.7% 1.57x 64.8% 8.137%
2008................. 85 25.8% 324,326,692 29.1% 1.34x 71.4% 7.203%
2009................. 67 20.3% 199,846,229 17.9% 1.38x 70.5% 7.659%
2010................. 3 0.9% 8,257,835 0.7% 1.28x 55.2% 8.312%
2011................. 3 0.9% 30,364,184 2.7% 1.26x 74.5% 7.267%
2012................. 6 1.8% 19,387,773 1.7% 1.22x 59.6% 8.295%
2013................. 11 3.3% 24,660,253 2.2% 1.45x 64.3% 7.523%
2014................. 6 1.8% 15,162,688 1.4% 1.32x 64.7% 7.359%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........ 330 100.0% $1,115,186,748 100.0% 1.38x 67.4% 7.804%
=== ===== ============== ===== ==== ==== =====
</TABLE>
A-17
<PAGE> 167
PROPERTY TYPE -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE MIN/MAX AVERAGE MIN/MAX
MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING UNDERWRITING CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES PROPERTIES BALANCE BALANCE DSCR DSCR LTV RATIO LTV RATIO
------------- ---------- ---------- ------------ ------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Retail............... 54 32.1% $181,337,153 34.8% 1.32x 1.20/1.70x 73.2% 45.6/82.0%
Multifamily.......... 58 34.5% 177,867,850 34.1% 1.38x 1.21/4.88x 73.2% 21.9/79.7%
Office............... 21 12.5% 79,265,739 15.2% 1.27x 1.20/1.58x 74.2% 51.8/79.3%
Industrial........... 18 10.7% 41,824,190 8.0% 1.33x 1.22/1.50x 70.4% 50.5/79.1%
Health Care.......... 6 3.6% 29,172,426 5.6% 1.38x 1.29/1.61x 66.8% 41.9/73.7%
Mini Storage......... 10 6.0% 10,561,586 2.0% 1.45x 1.26/1.85x 68.5% 58.2/75.5%
Mobile Home.......... 1 0.6% 961,214 0.2% 1.31x 1.31/1.31x 67.2% 67.2/67.2%
--- ----- ------------ ----- ---- --------- ---- ---------
168 100.0% $520,990,158 100.0% 1.34x 1.20/4.88x 72.6% 21.9/82.0%
=== ===== ============ ===== ==== ========= ==== =========
<CAPTION>
WEIGHTED
AVERAGE
MORTGAGE
PROPERTY TYPE RATE
------------- --------
<S> <C>
Retail............... 7.329%
Multifamily.......... 7.184%
Office............... 7.128%
Industrial........... 7.377%
Health Care.......... 8.413%
Mini Storage......... 7.722%
Mobile Home.......... 8.000%
-----
7.323%
=====
</TABLE>
CUT-OFF DATE BALANCES -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
CUT-OFF DATE MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
BALANCES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
$317,179 -- $999,999........ 32 20.8% $ 24,353,436 4.7% 1.45x 66.5% 7.759%
$1,000,000 -- $1,999,999...... 41 26.6% 64,725,660 12.4% 1.49x 68.9% 7.430%
$2,000,000 -- $2,999,999...... 33 21.4% 82,620,095 15.9% 1.31x 72.0% 7.227%
$3,000,000 -- $3,999,999...... 9 5.8% 31,785,236 6.1% 1.35x 72.3% 7.413%
$4,000,000 -- $4,999,999...... 12 7.8% 53,465,745 10.3% 1.31x 73.5% 7.368%
$5,000,000 -- $7,499,999...... 12 7.8% 69,245,895 13.3% 1.31x 72.3% 7.391%
$7,500,000 -- $9,999,999...... 5 3.2% 44,599,065 8.6% 1.29x 76.8% 7.291%
$10,000,000 -- $14,999,999...... 7 4.5% 82,143,693 15.8% 1.36x 71.7% 7.221%
$20,000,000 -- $24,328,468...... 3 1.9% 68,051,333 13.1% 1.26x 77.4% 7.176%
--- ----- ------------ ----- ---- ---- -----
154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-18
<PAGE> 168
GEOGRAPHIC DISTRIBUTION(1) -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MORTGAGED MORTGAGED CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
PROPERTY LOCATION PROPERTIES PROPERTIES BALANCE BALANCE DSCR LTV RATIO RATE
----------------- ---------- ---------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
CA.................... 40 23.8% $ 98,333,613 18.9% 1.33x 71.0% 7.214%
Los Angeles......... 14 8.3% 26,662,431 5.1% 1.39x 70.3% 7.078%
Sacramento.......... 1 0.6% 24,328,468 4.7% 1.21x 78.5% 7.040%
Orange.............. 6 3.6% 11,399,663 2.2% 1.45x 61.4% 7.534%
Contra Costa........ 1 0.6% 10,406,468 2.0% 1.20x 74.3% 7.125%
San Diego........... 4 2.4% 8,938,280 1.7% 1.30x 72.0% 7.338%
Santa Barbara....... 1 0.6% 2,464,700 0.5% 1.25x 67.5% 7.620%
San Mateo........... 1 0.6% 2,305,642 0.4% 1.57x 57.6% 7.460%
San Bernardino...... 2 1.2% 1,979,071 0.4% 1.67x 63.2% 7.234%
Santa Clara......... 1 0.6% 1,966,902 0.4% 1.41x 66.7% 6.598%
Alameda............. 2 1.2% 1,740,913 0.3% 1.33x 66.8% 7.543%
Other Counties...... 7 4.2% 6,141,075 1.2% 1.35x 67.3% 7.713%
FL.................... 16 9.5% 89,820,903 17.2% 1.28x 73.1% 7.223%
NV.................... 10 6.0% 60,828,901 11.7% 1.31x 74.8% 7.354%
AZ.................... 15 8.9% 30,171,244 5.8% 1.56x 70.8% 7.197%
TX.................... 11 6.5% 26,419,779 5.1% 1.42x 66.9% 7.316%
VA.................... 8 4.8% 26,193,949 5.0% 1.36x 71.5% 7.713%
NJ.................... 7 4.2% 25,979,179 5.0% 1.32x 69.4% 7.681%
NC.................... 6 3.6% 23,941,967 4.6% 1.29x 79.5% 7.265%
WA.................... 3 1.8% 19,793,196 3.8% 1.40x 74.4% 6.961%
IL.................... 9 5.4% 19,457,897 3.7% 1.31x 77.8% 6.928%
NY.................... 9 5.4% 17,094,443 3.3% 1.31x 71.8% 7.317%
LA.................... 1 0.6% 10,139,434 1.9% 1.35x 79.5% 6.840%
MN.................... 9 5.4% 8,512,053 1.6% 1.43x 74.4% 7.895%
OR.................... 1 0.6% 8,306,850 1.6% 1.29x 71.6% 8.505%
GA.................... 4 2.4% 8,245,594 1.6% 1.31x 75.4% 7.748%
MO.................... 3 1.8% 7,362,832 1.4% 1.30x 68.8% 7.727%
NE.................... 1 0.6% 6,638,970 1.3% 1.27x 71.0% 7.470%
OK.................... 2 1.2% 5,332,951 1.0% 1.88x 63.5% 7.325%
WI.................... 1 0.6% 4,806,900 0.9% 1.20x 76.9% 7.750%
KY.................... 1 0.6% 4,407,633 0.8% 1.36x 72.3% 7.140%
IN.................... 3 1.8% 4,131,865 0.8% 1.35x 64.6% 7.740%
KS.................... 2 1.2% 3,761,671 0.7% 1.28x 75.0% 6.943%
NM.................... 1 0.6% 2,769,706 0.5% 1.26x 79.1% 7.223%
MA.................... 1 0.6% 2,759,241 0.5% 1.25x 77.1% 7.010%
UT.................... 1 0.6% 2,552,183 0.5% 1.30x 67.7% 6.850%
CO.................... 2 1.2% 2,031,991 0.4% 1.33x 66.9% 7.680%
PA.................... 1 0.6% 1,195,213 0.2% 1.25x 79.7% 8.305%
--- ----- ------------ ----- ---- ---- -----
Total/Weighted
Average............. 168 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
- ---------------
(1) States or district in which the respective Mortgaged Properties are located.
For Mortgage Loans secured by multiple properties, the Cut-Off Date Balance
is allocated.
A-19
<PAGE> 169
UNDERWRITING DEBT SERVICE COVERAGE RATIO -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
UNDERWRITING MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
DSCRS LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1.20x -- 1.24x....... 8 5.2% $ 62,736,674 12.0% 1.21x 76.9% 7.157%
1.25x -- 1.29x....... 54 35.1% 191,191,281 36.7% 1.26x 74.5% 7.295%
1.30x -- 1.34x....... 35 22.7% 113,341,545 21.8% 1.32x 72.9% 7.420%
1.35x -- 1.39x....... 17 11.0% 50,983,530 9.8% 1.36x 71.8% 7.371%
1.40x -- 1.49x....... 18 11.7% 64,986,011 12.5% 1.44x 69.9% 7.240%
1.50x -- 1.59x....... 10 6.5% 17,581,699 3.4% 1.53x 65.5% 7.380%
1.60x -- 1.69x....... 3 1.9% 6,959,820 1.3% 1.62x 65.8% 8.231%
1.70x -- 1.79x....... 3 1.9% 4,994,884 1.0% 1.71x 58.7% 7.500%
1.80x -- 1.89x....... 3 1.9% 3,872,436 0.7% 1.81x 57.1% 7.419%
2.00x -- 2.99x....... 2 1.3% 2,354,440 0.5% 2.15x 57.5% 7.356%
3.00x -- 4.88x....... 1 0.6% 1,987,838 0.4% 4.88x 21.9% 6.744%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
CUT-OFF DATE LOAN-TO-VALUE RATIO -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
RANGE OF CUT-OFF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
DATE LTV RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
----------------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
21.87% -- 29.9%...... 2 1.3% $ 2,472,594 0.5% 4.32x 22.7% 6.922%
30.0 % -- 49.9%...... 4 2.6% 3,731,271 0.7% 1.52x 44.2% 8.321%
50.0 % -- 59.9%...... 9 5.8% 10,995,914 2.1% 1.61x 55.1% 7.389%
60.0 % -- 64.9%...... 14 9.1% 49,300,822 9.5% 1.46x 63.1% 7.477%
65.0 % -- 69.9%...... 33 21.4% 86,685,687 16.6% 1.35x 67.7% 7.678%
70.0 % -- 74.9%...... 43 27.9% 147,984,050 28.4% 1.30x 73.4% 7.298%
75.0 % -- 79.9%...... 47 30.5% 207,642,117 39.9% 1.29x 78.0% 7.151%
80.0 % -- 81.97%..... 2 1.3% 12,177,703 2.3% 1.26x 81.6% 7.112%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
MATURITY DATE LOAN-TO-VALUE RATIO -- CONDUIT LOANS
<TABLE>
<CAPTION>
WEIGHTED
RANGE OF % OF WEIGHTED AVERAGE WEIGHTED
MATURITY NUMBER OF % OF AGGREGATE INITIAL AVERAGE MATURITY AVERAGE
DATE LTV MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING DATE MORTGAGE
RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
0.00% -- 24.9%...... 3 1.9% $ 3,064,968 0.6% 3.74x 12.4% 7.130%
25.0 % -- 49.9%...... 21 13.6% 42,019,735 8.1% 1.47x 40.9% 7.391%
50.0 % -- 59.9%...... 36 23.4% 125,979,927 24.2% 1.34x 57.0% 7.499%
60.0 % -- 64.9%...... 32 20.8% 81,189,926 15.6% 1.33x 62.7% 7.505%
65.0 % -- 69.9%...... 49 31.8% 207,526,380 39.8% 1.30x 67.0% 7.114%
70.0 % -- 74.9%...... 12 7.8% 57,708,576 11.1% 1.28x 70.9% 7.390%
75.0 % -- 76.16%..... 1 0.6% 3,500,646 0.7% 1.26x 76.2% 7.350%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 62.0% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-20
<PAGE> 170
MORTGAGE RATES -- CONDUIT LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
MORTGAGE MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
RATES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
6.348% -- 6.499%......... 2 1.3% $ 4,864,366 0.9% 1.30x 79.1% 6.390%
6.500% -- 6.999%......... 28 18.2% 107,559,655 20.6% 1.39x 73.8% 6.807%
7.000% -- 7.249%......... 27 17.5% 131,145,658 25.2% 1.30x 74.6% 7.118%
7.250% -- 7.499%......... 31 20.1% 130,404,140 25.0% 1.33x 72.8% 7.307%
7.500% -- 7.749%......... 19 12.3% 53,650,755 10.3% 1.32x 70.2% 7.594%
7.750% -- 7.999%......... 17 11.0% 42,337,484 8.1% 1.34x 71.9% 7.859%
8.000% -- 8.499%......... 24 15.6% 28,788,373 5.5% 1.37x 68.3% 8.097%
8.500% -- 8.960%......... 6 3.9% 22,239,727 4.3% 1.39x 65.9% 8.637%
--- ----- ------------ ----- ---- ---- -----
Total/Wtg Avg............ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
ORIGINAL TERM TO MATURITY -- CONDUIT LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
ORIGINAL TERM NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
TO MATURITY MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
60...................... 1 0.6% $ 3,500,646 0.7% 1.26x 78.7% 7.350%
84...................... 3 1.9% 7,646,068 1.5% 1.34x 68.5% 7.934%
85 -- 99............... 1 0.6% 4,806,900 0.9% 1.20x 76.9% 7.750%
100 -- 119............... 5 3.2% 13,718,671 2.6% 1.33x 70.3% 7.509%
120...................... 130 84.4% 434,332,625 83.4% 1.34x 72.7% 7.310%
140 -- 179............... 4 2.6% 33,369,988 6.4% 1.24x 78.2% 7.183%
180...................... 10 6.5% 23,615,260 4.5% 1.46x 65.0% 7.364%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg............ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
ORIGINAL AMORTIZATION TERM (1) -- CONDUIT LOANS
<TABLE>
<CAPTION>
ORIGINAL % OF WEIGHTED WEIGHTED WEIGHTED
AMORTIZATION NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
TERM MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
180......................... 2 1.3% $ 1,077,130 0.2% 1.63x 36.9% 7.842%
181 -- 239.................. 1 0.6% 2,712,787 0.5% 1.26x 73.3% 7.250%
240......................... 8 5.2% 21,097,397 4.1% 1.33x 65.6% 7.382%
241 -- 299.................. 2 1.3% 6,688,376 1.3% 1.33x 74.8% 7.340%
300......................... 39 25.3% 117,097,551 22.5% 1.34x 71.0% 7.597%
301 -- 359.................. 2 1.3% 8,480,846 1.6% 1.36x 72.0% 7.761%
360......................... 100 64.9% 363,836,071 69.8% 1.34x 73.7% 7.219%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg............... 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
- ---------------
(1) For Mortgage Loans which accrue interest on the basis of actual days elapsed
during each calendar month and a 360-day year, except for Loan Number 51441
which uses the actual amortization term, the amortization term is the term
in which the loan would amortize if interest paid on the basis of a 30-day
month and a 360-day year. The actual amortization term would be longer.
A-21
<PAGE> 171
REMAINING TERM TO MATURITY -- CONDUIT LOANS
<TABLE>
<CAPTION>
RANGE OF
REMAINING NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
TERMS TO OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MATURITY MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
37 -- 39............ 1 0.6% $ 3,500,646 0.7% 1.26x 78.7% 7.350%
40 -- 59............ 1 0.6% 4,349,016 0.8% 1.32x 68.4% 8.140%
60 -- 79............ 2 1.3% 3,297,051 0.6% 1.36x 68.5% 7.661%
80 -- 99............ 9 5.8% 54,608,035 10.5% 1.29x 73.4% 7.689%
100 -- 109........... 63 40.9% 219,660,958 42.2% 1.32x 73.2% 7.069%
110 -- 119........... 64 41.6% 178,589,204 34.3% 1.38x 71.8% 7.517%
120 -- 139........... 2 1.3% 26,802,619 5.1% 1.21x 78.0% 7.059%
140 -- 159........... 1 0.6% 2,218,388 0.4% 1.34x 79.2% 7.500%
160 -- 171........... 11 7.1% 27,964,241 5.4% 1.45x 67.2% 7.429%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
REMAINING STATED AMORTIZATION TERMS -- CONDUIT LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
REMAINING MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
AMORT LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
170 -- 174........... 2 1.3% $ 1,077,130 0.2% 1.63x 36.9% 7.842%
200 -- 224........... 1 0.6% 2,712,787 0.5% 1.26x 73.3% 7.250%
225 -- 249........... 9 5.8% 23,315,785 4.5% 1.33x 66.9% 7.393%
250 -- 274........... 1 0.6% 4,469,988 0.9% 1.32x 72.6% 7.260%
275 -- 299........... 39 25.3% 117,097,551 22.5% 1.34x 71.0% 7.597%
325 -- 349........... 60 39.0% 233,613,764 44.8% 1.33x 73.3% 7.149%
350 -- 354........... 42 27.3% 138,703,152 26.6% 1.36x 74.2% 7.371%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
SEASONING -- CONDUIT LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
SEASONING MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
6 -- 12............ 92 59.7% $290,199,655 55.7% 1.35x 71.7% 7.435%
13 -- 24............ 61 39.6% 226,441,487 43.5% 1.33x 73.9% 7.162%
25.................. 1 0.6% 4,349,016 0.8% 1.32x 68.4% 8.140%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-22
<PAGE> 172
YEAR OF MORTGAGE ORIGINATION -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
ORIGINATION LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
----------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1997................. 8 5.2% $ 49,857,085 9.6% 1.30x 73.3% 7.726%
1998................. 103 66.9% 338,386,251 65.0% 1.33x 72.8% 7.193%
1999................. 43 27.9% 132,746,822 25.5% 1.37x 71.9% 7.503%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
YEAR OF MORTGAGE MATURITY -- CONDUIT LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
MATURITY LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
2002................. 1 0.6% $ 3,500,646 0.7% 1.26x 78.7% 7.350%
2004................. 1 0.6% 4,349,016 0.8% 1.32x 68.4% 8.140%
2005................. 1 0.6% 934,458 0.2% 1.40x 69.2% 7.500%
2006................. 2 1.3% 7,169,493 1.4% 1.25x 74.1% 7.742%
2007................. 4 2.6% 24,318,299 4.7% 1.27x 73.9% 7.674%
2008................. 67 43.5% 245,143,793 47.1% 1.32x 73.1% 7.134%
2009................. 64 41.6% 178,589,204 34.3% 1.38x 71.8% 7.517%
2010................. 1 0.6% 2,474,151 0.5% 1.25x 72.8% 7.250%
2011................. 2 1.3% 26,546,857 5.1% 1.22x 78.5% 7.078%
2013................. 5 3.2% 12,801,553 2.5% 1.59x 70.2% 7.511%
2014................. 6 3.9% 15,162,688 2.9% 1.32x 64.7% 7.359%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 154 100.0% $520,990,158 100.0% 1.34x 72.6% 7.323%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-23
<PAGE> 173
PROPERTY TYPE -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE MIN/MAX AVERAGE MIN/MAX
MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING UNDERWRITING CUT-OFF DATE CUT-OFF DATE
PROPERTY TYPE PROPERTIES PROPERTIES BALANCE BALANCE DSCR DSCR LTV RATIO LTV RATIO
------------- ---------- ---------- ------------ ------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Multifamily.......... 52 28.1% $180,608,168 30.4% 1.43x 1.10/3.29x 62.9% 30.2/79.8%
Retail............... 26 14.1% 111,379,408 18.7% 1.29x 1.12/2.32x 65.7% 30.7/77.0%
Industrial........... 45 24.3% 109,142,534 18.4% 1.41x 1.11/2.83x 62.6% 22.4/80.6%
Office............... 21 11.4% 68,294,269 11.5% 1.38x 1.11/1.81x 63.7% 24.0/82.0%
Mobile Home.......... 12 6.5% 34,670,674 5.8% 1.42x 1.20/2.95x 63.0% 24.7/72.4%
Health Care.......... 7 3.8% 30,170,351 5.1% 1.79x 1.15/4.61x 59.3% 43.3/70.0%
Special Purpose...... 10 5.4% 28,027,440 4.7% 1.33x 1.11/1.68x 60.9% 45.8/70.7%
Mini Storage......... 9 4.9% 19,586,869 3.3% 1.71x 1.31/2.00x 52.9% 29.5/61.5%
Hotel................ 2 1.1% 8,540,909 1.4% 1.62x 1.55/1.81x 54.9% 53.3/59.1%
Mixed Use............ 1 0.5% 3,775,967 0.6% 1.45x 1.45/1.45x 69.9% 69.9/69.9%
--- ----- ------------ ----- ---- --------- ---- ---------
Total/ Wtd Avg....... 185 100.0% $594,196,590 100.0% 1.42x 1.10/4.61x 62.8% 22.4/82.0%
=== ===== ============ ===== ==== ========= ==== =========
<CAPTION>
WEIGHTED
AVERAGE
MORTGAGE
PROPERTY TYPE RATE
------------- --------
<S> <C>
Multifamily.......... 7.890%
Retail............... 8.395%
Industrial........... 8.366%
Office............... 8.354%
Mobile Home.......... 7.835%
Health Care.......... 8.549%
Special Purpose...... 8.420%
Mini Storage......... 8.545%
Hotel................ 8.945%
Mixed Use............ 9.375%
-----
Total/ Wtd Avg....... 8.227%
=====
</TABLE>
CUT-OFF DATE BALANCES -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
CUT-OFF DATE MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
BALANCES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
$1,010,199 -- $1,999,999...... 60 34.1% $102,005,450 17.2% 1.58x 58.5% 8.378%
$2,000,000 -- $2,999,999...... 43 24.4% 107,060,258 18.0% 1.46x 59.9% 8.268%
$3,000,000 -- $3,999,999...... 34 19.3% 116,688,581 19.6% 1.42x 62.9% 8.211%
$4,000,000 -- $4,999,999...... 14 8.0% 61,562,672 10.4% 1.41x 66.4% 8.130%
$5,000,000 -- $7,499,999...... 13 7.4% 78,809,737 13.3% 1.36x 61.3% 8.750%
$7,500,000 -- $9,999,999...... 7 4.0% 58,023,756 9.8% 1.37x 63.6% 8.061%
$10,000,000 -- $14,999,999...... 4 2.3% 44,126,284 7.4% 1.24x 72.0% 8.123%
$20,000,000 -- $25,919,852...... 1 0.6% 25,919,852 4.4% 1.21x 70.1% 6.720%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg................... 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-24
<PAGE> 174
GEOGRAPHIC DISTRIBUTION(1) -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MORTGAGE MORTGAGED CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
PROPERTY LOCATION PROPERTIES PROPERTIES BALANCE BALANCE DSCR LTV RATIO RATE
----------------- ---------- ---------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
CA.................... 92 49.7% $301,422,730 50.7% 1.38x 62.8% 8.425%
Los Angeles......... 23 12.4% 69,446,480 11.7% 1.41x 61.2% 8.474%
Orange.............. 15 8.1% 36,671,108 6.2% 1.49x 60.5% 8.561%
Sacramento.......... 7 3.8% 28,869,721 4.9% 1.29x 61.6% 8.028%
Riverside........... 6 3.2% 26,837,987 4.5% 1.29x 67.5% 8.222%
Ventura............. 5 2.7% 25,626,776 4.3% 1.47x 62.0% 8.649%
Santa Clara......... 6 3.2% 24,331,801 4.1% 1.25x 64.4% 9.071%
Alameda............. 6 3.2% 13,734,967 2.3% 1.34x 66.9% 7.816%
San Diego........... 4 2.2% 12,426,850 2.1% 1.34x 59.6% 9.694%
San Luis Obispo..... 1 0.5% 10,803,864 1.8% 1.19x 74.5% 7.500%
Sonoma.............. 1 0.5% 7,884,360 1.3% 1.24x 62.1% 7.750%
Other Counties...... 18 9.7% 44,788,816 7.5% 1.46x 61.4% 8.314%
WA.................... 34 18.4% 96,387,085 16.2% 1.56x 63.0% 8.318%
NV.................... 17 9.2% 57,806,084 9.7% 1.32x 61.7% 8.111%
OR.................... 14 7.6% 46,972,122 7.9% 1.34x 65.9% 7.970%
TX.................... 3 1.6% 33,298,286 5.6% 1.31x 66.9% 6.875%
AZ.................... 12 6.5% 30,619,670 5.2% 1.44x 63.6% 8.181%
AK.................... 4 2.2% 7,074,990 1.2% 1.49x 66.1% 8.470%
ID.................... 3 1.6% 6,899,505 1.2% 1.39x 66.1% 8.043%
AL.................... 3 1.6% 5,972,973 1.0% 2.73x 43.5% 7.994%
NM.................... 1 0.5% 4,293,120 0.7% 1.64x 33.3% 7.990%
AR.................... 1 0.5% 1,896,276 0.3% 2.25x 31.6% 7.940%
OK.................... 1 0.5% 1,553,750 0.3% 1.48x 64.7% 7.650%
--- ----- ------------ ----- ---- ---- -----
Total/Weighted
Average............. 185 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
- ---------------
(1) States or district in which the respective Mortgaged Properties are located.
For Mortgage Loans secured by multiple properties, the Cut-Off Date Balance
is allocated.
A-25
<PAGE> 175
UNDERWRITING DEBT SERVICE COVERAGE RATIO -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
UNDERWRITING MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
DSCRS LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1.10x -- 1.19x....... 29 16.5% $ 87,982,085 14.8% 1.15x 65.8% 8.395%
1.20x -- 1.24x....... 28 15.9% 133,962,311 22.5% 1.22x 67.2% 7.920%
1.25x -- 1.29x....... 20 11.4% 69,443,568 11.7% 1.27x 67.4% 8.280%
1.30x -- 1.34x....... 13 7.4% 50,952,134 8.6% 1.32x 63.0% 8.106%
1.35x -- 1.39x....... 13 7.4% 38,309,267 6.4% 1.37x 58.1% 8.779%
1.40x -- 1.49x....... 19 10.8% 50,688,638 8.5% 1.44x 61.6% 8.079%
1.50x -- 1.59x....... 15 8.5% 58,506,490 9.8% 1.54x 63.2% 8.203%
1.60x -- 1.69x....... 12 6.8% 39,811,567 6.7% 1.64x 57.9% 8.649%
1.70x -- 1.79x....... 5 2.8% 17,671,884 3.0% 1.74x 58.9% 7.993%
1.80x -- 1.89x....... 3 1.7% 6,455,637 1.1% 1.83x 52.5% 8.776%
1.90x -- 1.99x....... 6 3.4% 10,904,017 1.8% 1.95x 56.2% 8.294%
2.00x -- 2.99x....... 11 6.3% 25,930,960 4.4% 2.45x 43.2% 8.188%
3.00x -- 4.61x....... 2 1.1% 3,577,931 0.6% 3.95x 45.2% 8.388%
--- ----- ------------ ----- ---- ---- -----
176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
ASSUMED DEBT SERVICE COVERAGE RATIO(1) -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
RANGE OF MORTGAGE MORTGAGE CUT-OFF DATE POOL ASSUMED CUT-OFF DATE MORTGAGE
ASSUMED DSCRS LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1.12x -- 1.19x....... 2 1.1% $ 32,297,188 5.4% 1.13x 69.8% 6.874%
1.20x -- 1.24x....... 2 1.1% 4,398,395 0.7% 1.23x 72.7% 7.695%
1.25x -- 1.29x....... 4 2.3% 13,108,586 2.2% 1.28x 67.6% 7.711%
1.30x -- 1.34x....... 12 6.8% 39,139,019 6.6% 1.32x 71.0% 7.826%
1.35x -- 1.39x....... 9 5.1% 32,538,895 5.5% 1.37x 70.0% 7.981%
1.40x -- 1.49x....... 29 16.5% 107,412,455 18.1% 1.44x 66.5% 8.082%
1.50x -- 1.59x....... 17 9.7% 63,550,847 10.7% 1.54x 66.6% 8.497%
1.60x -- 1.69x....... 16 9.1% 47,498,744 8.0% 1.64x 63.7% 8.185%
1.70x -- 1.79x....... 18 10.2% 58,042,337 9.8% 1.74x 63.8% 8.270%
1.80x -- 1.89x....... 11 6.3% 43,788,564 7.4% 1.85x 62.1% 8.785%
1.90x -- 1.99x....... 13 7.4% 41,276,601 6.9% 1.93x 61.5% 8.226%
2.00x -- 2.99x....... 30 17.0% 85,362,459 14.4% 2.34x 51.6% 8.774%
3.00x -- 5.88x....... 13 7.4% 25,782,501 4.3% 3.90x 39.4% 8.352%
--- ----- ------------ ----- ---- ---- -----
Total/WAV............ 176 100.0% $594,196,590 100.0% 1.76x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
- ---------------
(1) Assumed DSCR is the ratio of the Underwriting Cash Flow to a Debt Service
payment based on an 8.5% constant.
A-26
<PAGE> 176
CUT-OFF DATE LOAN-TO-VALUE RATIO -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
RANGE OF CUT-OFF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
DATE LTV RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
----------------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
22.35% -- 29.9%...... 4 2.3% $ 5,666,707 1.0% 1.92x 24.7% 8.016%
30.0 % -- 49.9%...... 24 13.6% 58,948,489 9.9% 1.87x 41.6% 8.608%
50.0 % -- 59.9%...... 32 18.2% 99,803,061 16.8% 1.50x 55.6% 8.453%
60.0 % -- 64.9%...... 37 21.0% 130,368,099 21.9% 1.41x 62.9% 8.242%
65.0 % -- 69.9%...... 44 25.0% 149,846,034 25.2% 1.29x 67.3% 8.276%
70.0 % -- 74.9%...... 29 16.5% 133,046,438 22.4% 1.30x 72.0% 7.822%
75.0 % -- 79.9%...... 4 2.3% 10,617,900 1.8% 1.31x 78.3% 8.228%
80.0 % -- 82.03%..... 2 1.1% 5,899,861 1.0% 1.21x 81.7% 8.329%
--- ----- ------------ ----- ---- ---- -----
176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
MATURITY DATE LOAN-TO-VALUE RATIO -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
WEIGHTED
RANGE OF % OF WEIGHTED AVERAGE WEIGHTED
MATURITY NUMBER OF % OF AGGREGATE INITIAL AVERAGE MATURITY AVERAGE
DATE LTV MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING DATE MORTGAGE
RATIO(S) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
0.0% -- 24.9%....... 23 13.1% $ 56,576,674 9.5% 1.39x 2.4% 8.347%
25.0% -- 49.9%....... 39 22.2% 111,625,379 18.8% 1.70x 38.7% 8.540%
50.0% -- 59.9%....... 61 34.7% 215,334,491 36.2% 1.38x 55.4% 8.262%
60.0% -- 64.9%....... 36 20.5% 156,587,255 26.4% 1.31x 61.8% 7.969%
65.0% -- 69.9%....... 13 7.4% 41,380,153 7.0% 1.33x 66.9% 8.038%
70.0% -- 74.9%....... 1 0.6% 2,952,999 0.5% 1.17x 73.2% 8.750%
75.0% -- 80.4%....... 3 1.7% 9,739,638 1.6% 1.33x 76.9% 7.967%
--- ----- ------------ ----- ---- ---- -----
176 100.0% $594,196,590 100.0% 1.42x 50.2% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-27
<PAGE> 177
MORTGAGE RATES -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
RANGE OF NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
MORTGAGE MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
RATES LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
6.720% -- 6.999%........ 1 0.6% $ 25,919,852 4.4% 1.21x 70.1% 6.720%
7.000% -- 7.249%........ 5 2.8% 12,166,857 2.0% 1.26x 61.2% 7.219%
7.250% -- 7.499%........ 11 6.3% 39,481,255 6.6% 1.47x 65.5% 7.363%
7.500% -- 7.749%........ 18 10.2% 67,546,811 11.4% 1.34x 65.9% 7.590%
7.750% -- 7.999%........ 28 15.9% 92,654,226 15.6% 1.47x 61.9% 7.874%
8.000% -- 8.499%........ 37 21.0% 133,503,942 22.5% 1.46x 62.7% 8.202%
8.500% -- 8.999%........ 51 29.0% 140,210,261 23.6% 1.46x 61.9% 8.650%
9.000% -- 9.499%........ 15 8.5% 48,634,793 8.2% 1.33x 62.5% 9.148%
9.500% -- 9.999%........ 6 3.4% 18,858,888 3.2% 1.40x 55.5% 9.772%
10.000% -- 10.375%....... 4 2.3% 15,219,703 2.6% 1.38x 55.6% 10.270%
--- ----- ------------ ----- ---- ---- ------
Total/Wtg Avg............ 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== ======
</TABLE>
ORIGINAL TERM TO MATURITY -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
WEIGHTED
WEIGHTED AVERAGE WEIGHTED
ORIGINAL TERM NUMBER OF % OF AGGREGATE % OF AVERAGE CUT-OFF AVERAGE
TO MATURITY MORTGAGE MORTGAGE CUT-OFF DATE INITIAL POOL UNDERWRITING DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------- --------- -------- -------------- ------------ ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
60..................... 4 2.3% $ 14,519,831 2.4% 1.55x 67.1% 8.524%
61 -- 83.............. 3 1.7% 8,288,826 1.4% 1.60x 57.9% 8.069%
84..................... 28 15.9% 75,382,942 12.7% 1.42x 62.9% 8.431%
85 -- 99.............. 2 1.1% 5,675,513 1.0% 1.49x 46.4% 8.821%
100 -- 119.............. 9 5.1% 34,907,417 5.9% 1.66x 62.2% 7.913%
120..................... 97 55.1% 339,876,507 57.2% 1.39x 63.9% 8.113%
121 -- 139.............. 10 5.7% 39,107,409 6.6% 1.50x 63.5% 8.608%
140 -- 179.............. 5 2.8% 20,940,076 3.5% 1.47x 62.6% 7.986%
180..................... 16 9.1% 52,321,560 8.8% 1.27x 57.8% 8.555%
240..................... 1 0.6% 1,551,460 0.3% 1.36x 59.9% 8.400%
355..................... 1 0.6% 1,625,049 0.3% 1.81x 24.0% 8.625%
--- ----- -------------- ----- ---- ---- -----
Total/Wtd Avg........... 176 100.0% $ 594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============== ===== ==== ==== =====
</TABLE>
ORIGINAL AMORTIZATION TERM (1) -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
ORIGINAL % OF WEIGHTED WEIGHTED WEIGHTED
AMORTIZATION NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
TERM MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
------------ --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
96 -- 179.................. 3 1.7% $ 7,160,808 1.2% 1.24x 39.7% 8.022%
180......................... 17 9.7% 44,338,295 7.5% 1.30x 54.2% 8.441%
181 -- 239.................. 1 0.6% 6,665,557 1.1% 1.73x 56.0% 7.740%
240......................... 34 19.3% 100,938,027 17.0% 1.60x 55.9% 8.725%
241 -- 299.................. 2 1.1% 10,466,848 1.8% 1.36x 67.3% 7.429%
300......................... 95 54.0% 319,401,432 53.8% 1.41x 64.8% 8.244%
301 -- 359.................. 2 1.1% 9,729,818 1.6% 1.40x 52.9% 8.313%
360......................... 22 12.5% 95,495,804 16.1% 1.31x 70.1% 7.670%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg............... 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
- ---------------
(1) For Mortgage Loans which accrue interest on the basis of actual days elapsed
during each calendar month and a 360-day year, the amortization term is the
term in which the loan would amortize if interest paid on the basis of a
30-day month and a 360-day year. The actual amortization term would be
longer.
A-28
<PAGE> 178
REMAINING TERM TO MATURITY -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
RANGE OF
REMAINING NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
TERMS TO OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
MATURITY MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
3 -- 19........... 12 6.8% $ 32,237,481 5.4% 1.58x 62.4% 8.525%
20 -- 39........... 24 13.6% 69,606,479 11.7% 1.39x 63.2% 8.473%
40 -- 59........... 12 6.8% 32,971,212 5.5% 1.42x 58.6% 8.048%
60 -- 79........... 54 30.7% 206,055,483 34.7% 1.37x 63.0% 8.329%
80 -- 99........... 43 24.4% 125,499,866 21.1% 1.54x 63.6% 8.260%
100 -- 109........... 13 7.4% 65,721,559 11.1% 1.38x 67.5% 7.359%
110 -- 119........... 2 1.1% 10,606,725 1.8% 1.53x 54.3% 8.673%
120 -- 139........... 3 1.7% 16,433,985 2.8% 1.27x 59.4% 8.944%
140 -- 159........... 8 4.5% 24,951,705 4.2% 1.30x 56.4% 8.373%
160 -- 168........... 5 2.8% 10,112,095 1.7% 1.24x 60.5% 7.317%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
REMAINING STATED AMORTIZATION TERMS -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
REMAINING MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
AMORT LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
33 -- 149........... 13 7.4% $ 36,040,203 6.1% 1.31x 48.5% 8.624%
150 -- 174........... 12 6.8% 24,359,726 4.1% 1.40x 56.3% 8.168%
175 -- 199........... 17 9.7% 66,798,427 11.2% 1.50x 57.2% 8.755%
200 -- 224........... 15 8.5% 35,080,842 5.9% 1.83x 54.0% 8.450%
225 -- 249........... 30 17.0% 95,058,039 16.0% 1.36x 62.9% 8.628%
250 -- 274........... 53 30.1% 191,055,296 32.2% 1.40x 66.4% 8.137%
275 -- 299........... 17 9.7% 57,646,725 9.7% 1.47x 62.7% 7.901%
300 -- 324........... 11 6.3% 46,876,661 7.9% 1.38x 70.6% 7.932%
325 -- 344........... 8 4.5% 41,280,670 6.9% 1.25x 70.1% 7.153%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
SEASONING -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
NUMBER % OF WEIGHTED WEIGHTED WEIGHTED
OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
SEASONING MORTGAGED MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
(MONTHS) LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
--------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
12.................. 3 1.7% $ 4,924,582 0.8% 1.15x 62.4% 7.223%
13 -- 24........... 25 14.2% 94,418,632 15.9% 1.40x 64.0% 7.444%
25 -- 36........... 36 20.5% 104,392,156 17.6% 1.58x 60.6% 8.399%
37 -- 48........... 49 27.8% 178,996,098 30.1% 1.38x 65.0% 8.021%
49 -- 60........... 35 19.9% 140,451,903 23.6% 1.35x 63.2% 8.671%
61 -- 72........... 20 11.4% 53,361,078 9.0% 1.45x 57.6% 8.739%
73 -- 84........... 5 2.8% 12,283,307 2.1% 1.45x 62.2% 8.679%
85 -- 120........... 1 0.6% 2,192,324 0.4% 1.10x 65.9% 8.875%
121 -- 160........... 1 0.6% 1,551,460 0.3% 1.36x 59.9% 8.400%
161 -- 296........... 1 0.6% 1,625,049 0.3% 1.81x 24.0% 8.625%
--- ----- ------------ ----- ---- ---- -----
Total/Wtd Avg........ 176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-29
<PAGE> 179
YEAR OF MORTGAGE ORIGINATION -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
ORIGINATION LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
----------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
1974................. 1 0.6% $ 1,625,049 0.3% 1.81x 24.0% 8.625%
1987................. 1 0.6% 1,551,460 0.3% 1.36x 59.9% 8.400%
1990................. 1 0.6% 2,192,324 0.4% 1.10x 65.9% 8.875%
1992................. 1 0.6% 3,594,687 0.6% 1.23x 70.5% 9.130%
1993................. 5 2.8% 10,507,426 1.8% 1.55x 58.3% 8.494%
1994................. 28 15.9% 92,580,079 15.6% 1.38x 58.4% 8.949%
1995................. 49 27.8% 190,279,903 32.0% 1.35x 65.8% 8.161%
1996................. 38 21.6% 124,883,502 21.0% 1.46x 63.2% 8.314%
1997................. 33 18.8% 93,987,414 15.8% 1.57x 59.8% 8.196%
1998................. 19 10.8% 72,994,745 12.3% 1.36x 64.9% 7.258%
--- ----- ------------ ----- ---- ---- -----
176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
YEAR OF MORTGAGE MATURITY -- PORTFOLIO LOANS
<TABLE>
<CAPTION>
% OF WEIGHTED WEIGHTED WEIGHTED
NUMBER OF % OF AGGREGATE INITIAL AVERAGE AVERAGE AVERAGE
YEAR OF MORTGAGE MORTGAGE CUT-OFF DATE POOL UNDERWRITING CUT-OFF DATE MORTGAGE
MATURITY LOANS LOANS BALANCE BALANCE DSCR LTV RATIO RATE
-------- --------- -------- ------------ ------- ------------ ------------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
2000................. 5 2.8% $ 13,867,509 2.3% 1.48x 66.2% 8.300%
2001................. 14 8.0% 40,222,938 6.8% 1.52x 60.8% 8.757%
2002................. 14 8.0% 37,499,374 6.3% 1.38x 61.1% 8.391%
2003................. 6 3.4% 17,176,566 2.9% 1.45x 66.4% 8.241%
2004................. 12 6.8% 38,396,933 6.5% 1.35x 61.1% 8.249%
2005................. 24 13.6% 100,667,986 16.9% 1.36x 63.0% 8.398%
2006................. 41 23.3% 143,467,791 24.1% 1.38x 64.4% 8.231%
2007................. 24 13.6% 61,610,085 10.4% 1.69x 61.2% 8.319%
2008................. 18 10.2% 79,182,899 13.3% 1.40x 66.1% 7.416%
2009................. 3 1.7% 21,257,026 3.6% 1.39x 60.1% 8.857%
2010................. 2 1.1% 5,783,684 1.0% 1.29x 47.6% 8.766%
2011................. 1 0.6% 3,817,327 0.6% 1.54x 46.3% 8.575%
2012................. 6 3.4% 19,387,773 3.3% 1.22x 59.6% 8.295%
2013................. 6 3.4% 11,858,700 2.0% 1.30x 57.8% 7.535%
--- ----- ------------ ----- ---- ---- -----
176 100.0% $594,196,590 100.0% 1.42x 62.8% 8.227%
=== ===== ============ ===== ==== ==== =====
</TABLE>
A-30
<PAGE> 180
PRE-MERGER BANK OF AMERICA COMMERCIAL MORTGAGE PORTFOLIO
PREPAYMENT RATE (CPR)
The historical prepayment information shown in the following table was
derived from data available on the performance, since January 31, 1998, of all
mortgage loans in the Bank of America NT&SA commercial and multifamily term real
estate loan portfolio prior to the Merger (the "Pre-Merger Bank of America
Portfolio"). In deriving such information, a sample of the Pre-Merger Bank of
America Portfolio was created to analyze fixed rate loans with characteristics
similar to those of the Portfolio Mortgage Loans. The sample excluded loans with
balances below $1.5 million dollars as of December 31, 1997, loans sold, loans
where no prepayment penalties were collected, and amongst other items floating
rate notes. Any prepayments received during the last 6 pay periods including the
maturity date of the mortgage loan were considered to be scheduled principal.
As of January 31, 1998 the sample consisted of approximately 475 mortgage
loans. In general the Portfolio Mortgage Loans that were outstanding on January
31, 1998 would compose a subset of the sample set. We cannot assure you that the
Portfolio Mortgage Loans will exhibit similar prepayment characteristics, nor
can we make any other representation regarding what the actual performance of
the Portfolio Mortgage Loans will be.
<TABLE>
<S> <C>
January 1998............................................. 9.7%
February 1998............................................ 4.0%
March 1998............................................... 17.0%
April 1998............................................... 10.7%
May 1998................................................. 7.8%
June 1998................................................ 3.6%
July 1998................................................ 15.4%
August 1998.............................................. 1.4%
September 1998........................................... 10.8%
October 1998............................................. 5.4%
November 1998............................................ 7.6%
December 1998............................................ 4.0%
January 1999............................................. 1.2%
February 1999............................................ 0.0%
March 1999............................................... 11.7%
April 1999............................................... 2.8%
May 1999................................................. 10.5%
June 1999................................................ 0.0%
July 1999................................................ 1.8%
August 1999.............................................. 7.0%
September 1999........................................... 6.2%
</TABLE>
A-31
<PAGE> 181
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT TO
LOAN IMPROVEMENT IMPROVEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments Multifamily $ 4,767 $ 4,808
C2 51384 Club Mira Lago Apartments Multifamily
P3 3055209 Rancho Palisades Apartments Multifamily
C4 50372 Gessner Apartments Portfolio Multifamily 135,950 93,844 $ 25,000
C5 50389 Sheldon Palms Apartments Multifamily
P6 3102126 Pioneer Ridge Apartments Multifamily
C7 51482 South Point Apartments Multifamily
P8 3102282 SIMA Multifamily Portfolio Multifamily
C9 51047 San Michele Apartments Multifamily
P10 3008489 American River Commons Apartments Multifamily
C11 50523 Tenaya Palms Apartments Multifamily 5,406
P12 3010212 Quail Tree Apartments Multifamily
C13 51024 L8 - Goldfarb Apartments Multifamily 16,500 16,739
C14 50822 Woodglen Apartments Multifamily 5,750 5,835
P15 3007648 Saratoga Palms Multifamily
P16 3014594 Walnut Square Apartments Complex Multifamily
P17 3102233 Crystal Lake Apartments Multifamily
P18 3009024 River Park Apartments Multifamily
P19 3013216 Warren Coronado Apartments Multifamily
P20 3047925 Shoreline Plaza Apartments Multifamily
P21 4540332 Gold Belt Multifamily Portfolio Multifamily
C22 50292 Fayette/Vantage Point/Woodside Village Multifamily 43,125 100,000
P23 3102076 Quail Hill Apartments Multifamily
P24 3040078 Heritage Oaks Apartments Multifamily
P25 1865195 Trailside Apartments Multifamily
P26 3012580 Oak Park Apartments Multifamily
C27 50402 Veranda Apartments Multifamily 4,063 14,500
C28 50985 Mansions South Apartments Multifamily 74,460
P29 3013273 Warren Inn Apartments Multifamily
P30 3016060 Viking Villas Apartments Multifamily
C31 51514 Heritage Trace Apartments Multifamily 143,813 143,813
P32 3018421 Mulberry Hollow Apartments Multifamily
P33 3011269 Amberwood Garden Apartments Multifamily
P34 3101144 Barclay Village Apartments Multifamily
P35 3016565 Garden Hill Apartments Multifamily
P36 4544748 Cedar Meadows Apartments Multifamily
P37 3015872 Tamarack Pointe Villas Multifamily
P38 3021714 Balfour Place Apartments Multifamily
<CAPTION>
ANNUAL
DEPOSIT TO CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments Multifamily $136,488 $ 45,620 Yes
C2 51384 Club Mira Lago Apartments Multifamily 60,800 20,322 Yes
P3 3055209 Rancho Palisades Apartments Multifamily No
C4 50372 Gessner Apartments Portfolio Multifamily 230,850 166,675 Yes
C5 50389 Sheldon Palms Apartments Multifamily 46,800 67,837 No
P6 3102126 Pioneer Ridge Apartments Multifamily No
C7 51482 South Point Apartments Multifamily 76,800 12,809 Yes
P8 3102282 SIMA Multifamily Portfolio Multifamily No
C9 51047 San Michele Apartments Multifamily 21,600 12,669 Yes
P10 3008489 American River Commons Apartments Multifamily No
C11 50523 Tenaya Palms Apartments Multifamily 23,808 28,221 Yes
P12 3010212 Quail Tree Apartments Multifamily No
C13 51024 L8 - Goldfarb Apartments Multifamily 28,620 16,786 Yes
C14 50822 Woodglen Apartments Multifamily 36,850 36,968 Yes
P15 3007648 Saratoga Palms Multifamily No
P16 3014594 Walnut Square Apartments Complex Multifamily No
P17 3102233 Crystal Lake Apartments Multifamily No
P18 3009024 River Park Apartments Multifamily No
P19 3013216 Warren Coronado Apartments Multifamily No
P20 3047925 Shoreline Plaza Apartments Multifamily No
P21 4540332 Gold Belt Multifamily Portfolio Multifamily No
C22 50292 Fayette/Vantage Point/Woodside Village Multifamily 42,336 2,248 Yes
P23 3102076 Quail Hill Apartments Multifamily No
P24 3040078 Heritage Oaks Apartments Multifamily No
P25 1865195 Trailside Apartments Multifamily No
P26 3012580 Oak Park Apartments Multifamily No
C27 50402 Veranda Apartments Multifamily 42,900 26,004 Yes
C28 50985 Mansions South Apartments Multifamily 58,001 Yes
P29 3013273 Warren Inn Apartments Multifamily No
P30 3016060 Viking Villas Apartments Multifamily No
C31 51514 Heritage Trace Apartments Multifamily 54,000 4,500 Yes
P32 3018421 Mulberry Hollow Apartments Multifamily No
P33 3011269 Amberwood Garden Apartments Multifamily No
P34 3101144 Barclay Village Apartments Multifamily No
P35 3016565 Garden Hill Apartments Multifamily No
P36 4544748 Cedar Meadows Apartments Multifamily No
P37 3015872 Tamarack Pointe Villas Multifamily No
P38 3021714 Balfour Place Apartments Multifamily No
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments Multifamily 5/27/99
C2 51384 Club Mira Lago Apartments Multifamily 5/27/99
P3 3055209 Rancho Palisades Apartments Multifamily 5/26/99
C4 50372 Gessner Apartments Portfolio Multifamily 5/25/99
C5 50389 Sheldon Palms Apartments Multifamily 5/27/99
P6 3102126 Pioneer Ridge Apartments Multifamily 5/26/99
C7 51482 South Point Apartments Multifamily 5/27/99
P8 3102282 SIMA Multifamily Portfolio Multifamily 5/26/99
C9 51047 San Michele Apartments Multifamily 5/27/99
P10 3008489 American River Commons Apartments Multifamily 5/26/99
C11 50523 Tenaya Palms Apartments Multifamily 5/26/99
P12 3010212 Quail Tree Apartments Multifamily 5/26/99
C13 51024 L8 - Goldfarb Apartments Multifamily 5/27/99
C14 50822 Woodglen Apartments Multifamily 5/26/99
P15 3007648 Saratoga Palms Multifamily 5/26/99
P16 3014594 Walnut Square Apartments Complex Multifamily 5/26/99
P17 3102233 Crystal Lake Apartments Multifamily 5/26/99
P18 3009024 River Park Apartments Multifamily 5/26/99
P19 3013216 Warren Coronado Apartments Multifamily 5/26/99
P20 3047925 Shoreline Plaza Apartments Multifamily 5/26/99
P21 4540332 Gold Belt Multifamily Portfolio Multifamily 5/26/99
C22 50292 Fayette/Vantage Point/Woodside Village Multifamily 5/25/99
P23 3102076 Quail Hill Apartments Multifamily 5/26/99
P24 3040078 Heritage Oaks Apartments Multifamily 5/26/99
P25 1865195 Trailside Apartments Multifamily 5/26/99
P26 3012580 Oak Park Apartments Multifamily 5/26/99
C27 50402 Veranda Apartments Multifamily 5/25/99
C28 50985 Mansions South Apartments Multifamily 5/25/99
P29 3013273 Warren Inn Apartments Multifamily 5/26/99
P30 3016060 Viking Villas Apartments Multifamily 5/26/99
C31 51514 Heritage Trace Apartments Multifamily 5/25/99
P32 3018421 Mulberry Hollow Apartments Multifamily 5/26/99
P33 3011269 Amberwood Garden Apartments Multifamily 5/26/99
P34 3101144 Barclay Village Apartments Multifamily 5/26/99
P35 3016565 Garden Hill Apartments Multifamily 5/26/99
P36 4544748 Cedar Meadows Apartments Multifamily 5/26/99
P37 3015872 Tamarack Pointe Villas Multifamily 5/26/99
P38 3021714 Balfour Place Apartments Multifamily 5/26/99
</TABLE>
B-1
<PAGE> 182
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT TO
LOAN IMPROVEMENT IMPROVEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P39 3044039 Desert Garden Apartments Multifamily
C40 50731 Border City Mills Multifamily $ 88,609 $ 15,000
P41 3014289 Empire Terrace Apartments Multifamily
P42 1201383 The Park Manor Apartments Multifamily
C43 51082 Cinnamon Tree Apartments Multifamily 42,500 $ 42,980 2,250
C44 51290 Fletcher Valley Apartments Multifamily
P45 3016037 Sierra Vista Square Apartments Multifamily
C46 51462 College Terrace Apartments II Multifamily
C47 51208 Loma Linda Gardens Multifamily
C48 51279 Silver Tree Apartments Multifamily 61,300
P49 3035128 Warren House Apartments Multifamily
C50 51032 Westwood Apartments Multifamily 109,680 38,665
C51 51446 Ross Tower Apartments Multifamily 26,406 120,000
P52 3010428 Pueblo Village Apartments Multifamily
C53 51496 Greenbrier And Village Oaks Apartments Multifamily
P54 3036670 Gilman Terrace Apartments II Multifamily
P55 3034980 Warren House East Apartments Multifamily
C56 51490 Scottsdale Serrento Apartments Multifamily
P57 3012309 Saratoga Palms at Diamond Head Multifamily
P58 3034733 Warren House/Terrace II Apts. Multifamily
P59 3021334 Weddington Apartments Multifamily
C60 51054 Spanish Garden Apartments Multifamily
C61 51517 Camelot West Apartments Multifamily 25,000
P62 3019882 Juniper Court Apartments Multifamily
C63 51485 Oceana Apartments Multifamily
C64 51477 El Caballero Apartments Multifamily
C65 51461 College Terrace Apartments I Multifamily
C66 50378 Buckhead Gardens Apts Multifamily 15,125 4,336
P67 3037876 Warren Village Mobile Multifamily
P68 3037868 Warren Inn (Mobile) Multifamily
C69 51345 Drake Plaza Apartments Multifamily 79,210 79,797
P70 3014420 The Courtyard Apartments Multifamily
P71 3016698 Maryland Gardens Apartments Multifamily
P72 1796796 Upstairs/Downstairs Apartments Multifamily
C73 50401 Colbath Apartments Multifamily 6,500
C74 51031 Stonewood Apartments Multifamily 10,188 2,741
P75 3034998 Park Thomas Apartments Multifamily
C76 50995 232 Front Street Multifamily
<CAPTION>
ANNUAL
DEPOSIT TO CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P39 3044039 Desert Garden Apartments Multifamily No
C40 50731 Border City Mills Multifamily $ 26,500 $ 14,145 Yes
P41 3014289 Empire Terrace Apartments Multifamily No
P42 1201383 The Park Manor Apartments Multifamily No
C43 51082 Cinnamon Tree Apartments Multifamily 23,290 17,853 Yes
C44 51290 Fletcher Valley Apartments Multifamily 8,040 4,705 Yes
P45 3016037 Sierra Vista Square Apartments Multifamily No
C46 51462 College Terrace Apartments II Multifamily 8,800 2,201 Yes
C47 51208 Loma Linda Gardens Multifamily 29,508 22,282 Yes
C48 51279 Silver Tree Apartments Multifamily 29,112 17,066 Yes
P49 3035128 Warren House Apartments Multifamily No
C50 51032 Westwood Apartments Multifamily 42,168 20,940 Yes
C51 51446 Ross Tower Apartments Multifamily 32,398 132,514 Yes
P52 3010428 Pueblo Village Apartments Multifamily No
C53 51496 Greenbrier And Village Oaks Apartments Multifamily 32,800 Yes
P54 3036670 Gilman Terrace Apartments II Multifamily No
P55 3034980 Warren House East Apartments Multifamily No
C56 51490 Scottsdale Serrento Apartments Multifamily No
P57 3012309 Saratoga Palms at Diamond Head Multifamily No
P58 3034733 Warren House/Terrace II Apts. Multifamily No
P59 3021334 Weddington Apartments Multifamily No
C60 51054 Spanish Garden Apartments Multifamily 28,000 18,771 Yes
C61 51517 Camelot West Apartments Multifamily 15,410 1,942 Yes
P62 3019882 Juniper Court Apartments Multifamily No
C63 51485 Oceana Apartments Multifamily Yes
C64 51477 El Caballero Apartments Multifamily Yes
C65 51461 College Terrace Apartments I Multifamily 7,600 1,901 Yes
C66 50378 Buckhead Gardens Apts Multifamily 7,500 9,926 Yes
P67 3037876 Warren Village Mobile Multifamily No
P68 3037868 Warren Inn (Mobile) Multifamily No
C69 51345 Drake Plaza Apartments Multifamily 20,124 5,037 Yes
P70 3014420 The Courtyard Apartments Multifamily No
P71 3016698 Maryland Gardens Apartments Multifamily No
P72 1796796 Upstairs/Downstairs Apartments Multifamily No
C73 50401 Colbath Apartments Multifamily 5,496 14,623 Yes
C74 51031 Stonewood Apartments Multifamily 25,317 12,830 Yes
P75 3034998 Park Thomas Apartments Multifamily No
C76 50995 232 Front Street Multifamily 1,600 1,204 Yes
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P39 3044039 Desert Garden Apartments Multifamily 5/26/99
C40 50731 Border City Mills Multifamily 5/25/99
P41 3014289 Empire Terrace Apartments Multifamily 5/26/99
P42 1201383 The Park Manor Apartments Multifamily 5/26/99
C43 51082 Cinnamon Tree Apartments Multifamily 6/6/99
C44 51290 Fletcher Valley Apartments Multifamily 5/27/99
P45 3016037 Sierra Vista Square Apartments Multifamily 5/26/99
C46 51462 College Terrace Apartments II Multifamily 5/27/99
C47 51208 Loma Linda Gardens Multifamily 5/27/99
C48 51279 Silver Tree Apartments Multifamily 5/27/99
P49 3035128 Warren House Apartments Multifamily 5/26/99
C50 51032 Westwood Apartments Multifamily 5/27/99
C51 51446 Ross Tower Apartments Multifamily 5/27/99
P52 3010428 Pueblo Village Apartments Multifamily 5/26/99
C53 51496 Greenbrier And Village Oaks Apartments Multifamily 5/27/99
P54 3036670 Gilman Terrace Apartments II Multifamily 5/26/99
P55 3034980 Warren House East Apartments Multifamily 5/26/99
C56 51490 Scottsdale Serrento Apartments Multifamily 5/27/99
P57 3012309 Saratoga Palms at Diamond Head Multifamily 5/26/99
P58 3034733 Warren House/Terrace II Apts. Multifamily 5/26/99
P59 3021334 Weddington Apartments Multifamily 5/26/99
C60 51054 Spanish Garden Apartments Multifamily 5/25/99
C61 51517 Camelot West Apartments Multifamily 5/27/99
P62 3019882 Juniper Court Apartments Multifamily 5/26/99
C63 51485 Oceana Apartments Multifamily 5/27/99
C64 51477 El Caballero Apartments Multifamily 5/27/99
C65 51461 College Terrace Apartments I Multifamily 5/27/99
C66 50378 Buckhead Gardens Apts Multifamily 5/25/99
P67 3037876 Warren Village Mobile Multifamily 5/26/99
P68 3037868 Warren Inn (Mobile) Multifamily 5/26/99
C69 51345 Drake Plaza Apartments Multifamily 5/27/99
P70 3014420 The Courtyard Apartments Multifamily 5/26/99
P71 3016698 Maryland Gardens Apartments Multifamily 5/26/99
P72 1796796 Upstairs/Downstairs Apartments Multifamily 5/26/99
C73 50401 Colbath Apartments Multifamily 5/25/99
C74 51031 Stonewood Apartments Multifamily 5/27/99
P75 3034998 Park Thomas Apartments Multifamily 5/26/99
C76 50995 232 Front Street Multifamily 5/27/99
</TABLE>
B-2
<PAGE> 183
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT
LOAN IMPROVEMENT IMPROVEMENT TO REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P77 3013232 Autumn Woods Apartments Multifamily
P78 3036001 Newport 40 Multifamily
P79 2092443 2121-2127 Fillmore Street Multifamily
P80 3015682 Regents Apartments Multifamily
C81 51463 Fairview Apartments Multifamily $ 33,725 $33,979
C82 51100 Mission Manor Apartments Multifamily $40,000
C83 51476 Peach Tree Apartments Multifamily
C84 51489 Highland Square Apartments Multifamily 18,813 18,896 13,124
C85 51479 Carousel Apartments Multifamily 19,025 19,151 10,000
C86 51505 Casa Del Valle Apartments Multifamily 10,000
C87 51270 1346 W. Jarvis Apartments Multifamily
C88 51478 Madison Square Apartments Multifamily
C89 51486 Kelvin Square Apartments Multifamily
C90 51467 Brynwood Apartments Multifamily
C91 51451 Riata Court Apartments Multifamily
C92 51466 Park Place Apartments Multifamily
C93 51464 Countryside Court Apartments Multifamily
C94 51226 Edgewood Apartments Multifamily
C95 51420 Evergreen Apartments Multifamily 23,438 23,628
C96 51487 Crenshire Villa Apartments Multifamily 4,250
C97 51459 Highlander Apartments Multifamily
C98 51441 Village Apartments Multifamily 6,250
C99 51278 South Hill Village Shopping Center Retail
C100 51321 SLJ Realty Portfolio Retail 37,250 37,496
P101 3023470 De Anza Country Shopping Center Retail
C102 50233 Summerhill Plaza Shopping Center Retail
P103 3011459 Downtown Centre Retail
P104 1200963 Las Posas Plaza Retail
C105 50791 K-Mart Plaza - Durham, NC Retail 280,625 519 37,500
C106 51292 Mesa Shores Shopping Center Retail 15,470
P107 3016292 Bouquet Canyon Plaza Retail
P108 3019775 Home Depot/Parkside Center Retail
C109 51044 University Plaza Shopping Center Retail
C110 51330 Woodlawn Shopping Center Retail
P111 3011889 Sante Fe Springs Promenade Retail
P112 3008539 H. K. Valley Shopping Center Retail
P113 3021508 Best Buy Plaza Retail
C114 51163 Town & Country Plaza Retail
<CAPTION>
ANNUAL
DEPOSIT CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P77 3013232 Autumn Woods Apartments Multifamily No
P78 3036001 Newport 40 Multifamily No
P79 2092443 2121-2127 Fillmore Street Multifamily No
P80 3015682 Regents Apartments Multifamily No
C81 51463 Fairview Apartments Multifamily $ 18,000 $ 6,007 Yes
C82 51100 Mission Manor Apartments Multifamily 26,112 33,631 Yes
C83 51476 Peach Tree Apartments Multifamily Yes
C84 51489 Highland Square Apartments Multifamily 16,099 15,868 Yes
C85 51479 Carousel Apartments Multifamily 23,000 3,849 Yes
C86 51505 Casa Del Valle Apartments Multifamily 11,250 10,958 Yes
C87 51270 1346 W. Jarvis Apartments Multifamily 8,500 5,693 Yes
C88 51478 Madison Square Apartments Multifamily Yes
C89 51486 Kelvin Square Apartments Multifamily Yes
C90 51467 Brynwood Apartments Multifamily 12,500 4,169 Yes
C91 51451 Riata Court Apartments Multifamily 4,800 1,601 Yes
C92 51466 Park Place Apartments Multifamily 12,000 4,002 Yes
C93 51464 Countryside Court Apartments Multifamily 8,500 2,835 Yes
C94 51226 Edgewood Apartments Multifamily 3,960 2,651 Yes
C95 51420 Evergreen Apartments Multifamily 9,250 3,085 Yes
C96 51487 Crenshire Villa Apartments Multifamily 4,262 Yes
C97 51459 Highlander Apartments Multifamily 8,000 2,668 Yes
C98 51441 Village Apartments Multifamily Yes
C99 51278 South Hill Village Shopping Center Retail 4,080 2,383 Yes
C100 51321 SLJ Realty Portfolio Retail 13,000 3,251 Yes
P101 3023470 De Anza Country Shopping Center Retail No
C102 50233 Summerhill Plaza Shopping Center Retail 10,961 14,794 Yes
P103 3011459 Downtown Centre Retail No
P104 1200963 Las Posas Plaza Retail No
C105 50791 K-Mart Plaza - Durham, NC Retail 58,620 59,557 Yes
C106 51292 Mesa Shores Shopping Center Retail 19,035 11,163 Yes
P107 3016292 Bouquet Canyon Plaza Retail No
P108 3019775 Home Depot/Parkside Center Retail No
C109 51044 University Plaza Shopping Center Retail 58,588 39,204 Yes
C110 51330 Woodlawn Shopping Center Retail 21,938 5,485 Yes
P111 3011889 Sante Fe Springs Promenade Retail No
P112 3008539 H. K. Valley Shopping Center Retail No
P113 3021508 Best Buy Plaza Retail No
C114 51163 Town & Country Plaza Retail 18,838 7,864 Yes
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P77 3013232 Autumn Woods Apartments Multifamily 5/26/99
P78 3036001 Newport 40 Multifamily 5/26/99
P79 2092443 2121-2127 Fillmore Street Multifamily 5/26/99
P80 3015682 Regents Apartments Multifamily 5/26/99
C81 51463 Fairview Apartments Multifamily 5/27/99
C82 51100 Mission Manor Apartments Multifamily 5/27/99
C83 51476 Peach Tree Apartments Multifamily 5/27/99
C84 51489 Highland Square Apartments Multifamily 5/27/99
C85 51479 Carousel Apartments Multifamily 5/27/99
C86 51505 Casa Del Valle Apartments Multifamily 5/27/99
C87 51270 1346 W. Jarvis Apartments Multifamily 5/27/99
C88 51478 Madison Square Apartments Multifamily 5/27/99
C89 51486 Kelvin Square Apartments Multifamily 5/27/99
C90 51467 Brynwood Apartments Multifamily 5/27/99
C91 51451 Riata Court Apartments Multifamily 5/27/99
C92 51466 Park Place Apartments Multifamily 5/27/99
C93 51464 Countryside Court Apartments Multifamily 5/27/99
C94 51226 Edgewood Apartments Multifamily 5/27/99
C95 51420 Evergreen Apartments Multifamily 5/27/99
C96 51487 Crenshire Villa Apartments Multifamily 5/27/99
C97 51459 Highlander Apartments Multifamily 5/27/99
C98 51441 Village Apartments Multifamily 5/27/99
C99 51278 South Hill Village Shopping Center Retail $ 50,000 $ 24,996 $ 65,457 5/27/99
C100 51321 SLJ Realty Portfolio Retail 200,000 202,236 5/27/99
P101 3023470 De Anza Country Shopping Center Retail 5/26/99
C102 50233 Summerhill Plaza Shopping Center Retail 689,999 5/25/99
P103 3011459 Downtown Centre Retail 5/26/99
P104 1200963 Las Posas Plaza Retail 5/26/99
C105 50791 K-Mart Plaza - Durham, NC Retail 70,000 72,634 5/27/99
C106 51292 Mesa Shores Shopping Center Retail 51,824 30,396 5/27/99
P107 3016292 Bouquet Canyon Plaza Retail 5/26/99
P108 3019775 Home Depot/Parkside Center Retail 5/26/99
C109 51044 University Plaza Shopping Center Retail 82,800 5/25/99
C110 51330 Woodlawn Shopping Center Retail 5/25/99
P111 3011889 Sante Fe Springs Promenade Retail 5/26/99
P112 3008539 H. K. Valley Shopping Center Retail 5/26/99
P113 3021508 Best Buy Plaza Retail 5/26/99
C114 51163 Town & Country Plaza Retail 5/27/99
</TABLE>
B-3
<PAGE> 184
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT
LOAN IMPROVEMENT IMPROVEMENT TO REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C115 51162 Miller West Plaza Retail
C116 51171 Third Street Plaza Shopping Center Retail
C117 50976 Pine Lake Plaza Retail 1,000 1,004
C118 51498 Glenwood Crossings Shopping Center Retail $ 3,125 $ 3,131
C119 50991 Monterey Plaza Shopping Center Retail
C120 50885 Paducah Towne Center Retail
C121 50154 Dolphin Plaza Shopping Center Retail
C122 50311 University Square Shopping Center Retail
C123 51144 Tri State # 1 & # 3 Retail $ 5,000
P124 4549193 Barkley Village Retail
C125 50916 Royal Oaks of Bloomingdale Retail 200,000
P126 1201300 McGrath Court Retail Center Retail
C127 51306 Best Buy Building Retail
P128 3021920 Foothill Ranch Marketplace Retail
P129 3041399 Ironwood Square - Phase III Retail
C130 51437 Shops At England Run Retail 20,600
C131 51484 Fairfield Square Shopping Center Retail 17,500 17,599
P132 3009370 Greentree Village Shopping Center Retail
C133 51449 Perimeter Oaks Shopping Center Retail 1,350
C134 51327 Gower-Gulch Center Retail
P135 3009040 Willow Glen Plaza Retail
P136 3054277 SRO Center Retail
C137 51052 Tukwila Park Shopping Center Retail 5,000
C138 51516 Rite Aid-Alpine Retail
C139 51216 San Miguel Plaza Retail
C140 51335 Kids "R" Us Retail
C141 51450 Brea Village Shopping Center Retail
C142 51002 Spring Hope Commons Shopping Center Retail
C143 51005 Warren Corners Shopping Center Retail 4,531 4,600
C144 51508 500 State Street Retail 68,750 68,821
C145 51507 Arts Industria Center Retail
C146 51494 Harbor Place Retail
P147 3046620 Victory Plaza Shopping Center Retail
C148 51389 Towne Point Shopping Center Retail 9,625
P149 3033792 Las Vegas Discount Golf & Tennis Retail
C150 51510 NationsBank Branch - Ft. Lauderdale Retail
C151 51333 OfficeMax Building - Phoenix, AZ Retail
C152 50864 Hardin Village Shopping Center Retail
<CAPTION>
ANNUAL
DEPOSIT CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
C115 51162 Miller West Plaza Retail 17,544 7,321 Yes
C116 51171 Third Street Plaza Shopping Center Retail 14,251 7,150 Yes
C117 50976 Pine Lake Plaza Retail 15,916 9,331 Yes
C118 51498 Glenwood Crossings Shopping Center Retail $ 15,519 $ 1,293 Yes
C119 50991 Monterey Plaza Shopping Center Retail 10,209 8,586 Yes
C120 50885 Paducah Towne Center Retail 11,350 6,647 Yes
C121 50154 Dolphin Plaza Shopping Center Retail 11,543 3,887 Yes
C122 50311 University Square Shopping Center Retail 10,182 7,048 Yes
C123 51144 Tri State # 1 & # 3 Retail 27,204 16,405 Yes
P124 4549193 Barkley Village Retail No
C125 50916 Royal Oaks of Bloomingdale Retail 8,927 155,563 Yes
P126 1201300 McGrath Court Retail Center Retail No
C127 51306 Best Buy Building Retail No
P128 3021920 Foothill Ranch Marketplace Retail No
P129 3041399 Ironwood Square - Phase III Retail No
C130 51437 Shops At England Run Retail 10,175 2,544 Yes
C131 51484 Fairfield Square Shopping Center Retail 14,162 3,541 Yes
P132 3009370 Greentree Village Shopping Center Retail No
C133 51449 Perimeter Oaks Shopping Center Retail 3,470 2,509 Yes
C134 51327 Gower-Gulch Center Retail 5,361 2,683 Yes
P135 3009040 Willow Glen Plaza Retail No
P136 3054277 SRO Center Retail No
C137 51052 Tukwila Park Shopping Center Retail 7,495 10,072 Yes
C138 51516 Rite Aid-Alpine Retail 1,007 84 Yes
C139 51216 San Miguel Plaza Retail 2,660 1,998 Yes
C140 51335 Kids "R" Us Retail No
C141 51450 Brea Village Shopping Center Retail 9,012 3,006 Yes
C142 51002 Spring Hope Commons Shopping Center Retail 4,076 2,721 Yes
C143 51005 Warren Corners Shopping Center Retail 3,178 2,122 Yes
C144 51508 500 State Street Retail 3,139 Yes
C145 51507 Arts Industria Center Retail 2,730 Yes
C146 51494 Harbor Place Retail 5,124 854 Yes
P147 3046620 Victory Plaza Shopping Center Retail No
C148 51389 Towne Point Shopping Center Retail 14,629 14,528 Yes
P149 3033792 Las Vegas Discount Golf & Tennis Retail No
C150 51510 NationsBank Branch - Ft. Lauderdale Retail 527 No
C151 51333 OfficeMax Building - Phoenix, AZ Retail 850 284 No
C152 50864 Hardin Village Shopping Center Retail 2,844 2,148 Yes
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
C115 51162 Miller West Plaza Retail 5/27/99
C116 51171 Third Street Plaza Shopping Center Retail 5/27/99
C117 50976 Pine Lake Plaza Retail 5/27/99
C118 51498 Glenwood Crossings Shopping Center Retail 5/27/99
C119 50991 Monterey Plaza Shopping Center Retail $142,358 $ 98,591 5/25/99
C120 50885 Paducah Towne Center Retail 13,716 5/27/99
C121 50154 Dolphin Plaza Shopping Center Retail 50,000 53,466 5/27/99
C122 50311 University Square Shopping Center Retail 5/27/99
C123 51144 Tri State # 1 & # 3 Retail 5/25/99
P124 4549193 Barkley Village Retail 5/26/99
C125 50916 Royal Oaks of Bloomingdale Retail 5/27/99
P126 1201300 McGrath Court Retail Center Retail 5/26/99
C127 51306 Best Buy Building Retail 5/27/99
P128 3021920 Foothill Ranch Marketplace Retail 5/26/99
P129 3041399 Ironwood Square - Phase III Retail 5/26/99
C130 51437 Shops At England Run Retail 5/25/99
C131 51484 Fairfield Square Shopping Center Retail 5/27/99
P132 3009370 Greentree Village Shopping Center Retail 5/26/99
C133 51449 Perimeter Oaks Shopping Center Retail 5/27/99
C134 51327 Gower-Gulch Center Retail 5/27/99
P135 3009040 Willow Glen Plaza Retail 5/26/99
P136 3054277 SRO Center Retail 5/26/99
C137 51052 Tukwila Park Shopping Center Retail 43,587 44,126 5/25/99
C138 51516 Rite Aid-Alpine Retail 5/27/99
C139 51216 San Miguel Plaza Retail $ 1,194 897 5/27/99
C140 51335 Kids "R" Us Retail 5/27/99
C141 51450 Brea Village Shopping Center Retail 5/27/99
C142 51002 Spring Hope Commons Shopping Center Retail 47,000 47,709 5/27/99
C143 51005 Warren Corners Shopping Center Retail 5/27/99
C144 51508 500 State Street Retail 5/27/99
C145 51507 Arts Industria Center Retail 5/26/99
C146 51494 Harbor Place Retail 25,000 18,888 28,287 5/27/99
P147 3046620 Victory Plaza Shopping Center Retail 5/26/99
C148 51389 Towne Point Shopping Center Retail 5/25/99
P149 3033792 Las Vegas Discount Golf & Tennis Retail 5/26/99
C150 51510 NationsBank Branch - Ft. Lauderdale Retail 5/27/99
C151 51333 OfficeMax Building - Phoenix, AZ Retail 5/27/99
C152 50864 Hardin Village Shopping Center Retail 5/26/99
</TABLE>
B-4
<PAGE> 185
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT
LOAN IMPROVEMENT IMPROVEMENT TO REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P153 3022746 Barnes & Noble Booksellers Retail
P154 1201185 Dollinger Central Retail
P155 1794569 Salmon Creek Shopping Center Retail
P156 3013471 Petrini's Rheem Valley Shopping Center Retail
P157 3041589 Mission Village Center Retail
C158 51140 Maple Wood Plaza Retail $ 1,468
P159 3056140 Crossroads at Hacienda Shopping Center Retail
P160 3056132 Crossroads at Hacienda Shopping Center Retail
P161 3051141 Barnsdall Square Shopping Center Retail
P162 3000932 Wild West Shopping Center Retail
C163 51276 Western Dental Plaza Retail
C164 51475 Northome Shopping Center Retail
C165 51492 KMS Retail Center Retail
C166 51361 Harbor Plaza Shopping Center Retail
C167 51370 Harding Atlantic Shopping Center Retail
C168 51439 Towne Square Shopping Center Retail $ 5,000
C169 51469 Arlington Square Retail $ 1,250 1,252
C170 51483 Sag Harbor Shopping Cove Retail 6,125 6,162
C171 51468 Victoria Village Shopping Center Retail
C172 51432 Prince & Fairview Shopping Center Retail
C173 51452 El Camino Retail Retail
C174 51433 Clothestime Retail Building Retail
P175 3011970 Crockett Industrial Portfolio Industrial
C176 50919 1/2 Price Distribution Center Industrial 22,000
P177 3000908 Charter Business Park Industrial
C178 51187 Tyco Warehouse Industrial
P179 3038361 Lakepoint/Ignacio Business Park Industrial
P180 3021458 San Tomas Business Centre Industrial
C181 50944 7777 West Side Ave. Industrial 144,800
P182 3033032 Zidell Valve Corporation Industrial
C183 51186 Nokia Office Warehouse Building Industrial
P184 2088680 Amdahl Building Industrial
P185 3032760 Bancroft Building Industrial
P186 3000890 Jersey Business Park Industrial
P187 3054947 Condor Pacific Industries Industrial
P188 3023538 Vista Paints Industrial
C189 51448 Santoli Commerce Center Industrial
P190 3006681 Trojan Battery Company Industrial
<CAPTION>
ANNUAL
DEPOSIT CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P153 3022746 Barnes & Noble Booksellers Retail No
P154 1201185 Dollinger Central Retail No
P155 1794569 Salmon Creek Shopping Center Retail No
P156 3013471 Petrini's Rheem Valley Shopping Center Retail No
P157 3041589 Mission Village Center Retail No
C158 51140 Maple Wood Plaza Retail $ 5,954 $ 1,990 Yes
P159 3056140 Crossroads at Hacienda Shopping Center Retail No
P160 3056132 Crossroads at Hacienda Shopping Center Retail No
P161 3051141 Barnsdall Square Shopping Center Retail No
P162 3000932 Wild West Shopping Center Retail No
C163 51276 Western Dental Plaza Retail 3,160 1,846 Yes
C164 51475 Northome Shopping Center Retail 18,563 4,647 Yes
C165 51492 KMS Retail Center Retail 1,800 150 Yes
C166 51361 Harbor Plaza Shopping Center Retail 3,607 1,805 Yes
C167 51370 Harding Atlantic Shopping Center Retail 2,763 1,383 Yes
C168 51439 Towne Square Shopping Center Retail 3,261 6,114 Yes
C169 51469 Arlington Square Retail 4,660 1,554 Yes
C170 51483 Sag Harbor Shopping Cove Retail 1,256 314 Yes
C171 51468 Victoria Village Shopping Center Retail 1,824 608 Yes
C172 51432 Prince & Fairview Shopping Center Retail Yes
C173 51452 El Camino Retail Retail 2,093 178 Yes
C174 51433 Clothestime Retail Building Retail 371 93 Yes
P175 3011970 Crockett Industrial Portfolio Industrial No
C176 50919 1/2 Price Distribution Center Industrial 53,316 62,394 Yes
P177 3000908 Charter Business Park Industrial No
C178 51187 Tyco Warehouse Industrial No
P179 3038361 Lakepoint/Ignacio Business Park Industrial No
P180 3021458 San Tomas Business Centre Industrial No
C181 50944 7777 West Side Ave. Industrial 6,332 150,985 Yes
P182 3033032 Zidell Valve Corporation Industrial No
C183 51186 Nokia Office Warehouse Building Industrial No
P184 2088680 Amdahl Building Industrial No
P185 3032760 Bancroft Building Industrial No
P186 3000890 Jersey Business Park Industrial No
P187 3054947 Condor Pacific Industries Industrial No
P188 3023538 Vista Paints Industrial No
C189 51448 Trojan Battery Company Industrial 6,856 2,858 Yes
P190 3006681 Santoli Commerce Center Industrial No
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P153 3022746 Barnes & Noble Booksellers Retail 5/26/99
P154 1201185 Dollinger Central Retail 5/26/99
P155 1794569 Salmon Creek Shopping Center Retail 5/26/99
P156 3013471 Petrini's Rheem Valley Shopping Center Retail 5/26/99
P157 3041589 Mission Village Center Retail 5/26/99
C158 51140 Maple Wood Plaza Retail 5/10/99
P159 3056140 Crossroads at Hacienda Shopping Center Retail 5/26/99
P160 3056132 Crossroads at Hacienda Shopping Center Retail 5/26/99
P161 3051141 Barnsdall Square Shopping Center Retail 5/26/99
P162 3000932 Wild West Shopping Center Retail 5/26/99
C163 51276 Western Dental Plaza Retail $ 8,643 $ 5,059 5/27/99
C164 51475 Northome Shopping Center Retail 39,009 20 5/27/99
C165 51492 KMS Retail Center Retail 5/27/99
C166 51361 Harbor Plaza Shopping Center Retail $ 3,500 7,679 7,393 5/27/99
C167 51370 Harding Atlantic Shopping Center Retail 10,000 7,375 13,815 5/27/99
C168 51439 Towne Square Shopping Center Retail 18,500 18,464 18,625 5/27/99
C169 51469 Arlington Square Retail 13,357 4,454 5/27/99
C170 51483 Sag Harbor Shopping Cove Retail 5/27/99
C171 51468 Victoria Village Shopping Center Retail 11,916 3,974 5/27/99
C172 51432 Prince & Fairview Shopping Center Retail 5/27/99
C173 51452 El Camino Retail Retail 7,000 9,360 10,184 5/27/99
C174 51433 Clothestime Retail Building Retail 2,500 2,241 3,070 5/27/99
P175 3011970 Crockett Industrial Portfolio Industrial 5/26/99
C176 50919 1/2 Price Distribution Center Industrial 247,000 23,784 268,574 5/25/99
P177 3000908 Charter Business Park Industrial 5/26/99
C178 51187 Tyco Warehouse Industrial 5/27/99
P179 3038361 Lakepoint/Ignacio Business Park Industrial 5/26/99
P180 3021458 San Tomas Business Centre Industrial 5/26/99
C181 50944 7777 West Side Ave. Industrial 5/25/99
P182 3033032 Zidell Valve Corporation Industrial 5/26/99
C183 51186 Nokia Office Warehouse Building Industrial 5/25/99
P184 2088680 Amdahl Building Industrial 5/26/99
P185 3032760 Bancroft Building Industrial 5/26/99
P186 3000890 Jersey Business Park Industrial 5/26/99
P187 3054947 Condor Pacific Industries Industrial 5/26/99
P188 3023538 Vista Paints Industrial 5/26/99
C189 51448 Santoli Commerce Center Industrial 5/27/99
P190 3006681 Trojan Battery Company Industrial 5/26/99
</TABLE>
B-5
<PAGE> 186
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL
LOAN IMPROVEMENT IMPROVEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
P191 3011426 4240 Hollis Street Industrial
P192 3032406 Airport Office Park Industrial
P193 3011921 Fabrica International Building Industrial
P194 4540878 Performance Radiator Industrial
P195 2093268 Valley North Business Park Industrial
C196 51392 325 Exterior Street Industrial $18,438 $19,017
P197 3057932 Northwestern Polytechnic University Industrial
P198 1204346 Warner Fairview Business Park Industrial
P199 3009883 Industry West Industrial Park Industrial
C200 51326 Hampton Commerce Center Industrial 10,406 3,825
P201 3025343 4880 West Rosecrans Avenue Industrial
P202 3058575 Ledtronics Industrial
P203 3034873 Hofmann Industrial Portfolio Industrial
P204 3014958 Avioan Business Center Industrial
P205 1201136 Valencia Industrial Center Industrial
C206 51194 Van Nuys Airport Business Center Industrial 10,375
P207 3011632 Seaview Business Park Industrial
C208 51247 Technology Drive Industrial Industrial
C209 51280 1400 Dell Avenue Building Industrial
P210 3032786 Tromley Industrial Building Industrial
C211 51337 2500-2520 Park Central Industrial 31,973 32,239
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. Industrial
P213 3021284 250 W. Artesia Boulevard Industrial
P214 2034692 1-31 North Salsipuedes Street Industrial
P215 3007127 14402 Franklin Avenue Industrial
P216 4538229 Puget Sound Tire Building Industrial
P217 3039914 Span-O-Matic, Inc. Industrial
P218 3009974 Watt-Eighty Business Park Industrial
P219 4538864 Slope Indicator Company Industrial
P220 1795863 Newport Shores Office/Warehouse Industrial
P221 1201326 6231, 6241 Yarrow Drive Industrial
P222 3006491 25620 Rye Canyon Road Industrial
P223 3039450 Ross Industrial Park Industrial
P224 3074754 Chicago Avenue Business Center Industrial
C225 51193 Walmar Industrial Center Industrial
P226 3001211 View Engineering, Inc. Industrial
P227 3101367 Montgomery Ward Distribution Warehouse Industrial
P228 4547279 Freshmark Foods Building Industrial
<CAPTION>
ANNUAL
INITIAL DEPOSIT TO DEPOSIT TO
LOAN REPLACEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
P191 3011426 4240 Hollis Street Industrial
P192 3032406 Airport Office Park Industrial
P193 3011921 Fabrica International Building Industrial
P194 4540878 Performance Radiator Industrial
P195 2093268 Valley North Business Park Industrial
C196 51392 325 Exterior Street Industrial $ 5,912
P197 3057932 Northwestern Polytechnic University Industrial
P198 1204346 Warner Fairview Business Park Industrial
P199 3009883 Industry West Industrial Park Industrial
C200 51326 Hampton Commerce Center Industrial 15,720
P201 3025343 4880 West Rosecrans Avenue Industrial
P202 3058575 Ledtronics Industrial
P203 3034873 Hofmann Industrial Portfolio Industrial
P204 3014958 Avioan Business Center Industrial
P205 1201136 Valencia Industrial Center Industrial
C206 51194 Van Nuys Airport Business Center Industrial 11,498
P207 3011632 Seaview Business Park Industrial
C208 51247 Technology Drive Industrial Industrial 6,110
C209 51280 1400 Dell Avenue Building Industrial 1,950
P210 3032786 Tromley Industrial Building Industrial
C211 51337 2500-2520 Park Central Industrial 18,163
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. Industrial
P213 3021284 250 W. Artesia Boulevard Industrial
P214 2034692 1-31 North Salsipuedes Street Industrial
P215 3007127 14402 Franklin Avenue Industrial
P216 4538229 Puget Sound Tire Building Industrial
P217 3039914 Span-O-Matic, Inc. Industrial
P218 3009974 Watt-Eighty Business Park Industrial
P219 4538864 Slope Indicator Company Industrial
P220 1795863 Newport Shores Office/Warehouse Industrial
P221 1201326 6231, 6241 Yarrow Drive Industrial
P222 3006491 25620 Rye Canyon Road Industrial
P223 3039450 Ross Industrial Park Industrial
P224 3074754 Chicago Avenue Business Center Industrial
C225 51193 Walmar Industrial Center Industrial 2,020
P226 3001211 View Engineering, Inc. Industrial
P227 3101367 Montgomery Ward Distribution Warehouse Industrial
P228 4547279 Freshmark Foods Building Industrial
<CAPTION>
CURRENT BALANCE TAX AND
LOAN IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES ESCROW
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
P191 3011426 4240 Hollis Street Industrial No
P192 3032406 Airport Office Park Industrial No
P193 3011921 Fabrica International Building Industrial No
P194 4540878 Performance Radiator Industrial No
P195 2093268 Valley North Business Park Industrial No
C196 51392 325 Exterior Street Industrial $ 985 Yes
P197 3057932 Northwestern Polytechnic University Industrial No
P198 1204346 Warner Fairview Business Park Industrial No
P199 3009883 Industry West Industrial Park Industrial No
C200 51326 Hampton Commerce Center Industrial 3,932 Yes
P201 3025343 4880 West Rosecrans Avenue Industrial No
P202 3058575 Ledtronics Industrial No
P203 3034873 Hofmann Industrial Portfolio Industrial No
P204 3014958 Avioan Business Center Industrial No
P205 1201136 Valencia Industrial Center Industrial No
C206 51194 Van Nuys Airport Business Center Industrial 9,638 Yes
P207 3011632 Seaview Business Park Industrial No
C208 51247 Technology Drive Industrial Industrial 4,089 Yes
C209 51280 1400 Dell Avenue Building Industrial 1,139 Yes
P210 3032786 Tromley Industrial Building Industrial No
C211 51337 2500-2520 Park Central Industrial 6,067 Yes
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. Industrial No
P213 3021284 250 W. Artesia Boulevard Industrial No
P214 2034692 1-31 North Salsipuedes Street Industrial No
P215 3007127 14402 Franklin Avenue Industrial No
P216 4538229 Puget Sound Tire Building Industrial No
P217 3039914 Span-O-Matic, Inc. Industrial No
P218 3009974 Watt-Eighty Business Park Industrial No
P219 4538864 Slope Indicator Company Industrial No
P220 1795863 Newport Shores Office/Warehouse Industrial No
P221 1201326 6231, 6241 Yarrow Drive Industrial No
P222 3006491 25620 Rye Canyon Road Industrial No
P223 3039450 Ross Industrial Park Industrial No
P224 3074754 Chicago Avenue Business Center Industrial No
C225 51193 Walmar Industrial Center Industrial Yes
P226 3001211 View Engineering, Inc. Industrial 1,855 No
P227 3101367 Montgomery Ward Distribution Warehouse Industrial No
P228 4547279 Freshmark Foods Building Industrial No
<CAPTION>
ANNUAL
INITIAL DEPOSIT DEPOSIT TO
LOAN TO TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
P191 3011426 4240 Hollis Street Industrial
P192 3032406 Airport Office Park Industrial
P193 3011921 Fabrica International Building Industrial
P194 4540878 Performance Radiator Industrial
P195 2093268 Valley North Business Park Industrial
C196 51392 325 Exterior Street Industrial
P197 3057932 Northwestern Polytechnic University Industrial
P198 1204346 Warner Fairview Business Park Industrial
P199 3009883 Industry West Industrial Park Industrial
C200 51326 Hampton Commerce Center Industrial
P201 3025343 4880 West Rosecrans Avenue Industrial
P202 3058575 Ledtronics Industrial
P203 3034873 Hofmann Industrial Portfolio Industrial
P204 3014958 Avioan Business Center Industrial
P205 1201136 Valencia Industrial Center Industrial
C206 51194 Van Nuys Airport Business Center Industrial
P207 3011632 Seaview Business Park Industrial
C208 51247 Technology Drive Industrial Industrial $17,446
C209 51280 1400 Dell Avenue Building Industrial 9,000
P210 3032786 Tromley Industrial Building Industrial
C211 51337 2500-2520 Park Central Industrial
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. Industrial
P213 3021284 250 W. Artesia Boulevard Industrial
P214 2034692 1-31 North Salsipuedes Street Industrial
P215 3007127 14402 Franklin Avenue Industrial
P216 4538229 Puget Sound Tire Building Industrial
P217 3039914 Span-O-Matic, Inc. Industrial
P218 3009974 Watt-Eighty Business Park Industrial
P219 4538864 Slope Indicator Company Industrial
P220 1795863 Newport Shores Office/Warehouse Industrial
P221 1201326 6231, 6241 Yarrow Drive Industrial
P222 3006491 25620 Rye Canyon Road Industrial
P223 3039450 Ross Industrial Park Industrial
P224 3074754 Chicago Avenue Business Center Industrial
C225 51193 Walmar Industrial Center Industrial 5,000
P226 3001211 View Engineering, Inc. Industrial
P227 3101367 Montgomery Ward Distribution Warehouse Industrial
P228 4547279 Freshmark Foods Building Industrial
<CAPTION>
CURRENT
BALANCE IN
LOAN TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW REPORT DATE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
P191 3011426 4240 Hollis Street Industrial 5/26/99
P192 3032406 Airport Office Park Industrial 5/26/99
P193 3011921 Fabrica International Building Industrial 5/26/99
P194 4540878 Performance Radiator Industrial 5/26/99
P195 2093268 Valley North Business Park Industrial 5/26/99
C196 51392 325 Exterior Street Industrial 5/27/99
P197 3057932 Northwestern Polytechnic University Industrial 5/26/99
P198 1204346 Warner Fairview Business Park Industrial 5/26/99
P199 3009883 Industry West Industrial Park Industrial 5/26/99
C200 51326 Hampton Commerce Center Industrial 5/27/99
P201 3025343 4880 West Rosecrans Avenue Industrial 5/26/99
P202 3058575 Ledtronics Industrial 5/26/99
P203 3034873 Hofmann Industrial Portfolio Industrial 5/26/99
P204 3014958 Avioan Business Center Industrial 5/26/99
P205 1201136 Valencia Industrial Center Industrial 5/26/99
C206 51194 Van Nuys Airport Business Center Industrial 5/27/99
P207 3011632 Seaview Business Park Industrial 5/26/99
C208 51247 Technology Drive Industrial Industrial $11,698 5/27/99
C209 51280 1400 Dell Avenue Building Industrial 5,267 5/27/99
P210 3032786 Tromley Industrial Building Industrial 5/26/99
C211 51337 2500-2520 Park Central Industrial 5/27/99
P212 4538179 Coeur d'Alenes Co. & Stock Steel Metal Fabrication Bldg. Industrial 5/26/99
P213 3021284 250 W. Artesia Boulevard Industrial 5/26/99
P214 2034692 1-31 North Salsipuedes Street Industrial 5/26/99
P215 3007127 14402 Franklin Avenue Industrial 5/26/99
P216 4538229 Puget Sound Tire Building Industrial 5/26/99
P217 3039914 Span-O-Matic, Inc. Industrial 5/26/99
P218 3009974 Watt-Eighty Business Park Industrial 5/26/99
P219 4538864 Slope Indicator Company Industrial 5/26/99
P220 1795863 Newport Shores Office/Warehouse Industrial 5/26/99
P221 1201326 6231, 6241 Yarrow Drive Industrial 5/26/99
P222 3006491 25620 Rye Canyon Road Industrial 5/26/99
P223 3039450 Ross Industrial Park Industrial 5/26/99
P224 3074754 Chicago Avenue Business Center Industrial 5/26/99
C225 51193 Walmar Industrial Center Industrial 4,603 5/27/99
P226 3001211 View Engineering, Inc. Industrial 5/26/99
P227 3101367 Montgomery Ward Distribution Warehouse Industrial 5/26/99
P228 4547279 Freshmark Foods Building Industrial 5/26/99
</TABLE>
B-6
<PAGE> 187
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL
LOAN IMPROVEMENT IMPROVEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C229 51454 Airpark Trade Center Industrial
C230 51470 Raintree Commerce Center Industrial
C231 51314 Huntwood Ave. Light Industrial Industrial
C232 51506 North American Cable Building Industrial
C233 51438 One Industrial Building Industrial
C234 51503 Bank of America Regional Headquarters Office $ 213
C235 51332 101 Ygnacio Plaza Office $ 9,469 9,582
C236 50987 Three Palms Center Office 15,000 15,224
P237 3012937 Waterfront Plaza Office
P238 3026820 Water Court Office Buildings Office
P239 3054939 Executive Park Office
P240 1202811 300 Hamilton Building Office
C241 51040 Journal Square Plaza I Office 4,713 4,776
P242 4539961 Lakes Medical Plaza Office
P243 1203637 High Bluff - Del Mar Office
P244 4547972 Percival Plaza Office
P245 1794478 Richland Medical Center & Pharmacy Office
P246 3007754 12700 Ventura Boulevard Office
C247 51019 2002 Avenue U Office
P248 3038502 American Radio Systems Building Office
C249 51037 Double Eagle Office Building Office
P250 3010717 Riverpark Office
C251 51168 Village Square Office Building Office
C252 50903 Grove Office Plaza Office 8,813
C253 51493 Stanford Coastside Medical Clinic Office
P254 3046208 3330 West Desert Inn Road Office
C255 50826 Golf Course Plaza Office 9,863 10,088
P256 3001096 2220 Lynn Road Office
P257 2091932 Century Center Office Building Office
P258 3049228 Alta Mesa Professional Center #333 Office
C259 50963 16 East 41st Street Office Building Office
C260 51222 Greenfield Road Office Building Office
P261 3007713 San Clemente Professional Center Office
P262 1794353 The Doyle Building Office
P263 4544987 Colorado Professional Park Office
P264 2053130 Courthouse Square Office
P265 3043346 881 Fremont Ave. Office
P266 3022530 300 University Avenue Office
<CAPTION>
ANNUAL
INITIAL DEPOSIT TO DEPOSIT TO
LOAN REPLACEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C229 51454 Airpark Trade Center Industrial 5,273
C230 51470 Raintree Commerce Center Industrial 1,740
C231 51314 Huntwood Ave. Light Industrial Industrial 6,608
C232 51506 North American Cable Building Industrial 22,273
C233 51438 One Industrial Building Industrial 1,394
C234 51503 Bank of America Regional Headquarters Office
C235 51332 101 Ygnacio Plaza Office $ 9,193
C236 50987 Three Palms Center Office 19,855
P237 3012937 Waterfront Plaza Office
P238 3026820 Water Court Office Buildings Office
P239 3054939 Executive Park Office
P240 1202811 300 Hamilton Building Office
C241 51040 Journal Square Plaza I Office 15,780
P242 4539961 Lakes Medical Plaza Office
P243 1203637 High Bluff - Del Mar Office
P244 4547972 Percival Plaza Office
P245 1794478 Richland Medical Center & Pharmacy Office
P246 3007754 12700 Ventura Boulevard Office
C247 51019 2002 Avenue U Office $ 219 2,629
P248 3038502 American Radio Systems Building Office
C249 51037 Double Eagle Office Building Office 4,675
P250 3010717 Riverpark Office
C251 51168 Village Square Office Building Office 4,005
C252 50903 Grove Office Plaza Office 10,377
C253 51493 Stanford Coastside Medical Clinic Office 3,834
P254 3046208 3330 West Desert Inn Road Office
C255 50826 Golf Course Plaza Office 6,479
P256 3001096 2220 Lynn Road Office
P257 2091932 Century Center Office Building Office
P258 3049228 Alta Mesa Professional Center #333 Office
C259 50963 16 East 41st Street Office Building Office 1,883
C260 51222 Greenfield Road Office Building Office 3,900
P261 3007713 San Clemente Professional Center Office
P262 1794353 The Doyle Building Office
P263 4544987 Colorado Professional Park Office
P264 2053130 Courthouse Square Office
P265 3043346 881 Fremont Ave. Office
P266 3022530 300 University Avenue Office
<CAPTION>
CURRENT BALANCE TAX AND
LOAN IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES ESCROW
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C229 51454 Airpark Trade Center Industrial 1,759 Yes
C230 51470 Raintree Commerce Center Industrial 580 Yes
C231 51314 Huntwood Ave. Light Industrial Industrial 3,313 Yes
C232 51506 North American Cable Building Industrial Yes
C233 51438 One Industrial Building Industrial 466 Yes
C234 51503 Bank of America Regional Headquarters Office No
C235 51332 101 Ygnacio Plaza Office $ 4,611 Yes
C236 50987 Three Palms Center Office 11,622 Yes
P237 3012937 Waterfront Plaza Office No
P238 3026820 Water Court Office Buildings Office No
P239 3054939 Executive Park Office No
P240 1202811 300 Hamilton Building Office No
C241 51040 Journal Square Plaza I Office 10,582 Yes
P242 4539961 Lakes Medical Plaza Office No
P243 1203637 High Bluff - Del Mar Office No
P244 4547972 Percival Plaza Office No
P245 1794478 Richland Medical Center & Pharmacy Office No
P246 3007754 12700 Ventura Boulevard Office No
C247 51019 2002 Avenue U Office 1,979 Yes
P248 3038502 American Radio Systems Building Office No
C249 51037 Double Eagle Office Building Office 2,730 Yes
P250 3010717 Riverpark Office No
C251 51168 Village Square Office Building Office Yes
C252 50903 Grove Office Plaza Office 9,616 Yes
C253 51493 Stanford Coastside Medical Clinic Office 639 Yes
P254 3046208 3330 West Desert Inn Road Office No
C255 50826 Golf Course Plaza Office 18,116 Yes
P256 3001096 2220 Lynn Road Office No
P257 2091932 Century Center Office Building Office No
P258 3049228 Alta Mesa Professional Center #333 Office No
C259 50963 16 East 41st Street Office Building Office 1,417 Yes
C260 51222 Greenfield Road Office Building Office 2,930 Yes
P261 3007713 San Clemente Professional Center Office No
P262 1794353 The Doyle Building Office No
P263 4544987 Colorado Professional Park Office No
P264 2053130 Courthouse Square Office No
P265 3043346 881 Fremont Ave. Office No
P266 3022530 300 University Avenue Office No
<CAPTION>
ANNUAL
INITIAL DEPOSIT DEPOSIT TO
LOAN TO TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C229 51454 Airpark Trade Center Industrial 18,010
C230 51470 Raintree Commerce Center Industrial 8,055
C231 51314 Huntwood Ave. Light Industrial Industrial 7,518
C232 51506 North American Cable Building Industrial $ 8,500 17,520
C233 51438 One Industrial Building Industrial 5,884
C234 51503 Bank of America Regional Headquarters Office
C235 51332 101 Ygnacio Plaza Office $92,783
C236 50987 Three Palms Center Office
P237 3012937 Waterfront Plaza Office
P238 3026820 Water Court Office Buildings Office
P239 3054939 Executive Park Office
P240 1202811 300 Hamilton Building Office
C241 51040 Journal Square Plaza I Office 32,400
P242 4539961 Lakes Medical Plaza Office
P243 1203637 High Bluff - Del Mar Office
P244 4547972 Percival Plaza Office
P245 1794478 Richland Medical Center & Pharmacy Office
P246 3007754 12700 Ventura Boulevard Office
C247 51019 2002 Avenue U Office
P248 3038502 American Radio Systems Building Office
C249 51037 Double Eagle Office Building Office
P250 3010717 Riverpark Office
C251 51168 Village Square Office Building Office $ 100,000
C252 50903 Grove Office Plaza Office 305,037
C253 51493 Stanford Coastside Medical Clinic Office
P254 3046208 3330 West Desert Inn Road Office
C255 50826 Golf Course Plaza Office 27,711
P256 3001096 2220 Lynn Road Office
P257 2091932 Century Center Office Building Office
P258 3049228 Alta Mesa Professional Center #333 Office
C259 50963 16 East 41st Street Office Building Office
C260 51222 Greenfield Road Office Building Office 16,260
P261 3007713 San Clemente Professional Center Office
P262 1794353 The Doyle Building Office
P263 4544987 Colorado Professional Park Office
P264 2053130 Courthouse Square Office
P265 3043346 881 Fremont Ave. Office
P266 3022530 300 University Avenue Office
<CAPTION>
CURRENT
BALANCE IN
LOAN TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW REPORT DATE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C229 51454 Airpark Trade Center Industrial 6,012 5/27/99
C230 51470 Raintree Commerce Center Industrial 2,686 5/27/99
C231 51314 Huntwood Ave. Light Industrial Industrial 3,770 5/27/99
C232 51506 North American Cable Building Industrial 8,503 5/27/99
C233 51438 One Industrial Building Industrial 1,965 5/27/99
C234 51503 Bank of America Regional Headquarters Office 5/26/99
C235 51332 101 Ygnacio Plaza Office $46,597 5/27/99
C236 50987 Three Palms Center Office 678 5/27/99
P237 3012937 Waterfront Plaza Office 5/26/99
P238 3026820 Water Court Office Buildings Office 5/26/99
P239 3054939 Executive Park Office 5/26/99
P240 1202811 300 Hamilton Building Office 5/26/99
C241 51040 Journal Square Plaza I Office 5/25/99
P242 4539961 Lakes Medical Plaza Office 5/26/99
P243 1203637 High Bluff - Del Mar Office 5/26/99
P244 4547972 Percival Plaza Office 5/26/99
P245 1794478 Richland Medical Center & Pharmacy Office 5/26/99
P246 3007754 12700 Ventura Boulevard Office 5/26/99
C247 51019 2002 Avenue U Office 5/27/99
P248 3038502 American Radio Systems Building Office 5/26/99
C249 51037 Double Eagle Office Building Office 5/27/99
P250 3010717 Riverpark Office 5/26/99
C251 51168 Village Square Office Building Office 100,561 6/6/99
C252 50903 Grove Office Plaza Office 312,537 5/6/99
C253 51493 Stanford Coastside Medical Clinic Office 5/27/99
P254 3046208 3330 West Desert Inn Road Office 5/26/99
C255 50826 Golf Course Plaza Office 16,405 5/25/99
P256 3001096 2220 Lynn Road Office 5/26/99
P257 2091932 Century Center Office Building Office 5/26/99
P258 3049228 Alta Mesa Professional Center #333 Office 5/26/99
C259 50963 16 East 41st Street Office Building Office 5/27/99
C260 51222 Greenfield Road Office Building Office 12,278 5/27/99
P261 3007713 San Clemente Professional Center Office 5/26/99
P262 1794353 The Doyle Building Office 5/26/99
P263 4544987 Colorado Professional Park Office 5/26/99
P264 2053130 Courthouse Square Office 5/26/99
P265 3043346 881 Fremont Ave. Office 5/26/99
P266 3022530 300 University Avenue Office 5/26/99
</TABLE>
B-7
<PAGE> 188
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL
LOAN IMPROVEMENT IMPROVEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C267 51214 Byrd Building Office
C268 50972 Duke Medical Office Office
C269 51229 5240 North 16th Street Building Office
C270 51488 Scripps Crest Building Office
C271 51474 Clocktower Center Office
C272 51369 East Mississippi Professional Office Building Office 18,313 18,486
C273 51000 U.S. Fish and Wildlife Center Office
C274 51272 Bethany Medical Plaza Office
P275 4547840 The Weatherly Inn Health Care
C276 50330 Powell Valley Assisted Living Center Health Care
C277 51501 Hamilton Plaza Nursing Home Health Care
C278 51500 Iliff Rehab and Nursing Center Health Care $ 4,688 $ 4,706
P279 3101599 Olympics West Retirement Center Health Care
P280 4545786 Merrill Gardens at Northgate Health Care
C281 50946 Chateau Marymoor Retirement & Asst. Living Comm. Health Care
C282 50803 Fairfield Manor Nursing Home Health Care
P283 3048741 Hearthstone Cottage of Ellensburg Health Care
P284 1865559 Carson Oaks Health Care
P285 4544128 Life Care Center of Escondido Health Care
C286 51499 Park Manor Nursing Home Health Care 23,125 23,218
P287 3032034 Highline Convalescent Center Health Care
P288 3009594 Valley Village Mobile Home Park Mobile Home
P289 3012291 Cordovan Mobile Home Estates Mobile Home
P290 3022969 Mesa Village Mobile Home Park Mobile Home
P291 3009545 Village Green Mobile Home Park Mobile Home
P292 3009586 Orcutt Ranch Mobile Home Park Mobile Home
P293 3009636 Town & Country Mobile Home Park Mobile Home
P294 3025335 Blue Sky Mobile Home Park Mobile Home
P295 1796705 Meadowbrook Mobile Home Estate Mobile Home
P296 3102456 Springbrook Estates Manufactured Home Park Ph. I Mobile Home
P297 3043486 College Place Mobile Home Park Mobile Home
P298 3015435 Silverado Estates Mobile Home
P299 3012705 Sierra Vista Mobile Home Park Mobile Home
C300 51418 Deep Valley Mobile Home Park Mobile Home
P301 3015526 E-Z Storage Pico Mini Storage
P302 3015500 E-Z Storage Desoto Mini Storage
P303 3015518 E-Z Storage Van Nuys Mini Storage
P304 3000239 America's Best Self Storage Mini Storage
<CAPTION>
ANNUAL
INITIAL DEPOSIT TO DEPOSIT TO
LOAN REPLACEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C267 51214 Byrd Building Office 3,983
C268 50972 Duke Medical Office Office 1,709
C269 51229 5240 North 16th Street Building Office 5,515
C270 51488 Scripps Crest Building Office 5,195
C271 51474 Clocktower Center Office 6,320
C272 51369 East Mississippi Professional Office Building Office 8,469
C273 51000 U.S. Fish and Wildlife Center Office 935
C274 51272 Bethany Medical Plaza Office $ 3,015
P275 4547840 The Weatherly Inn Health Care
C276 50330 Powell Valley Assisted Living Center Health Care 32,268
C277 51501 Hamilton Plaza Nursing Home Health Care 24,000
C278 51500 Iliff Rehab and Nursing Center Health Care $57,981 47,888
P279 3101599 Olympics West Retirement Center Health Care
P280 4545786 Merrill Gardens at Northgate Health Care
C281 50946 Chateau Marymoor Retirement & Asst. Living Comm. Health Care 3,596 21,576
C282 50803 Fairfield Manor Nursing Home Health Care 650 3,900
P283 3048741 Hearthstone Cottage of Ellensburg Health Care
P284 1865559 Carson Oaks Health Care
P285 4544128 Life Care Center of Escondido Health Care
C286 51499 Park Manor Nursing Home Health Care 13,048
P287 3032034 Highline Convalescent Center Health Care
P288 3009594 Valley Village Mobile Home Park Mobile Home
P289 3012291 Cordovan Mobile Home Estates Mobile Home
P290 3022969 Mesa Village Mobile Home Park Mobile Home
P291 3009545 Village Green Mobile Home Park Mobile Home
P292 3009586 Orcutt Ranch Mobile Home Park Mobile Home
P293 3009636 Town & Country Mobile Home Park Mobile Home
P294 3025335 Blue Sky Mobile Home Park Mobile Home
P295 1796705 Meadowbrook Mobile Home Estate Mobile Home
P296 3102456 Springbrook Estates Manufactured Home Park Ph. I Mobile Home
P297 3043486 College Place Mobile Home Park Mobile Home
P298 3015435 Silverado Estates Mobile Home
P299 3012705 Sierra Vista Mobile Home Park Mobile Home
C300 51418 Deep Valley Mobile Home Park Mobile Home 4,740
P301 3015526 E-Z Storage Pico Mini Storage
P302 3015500 E-Z Storage Desoto Mini Storage
P303 3015518 E-Z Storage Van Nuys Mini Storage
P304 3000239 America's Best Self Storage Mini Storage
<CAPTION>
CURRENT BALANCE TAX AND
LOAN IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES ESCROW
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C267 51214 Byrd Building Office 2,992 Yes
C268 50972 Duke Medical Office Office 760 Yes
C269 51229 5240 North 16th Street Building Office 1,112 Yes
C270 51488 Scripps Crest Building Office 433 Yes
C271 51474 Clocktower Center Office 1,581 Yes
C272 51369 East Mississippi Professional Office Building Office 4,243 Yes
C273 51000 U.S. Fish and Wildlife Center Office 705 Yes
C274 51272 Bethany Medical Plaza Office $ 2,265 Yes
P275 4547840 The Weatherly Inn Health Care No
C276 50330 Powell Valley Assisted Living Center Health Care 21,363 Yes
C277 51501 Hamilton Plaza Nursing Home Health Care 4,001 Yes
C278 51500 Iliff Rehab and Nursing Center Health Care 66,230 Yes
P279 3101599 Olympics West Retirement Center Health Care No
P280 4545786 Merrill Gardens at Northgate Health Care No
C281 50946 Chateau Marymoor Retirement & Asst. Living Comm. Health Care 21,846 Yes
C282 50803 Fairfield Manor Nursing Home Health Care 3,603 Yes
P283 3048741 Hearthstone Cottage of Ellensburg Health Care No
P284 1865559 Carson Oaks Health Care No
P285 4544128 Life Care Center of Escondido Health Care No
C286 51499 Park Manor Nursing Home Health Care 3,262 Yes
P287 3032034 Highline Convalescent Center Health Care No
P288 3009594 Valley Village Mobile Home Park Mobile Home No
P289 3012291 Cordovan Mobile Home Estates Mobile Home No
P290 3022969 Mesa Village Mobile Home Park Mobile Home No
P291 3009545 Village Green Mobile Home Park Mobile Home No
P292 3009586 Orcutt Ranch Mobile Home Park Mobile Home No
P293 3009636 Town & Country Mobile Home Park Mobile Home No
P294 3025335 Blue Sky Mobile Home Park Mobile Home No
P295 1796705 Meadowbrook Mobile Home Estate Mobile Home No
P296 3102456 Springbrook Estates Manufactured Home Park Ph. I Mobile Home No
P297 3043486 College Place Mobile Home Park Mobile Home No
P298 3015435 Silverado Estates Mobile Home No
P299 3012705 Sierra Vista Mobile Home Park Mobile Home No
C300 51418 Deep Valley Mobile Home Park Mobile Home 1,185 Yes
P301 3015526 E-Z Storage Pico Mini Storage No
P302 3015500 E-Z Storage Desoto Mini Storage No
P303 3015518 E-Z Storage Van Nuys Mini Storage No
P304 3000239 America's Best Self Storage Mini Storage No
<CAPTION>
ANNUAL
INITIAL DEPOSIT DEPOSIT TO
LOAN TO TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C267 51214 Byrd Building Office 17,298
C268 50972 Duke Medical Office Office
C269 51229 5240 North 16th Street Building Office 21,954
C270 51488 Scripps Crest Building Office 45,000 33,680
C271 51474 Clocktower Center Office 8,000 18,574
C272 51369 East Mississippi Professional Office Building Office
C273 51000 U.S. Fish and Wildlife Center Office
C274 51272 Bethany Medical Plaza Office $10,000 $15,950
P275 4547840 The Weatherly Inn Health Care
C276 50330 Powell Valley Assisted Living Center Health Care
C277 51501 Hamilton Plaza Nursing Home Health Care
C278 51500 Iliff Rehab and Nursing Center Health Care
P279 3101599 Olympics West Retirement Center Health Care
P280 4545786 Merrill Gardens at Northgate Health Care
C281 50946 Chateau Marymoor Retirement & Asst. Living Comm. Health Care
C282 50803 Fairfield Manor Nursing Home Health Care
P283 3048741 Hearthstone Cottage of Ellensburg Health Care
P284 1865559 Carson Oaks Health Care
P285 4544128 Life Care Center of Escondido Health Care
C286 51499 Park Manor Nursing Home Health Care
P287 3032034 Highline Convalescent Center Health Care
P288 3009594 Valley Village Mobile Home Park Mobile Home
P289 3012291 Cordovan Mobile Home Estates Mobile Home
P290 3022969 Mesa Village Mobile Home Park Mobile Home
P291 3009545 Village Green Mobile Home Park Mobile Home
P292 3009586 Orcutt Ranch Mobile Home Park Mobile Home
P293 3009636 Town & Country Mobile Home Park Mobile Home
P294 3025335 Blue Sky Mobile Home Park Mobile Home
P295 1796705 Meadowbrook Mobile Home Estate Mobile Home
P296 3102456 Springbrook Estates Manufactured Home Park Ph. I Mobile Home
P297 3043486 College Place Mobile Home Park Mobile Home
P298 3015435 Silverado Estates Mobile Home
P299 3012705 Sierra Vista Mobile Home Park Mobile Home
C300 51418 Deep Valley Mobile Home Park Mobile Home
P301 3015526 E-Z Storage Pico Mini Storage
P302 3015500 E-Z Storage Desoto Mini Storage
P303 3015518 E-Z Storage Van Nuys Mini Storage
P304 3000239 America's Best Self Storage Mini Storage
<CAPTION>
CURRENT
BALANCE IN
LOAN TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW REPORT DATE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
C267 51214 Byrd Building Office 13,047 5/27/99
C268 50972 Duke Medical Office Office 5/27/99
C269 51229 5240 North 16th Street Building Office 12,877 5/27/99
C270 51488 Scripps Crest Building Office 47,898 5/27/99
C271 51474 Clocktower Center Office 12,707 5/27/99
C272 51369 East Mississippi Professional Office Building Office 5/27/99
C273 51000 U.S. Fish and Wildlife Center Office 5/27/99
C274 51272 Bethany Medical Plaza Office $ 9,720 5/27/99
P275 4547840 The Weatherly Inn Health Care 5/26/99
C276 50330 Powell Valley Assisted Living Center Health Care 5/25/99
C277 51501 Hamilton Plaza Nursing Home Health Care 5/27/99
C278 51500 Iliff Rehab and Nursing Center Health Care 5/27/99
P279 3101599 Olympics West Retirement Center Health Care 5/26/99
P280 4545786 Merrill Gardens at Northgate Health Care 5/26/99
C281 50946 Chateau Marymoor Retirement & Asst. Living Comm. Health Care 5/27/99
C282 50803 Fairfield Manor Nursing Home Health Care 5/27/99
P283 3048741 Hearthstone Cottage of Ellensburg Health Care 5/26/99
P284 1865559 Carson Oaks Health Care 5/26/99
P285 4544128 Life Care Center of Escondido Health Care 5/26/99
C286 51499 Park Manor Nursing Home Health Care 5/27/99
P287 3032034 Highline Convalescent Center Health Care 5/26/99
P288 3009594 Valley Village Mobile Home Park Mobile Home 5/26/99
P289 3012291 Cordovan Mobile Home Estates Mobile Home 5/26/99
P290 3022969 Mesa Village Mobile Home Park Mobile Home 5/26/99
P291 3009545 Village Green Mobile Home Park Mobile Home 5/26/99
P292 3009586 Orcutt Ranch Mobile Home Park Mobile Home 5/26/99
P293 3009636 Town & Country Mobile Home Park Mobile Home 5/26/99
P294 3025335 Blue Sky Mobile Home Park Mobile Home 5/26/99
P295 1796705 Meadowbrook Mobile Home Estate Mobile Home 5/26/99
P296 3102456 Springbrook Estates Manufactured Home Park Ph. I Mobile Home 5/26/99
P297 3043486 College Place Mobile Home Park Mobile Home 5/26/99
P298 3015435 Silverado Estates Mobile Home 5/26/99
P299 3012705 Sierra Vista Mobile Home Park Mobile Home 5/26/99
C300 51418 Deep Valley Mobile Home Park Mobile Home 5/27/99
P301 3015526 E-Z Storage Pico Mini Storage 5/26/99
P302 3015500 E-Z Storage Desoto Mini Storage 5/26/99
P303 3015518 E-Z Storage Van Nuys Mini Storage 5/26/99
P304 3000239 America's Best Self Storage Mini Storage
</TABLE>
B-8
<PAGE> 189
ANNEX B
CAPITAL IMPROVEMENT, REPLACEMENT RESERVE AND ESCROW ACCOUNTS
(ALL MORTGAGE LOANS)
<TABLE>
<CAPTION>
INITIAL DEPOSIT CURRENT BALANCE
TO CAPITAL IN CAPITAL INITIAL DEPOSIT TO
LOAN IMPROVEMENT IMPROVEMENT REPLACEMENT
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES RESERVES
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P305 3009263 Save-Most Self Storage Mini Storage
C306 51411 Pantego American Store. & Mini Storage
Arkansas Lane Self Store.
P307 3012887 Aim All Storage Mini Storage
C308 51427 Stor-A-Lot Mini Storage
C309 51017 A-Safe Mini Storage Mini Storage
P310 3021862 Castro Valley Storage Mini Storage
C311 51083 Plaza 303 - All Storage
Self-Storage Mini Storage
P312 8317463 Broadway Public Storage II Mini Storage
P313 3019114 Buffalo Mini-Storage Mini Storage
C314 51206 Discount Storage Mini Storage
C315 51252 American Self Storage Mini Storage
C316 51364 Industrial Blvd Self-Storage Mini Storage
C317 51440 LaSoto Business Park Mini Storage
C318 51416 DeSoto Preferred Storage Mini Storage
P319 3024635 Folsom Lake Ford Special Purpose
P320 3103405 Act III Theatre Special Purpose
P321 1867084 Oskoui Health Club Portfolio Special Purpose
P322 3024643 Folsom Lake Toyota Special Purpose
P323 3040482 Bellevue Auto Center Special Purpose
P324 3022993 L.A. Fitness Sports Club Special Purpose
P325 1792761 University Volkswagon Special Purpose
P326 3011822 Las Vegas Athletic Club Special Purpose
P327 3005691 Lynnwood Auto Center Special Purpose
P328 4540613 Inn at the Market Hotel
P329 2092120 Best Western Anaheim Inn Hotel
P330 3006723 670 West 17th Street Mixed Use
- ---------------------------------------------------------------------------------------------------------------------------------
TOTALS $1,504,067 $812,640 $963,781
<CAPTION>
ANNUAL
DEPOSIT TO CURRENT BALANCE TAX AND
LOAN REPLACEMENT IN REPLACEMENT INSURANCE
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE RESERVES RESERVES ESCROW
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
P305 3009263 Save-Most Self Storage Mini Storage No
C306 51411 Pantego American Store. & Mini Storage 14,225 2,371 Yes
Arkansas Lane Self Store.
P307 3012887 Aim All Storage Mini Storage No
C308 51427 Stor-A-Lot Mini Storage 5,192 2,165 Yes
C309 51017 A-Safe Mini Storage Mini Storage 7,879 5,290 Yes
P310 3021862 Castro Valley Storage Mini Storage No
C311 51083 Plaza 303 - All Storage
Self-Storage Mini Storage 7,438 4,987 Yes
P312 8317463 Broadway Public Storage II Mini Storage No
P313 3019114 Buffalo Mini-Storage Mini Storage No
C314 51206 Discount Storage Mini Storage $ 5,000 $ 3,761 Yes
C315 51252 American Self Storage Mini Storage 4,941 3,299 Yes
C316 51364 Industrial Blvd Self-Storage Mini Storage 1,859 932 Yes
C317 51440 LaSoto Business Park Mini Storage 4,630 1,546 Yes
C318 51416 DeSoto Preferred Storage Mini Storage 4,475 1,493 Yes
P319 3024635 Folsom Lake Ford Special Purpose No
P320 3103405 Act III Theatre Special Purpose No
P321 1867084 Oskoui Health Club Portfolio Special Purpose No
P322 3024643 Folsom Lake Toyota Special Purpose No
P323 3040482 Bellevue Auto Center Special Purpose No
P324 3022993 L.A. Fitness Sports Club Special Purpose No
P325 1792761 University Volkswagon Special Purpose No
P326 3011822 Las Vegas Athletic Club Special Purpose No
P327 3005691 Lynnwood Auto Center Special Purpose No
P328 4540613 Inn at the Market Hotel No
P329 2092120 Best Western Anaheim Inn Hotel No
P330 3006723 670 West 17th Street Mixed Use No
- -------------------------------------------------------------------------------------------------------------------------------
TOTALS $2,280,917 $1,810,309
<CAPTION>
ANNUAL CURRENT
INITIAL DEPOSIT DEPOSIT TO BALANCE IN
LOAN TO TI/LC TI/LC TI/LC
SEQUENCE NUMBER PROPERTY NAME PROPERTY TYPE ESCROW ESCROW ESCROW REPORT DATE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P305 3009263 Save-Most Self Storage Mini Storage 5/26/99
C306 51411 Pantego American Store. & Mini Storage 5/27/99
Arkansas Lane Self Store.
P307 3012887 Aim All Storage Mini Storage 5/26/99
C308 51427 Stor-A-Lot Mini Storage 5/27/99
C309 51017 A-Safe Mini Storage Mini Storage 5/10/99
P310 3021862 Castro Valley Storage Mini Storage 5/26/99
C311 51083 Plaza 303 - All Storage
Self-Storage Mini Storage 5/25/99
P312 8317463 Broadway Public Storage II Mini Storage 5/26/99
P313 3019114 Buffalo Mini-Storage Mini Storage 5/26/99
C314 51206 Discount Storage Mini Storage 5/27/99
C315 51252 American Self Storage Mini Storage 5/27/99
C316 51364 Industrial Blvd Self-Storage Mini Storage 5/27/99
C317 51440 LaSoto Business Park Mini Storage 5/27/99
C318 51416 DeSoto Preferred Storage Mini Storage 5/27/99
P319 3024635 Folsom Lake Ford Special Purpose 5/26/99
P320 3103405 Act III Theatre Special Purpose 5/26/99
P321 1867084 Oskoui Health Club Portfolio Special Purpose 5/26/99
P322 3024643 Folsom Lake Toyota Special Purpose 5/26/99
P323 3040482 Bellevue Auto Center Special Purpose 5/26/99
P324 3022993 L.A. Fitness Sports Club Special Purpose 5/26/99
P325 1792761 University Volkswagon Special Purpose 5/26/99
P326 3011822 Las Vegas Athletic Club Special Purpose 5/26/99
P327 3005691 Lynnwood Auto Center Special Purpose 5/26/99
P328 4540613 Inn at the Market Hotel 5/26/99
P329 2092120 Best Western Anaheim Inn Hotel 5/26/99
P330 3006723 670 West 17th Street Mixed Use 5/26/99
- -------------------------------------------------------------------------------------------------------------------------------
TOTALS $2,082,981 $686,573 $1,622,490
</TABLE>
B-9
<PAGE> 190
ANNEX B
MULTIFAMILY SCHEDULE
<TABLE>
<CAPTION>
SEQUENCE LOAN NUMBER PROPERTY NAME CUT-OFF BALANCE UTILITIES TENANT PAYS/PAYMENT OF UTIL.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments $23,032,935 Electric/Gas/Hot Water/Cable TV
C2 51384 Club Mira Lago Apartments $20,689,929 Electric, Hot Water, Cable TV
-------------
SUB-TOTAL CROSSED LOANS $43,722,864
P3 3055209 Rancho Palisades Apartments $25,919,852 Partial Paid by Each
C4 50372 Gessner Apartments Portfolio $13,279,355 Electric
C5 50389 Sheldon Palms Apartments $12,481,772 Sewer, Water
P6 3102126 Pioneer Ridge Apartments $11,282,875 Partial Paid by Each
C7 51482 South Point Apartments $10,139,434 Electric/Gas
P8A 3102282 Birnamwood Apartments Partial Paid by Each
P8B 3102282 Southridge Apartments Partial Paid by Each
P8C 3102282 Spring Mountain Apartments Partial Paid by Each
P8D 3102282 Hermitage Apartments Partial Paid by Each
P8 3102282 SIMA Multifamily Portfolio (Roll-Up) $ 9,245,031 Partial Paid by Each
C9 51047 San Michele Apartments $ 9,206,339 Electric/Gas/Cable TV
P10 3008489 American River Commons Apartments $ 8,104,769 Partial Paid by Each
C11 50523 Tenaya Palms Apartments $ 6,349,443 Electric/Gas/Cable TV
P12 3010212 Quail Tree Apartments $ 5,879,127 Partial Paid by Each
C13A 51024 L8 - Goldfarb Apartments-107-111 E.
Springfield Ave Electric/Water/Cable TV
C13B 51024 L8 - Goldfarb Apartments-405 E. Stoughton St. Electric/Water/Cable TV
C13C 51024 L8 - Goldfarb Apartments-608 E. White St. Electric/Water/Cable TV
C13D 51024 L8 - Goldfarb Apartments-402 S. Fifth St. Electric/Water/Cable TV
C13E 51024 L8 - Goldfarb Apartments-402 N. Gregory St. Electric/Water/Cable TV
C13 51024 L8 - Goldfarb Apartments (Roll-Up) $ 5,136,130 Electric/Water/Cable TV
C14 50822 Woodglen Apartments $ 5,103,876 Electric/Gas/Cable TV
P15 3007648 Saratoga Palms $ 4,993,571 Partial Paid by Each
P16 3014594 Walnut Square Apartments Complex $ 4,839,503 Tenant(s)
P17 3102233 Crystal Lake Apartments $ 4,691,913 Partial Paid by Each
P18 3009024 River Park Apartments $ 4,434,676 Partial Paid by Each
P19 3013216 Warren Coronado Apartments $ 4,293,120 Landlord
P20 3047925 Shoreline Plaza Apartments $ 4,197,890 Partial Paid by Each
P21A 4540332 Wood River Park Apartments Partial Paid by Each
P21B 4540332 Tudor Park Apartments Partial Paid by Each
P21C 4540332 Russian Jack Apartments Partial Paid by Each
P21 4540332 Gold Belt Multifamily Portfolio (Roll-Up) $ 4,153,721 Partial Paid by Each
C22A 50292 Woodside Village Apartments Electric/Cable TV
C22B 50292 Fayette Apartments Electric/Cable TV
C22C 50292 Vantage Point Apartments Electric/Cable TV
C22 50292 Fayette/Vantage Point/Woodside
Village (Roll-Up) $4,131,865 Electric/Cable TV
P23 3102076 Quail Hill Apartments $4,094,902 Tenant(s)
<CAPTION>
STUDIO 1 BEDROOM 2 BEDROOM 3 BEDROOM 4 BEDROOM
-----------------------------------------------------------------------
# OF AVG # OF AVG # OF AVG # OF AVG # OF AVG
SEQUENCE LOAN NUMBER PROPERTY NAME UNITS RENT UNITS RENT UNITS RENT UNITS RENT UNITS RENT
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
C1 51113 Indian Hills Apartments 192 $625 292 $760
C2 51384 Club Mira Lago Apartments 16 910 192 986 96 $1,235
Sub-Total Crossed Loans
P3 3055209 Rancho Palisades Apartments 358 769 204 1035
C4 50372 Gessner Apartments Portfolio 570 349 240 474
C5 50389 Sheldon Palms Apartments 156 530 84 665 72 780
P6 3102126 Pioneer Ridge Apartments 48 615 200 725 48 849
C7 51482 South Point Apartments 224 490 160 632.5
P8A 3102282 Birnamwood Apartments 48 488 96 574 57 695
P8B 3102282 Southridge Apartments 33 415 95 495
P8C 3102282 Spring Mountain Apartments 87 475 16 525
P8D 3102282 Hermitage Apartments 40 415 20 485
P8 3102282 SIMA Multifamily Portfolio
(Roll-Up) 208 457 227 530 57 695
C9 51047 San Michele Apartments 96 595 120 692
P10 3008489 American River Commons
Apartments 141 580 142 672 17 878
C11 50523 Tenaya Palms Apartments 40 640 80 730 16 918
P12 3010212 Quail Tree Apartments 122 $485 88 565 16 750
C13A 51024 L8 - Goldfarb Apartments-107-111 E.
Springfield Ave 1 395 24 604 36 735 3 $967
C13B 51024 L8 - Goldfarb Apartments-405 E.
Stoughton St. 8 659 4 1100
C13C 51024 L8 - Goldfarb Apartments-608 E.
White St. 1 525 11 651
C13D 51024 L8 - Goldfarb Apartments-402 S.
Fifth St. 10 953
C13E 51024 L8 - Goldfarb Apartments-402 N.
Gregory St. 8 806
C13 51024 L8 - Goldfarb Apartments (Roll-Up) 1 395 33 687 55 707 17 982
C14 50822 Woodglen Apartments 20 635 114 703
P15 3007648 Saratoga Palms 24 525 104 625 24 725
P16 3014594 Walnut Square Apartments Complex 23 892 49 986 28 1085
P17 3102233 Crystal Lake Apartments 75 570 75 770
P18 3009024 River Park Apartments 80 491 96 570
P19 3013216 Warren Coronado Apartments 357 352 149 425
P20 3047925 Shoreline Plaza Apartments 254 415
P21A 4540332 Wood River Park Apartments 2 525 9 597 19 742 33 882
P21B 4540332 Tudor Park Apartments 1 550 29 590 12 681
P21C 4540332 Russian Jack Apartments 30 592 12 690
P21 4540332 Gold Belt Multifamily Portfolio
(Roll-Up) 3 533 68 592 43 710 33 882
C22A 50292 Woodside Village Apartments 46 331 54 419
C22B 50292 Fayette Apartments 10 400 30 450 10 337
C22C 50292 Vantage Point Apartments 10 $399 36 $473
C22 50292 Fayette/Vantage Point/Woodside
Village (Roll-Up) 66 352 120 443 10 $337
P23 3102076 Quail Hill Apartments 112 657 24 810
</TABLE>
<PAGE> 191
ANNEX B
MULTIFAMILY SCHEDULE
<TABLE>
<CAPTION>
Studio 1 Bedroom
---------------------
Loan Utilities # of Avg # of
Sequence Number Property Name Cut-Off Balance Tenant Pays/Payment of Util. Units Rent Units
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P24 3040078 Heritage Oaks Apartments $4,051,542 Partial Paid by Each 54
P25 1865195 Trailside Apartments $3,933,631 Partial Paid by Each 37
P26 3012580 Oak Park Apartments $3,839,777 Unable to Determine 108
C27 50402 Veranda Apartments $3,500,646 Electric/Gas/Cable TV 80
C28 50985 Mansions South Apartments $3,463,267 None 18
P29 3013273 Warren Inn Apartments $3,442,710 Partial Paid by Each 259 $423 156
P30 3016060 Viking Villas Apartments $3,380,757 Partial Paid by Each 141
C31 51514 Heritage Trace Apartments $3,354,393 Electric, Cable TV 96
P32 3018421 Mulberry Hollow Apartments $3,345,337 Partial Paid by Each
P33 3011269 Amberwood Garden Apartments $3,326,627 Partial Paid by Each 22
P34 3101144 Barclay Village Apartments $3,323,001 Partial Paid by Each 14
P35 3016565 Garden Hill Apartments $3,305,139 Partial Paid by Each 3
P36 4544748 Cedar Meadows Apartments $3,173,500 Partial Paid by Each
P37 3015872 Tamarack Pointe Villas $2,952,999 Partial Paid by Each 24
P38 3021714 Balfour Place Apartments $2,810,496 Unable to Determine 48
P39 3044039 Desert Garden Apartments $2,795,968 Tenant(s) 118
C40 50731 Border City Mills $2,729,241 Electric 21
P41 3014289 Empire Terrace Apartments $2,653,853 Partial Paid by Each 48
P42 1201383 The Park Manor Apartments $2,568,203 Partial Paid by Each 280
C43 51082 Cinnamon Tree Apartments $2,552,183 Electric 1
C44 51290 Fletcher Valley Apartments $2,491,758 Electric/Cable TV, Hot Water, Hot Water 66
P45 3016037 Sierra Vista Square Apartments $2,481,634 Partial Paid by Each 173
C46 51462 College Terrace Apartments II $2,473,289 Electric/Gas/Hot Water/Cable TV/AC/Heat
C47 51208 Loma Linda Gardens $2,445,682 Cable TV 1 350 63
C48 51279 Silver Tree Apartments $2,372,608 Electric/Gas 16 345 42
P49 3035128 Warren House Apartments $2,370,344 Unable to Determine 92 405 100
C50 51032 Westwood Apartments $2,324,797 Electric/Gas/Cable TV 48
C51 51446 Ross Tower Apartments $2,273,825 Electric/Gas/Hot Water/AC/Heat 60
P52 3010428 Pueblo Village Apartments $2,245,930 Partial Paid by Each 62
C53A 51496 Greenbrier And Village Oaks
Apartments-Greenbrier Apts None 35
C53B 51496 Greenbrier And Village Oaks
Apartments-Village Oaks Apts None 35
C53 51496 Greenbrier And Village Oaks
Apartments (Roll-Up) $2,226,855 None 70
P54 3036670 Gilman Terrace Apartments II $2,192,324 Partial Paid by Each 9 584 14
P55 3034980 Warren House East Apartments $2,085,083 Landlord 63 330 159
C56 51490 Scottsdale Serrento Apartments $1,987,838 Electric/Hot Water/Cable TV/Heat 35 555 69
P57 3012309 Saratoga Palms at Diamond Head $1,928,036 Tenant(s) 8
P58 3034733 Warren House/Terrace II Apts. $1,896,276 Partial Paid by Each 108 319 71
P59 3021334 Weddington Apartments $1,872,857 Partial Paid by Each 32
C60 51054 Spanish Garden Apartments $1,869,684 Electric 2 $325 58
C61 51517 Camelot West Apartments $1,868,496 Electric, Cable TV 48
P62 3019882 Juniper Court Apartments $1,866,883 Partial Paid by Each 48
C63 51485 Oceana Apartments $1,866,719 None 35 453 41
C64 51477 El Caballero Apartments $1,851,207 None 58 432 12
C65 51461 College Terrace Apartments I $1,827,651 Electric/Gas/Hot Water/AC/Heat 1
C66 50378 Buckhead Gardens Apts $1,810,943 Electric 34
<CAPTION>
1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
-----------------------------------------------------------
Loan Avg # of Avg # of Avg # of Avg
Sequence Number Property Name Rent Units Rent Units Rent Units Rent
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P24 3040078 Heritage Oaks Apartments $622 56 744
P25 1865195 Trailside Apartments 597 81 852 2 1150
P26 3012580 Oak Park Apartments 545 62 671
C27 50402 Veranda Apartments 406 76 464
C28 50985 Mansions South Apartments 690 96 900 32 960
P29 3013273 Warren Inn Apartments 348 37 449
P30 3016060 Viking Villas Apartments 419 11 774 1 1000
C31 51514 Heritage Trace Apartments 369 52 464 52 534
P32 3018421 Mulberry Hollow Apartments 120 583 56 695
P33 3011269 Amberwood Garden Apartments 763 50 928 1 1200
P34 3101144 Barclay Village Apartments 546 132 602
P35 3016565 Garden Hill Apartments 588 55 765 22 880
P36 4544748 Cedar Meadows Apartments 144 565
P37 3015872 Tamarack Pointe Villas 865 24 1062
P38 3021714 Balfour Place Apartments 500 148 632 24 754
P39 3044039 Desert Garden Apartments 458 30 495
C40 50731 Border City Mills 568 80 658 5 802
P41 3014289 Empire Terrace Apartments 630 46 730
P42 1201383 The Park Manor Apartments 444 120 551
C43 51082 Cinnamon Tree Apartments 375 23 195 41 198
C44 51290 Fletcher Valley Apartments 540 6 625
P45 3016037 Sierra Vista Square Apartments 476 1(1) NAP(1)
C46 51462 College Terrace Apartments II 22 $1,540
C47 51208 Loma Linda Gardens 470 66 585
C48 51279 Silver Tree Apartments 410 40 533
P49 3035128 Warren House Apartments 450 52 578
C50 51032 Westwood Apartments 345 96 424 24 490
C51 51446 Ross Tower Apartments 500 45 692
P52 3010428 Pueblo Village Apartments 476 60 578 2(2) 675(2)
C53A 51496 Greenbrier And Village Oaks
Apartments-Greenbrier Apts 475 28 614
C53B 51496 Greenbrier And Village Oaks
Apartments-Village Oaks Apts 496 29 612
C53 51496 Greenbrier And Village Oaks
Apartments (Roll-Up) 486 57 613
P54 3036670 Gilman Terrace Apartments II 721 15 978 4 1376
P55 3034980 Warren House East Apartments 386 35 485
C56 51490 Scottsdale Serrento Apartments 624 84 770
P57 3012309 Saratoga Palms at Diamond Head 504 33 602 15 666
P58 3034733 Warren House/Terrace II Apts. 387 44 445
P59 3021334 Weddington Apartments 663 18 781
C60 51054 Spanish Garden Apartments 426 10 465
C61 51517 Camelot West Apartments 487 1 638 18 655
P62 3019882 Juniper Court Apartments 400 48 475
C63 51485 Oceana Apartments 550 5 750
C64 51477 El Caballero Apartments 550 14 763
C65 51461 College Terrace Apartments I 500 1 740 17 $1,480
C66 50378 Buckhead Gardens Apts 612 16 750
</TABLE>
B-11
<PAGE> 192
ANNEX B
MULTIFAMILY SCHEDULE
<TABLE>
<CAPTION>
Studio 1 Bedroom
---------------------
Loan Utilities # of Avg # of
Sequence Number Property Name Cut-Off Balance Tenant Pays/Payment of Util. Units Rent Units
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
P67 3037876 Warren Village Mobile $1,801,315 Partial Paid by Each
P68 3037868 Warren Inn (Mobile) $1,801,315 Landlord 157 391 69
C69 51345 Drake Plaza Apartments $1,788,857 Electric/Gas/Trash/Hot Water/Heat 59
P70 3014420 The Courtyard Apartments $1,782,290 Tenant(s) 111
P71 3016698 Maryland Gardens Apartments $1,765,068 Partial Paid by Each 72
P72 1796796 Upstairs/Downstairs Apartments $1,733,675 Unable to Determine 1
C73 50401 Colbath Apartments $1,718,734 Electric/Gas/Cable TV/AC/Heat 10
C74 51031 Stonewood Apartments $1,632,305 Electric/Cable TV 31
P75 3034998 Park Thomas Apartments $1,611,200 Partial Paid by Each 85 326 108
C76 50995 232 Front Street $1,580,492 Electric 2 2225
P77 3013232 Autumn Woods Apartments $1,553,750 Partial Paid by Each 44
P78 3036001 Newport 40 $1,551,460 Partial Paid by Each
P79 2092443 2121-2127 Fillmore Street $1,529,674 Tenant(s) 6 1400 10
P80 3015682 Regents Apartments $1,523,675 Partial Paid by Each 2 478 2
C81 51463 Fairview Apartments $1,467,308 None 1
C82 51100 Mission Manor Apartments $1,436,874 Electric/Gas/Hot Water/AC/Heat 9 375 20
C83 51476 Peach Tree Apartments $1,340,526 Electric/Gas/Hot Water/Heat 88
C84 51489 Highland Square Apartments $1,195,213 Electric 3
C85 51479 Carousel Apartments $1,168,297 Electric/Cable TV 52
C86 51505 Casa Del Valle Apartments $1,030,748 Electric/Gas
C87 51270 1346 W. Jarvis Apartments $998,876 Electric 1 495 30
C88 51478 Madison Square Apartments $893,649 None 2 495 1
C89 51486 Kelvin Square Apartments $893,500 Electric 39 469 1
C90 51467 Brynwood Apartments $792,246 None 29 462 14
C91 51451 Riata Court Apartments $765,105 Electric/AC/Heat
C92 51466 Park Place Apartments $755,718 Electric 18
C93 51464 Countryside Court Apartments $665,637 Electric/AC 10
C94 51226 Edgewood Apartments $643,714 Electric/Cable TV/AC 6
C95 51420 Evergreen Apartments $608,972 None
C96 51487 Crenshire Villa Apartments $597,390 Electric/Gas/Cable TV
C97 51459 Highlander Apartments $546,773 Electric/Gas/Hot Water/Cable TV/AC/Heat 1
C98 51441 Village Apartments $484,756 Electric, AC, Heat 16
<CAPTION>
1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom
-----------------------------------------------------------
Loan Avg # of Avg # of Avg # of Avg
Sequence Number Property Name Rent Units Rent Units Rent Units Rent
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
P67 3037876 Warren Village Mobile 80 385 116 456
P68 3037868 Warren Inn (Mobile) 485
C69 51345 Drake Plaza Apartments 385 19 478
P70 3014420 The Courtyard Apartments 396 1(1) NAP(1)
P71 3016698 Maryland Gardens Apartments 389 48 495
P72 1796796 Upstairs/Downstairs Apartments 500 18(3) 2,022(3)
C73 50401 Colbath Apartments 950 12 1295
C74 51031 Stonewood Apartments 383 50 460 6 535
P75 3034998 Park Thomas Apartments 378
C76 50995 232 Front Street 2 2512 4 2512
P77 3013232 Autumn Woods Apartments 318 76 382
P78 3036001 Newport 40 34 794 6 892
P79 2092443 2121-2127 Fillmore Street 1600
P80 3015682 Regents Apartments 671 28 939 2 975
C81 51463 Fairview Apartments 375 70 470 1 565
C82 51100 Mission Manor Apartments 375 67 450
C83 51476 Peach Tree Apartments 430 1 520
C84 51489 Highland Square Apartments 381 50 471 3 633
C85 51479 Carousel Apartments 332 40 455
C86 51505 Casa Del Valle Apartments 45 493
C87 51270 1346 W. Jarvis Apartments 630 3 612
C88 51478 Madison Square Apartments 643 13 843
C89 51486 Kelvin Square Apartments 600 1 700
C90 51467 Brynwood Apartments 491 5 532 2 745
C91 51451 Riata Court Apartments 12 717 4 1,300
C92 51466 Park Place Apartments 318 30 363
C93 51464 Countryside Court Apartments 350 24 399
C94 51226 Edgewood Apartments 510 12 578
C95 51420 Evergreen Apartments 37 594
C96 51487 Crenshire Villa Apartments 17 824
C97 51459 Highlander Apartments 350 23 417
C98 51441 Village Apartments 459 32 571
</TABLE>
(1) Manager's Unit
(2) Number of bedrooms on these 2 units is not available.
(3) 3 5-BR's @ $2,000 and 15 6-BR's @ $2,026
B-12
<PAGE> 193
(NORWEST BANKS LOGO)
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
DISTRIBUTION DATE STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
STATEMENT SECTIONS PAGE(S)
<S> <C>
Certificate Distribution Detail 2
Certificate Factor Detail 3
Reconciliation Detail 4
Other Required Information 5
Ratings Detail 6
Current Mortgage Loan and Property Stratification Tables 7-15
Mortgage Loan Detail 16
Principal Prepayment Detail 17
Historical Detail 18
Delinquency Loan Detail 19
Specially Serviced Loan Detail 20-21
Modified Loan Detail 22
Liquidated Loan Detail 23
</TABLE>
<TABLE>
<CAPTION>
UNDERWRITER SERVICER SPECIAL SERVICER
<S> <C> <C>
Banc of America Securities LLC ORIX Real Estate Capital Markets, LLC ORIX Real Estate Capital Markets, LLC
100 North Tryon Street 1717 Main Street, 14th Floor 1717 Main Street, 14th Floor
Charlotte, NC 28255 Dallas, TX 75201 Dallas, TX 75201
Contact: David Gertner Contact: Paul G. Smyth Contact: Paul G. Smyth
Phone Number: (704) 388-3621 Phone Number: (214) 237-2010 Phone Number: (214) 237-2010
</TABLE>
This report has been compiled from information provided to Norwest by various
third parties, which may include the Servicer, Master Servicer, Special Servicer
and others. Norwest has not independently confirmed the accuracy of information
received from these third parties and assumes no duty to do so. Norwest
expressly disclaims any responsibility for the accuracy or completeness of
information furnished by third parties.
C-1
<PAGE> 194
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CERTIFICATE DISTRIBUTION DETAIL
<TABLE>
<CAPTION>
Class CUSIP Pass-Through Original Beginning Principal Interest Prepayment Realized Loss/
Rate Balance Balance Distribution Distribution Penalties Additional Trust
Fund Expenses
<S> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
A-2 N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
A-3 N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
A-4 N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
A-1C N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
A-2C N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
B N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
C N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
D N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
E N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
F N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
G N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
H N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
J N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
K N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
R-I N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
R-II N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
R-III N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
R-IIIU N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
R-IV N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
Totals 0.00 0.00 0.00 0.00 0.00 0.00
<CAPTION>
Class Total Ending Current
Distribution Balance Subordination
Level(1)
<S> <C> <C> <C>
A-1 0.00 0.00 0.00%
A-2 0.00 0.00 0.00%
A-3 0.00 0.00 0.00%
A-4 0.00 0.00 0.00%
A-1C 0.00 0.00 0.00%
A-2C 0.00 0.00 0.00%
B 0.00 0.00 0.00%
C 0.00 0.00 0.00%
D 0.00 0.00 0.00%
E 0.00 0.00 0.00%
F 0.00 0.00 0.00%
G 0.00 0.00 0.00%
H 0.00 0.00 0.00%
J 0.00 0.00 0.00%
K 0.00 0.00 0.00%
R-I 0.00 0.00 0.00%
R-II 0.00 0.00 0.00%
R-III 0.00 0.00 0.00%
R-IIIU 0.00 0.00 0.00%
R-IV 0.00 0.00 0.00%
Totals 0.00 0.00
</TABLE>
<TABLE>
<CAPTION>
Class CUSIP Pass-Through Original Beginning Interest Prepayment Total Ending
Rate Notional Notional Distribution Penalties Distribution Notional
Amount Amount Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
X N/A 0.000000% 0.00 0.00 0.00 0.00 0.00 0.00
</TABLE>
(1) Calculated by taking (A) the sum of the ending certificate balance of all
classes less (B) the sum of (i) the ending certificate balance of the designated
class and (ii) the ending certificate balance of all classes which are not
subordinate to the designated class and dividing the result by (A).
C-2
<PAGE> 195
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CERTIFICATE FACTOR DETAIL
<TABLE>
<CAPTION>
Class CUSIP Beginning Principal Interest Prepayment Realized Loss/ Ending
Balance Distribution Distribution Penalties Additional Trust Balance
Fund Expenses
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2 N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-3 N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-4 N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-1C N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
A-2C N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
B N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
C N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
D N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
E N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
F N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
G N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
H N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
J N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
K N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-I N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-II N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-III N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-IIIU N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
R-IV N/A 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000 0.00000000
</TABLE>
<TABLE>
<CAPTION>
Class CUSIP Beginning Ending
Notional Interest Prepayment Notional
Amount Distribution Penalties Amount
<S> <C> <C> <C> <C> <C>
X N/A 0.00000000 0.00000000 0.00000000 0.00000000
</TABLE>
C-3
<PAGE> 196
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
RECONCILIATION DETAIL
<TABLE>
<CAPTION>
ADVANCE SUMMARY SERVICING FEE BREAKDOWNS
<S> <C> <C> <C>
P & I Advances Outstanding 0.00 Current Period Accrued Servicing Fees 0.00
Servicing Advances Outstanding 0.00 Less Delinquent Servicing Fees 0.00
Less Reductions to Servicing Fees 0.00
Reimbursement for Interest on Advances 0.00 Plus Servicing Fees for Delinquent Payments Received 0.00
paid from general collections Plus Adjustments for Prior Servicing Calculation 0.00
Total Servicing Fees Collected 0.00
</TABLE>
CERTIFICATE INTEREST RECONCILIATION
<TABLE>
<CAPTION>
Accrued Net Aggregate Distributable Distributable Additional Interest Remaining Unpaid
Certificate Prepayment Certificate Certificate Interest Trust Fund Distribution Distributable
Class Interest Interest Shortfall Interest Adjustment Expenses Certificate Interest
<S> <C> <C> <C> <C> <C> <C> <C>
A-1 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-3 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-4 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-1C 0.00 0.00 0.00 0.00 0.00 0.00 0.00
A-2C 0.00 0.00 0.00 0.00 0.00 0.00 0.00
X 0.00 0.00 0.00 0.00 0.00 0.00 0.00
B 0.00 0.00 0.00 0.00 0.00 0.00 0.00
C 0.00 0.00 0.00 0.00 0.00 0.00 0.00
D 0.00 0.00 0.00 0.00 0.00 0.00 0.00
E 0.00 0.00 0.00 0.00 0.00 0.00 0.00
F 0.00 0.00 0.00 0.00 0.00 0.00 0.00
G 0.00 0.00 0.00 0.00 0.00 0.00 0.00
H 0.00 0.00 0.00 0.00 0.00 0.00 0.00
J 0.00 0.00 0.00 0.00 0.00 0.00 0.00
K 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total 0.00 0.00 0.00 0.00 0.00 0.00 0.00
</TABLE>
C-4
<PAGE> 197
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
OTHER REQUIRED INFORMATION
<TABLE>
<S> <C> <C>
Available Distribution Amount 0.00
Principal Distribution Amount 0.00
(a) Principal portion of Monthly Payments 0.00
and any Assumed Monthly Payments
(b) Principal Prepayments 0.00
(c) Collection of Principal on a Balloon 0.00
Loan after its Stated Maturity Date
(d) Liquidation Proceeds and Insurance 0.00
Proceeds received on a Mortgage Loan
(e) Liquidation Proceeds, Insurance Proceeds, 0.00
or REO Revenues received on an REO
Plus the excess of the prior Principal Distribution 0.00
Amount over the principal paid to the Sequential
Pay Certificates
Aggregate Number of Outstanding Loans 0
Aggregate Stated Principal Balance of the Mortgage Pool before distribution 0.00
Aggregate Stated Principal Balance of the Mortgage Pool after distribution 0.00
Total Servicing and Special Servicing Fee paid 0.00
Servicing Fee paid 0.00
Special Servicing Fee paid 0.00
Trustee Fee paid 0.00
Additional Trust Fund Expenses 0.00
(i) Fees paid to Special Servicer 0.00
(ii) Interest on Advances 0.00
(iii) Other Expenses of the Trust 0.00
</TABLE>
Appraisal Reduction Amount
<TABLE>
<CAPTION>
Appraisal Date Appraisal
Loan Reduction Reduction
Number Amount Effected
<S> <C> <C>
NONE
TOTAL
</TABLE>
C-5
<PAGE> 198
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
RATINGS DETAIL
<TABLE>
<CAPTION>
Original Ratings Current Ratings(1)
-------------------------------------------- --------------------------------------------
Class CUSIP DCR Fitch Moody's S&P DCR Fitch Moody's S&P
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
A-1 N/A
A-2 N/A
A-3 N/A
A-4 N/A
A-1C N/A
A-2C N/A
X N/A
B N/A
C N/A
D N/A
E N/A
F N/A
G N/A
H N/A
J N/A
K N/A
</TABLE>
NR - Designates that the class was not rated by the above agency at the time
of original issuance.
X - Designates that the above rating agency did not rate any classes in this
transaction at the time of original issuance.
N/A - Data not available this period.
1) For any class not rated at the time of original issuance by any particular
rating agency, no request has been made subsequent to issuance to obtain rating
information, if any, from such rating agency. The current ratings were obtained
directly from the applicable rating agency within 30 days of the payment date
listed above. The ratings may have changed since they were obtained. Because
the ratings may have changed, you may want to obtain current ratings directly
from the rating agencies.
<TABLE>
<S> <C> <C> <C>
Duff & Phelps Credit Rating Co. Fitch IBCA, Inc. Moody's Investors Service Standard & Poor's Rating Services
55 East Monroe Street One State Street Plaza 99 Church Street 26 Broadway
Chicago, Illinois 60603 New York, New York 10004 New York, New York 10007 New York, New York 10004
(312) 368-3100 (212) 908-0500 (212) 553-0300 (212) 208-8000
</TABLE>
C-6
<PAGE> 199
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
AGGREGATE POOL
SCHEDULED BALANCE
<TABLE>
<CAPTION>
% of
Scheduled # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
STATE(3)
<CAPTION>
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-7
<PAGE> 200
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
AGGREGATE POOL
DEBT SERVICE COVERAGE RATIO
<TABLE>
<CAPTION>
Debt Service # of Scheduled % of WAM Weighted
Coverage Ratio Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
PROPERTY TYPE(3)
<TABLE>
<CAPTION>
Property # of Scheduled % of WAM Weighted
Type Props. Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
NOTE RATE
<TABLE>
<CAPTION>
Note # of Scheduled % of WAM Weighted
Rate Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
SEASONING
<TABLE>
<CAPTION>
Seasoning # of Scheduled % of WAM Weighted
Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-8
<PAGE> 201
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
AGGREGATE POOL
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Anticipated Remaining # of Scheduled % of WAM Weighted
Term(2) Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
<TABLE>
<CAPTION>
Remaining Stated # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Remaining Amortization # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
AGE OF MOST RECENT NOI
<TABLE>
<CAPTION>
Age of Most # of Scheduled % of WAM Weighted
Recent NOI Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures
become available from borrowers on an asset level. In all cases the most current
DSCR provided by the Servicer is used. To the extent that no DSCR is provided by
the Servicer, information from the offering document is used. The Trustee makes
no representations as to the accuracy of the data provided by the borrower for
this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term
from the current month to the earlier of the Anticipated Repayment Date, if
applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro-rata the current loan
information to the properties based upon the Cut-off Date Balance of the related
mortgage loan as disclosed in the offering document.
Note: (i) There are no Hyper-Amortization Loans included in the Mortgage Pool.
C-9
<PAGE> 202
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
CONDUIT LOAN GROUP
SCHEDULED BALANCE
<TABLE>
<CAPTION>
% of
Scheduled # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
STATE(3)
<CAPTION>
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-10
<PAGE> 203
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
CONDUIT LOAN GROUP
DEBT SERVICE COVERAGE RATIO
<TABLE>
<CAPTION>
Debt Service # of Scheduled % of WAM Weighted
Coverage Ratio Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
PROPERTY TYPE(3)
<TABLE>
<CAPTION>
Property # of Scheduled % of WAM Weighted
Type Props. Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
NOTE RATE
<TABLE>
<CAPTION>
Note # of Scheduled % of WAM Weighted
Rate Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
SEASONING
<TABLE>
<CAPTION>
Seasoning # of Scheduled % of WAM Weighted
Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-11
<PAGE> 204
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
Conduit Loan Group
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Anticipated Remaining # of Scheduled % of WAM Weighted
Term(2) Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
<TABLE>
<CAPTION>
Remaining Stated # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Remaining Amortization # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
AGE OF MOST RECENT NOI
<TABLE>
<CAPTION>
Age of Most # of Scheduled % of WAM Weighted
Recent NOI Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures
become available from borrowers on an asset level. In all cases the most current
DSCR provided by the Servicer is used. To the extent that no DSCR is provided by
the Servicer, information from the offering document is used. The Trustee makes
no representations as to the accuracy of the data provided by the borrower for
this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term
from the current month to the earlier of the Anticipated Repayment Date, if
applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro-rata the current loan
information to the properties based upon the Cut-off Date Balance of the related
mortgage loan as disclosed in the offering document.
Note: (i) There are no Hyper-Amortization Loans included in the Mortgage Pool.
C-12
<PAGE> 205
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
PORTFOLIO LOAN GROUP
SCHEDULED BALANCE
<TABLE>
<CAPTION>
% of
Scheduled # of Scheduled Agg. WAM Weighted
Balance Loans Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
<TABLE>
STATE(3)
<CAPTION>
% of
# of Scheduled Agg. WAM Weighted
State Props. Balance Bal. (2) WAC Avg DSCR(1)
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-13
<PAGE> 206
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
PORTFOLIO LOAN GROUP
DEBT SERVICE COVERAGE RATIO
<TABLE>
<CAPTION>
Debt Service # of Scheduled % of WAM Weighted
Coverage Ratio Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
PROPERTY TYPE(3)
<TABLE>
<CAPTION>
Property # of Scheduled % of WAM Weighted
Type Props. Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
NOTE RATE
<TABLE>
<CAPTION>
Note # of Scheduled % of WAM Weighted
Rate Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
SEASONING
<TABLE>
<CAPTION>
Seasoning # of Scheduled % of WAM Weighted
Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
See footnotes on last page of this section.
C-14
<PAGE> 207
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
CURRENT MORTGAGE LOAN AND PROPERTY STRATIFICATION TABLES
PORTFOLIO LOAN GROUP
ANTICIPATED REMAINING TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Anticipated Remaining # of Scheduled % of WAM Weighted
Term(2) Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING STATED TERM (FULLY AMORTIZING LOANS)
<TABLE>
<CAPTION>
Remaining Stated # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
REMAINING AMORTIZATION TERM (ARD AND BALLOON LOANS)
<TABLE>
<CAPTION>
Remaining Amortization # of Scheduled % of WAM Weighted
Term Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
AGE OF MOST RECENT NOI
<TABLE>
<CAPTION>
Age of Most # of Scheduled % of WAM Weighted
Recent NOI Loans Balance Agg. (2) WAC Avg. DSCR(1)
Bal.
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
(1) Debt Service Coverage Ratios are updated periodically as new NOI figures
become available from borrowers on an asset level. In all cases the most current
DSCR provided by the Servicer is used. To the extent that no DSCR is provided by
the Servicer, information from the offering document is used. The Trustee makes
no representations as to the accuracy of the data provided by the borrower for
this calculation.
(2) Anticipated Remaining Term and WAM are each calculated based upon the term
from the current month to the earlier of the Anticipated Repayment Date, if
applicable, and the maturity date.
(3) Data in this table was calculated by allocating pro-rata the current loan
information to the properties based upon the Cut-off Date Balance of the related
mortgage loan as disclosed in the offering document.
Note: (i) There are no Hyper-Amortization Loans included in the Mortgage Pool.
C-15
<PAGE> 208
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
MORTGAGE LOAN DETAIL
<TABLE>
<CAPTION>
Anticipated Neg.
Loan Property Interest Principal Gross Repayment Maturity Amort.
Number ODCR Type(1) City State Payment Payment Coupon Date Date (Y/N)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Totals
<CAPTION>
Beginning Ending Paid Appraisal Appraisal Res. Mod.
Scheduled Scheduled Thru Reduction Reduction Strat. Code
Balance Balance Date Date Amount (2) (3)
<S> <C> <C> <C> <C> <C> <C>
Totals
</TABLE>
<TABLE>
<CAPTION>
(1) Property Type Code (2) Resolution Strategy Code
<S> <C> <C> <C> <C>
MF - Multi-Family OF - Office 1 - Modification 7 - REO 10 - Deed in Lieu of
RT - Retail MU - Mixed Use 2 - Foreclosure 8 - Resolved Foreclosure
HC - Health Care LO - Lodging 3 - Bankruptcy 9 - Pending Return 11 - Full Payoff
IN - Industrial SS - Self Storage 4 - Extension to Master Servicer 12 - Reps and Warranties
WH - Warehouse OT - Other 5 - Note Sale 13 - Other or TBD
MH - Mobile Home Park 6 - DPO
<CAPTION>
(3) Modification Code
<S> <C>
1 - Maturity Date Extension
2 - Amortization Change
3 - Principal Write-Off
4 - Combination
</TABLE>
C-16
<PAGE> 209
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
PRINCIPAL PREPAYMENT DETAIL
<TABLE>
<CAPTION>
Principal Prepayment Amount Prepayment Penalties
Offering Document ---------------------------------- ----------------------------------------------
Loan Number Cross-Reference Payoff Amount Curtailment Amount Prepayment Premium Yield Maintenance Premium
<S> <C> <C> <C> <C> <C>
Totals
</TABLE>
C-17
<PAGE> 210
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
HISTORICAL DETAIL
<TABLE>
<CAPTION>
Delinquencies Prepayments
- ------------------------------------------------------------------------------------------------------- ------------------------
Distribution 30-59 Days 60-89 Days 90 Days or More Foreclosure REO Modifications Curtailments Payoff
Date # Balance # Balance # Balance # Balance # Balance # Balance # Amount # Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
Rate and Maturities
- -----------------------------
Next Weighted Avg.
Coupon Remit WAM
<S> <C> <C>
</TABLE>
Note: Foreclosure and REO Totals are excluded from the delinquencies aging
categories.
C-18
<PAGE> 211
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
DELINQUENCY LOAN DETAIL
<TABLE>
<CAPTION>
Offering # of Current Outstanding Status of Resolution
Loan Number Document Months Paid Through P&I P&I Mortgage Strategy Servicing
Cross-Reference Delinq. Date Advances Advances** Loan(1) Code(2) Transfer Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Totals
<CAPTION>
Current Outstanding REO
Foreclosure Servicing Servicing Bankruptcy Date Date
Date Advances Advances
<S> <C> <C> <C> <C>
Totals
</TABLE>
<TABLE>
<CAPTION>
(1) Status of Mortgage Loan (2) Resolution Strategy Code
<S> <C> <C> <C> <C>
1 - Modification 6 - DPO 10 - Deed In Lieu of 1 - Modification 7 - REO
2 - Foreclosure 7 - REO Foreclosure 2 - Foreclosure 8 - Resolved
3 - Bankruptcy 8 - Resolved 11 - Full Payoff 3 - Bankruptcy 9 - Pending Return
4 - Extension 9 - Pending Return 12 - Reps and Warranties 4 - Extension to Master Servicer
5 - Note Sale to Master Servicer 13 - Other or TBD 5 - Note Sale 10- Deed in Lieu Of
6 - DPO Foreclosure
</TABLE>
** Outstanding P&I Advances include the current period advance
C-19
<PAGE> 212
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
SPECIALLY SERVICED LOAN DETAIL - PART 1
<TABLE>
<CAPTION>
Offering Servicing Resolution
Distribution Loan Document Transfer Strategy Scheduled Property State Interest Actual
Date Number Cross-Reference Date Code(1) Balance Type(2) Rate Balance
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
Net Remaining
Operating NOI DSCR Note Maturity Amortization
Income Date Date Date Term
<S> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
(1) Resolution Strategy Code (2) Property Type Code
<S> <C> <C> <C>
1 - Modification 7 - REO MF - Multi-Family OF - Office
2 - Foreclosure 8 - Resolved RT - Retail MU - Mixed Use
3 - Bankruptcy 9 - Pending Return HC - Health Care LO - Lodging
4 - Extension to Master Servicer IN - Industrial SS - Self Storage
5 - Note Sale 10 - Deed in Lieu Of WH - Warehouse OT - Other
6 - DPO Foreclosure MH - Mobile Home Park
</TABLE>
C-20
<PAGE> 213
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
SPECIALLY SERVICED LOAN DETAIL - PART 2
<TABLE>
<CAPTION>
Offering Resolution Site
Distribution Loan Document Strategy Inspection Phase 1 Date Appraisal Appraisal Other REO Comment
Date Number Cross-Reference Code(1) Date Date Value Property Revenue
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
</TABLE>
<TABLE>
<CAPTION>
(1) Resolution Strategy Code
<S> <C>
1 - Modification 6 - DPO 10 - Deed in Lieu Of
2 - Foreclosure 7 - REO Foreclosure
3 - Bankruptcy 8 - Resolved 11 - Full Payoff
4 - Extension 9 - Pending Return 12 - Reps and Warranties
5 - Note Sale to Master Servicer 13 - Other or TBD
</TABLE>
C-21
<PAGE> 214
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
MODIFIED LOAN DETAIL
<TABLE>
<CAPTION>
Offering
Loan Document Pre-Modification
Number Cross-Reference Balance Modification Date Modification Description
<S> <C> <C> <C> <C>
Total
</TABLE>
C-22
<PAGE> 215
[NORWEST BANKS LOGO]
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 1999-2
PAYMENT DATE: 12/20/1999
RECORD DATE: 11/30/1999
LIQUIDATED LOAN DETAIL
<TABLE>
<CAPTION>
Final Recovery Offering Gross Proceeds
Loan Determination Document Appraisal Appraisal Actual Gross as a % of
Number Date Cross-Reference Date Value Balance Proceeds Actual Balance
<S> <C> <C> <C> <C> <C> <C> <C>
Current Total
Cumulative Total
<CAPTION>
Aggregate Net Net Proceeds Repurchased
Liquidation Liquidation as a % of Realized by Seller
Expenses* Proceeds Actual Balance Loss (Y/N)
<S> <C> <C> <C> <C>
Current Total
Cumulative Total
</TABLE>
* Aggregate liquidation expenses also include outstanding P & I advances and
unpaid fees (servicing, trustee, etc.).
C-23
<PAGE> 216
Prospectus
NATIONSLINK FUNDING CORPORATION
DEPOSITOR
MORTGAGE PASS-THROUGH CERTIFICATES
<TABLE>
<CAPTION>
<S> <C>
CONSIDER CAREFULLY THE RISK FACTORS THE TRUST --
BEGINNING ON PAGE 10 IN THIS - may periodically issue mortgage pass-through
PROSPECTUS. certificates in one or more series with one or more
Neither the certificates nor the classes; and
underlying mortgage loans are insured - will own --
by any governmental agency. - multifamily and commercial mortgage loans;
The certificates will represent - mortgage-backed securities; and
interests only in the related trust - other property described and in the accompanying
only and will not represent interests prospectus supplement.
in or obligations of NationsLink THE CERTIFICATES --
Funding Corporation or any of its - will represent interests in the trust and will be
affiliates, including Bank of America paid only from the trust assets;
Corporation. - provide for the accrual of interest based on a fixed,
This prospectus may be used to offer variable or adjustable interest rate;
and sell any series of certificates - may be offered through underwriters, which may
only if accompanied by the prospectus include Banc of America Securities LLC, an affiliate of
supplement for that series. NationsLink Funding Corporation; and
- will not be listed on any securities exchange.
THE CERTIFICATEHOLDERS --
- will receive interest and principal payments based on
the rate of payment of principal and the timing of
receipt of payments on mortgage loans.
</TABLE>
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THESE
CERTIFICATES OR DETERMINED THAT THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
October 27, 1999
<PAGE> 217
FOR MORE INFORMATION
NationsLink Funding
Corporation has filed with the
SEC additional registration
materials relating to the
certificates. You may read
and copy any of these
materials at the SEC's Public
Reference Room at the
following locations:
- SEC Public Reference
Section
450 Fifth Street, N.W.
Room 1204
Washington, D.C. 20549
- SEC Midwest Regional
Offices Citicorp Center
500 West Madison Street
Suite 1400
Chicago, Illinois
60661-2511
- SEC Northeast Regional
Office
7 World Trade Center
Suite 1300
New York, New York 10048
You may obtain information on
the operation of the Public
Reference Room by calling the
SEC at 1-800-SEC-0330. The
SEC also maintains an
Internet site that contains
reports, proxy and
information statements, and
other information that has
been filed electronically
with the SEC. The Internet
address is
http://www.sec.gov.
You may also contact
NationsLink Funding
Corporation in writing at
Bank of America Corporate
Center,
100 North Tryon Street,
Charlotte,
North Carolina 28255, or by
telephone at (704) 386-2400.
See also the sections
captioned "Available
Information" and
"Incorporation of Certain
Information by Reference"
appearing at the end of this
prospectus.
TABLE OF CONTENTS
<TABLE>
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SUMMARY OF PROSPECTUS.......................... 5
RISK FACTORS................................... 10
Limited Liquidity of Certificates............ 10
Limited Assets............................... 10
Credit Support Limitations................... 11
Effect of Prepayments on Average Life of
Certificates.............................. 11
Effect of Prepayments on Yield of
Certificates.............................. 12
Limited Nature of Ratings.................... 12
Certain Factors Affecting Delinquency,
Foreclosure and Loss of the Mortgage
Loans..................................... 13
Inclusion of Delinquent Mortgage Loans in a
Mortgage Asset Pool....................... 16
PROSPECTUS SUPPLEMENT.......................... 16
DESCRIPTION OF THE TRUST FUNDS................. 18
General...................................... 18
Mortgage Loans............................... 18
MBS.......................................... 22
Certificate Accounts......................... 23
Credit Support............................... 23
Cash Flow Agreements......................... 23
YIELD AND MATURITY CONSIDERATIONS.............. 23
General...................................... 23
Pass-Through Rate............................ 24
Payment Delays............................... 24
Certain Shortfalls in Collections of
Interest.................................. 24
Yield and Prepayment Considerations.......... 24
Weighted Average Life and Maturity........... 26
Other Factors Affecting Yield, Weighted
Average Life and Maturity................. 27
THE DEPOSITOR.................................. 28
DESCRIPTION OF THE CERTIFICATES................ 29
General...................................... 29
Distributions................................ 30
Distributions of Interest on the
Certificates.............................. 30
Distributions of Principal of the
Certificates.............................. 31
Distributions on the Certificates Concerning
Prepayment Premiums or Concerning Equity
Participations............................ 32
Allocation of Losses and Shortfalls.......... 32
Advances in Respect of Delinquencies......... 32
Reports to Certificateholders................ 33
Voting Rights................................ 34
Termination.................................. 35
Book-Entry Registration and Definitive
Certificates.............................. 35
THE POOLING AND SERVICING AGREEMENTS........... 36
General...................................... 36
Assignment of Mortgage Loans; Repurchases.... 37
Representations and Warranties;
Repurchases............................... 39
Collection and Other Servicing Procedures.... 39
Sub-Servicers................................ 41
Certificate Account.......................... 42
Modifications, Waivers and Amendments of
Mortgage Loans............................ 44
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Realization upon Defaulted Mortgage Loans...... 44
Hazard Insurance Policies.................... 46
Due-on-Sale and Due-on-Encumbrance
Provisions................................ 47
Servicing Compensation and Payment of
Expenses.................................. 47
Evidence as to Compliance.................... 47
Certain Matters Regarding the Master
Servicer, the Special Servicer, the REMIC
Administrator and the Depositor........... 48
Events of Default............................ 49
Rights Upon Event of Default................. 50
Amendment.................................... 51
List of Certificateholders................... 52
The Trustee.................................. 52
Duties of the Trustee........................ 52
Certain Matters Regarding the Trustee........ 52
Resignation and Removal of the Trustee....... 52
DESCRIPTION OF CREDIT SUPPORT.................. 53
General...................................... 53
Subordinate Certificates..................... 53
Insurance or Guarantees Concerning to
Mortgage Loans............................ 54
Letter of Credit............................. 54
Certificate Insurance and Surety Bonds....... 54
Reserve Funds................................ 54
Cash Collateral Account...................... 55
Credit Support with respect to MBS........... 55
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS........ 55
General...................................... 55
Types of Mortgage Instruments................ 55
Leases and Rents............................. 56
Personalty................................... 57
Foreclosure.................................. 57
Bankruptcy Laws.............................. 60
Environmental Considerations................. 61
Due-on-Sale and Due-on-Encumbrance
Provisions................................ 63
Junior Liens; Rights of Holders of Senior
Liens..................................... 63
Subordinate Financing........................ 64
Default Interest and Limitations on
Prepayments............................... 64
Applicability of Usury Laws.................. 65
Certain Laws and Regulations................. 65
Americans with Disabilities Act.............. 65
Soldiers' and Sailors' Civil Relief Act of
1940...................................... 66
Forfeitures in Drug and RICO Proceedings..... 66
CERTAIN FEDERAL INCOME TAX CONSEQUENCES........ 66
General...................................... 66
REMICs....................................... 67
Grantor Trust Funds.......................... 82
STATE AND OTHER TAX CONSEQUENCES............... 91
CERTAIN ERISA CONSIDERATIONS................... 91
General...................................... 91
Plan Asset Regulations....................... 92
Insurance Company General Accounts........... 93
Consultation With Counsel.................... 93
Tax Exempt Investors......................... 94
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LEGAL INVESTMENT............................... 94
USE OF PROCEEDS.............................. 96
METHOD OF DISTRIBUTION....................... 96
LEGAL MATTERS................................ 97
FINANCIAL INFORMATION........................ 97
RATING....................................... 97
AVAILABLE INFORMATION........................ 98
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE................................. 99
INDEX OF PRINCIPAL DEFINITIONS............... 100
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SUMMARY OF PROSPECTUS
This summary highlights selected information from this prospectus. It does not
contain all the information you need to consider in making your investment
decision. You should carefully review this prospectus and the related prospectus
supplement in their entirety before making any investment in the certificates of
any series. As used in this prospectus, "you" refers to a prospective investor
in certificates, and "we" refers to the Depositor, NationsLink Funding
Corporation. An Index of Principal Definitions appears at the end of this
Prospectus.
SECURITIES OFFERED
Mortgage pass-through certificates.
DEPOSITOR
NationsLink Funding Corporation, a Delaware corporation and a subsidiary of Bank
of America, N.A. NationsLink Funding Corporation has its principal executive
offices at Bank of America Corporate Center, 100 North Tryon Street, Charlotte,
North Carolina 28255, and its telephone number is (704) 386-2400.
TRUSTEE
The trustee for each series of certificates will be named in the related
prospectus supplement.
MASTER SERVICER
If the trust includes mortgage loans, the master servicer for the corresponding
series of certificates will be named in the prospectus supplement.
SPECIAL SERVICER
If the trust includes mortgage loans, the special servicer for the corresponding
series of certificates will be named, or the circumstances under which a special
servicer may be appointed, will be described in the prospectus supplement.
MBS ADMINISTRATOR
If the trust includes mortgage-backed securities, the entity responsible for
administering the mortgage-backed securities will be named in the prospectus
supplement.
REMIC ADMINISTRATOR
The person responsible for the various tax-related administration duties for a
series of certificates concerning real estate mortgage investment conduits will
be named in the prospectus supplement.
THE MORTGAGE LOANS
Each series of certificates will, in general, consist of a pool of mortgage
loans (a "Mortgage Asset Pool") secured by first or junior liens on --
- - residential properties consisting of five or more rental or
cooperatively-owned dwelling units in high-rise, mid-rise or garden apartment
buildings or other residential structures; or
- - office buildings, retail stores, hotels or motels, nursing homes, hospitals or
other health care-related facilities, recreational vehicle and mobile home
parks, warehouse facilities, mini-warehouse facilities, self-storage
facilities, industrial plants, parking lots, entertainment or sports arenas,
restaurants, marinas, mixed use or various other types of income-producing
properties or unimproved land.
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However, no one of the following types of properties will be overly-represented
in the trust at the time the trust is formed: (1) restaurants; (2) entertainment
or sports arenas; (3) marinas; or (4) nursing homes, hospitals or other health
care-related facilities.
The mortgage loans will not be guaranteed or insured by NationsLink Funding
Corporation or any of its affiliates or, unless otherwise provided in the
prospectus supplement, by any governmental agency or by any other person.
If specified in the prospectus supplement, some mortgage loans may be delinquent
as of the date the trust is formed.
As described in the prospectus supplement, a mortgage loan may --
- - provide for no accrual of interest or for accrual of interest at an interest
rate that is fixed over its term or that adjusts from time to time, or that
may be converted at the borrower's election from an adjustable to a fixed
mortgage rate, or from a fixed to an adjustable mortgage rate;
- - provide for level payments to maturity or for payments that adjust from time
to time to accommodate changes in the mortgage rate or to reflect the
occurrence of certain events, and may permit negative amortization;
- - be fully amortizing or may be partially amortizing or nonamortizing, with a
balloon payment due on its stated maturity date;
- - may prohibit over its term or for a certain period prepayments and/or require
payment of a premium or a yield maintenance payment in connection with certain
prepayments; and
- - provide for payments of principal, interest or both, on due dates that occur
monthly, quarterly, semi-annually or at such other interval as specified in
the prospectus supplement.
Each mortgage loan will have had an original term to maturity of not more than
40 years. No mortgage loan will have been originated by NationsLink Funding
Corporation, although one of its affiliates may have originated some of the
mortgage loans.
If any mortgage loan, or group of related mortgage loans, involves unusual
credit risk, financial statements or other financial information concerning the
related mortgaged property will be included in the related prospectus
supplement.
As described in the prospectus supplement, the trust may also consist of
mortgage participations, mortgage pass-through certificates and/or other
mortgage-backed securities that evidence an interest in, or are secured by a
pledge of, one or more mortgage loans similar to the other mortgage loans in the
trust and which may or may not be issued, insured or guaranteed by the United
States or any governmental agency.
THE CERTIFICATES
Each series of certificates will be issued in one or more classes pursuant to a
pooling and servicing agreement or other agreement specified in the prospectus
supplement and will represent in total the entire beneficial ownership interest
in the trust.
As described in the prospectus supplement, the certificates of each series may
consist of one or more classes that --
- - are senior (collectively, "Senior Certificates") or subordinate (collectively,
"Subordinate Certificates")to one or more other classes of certificates in
entitlement to certain distributions on the certificates;
- - are "stripped principal certificates" entitled to distributions of principal,
with disproportionate, nominal or no distributions of interest;
- - are "stripped interest certificates" entitled to distributions of interest,
with disproportionate, nominal or no distributions of principal;
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- - provide for distributions of interest or principal that commence only after
the occurrence of certain events, such as the retirement of one or more other
classes of certificates of such series;
- - provide for distributions of principal to be made, from time to time or for
designated periods, at a rate that is faster (and, in some cases,
substantially faster) or slower (and, in some cases, substantially slower)
than the rate at which payments or other collections of principal are received
on the mortgage assets in the trust;
- - provide for distributions of principal to be made, subject to available funds,
based on a specified principal payment schedule or other methodology; or
- - provide for distribution based on collections on the mortgage assets in the
trust attributable to prepayment premiums, yield maintenance payments or
equity participations.
If specified in the prospectus supplement, a series of certificates may include
one or more "controlled amortization classes," which will entitle the holders to
receive principal distributions according to a specified principal payment
schedule. Although prepayment risk cannot be eliminated entirely for any class
of certificates, a controlled amortization class will generally provide a
relatively stable cash flow so long as the actual rate of prepayment on the
mortgage loans in the trust remains relatively constant at the rate of
prepayment used to establish the specific principal payment schedule for such
certificates. Prepayment risk with respect to a given mortgage asset pool does
not disappear, however, and the stability afforded to a controlled amortization
class comes at the expense of one or more other classes of the same series.
Each class of certificates, other than certain classes of stripped interest
certificates and certain classes of real estate mortgage investment conduit
residual certificates (also known as "REMIC residual certificates"), will have
an initial stated principal amount (a "Certificate Balance"). Each class of
certificates, other than certain classes of stripped principal certificates and
certain classes of REMIC residual certificates, will accrue interest on its
certificate balance or, in the case of certain classes of stripped interest
certificates, on a notional amount, based on a pass-through rate (a
"Pass-Through Rate") which may be fixed, variable or adjustable. The prospectus
supplement will specify the certificate balance, notional amount and/or pass-
through rate for each class of certificates.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Interest on each class of certificates (other than certain classes of stripped
principal certificates and certain classes of REMIC residual certificates) of
each series will accrue at the applicable pass-through rate on the certificate
balance and will paid on a distribution date. However, in the case of certain
classes of stripped interest certificates, the notional amount outstanding from
time to time will be paid to certificateholders as provided in the prospectus
supplement on a specified distribution date (each of the specified dates on
which distributions are to be made, a "Distribution Date").
Distributions of interest concerning one or more classes of certificates
(collectively, "Accrual Certificates") may not commence until the occurrence of
certain events, such as the retirement of one or more other classes of
certificates. Interest accrued concerning a class of accrual certificates prior
to the occurrence of such an event will either be added to the certificate
balance or otherwise deferred as described in the prospectus supplement.
Distributions of interest concerning one or more classes of certificates may be
reduced to the extent of certain delinquencies, losses and other contingencies
described in this prospectus and in the prospectus supplement.
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of certificates of each series (other than certain classes of
stripped interest certificates and certain classes of REMIC residual
certificates) will have a certificate balance. The certificate balance of a
class of certificates outstanding from time to time will represent the maximum
amount that the holders are then entitled to receive in respect of principal
from future cash flow on the assets in the trust. The initial total certificate
balance of all classes of a series of certificates will not be greater than the
outstanding principal balance of the related mortgage assets as of a specified
cut-off date, after application of scheduled payments
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due on or before such date, whether or not received. As described in the
prospectus supplement, distributions of principal with respect to the related
series of certificates will be made on each distribution date to the holders of
the class certificates of such series then entitled until the certificate
balances of such certificates have been reduced to zero. Distributions of
principal with respect to one or more classes of certificates --
- - may be made at a rate that is faster (and, in some cases, substantially
faster) or slower (and, in some cases, substantially slower) than the rate at
which payments or other collections of principal are received on the assets in
the trust;
- - may not commence until the occurrence of certain events, such as the
retirement of one or more other classes of certificates of the same series;
- - may be made, subject to certain limitations, based on a specified principal
payment schedule; or
- - may be contingent on the specified principal payment schedule for another
class of the same series and the rate at which payments and other collections
of principal on the mortgage assets in the trust are received. Unless
otherwise specified in the prospectus supplement, distributions of principal
of any class of certificates will be made on a pro rata basis among all of the
certificates of such class.
CREDIT SUPPORT AND CASH FLOW AGREEMENTS
If specified in the prospectus supplement, partial or full protection against
certain defaults and losses on the assets in the trust may be provided to one or
more classes of certificates by (1) subordination of one or more other classes
of certificates to classes in the same series, or by (2) of such series, one or
more other types of credit support, such as a letter of credit, insurance
policy, guarantee, reserve fund, cash collateral account or
overcollateralization (any such coverage with respect to the Certificates of any
series, "Credit Support"). If so provided in the prospectus supplement, the
trust may include --
- - guaranteed investment contracts pursuant to which moneys held in the funds and
accounts established for the related series will be invested at a specified
rate; or
- - certain other agreements, such as interest rate exchange agreements, interest
rate cap or floor agreements, or other agreements designed to reduce the
effects of interest rate fluctuations on the mortgage assets or on one or more
classes of certificates.
Certain relevant information regarding any applicable credit support or cash
flow agreement will be set forth in the prospectus supplement for a series of
certificates.
ADVANCES
As specified in the prospectus supplement, if the trust includes mortgage loans,
the master servicer, the special servicer, the trustee, any provider of credit
support, and/or another specified person may be obligated to make, or have the
option of making, certain advances concerning delinquent scheduled payments of
principal and/or interest on mortgage loans. Any advances made concerning a
particular mortgage loan will be reimbursable from subsequent recoveries
relating to the particular mortgage loan and as described in the prospectus
supplement. If specified in the prospectus supplement, any entity making such
advances may be entitled to receive interest for a specified period during which
certain or all of such advances are outstanding, payable from amounts in the
trust. If the trust includes mortgaged-backed securities, any comparable
advancing obligation of a party to the related pooling and servicing agreement,
or of a party to the related mortgage-backed securities agreement, will be
described in the prospectus supplement.
OPTIONAL TERMINATION
If specified in the prospectus supplement, a series of certificates may be
subject to optional early termination through the repurchase of the mortgage
assets in the trust. If provided in the related prospectus supplement, upon the
reduction of the certificate balance of a specified class or classes of
certificates by a specified percentage or amount, a specified party may be
authorized or required to solicit bids for the purchase of all of the assets of
the trust, or of a sufficient portion of such assets to retire such class or
classes.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The certificates of each series will constitute or evidence ownership of
either --
- - "regular interests" ("REMIC Regular Certificates") and "residual interests"
("REMIC Residual Certificates") in the trust, or a designated portion thereof,
treated as a REMIC under Sections 860A through 860G of the Internal Revenue
Code of 1986; or
- - certificates ("Grantor Trust Certificates") in a trust treated as a grantor
trust (or a partnership) under applicable provisions of the Internal Revenue
Code of 1986.
Investors are advised to consult their tax advisors and to review "Certain
Federal Income Tax Consequences" in this prospectus and in the prospectus
supplement.
CERTAIN ERISA CONSIDERATIONS
Fiduciaries of retirement plans and certain other employee benefit plans and
arrangements, including individual retirement accounts, annuities, Keogh plans,
and collective investment funds and separate accounts in which such plans,
accounts, annuities or arrangements are invested, that are subject to the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, should review with their legal advisors
whether the purchase or holding of certificates could give rise to a transaction
that is prohibited.
LEGAL INVESTMENT
The certificates will constitute "mortgage related securities" for purposes of
the Secondary Mortgage Market Enhancement Act of 1984, as amended ("SMMEA"),
only if specified in the prospectus supplement. Investors whose investment
authority is subject to legal restrictions should consult their legal advisors
to determine whether and to what extent the certificates constitute legal
investments for them.
RATING
At their respective dates of issuance, each class of certificates will be rated
as of investment grade by one or more nationally recognized statistical rating
agencies (each, a "Rating Agency").
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RISK FACTORS
In considering an investment in the certificates of any series, you should
consider carefully the following risk factors and the risk factors in the
prospectus supplement.
LIMITED LIQUIDITY OF CERTIFICATES
General. The certificates of any series may have limited or no liquidity.
You may be forced to bear the risk of investing in the certificates for an
indefinite period of time. In addition, you may have no redemption rights, and
the certificates are subject to early retirement only under certain
circumstances.
Lack of a Secondary Market. We cannot assure you that a secondary market
for the certificates will develop or, if it does develop, that it will provide
certificateholders with liquidity of investment or that it will continue for as
long as the certificates remain outstanding.
The prospectus supplement may indicate that an underwriter intends to
establish a secondary market in the certificates, although no underwriter will
be obligated to do so. Any secondary market may provide less liquidity to
investors than any comparable market for securities relating to single-family
mortgage loans. Unless specified in the prospectus supplement, the certificates
will not be listed on any securities exchange.
Limited Ongoing Information. The primary source of ongoing information
regarding the certificates, including information regarding the status of the
related mortgage assets and any credit support for the certificates, will be the
periodic reports to certificateholders to be delivered pursuant to the related
pooling and servicing agreement.
We cannot assure you that any additional ongoing information regarding the
certificates will be available through any other source. The limited nature of
such information concerning a series of certificates may adversely affect
liquidity, even if a secondary market for the certificates does develop.
Sensitivity to Interest Rates. If a secondary market does develop for the
certificates, the market value of the certificates will be affected by several
factors, including (1) perceived liquidity, (2) the anticipated cash flow (which
may vary widely depending upon the prepayment and default assumptions concerning
the underlying mortgage loans) and (3) prevailing interest rates.
The price payable at any given time for certain classes of certificates may
be extremely sensitive to small fluctuations in prevailing interest rates. The
relative change in price for a certificate in response to an upward or downward
movement in prevailing interest rates may not necessarily equal the relative
change in price for the certificate in response to an equal but opposite
movement in such rates. Therefore, the sale of certificates by a holder in any
secondary market that may develop may be at a discount from the price paid by
such holder. We are not aware of any source through which price information
about the certificates will be generally available on an ongoing basis.
LIMITED ASSETS
Unless specified in the prospectus supplement, neither the certificates nor
the mortgage assets in the trust will be guaranteed or insured by NationsLink
Funding Corporation or any of its affiliates, by any governmental agency or by
any other person or entity. No certificate will represent a claim against or
security interest in the trust funds for any other series. Therefore, if the
related trust fund has insufficient assets to make payments, no other assets
will be available for payment of the deficiency, and the holders of one or more
classes of the certificates will be required to bear the consequent loss.
Certain amounts on deposit from time to time in certain funds or accounts
constituting part of the trust, including the certificate account and any
accounts maintained as credit support, may be withdrawn under certain
conditions, for purposes other than the payment of principal of or interest on
the related series of certificates. On any distribution occurring after losses
or shortfalls in collections on the mortgage assets have been incurred, all or a
portion of the amount of losses or shortfalls in collections on the mortgage
assets will be borne on a disproportionate basis among classes of certificates.
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CREDIT SUPPORT LIMITATIONS
Limitations Regarding Types of Losses Covered. The prospectus supplement
for a series of certificates will describe any credit support. Such credit
support may not cover all potential losses. For example, credit support may or
may not cover loss by reason of fraud or negligence by a mortgage loan
originator or other parties. Any such losses not covered by credit support may,
at least in part, be allocated to one or more classes of certificates.
Disproportionate Benefits to Certain Classes and Series. A series of
certificates may include one or more classes of subordinate certificates, if
provided in the prospectus supplement. Although subordination is intended to
reduce the likelihood of temporary shortfalls and ultimate losses to holders of
senior certificates, the amount of subordination will be limited and may decline
under certain circumstances. In addition, if principal payments on one or more
classes of certificates of a series are made in a specified order of priority,
any related credit support may be exhausted before the principal of the
later-paid classes of certificates of such series has been repaid in full.
The impact of losses and shortfalls experienced with respect to the
mortgage assets may fall primarily upon those classes of certificates having a
later right of payment.
If a form of credit support covers the certificates of more than one series
and losses on the related mortgage assets exceed the amount of such credit
support, it is possible that the holders of certificates of one (or more) such
series such credit support will disproportionately benefit, to the detriment of
the holders of certificates of one (or more) other such series.
Limitations Regarding the Amount of Credit Support. The amount of any
applicable credit support supporting one or more classes of certificates will be
determined on the basis of criteria established by each rating agency rating
such classes of certificates based on an assumed level of defaults,
delinquencies and losses on the underlying mortgage assets and certain other
factors. However, we cannot assure you that the loss experience on the related
mortgage assets will not exceed such assumed levels. If the losses on the
related mortgage assets do exceed such assumed levels, the holders of one or
more classes of certificates will be required to bear such additional losses.
EFFECT OF PREPAYMENTS ON AVERAGE LIFE OF CERTIFICATES
As a result of prepayments on the mortgage loans in the trust, the amount
and timing of distributions of principal and/or interest on the certificates of
the related series may be highly unpredictable. Prepayments on the mortgage
loans in the trust will result in a faster rate of principal payments on one or
more classes of the related series of certificates than if payments on such
mortgage loans were made as scheduled. Therefore, the prepayment experience on
the mortgage loans in the trust may affect the average life of one or more
classes of certificates of the related series.
The rate of principal payments on pools of mortgage loans varies among
pools and from time to time is influenced by a variety of economic, demographic,
geographic, social, tax and legal factors. For example, if prevailing interest
rates fall significantly below the mortgage rates borne by the mortgage loans
included in the trust, principal prepayments on such mortgage loans are likely
to be higher than if prevailing interest rates remain at or above the rates
borne by those mortgage loans. Conversely, if prevailing interest rates rise
significantly above the mortgage rates borne by the mortgage loans included in
the trust, then principal prepayments on such mortgage loans are likely to be
lower than if prevailing interest rates remain at or below the mortgage rates
borne by those mortgage loans.
We cannot assure you what as to the actual rate of prepayment on the
mortgage loans in the trust will be, or that such rate of prepayment will
conform to any model in any prospectus supplement. As a result, depending on the
anticipated rate of prepayment for the mortgage loans in the trust, the
retirement of any class of certificates of the related series could occur
significantly earlier or later, and its average life could be significantly
shorter or longer, than expected.
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The extent to which prepayments on the mortgage loans in trust ultimately
affect the average life of any class of certificates of the related series will
depend on the terms and provisions of the certificates. A class of certificates
may provide that on any distribution date the holders of the certificates are
entitled to a pro rata share of the prepayments on the mortgage loans in the
trust fund that are distributable on such date.
A class of certificates that entitles the holders to a disproportionately
large share of the prepayments on the mortgage loans in the trust increases the
likelihood of early retirement of such class if the rate of prepayment is
relatively fast. This type of early retirement risk is sometimes referred to as
"call risk."
A class of certificates that entitles the holders thereof to a
disproportionately small share of the prepayments on the mortgage loans in the
trust increases the likelihood of an extended average life of such class if the
rate of prepayment is relatively slow. This type of prolonged retirement risk is
sometimes referred to as "extension risk."
As described in the prospectus supplement, the respective entitlements of
the various classes of certificateholders of any series to receive payments
(and, in particular, prepayments) of principal of the mortgage loans in the
trust may vary based on the occurrence of certain events (e.g., the retirement
of one or more classes of certificates of such series) or subject to certain
contingencies (e.g., prepayment and default rates with respect to such mortgage
loans).
A series of certificates may include one or more controlled amortization
classes, which will entitle the holders to receive principal distributions
according to a specified principal payment schedule. Although prepayment risk
cannot be eliminated entirely for any class of certificates, a controlled
amortization class will generally provide a relatively stable cash flow so long
as the actual rate of prepayment on the mortgage loans in the trust remains
relatively constant at the rate of prepayment used to establish the specific
principal payment schedule for the certificates. Prepayment risk concerning a
given mortgage asset pool does not disappear, however, and the stability
afforded to a controlled amortization class comes at the expense of one or more
companion classes of the same series.
As described in the prospectus supplement, a companion class may entitle
the holders to a disproportionately large share of prepayments on the mortgage
loans in the trust when the rate of prepayment is relatively fast, and/or may
entitle the holders to a disproportionately small share of prepayments on the
mortgage loans in the trust when the rate of prepayment is relatively slow. A
companion class absorbs some (but not all) of the call risk and/or extension
risk that would otherwise belong to the related controlled amortization class if
all payments of principal of the mortgage loans in the trust were allocated on a
pro rata basis.
EFFECT OF PREPAYMENTS ON YIELD OF CERTIFICATES
A series of certificates may include one or more classes offered at a
premium or discount. Yields on such classes of certificates will be sensitive,
and in some cases extremely sensitive, to prepayments on the mortgage loans in
the trust fund. If the amount of interest payable with respect to a class is
disproportionately large as compared to the amount of principal, as with certain
classes of stripped interest certificates, a holder might fail to recover its
original investment under some prepayment scenarios. The yield to maturity of
any class of certificates may vary from the anticipated yield due to the degree
to which the certificates are purchased at a discount or premium and the amount
and timing of distributions.
You should consider, in the case of any certificate 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. In the case of any certificate purchased at a
premium, you should consider 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.
LIMITED NATURE OF RATINGS
Any rating assigned by a rating agency to a class of certificates will
reflect only its assessment of the likelihood that holders of the certificates
will receive payments to which the certificateholders are entitled under the
related pooling and servicing agreement. Such rating will not constitute an
assessment of the
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likelihood that principal prepayments on the related mortgage loans will be
made, the degree to which the rate of such prepayments might differ from that
originally anticipated, or the likelihood of early optional termination of the
trust. Any rating will not address the possibility that prepayment of the
mortgage loans at a higher or lower rate than anticipated by an investor may
cause such investor to experience a lower than anticipated yield or that an
investor purchasing a certificate at a significant premium might fail to recover
its initial investment under certain prepayment scenarios. Therefore, a rating
assigned by a rating agency does not guarantee or ensure the realization of any
anticipated yield on a class of certificates.
The amount, type and nature of credit support given a series of
certificates will be determined on the basis of criteria established by each
rating agency rating classes of the certificates of such series. Those criteria
are sometimes based upon an actuarial analysis of the behavior of mortgage loans
in a larger group. There can be no assurance that the historical data supporting
any such actuarial analysis will accurately reflect future experience, or that
the data derived from a large pool of mortgage loans will accurately predict the
delinquency, foreclosure or loss experience of any particular pool of mortgage
loans. In other cases, such criteria may be based upon determinations of the
values of the properties that provide security for the mortgage loans. However,
we cannot assure you that those values will not decline in the future. As a
result, the credit support required in respect of the certificates of any series
may be insufficient to fully protect the holders thereof from losses on the
related mortgage asset pool.
CERTAIN FACTORS AFFECTING DELINQUENCY, FORECLOSURE AND LOSS OF THE MORTGAGE
LOANS
Mortgage loans made on the security of multifamily or commercial property
may have a greater likelihood of delinquency and foreclosure, and a greater
likelihood of loss than loans made on the security of an owner-occupied
single-family property. The ability of a borrower to repay a loan secured by an
income-producing property typically is dependent primarily upon the successful
operation of such property rather than upon the existence of independent income
or assets of the borrower. Therefore, the value of an income-producing property
is directly related to the net operating income derived from such property.
If the net operating income of the property is reduced (for example, if
rental or occupancy rates decline or real estate tax rates or other operating
expenses increase), the borrower's ability to repay the loan may be impaired. A
number of the mortgage loans may be secured by liens on owner-occupied
properties or on properties leased to a single tenant or in which only a few
tenants produce a material amount of the rental income. As the primary component
of the net operating income of a property, rental income (and maintenance
payments from tenant stockholders of a Cooperative) and the value of any
property are subject to the vagaries of the applicable real estate market and/or
business climate. Properties typically leased, occupied or used on a short-term
basis, such as health care-related facilities, hotels and motels, and mini-
warehouse and self-storage facilities, tend to be affected more rapidly by
changes in market or business conditions than do properties leased, occupied or
used for longer periods, such as (typically) warehouses, retail stores, office
buildings and industrial plants. Commercial Properties may be secured by
owner-occupied properties or properties leased to a single tenant. Therefore, a
decline in the financial condition of the borrower or a single tenant may have a
disproportionately greater effect on the net operating income from such
properties than would be the case with respect to properties with multiple
tenants.
Changes in the expense components of the net operating income of a property
due to the general economic climate or economic conditions in a locality or
industry segment, such as (1) increases in interest rates, real estate and
personal property tax rates and other operating expenses including energy costs,
(2) changes in governmental rules, regulations and fiscal policies, including
environmental legislation, and (3) acts of God may also affect the net operating
income and the value of the property and the risk of default on the related
mortgage loan. In some cases leases of properties may provide that the lessee,
rather than the mortgagor, is responsible for payment of certain of these
expenses ("Net Leases"). However, because leases are subject to default risks as
well as when a tenant's income is insufficient to cover its rent and operating
expenses, the existence of such "net of expense" provisions will only temper,
not eliminate, the impact of expense increases on the performance of the related
mortgage loan.
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Additional considerations may be presented by the type and use of a
particular property. For instance, properties that operate as hospitals and
nursing homes are subject to significant governmental regulation of the
ownership, operation, maintenance and financing of health care institutions.
Hotel, motel and restaurant properties are often operated pursuant to franchise,
management or operating agreements that may be terminable by the franchisor or
operator. The transferability of a hotel's or restaurant's operating, liquor and
other licenses upon a transfer of the hotel or the restaurant, whether through
purchase or foreclosure, is subject to local law requirements.
In addition, the concentration of default, foreclosure and loss risks in
mortgage loans in the trust will generally be greater than for pools of
single-family loans because mortgage loans in the trust generally will consist
of a smaller number of higher balance loans than would a pool of single-family
loans of comparable aggregate unpaid principal balance.
Limited Recourse Nature of the Mortgage Loans. We anticipate that some or
all of the mortgage loans included in any trust fund will be nonrecourse loans
or loans for which recourse may be restricted or unenforceable. In this type of
mortgage loan, recourse in the event of borrower default will be limited to the
specific real property and other assets that were pledged to secure the mortgage
loan. However, even with respect to those mortgage loans that provide for
recourse against the borrower and its assets, we cannot assure you that
enforcement of such recourse provisions will be practicable, or that the assets
of the borrower will be sufficient to permit a recovery concerning a defaulted
mortgage loan in excess of the liquidation value of the related property.
Limitations on Enforceability of Cross-Collateralization. A mortgage pool
may include groups of mortgage loans which are cross-collateralized and
cross-defaulted. These arrangements are designed primarily to ensure that all of
the collateral pledged to secure the respective mortgage loans in a
cross-collateralized group. Cash flows generated on these type of mortgage loans
are available to support debt service on, and ultimate repayment of, the total
indebtedness. These arrangements seek to reduce the risk that the inability of
one or more of the mortgaged properties securing any such group of mortgage
loans to generate net operating income sufficient to pay debt service will
result in defaults and ultimate losses.
If the properties securing a group of mortgage loans which are
cross-collateralized are not all owned by the same entity, creditors of one or
more of the related borrowers could challenge the cross-collateralization
arrangement as a fraudulent conveyance. Under federal and state fraudulent
conveyance statutes, the incurring of an obligation or the transfer of property
by a person will be subject to avoidance under certain circumstances if the
person did not receive fair consideration or reasonably equivalent value in
exchange for such obligation or transfer and was then insolvent, was rendered
insolvent by such obligation or transfer or had unreasonably small capital for
its business. A creditor seeking to enforce remedies against a property subject
to such cross-collateralization to repay such creditor's claim against the
related borrower could assert that (1) such borrower was insolvent at the time
the cross-collateralized mortgage loans were made and (2) such borrower did not,
when it allowed its property to be encumbered by a lien securing the
indebtedness represented by the other mortgage loans in the group of
cross-collateralized mortgage loans, receive fair consideration or reasonably
equivalent value for, in effect, "guaranteeing" the performance of the other
borrowers. Although the borrower making such "guarantee" will be receiving
"guarantees" from each of the other borrowers in return, we cannot assure you
that such exchanged "guarantees" would be found to constitute fair consideration
or be of reasonably equivalent value.
The cross-collateralized mortgage loans may be secured by mortgage liens on
properties located in different states. Because of various state laws governing
foreclosure or the exercise of a power of sale and because foreclosure actions
are usually brought in state court, and the courts of one state cannot exercise
jurisdiction over property in another state, it may be necessary upon a default
under any such mortgage loan to foreclose on the related mortgaged properties in
a particular order rather than simultaneously in order to ensure that the lien
of the related mortgages is not impaired or released.
Increased Risk of Default Associated With Balloon Payments. Some of the
mortgage loans included in the trust may be nonamortizing or only partially
amortizing over their terms to maturity. These types of mortgage loans will
require substantial payments of principal and interest (that is, balloon
payments) at their
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stated maturity. These loans involve a greater likelihood of default than
self-amortizing loans because the ability of a borrower to make a balloon
payment typically will depend upon its ability either to refinance the loan or
to sell the related property. The ability of a borrower to accomplish either of
these goals will be affected by --
- - the value of the related property;
- - the level of available mortgage rates at the time of sale or refinancing;
- - the borrower's equity in the related property;
- - the financial condition and operating history of the borrower and the related
property;
- - tax laws;
- - rent control laws (pertaining to certain residential properties);
- - Medicaid and Medicare reimbursement rates (pertaining to hospitals and nursing
homes);
- - prevailing general economic conditions; and
- - the availability of credit for loans secured by multifamily or commercial
property.
Neither NationsLink Funding Corporation nor any of its affiliates will be
required to refinance any mortgage loan.
As specified in the prospectus supplement, the master servicer or the
special servicer will be permitted (within prescribed limits) to extend and
modify mortgage loans that are in default or as to which a payment default is
imminent. Although the master servicer or the special servicer generally will be
required to determine that any such extension or modification is reasonably
likely to produce a greater recovery than liquidation, taking into account the
time value of money, we cannot assure you that any such extension or
modification will in fact increase the present value of receipts from or
proceeds of the affected mortgage loans.
Lender Difficulty in Collecting Rents Upon the Default and/or Bankruptcy of
Borrower. Each mortgage loan included in the trust secured by property that is
subject to leases typically will be secured by an assignment of leases and
rents. Under such an assignment, the mortgagor assigns to the mortgagee its
right, title and interest as lessor under the leases of the related property,
and the income derived, as further security for the related mortgage loan, while
retaining a license to collect rents for so long as there is no default. If the
borrower defaults, the license terminates and the lender is entitled to collect
rents. Some state laws may require that the lender take possession of the
property and obtain a judicial appointment of a receiver before becoming
entitled to collect the rents. 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.
Limitations on Enforceability of Due-on-Sale and Debt-Acceleration
Clauses. Mortgages may contain a due-on-sale clause, which permits the lender
to accelerate the maturity of the mortgage loan if the borrower sells, transfers
or conveys the related property or its interest in the property. Mortgages also
may include a debt-acceleration clause, which permits the lender to accelerate
the debt upon a monetary or nonmonetary default of the mortgagor. Such clauses
are generally enforceable subject to certain exceptions. The courts of all
states will enforce clauses providing for acceleration in the event of a
material payment default. The equity courts of any state, however, may refuse
the foreclosure of 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.
Risk of Liability Arising From Environmental Conditions. Under the laws of
certain states, contamination of real property may give rise to a lien on the
property to assure the costs of cleanup. In several states, such a lien has
priority over an existing mortgage lien on such property. In addition, under the
laws of some states and under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, a lender may be liable, as
an "owner" or "operator", for costs of addressing releases or threatened
releases of hazardous substances at a property, if agents or employees of the
lender have become sufficiently involved in the operations of the borrower,
regardless of whether the environmental damage or
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threat was caused by the borrower or a prior owner. A lender also risks such
liability on foreclosure of the mortgage.
Lack of Insurance Coverage for Certain Special Hazard Losses. Unless
otherwise specified in a prospectus supplement, the master servicer and special
servicer for the trust will be required to cause the borrower on each mortgage
loan in the trust to maintain such insurance coverage in respect of the property
as is required under the related mortgage, including hazard insurance. As
described in the prospectus supplement, the master servicer and the special
servicer may satisfy its obligation to cause hazard insurance to be maintained
with respect to any property through acquisition of a blanket policy.
In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements of the property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
Although the policies covering the properties will be underwritten by different
insurers under different state laws in accordance with different applicable
state forms, and therefore will not contain identical terms and conditions, most
such policies typically do not cover any physical damage resulting from war,
revolution, governmental actions, floods and other water-related causes, earth
movement (including earthquakes, landslides and mudflows), wet or dry rot,
vermin, domestic animals and certain other kinds of risks. Unless the mortgage
specifically requires the mortgagor to insure against physical damage arising
from such causes, then, to the extent any consequent losses are not covered by
credit support, such losses may be borne, at least in part, by the holders of
one or more classes of certificates of the related series.
INCLUSION OF DELINQUENT MORTGAGE LOANS IN A MORTGAGE ASSET POOL
If provided in the prospectus supplement, the trust fund for a particular
series of certificates may include mortgage loans that are past due. As
specified in the related prospectus supplement, the servicing of such mortgage
loans will be performed by the special servicer. The same entity may act as both
master servicer and special servicer. Credit support provided with respect to a
particular series of certificates may not cover all losses related to such
delinquent mortgage loans, and investors should consider the risk that the
inclusion of such mortgage loans in the trust fund may adversely affect the rate
of defaults and prepayments concerning the subject mortgage asset pool and the
yield on the certificates of such series.
PROSPECTUS SUPPLEMENT
To the extent appropriate, the prospectus supplement relating to each
series of offered certificates will contain:
- - a description of the class or classes of such offered certificates, including
the payment provisions with respect to each such class, the aggregate
principal amount (if any) of each such class, the rate at which interest
accrues from time to time (if at all), with respect to each such class or the
method of determining such rate, and whether interest with respect to each
such class will accrue from time to time on its aggregate principal amount (if
any) or on a specified notional amount (if at all);
- - information with respect to any other classes of Certificates of the same
series;
- - the respective dates on which distributions are to be made;
- - information as to the assets, including the Mortgage Assets, constituting the
related Trust Fund (all such assets, with respect to the Certificates of any
series, the "Trust Assets");
- - the circumstances, if any, under which the related Trust Fund may be subject
to early termination;
- - additional information with respect to the method of distribution of such
offered certificates;
- - whether one or more REMIC elections will be made and the designation of the
"regular interests" and "residual interests" in each REMIC to be created and
the identity of the person (the "REMIC Administrator") responsible for the
various tax-related duties in respect of each REMIC to be created;
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- - the initial percentage ownership interest in the related Trust Fund to be
evidenced by each class of Certificates of such series;
- - information concerning the Trustee (as defined herein) of the related Trust
Fund;
- - if the related Trust Fund includes Mortgage Loans, information concerning the
Master Servicer and any Special Servicer (each as defined herein) of such
Mortgage Loans and the circumstances under which all or a portion, as
specified, of the servicing of a Mortgage Loan would transfer from the Master
Servicer to the Special Servicer;
- - information as to the nature and extent of subordination of any class of
Certificates of such series, including a class of offered certificates; and
- - whether such offered certificates will be initially issued in definitive or
book-entry form.
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DESCRIPTION OF THE TRUST FUNDS
GENERAL
The primary assets of each trust (the "Trust Fund") will consist of (i)
various types of multifamily or commercial mortgage loans ("Mortgage Loans"),
(ii) mortgage participations, pass-through certificates or other mortgage-backed
securities ("MBS") that evidence interests in, or that are secured by pledges
of, one or more of various types of multifamily or commercial mortgage loans or
(iii) a combination of Mortgage Loans and MBS (collectively, "Mortgage Assets").
Each Trust Fund will be established by the Depositor. Each Mortgage Asset will
be selected by NationsLink Funding Corporation (the "Depositor") for inclusion
in a Trust Fund from among those purchased, either directly or indirectly, from
a prior holder thereof (a "Mortgage Asset Seller"), which prior holder may or
may not be the originator of such Mortgage Loan or the issuer of such MBS and
may be an affiliate of the Depositor. The Mortgage Assets will not be guaranteed
or insured by the Depositor or any of its affiliates or, unless otherwise
provided in the related Prospectus Supplement, by any governmental agency or
instrumentality or by any other person. The discussion below under the heading
"-- Mortgage Loans", unless otherwise noted, applies equally to mortgage loans
underlying any MBS included in a particular Trust Fund.
MORTGAGE LOANS
General. The Mortgage Loans will be evidenced by promissory notes (the
"Mortgage Notes") secured by mortgages, deeds of trust or similar security
instruments (the "Mortgages") that create first or junior liens on fee or
leasehold estates in properties (the "Mortgaged Properties") consisting of (i)
residential properties consisting of five or more rental or cooperatively-owned
dwelling units in high-rise, mid-rise or garden apartment buildings or other
residential structures ("Multifamily Properties") or (ii) office buildings,
retail stores and establishments, hotels or motels, nursing homes, hospitals or
other health care-related facilities, recreational vehicle and mobile home
parks, warehouse facilities, mini-warehouse facilities, self-storage facilities,
industrial plants, parking lots, entertainment or sports arenas, restaurants,
marinas, mixed use or various other types of income-producing properties or
unimproved land ("Commercial Properties"). The Multifamily Properties may
include mixed commercial and residential structures and apartment buildings
owned by private cooperative housing corporations ("Cooperatives"). However, no
one of the following types of Commercial Properties will represent security for
a material concentration of the Mortgage Loans in any Trust Fund, based on
principal balance at the time such Trust Fund is formed: (1) restaurants; (2)
entertainment or sports arenas; (3) marinas; or (4) nursing homes, hospitals or
other health care-related facilities. Unless otherwise specified in the related
Prospectus Supplement, each Mortgage will create a first priority mortgage lien
on a borrower's fee estate in a Mortgaged Property. If a Mortgage creates a lien
on a borrower's leasehold estate in a property, then, unless otherwise specified
in the related Prospectus Supplement, the term of any such leasehold will exceed
the term of the Mortgage Note by at least ten years. Unless otherwise specified
in the related Prospectus Supplement, each Mortgage Loan will have been
originated by a person (the "Originator") other than the Depositor; however, the
Originator may be or may have been an affiliate of the Depositor.
If so provided in the related Prospectus Supplement, Mortgage Assets for a
series of Certificates may include Mortgage Loans secured by junior liens, and
the loans secured by the related senior liens ("Senior Liens") may not be
included in the Mortgage Pool. The primary risk to holders of Mortgage Loans
secured by junior liens is the possibility that adequate funds will not be
received in connection with a foreclosure of the related Senior Liens to satisfy
fully both the Senior Liens and the Mortgage Loan. In the event that a holder of
a Senior Lien forecloses on a Mortgaged Property, the proceeds of the
foreclosure or similar sale will be applied first to the payment of court costs
and fees in connection with the foreclosure, second to real estate taxes, third
in satisfaction of all principal, interest, prepayment or acceleration
penalties, if any, and any other sums due and owing to the holder of the Senior
Liens. The claims of the holders of the Senior Liens will be satisfied in full
out of proceeds of the liquidation of the related Mortgage Property, if such
proceeds are sufficient, before the Trust Fund as holder of the junior lien
receives any payments in respect of the Mortgage Loan. If the Master Servicer
were to foreclose on any Mortgage Loan, it would do so subject to any related
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Senior Liens. In order for the debt related to such Mortgage Loan to be paid in
full at such sale, a bidder at the foreclosure sale of such Mortgage Loan would
have to bid an amount sufficient to pay off all sums due under the Mortgage Loan
and any Senior Liens or purchase the Mortgaged Property subject to such Senior
Liens. In the event that such proceeds from a foreclosure or similar sale of the
related Mortgaged Property are insufficient to satisfy all Senior Liens and the
Mortgage Loan in the aggregate, the Trust Fund, as the holder of the junior
lien, and, accordingly, holders of one or more classes of the Certificates of
the related series bear (1) the risk of delay in distributions while a
deficiency judgment against the borrower is obtained and (2) the risk of loss if
the deficiency judgment is not obtained and satisfied. Moreover, deficiency
judgments may not be available in certain jurisdictions, or the particular
Mortgage Loan may be a nonrecourse loan, which means that, absent special facts,
recourse in the case of default will be limited to the Mortgaged Property and
such other assets, if any, that were pledged to secure repayment of the Mortgage
Loan.
If so specified in the related Prospectus Supplement, the Mortgage Assets
for a particular series of Certificates may include Mortgage Loans that are
delinquent as of the date such Certificates are issued. In that case, the
related Prospectus Supplement will set forth, as to each such Mortgage Loan,
available information as to the period of such delinquency, any forbearance
arrangement then in effect, the condition of the related Mortgaged Property and
the ability of the Mortgaged Property to generate income to service the mortgage
debt.
Default and Loss Considerations with Respect to the Mortgage
Loans. Mortgage loans secured by liens on income-producing properties are
substantially different from loans made on the security of owner-occupied
single-family homes. The repayment of a loan secured by a lien on an
income-producing property is typically dependent upon the successful operation
of such property (that is, its ability to generate income). Moreover, as noted
above, some or all of the Mortgage Loans included in a particular Trust Fund may
be nonrecourse loans.
Lenders typically look to the Debt Service Coverage Ratio of a loan secured
by income-producing property as an important factor in evaluating the likelihood
of default on such a loan. Unless otherwise defined in the related Prospectus
Supplement, the "Debt Service Coverage Ratio" of a Mortgage Loan at any given
time is the ratio of (1) the Net Operating Income derived from the related
Mortgaged Property for a twelve-month period to (2) the annualized scheduled
payments of principal and/or interest on the Mortgage Loan and any other loans
senior thereto that are secured by the related Mortgaged Property. Unless
otherwise defined in the related Prospectus Supplement, "Net Operating Income"
means, for any given period, the total operating revenues derived from a
Mortgaged Property during such period, minus the total operating expenses
incurred in respect of such Mortgaged Property during such period other than (1)
noncash items such as depreciation and amortization, (2) capital expenditures
and (3) debt service on the related Mortgage Loan or on any other loans that are
secured by such Mortgaged Property. The Net Operating Income of a Mortgaged
Property will generally fluctuate over time and may or may not be sufficient to
cover debt service on the related Mortgage Loan at any given time. As the
primary source of the operating revenues of a nonowner occupied,
income-producing property, rental income (and, with respect to a Mortgage Loan
secured by a Cooperative apartment building, maintenance payments from
tenant-stockholders of a Cooperative) may be affected by the condition of the
applicable real estate market and/or area economy. In addition, properties
typically leased, occupied or used on a short-term basis, such as certain health
care-related facilities, hotels and motels, and mini-warehouse and self-storage
facilities, tend to be affected more rapidly by changes in market or business
conditions than do properties typically leased for longer periods, such as
warehouses, retail stores, office buildings and industrial plants. Commercial
Properties may be owner-occupied or leased to a small number of tenants. Thus,
the Net Operating Income of such a Mortgaged Property may depend substantially
on the financial condition of the borrower or a tenant, and Mortgage Loans
secured by liens on such properties may pose a greater likelihood of default and
loss than loans secured by liens on Multifamily Properties or on multi-tenant
Commercial Properties.
Increases in operating expenses due to the general economic climate or
economic conditions in a locality or industry segment, such as increases in
interest rates, real estate tax rates, energy costs, labor costs and other
operating expenses, and/or to changes in governmental rules, regulations and
fiscal policies, may also affect the likelihood of default on a Mortgage Loan.
As may be further described in the related Prospectus
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Supplement, in some cases leases of Mortgaged Properties may provide that the
lessee, rather than the borrower/landlord, is responsible for payment of
operating expenses ("Net Leases"). However, the existence of such "net of
expense" provisions will result in stable Net Operating Income to the
borrower/landlord only to the extent that the lessee is able to absorb operating
expense increases while continuing to make rent payments.
Lenders also look to the Loan-to-Value Ratio of a mortgage loan as a factor
in evaluating the likelihood of loss if a property must be liquidated following
a default. Unless otherwise defined in the related Prospectus Supplement, the
"Loan-to-Value Ratio" of a Mortgage Loan at any given time is the ratio
(expressed as a percentage) of (1) the then outstanding principal balance of the
Mortgage Loan and any other loans senior thereto that are secured by the related
Mortgaged Property to (2) the Value of the related Mortgaged Property. Unless
otherwise specified in the related Prospectus Supplement, the "Value" of a
Mortgaged Property will be its fair market value as determined by an appraisal
of such property conducted by or on behalf of the Originator in connection with
the origination of such loan. The lower the Loan-to-Value Ratio, the greater the
percentage of the borrower's equity in a Mortgaged Property, and thus (a) the
greater the incentive of the borrower to perform under the terms of the related
Mortgage Loan (in order to protect such equity) and (b) the greater the cushion
provided to the lender against loss on liquidation following a default.
Loan-to-Value Ratios will not necessarily constitute an accurate measure of
the likelihood of liquidation loss in a pool of Mortgage Loans. For example, the
value of a Mortgaged Property as of the date of initial issuance of the related
series of Certificates may be less than the Value determined at loan
origination, and will likely continue to fluctuate from time to time based upon
certain factors including changes in economic conditions and the real estate
market. Moreover, even when current, an appraisal is not necessarily a reliable
estimate of value. Appraised values of income-producing properties are generally
based on the market comparison method (recent resale value of comparable
properties at the date of the appraisal), the cost replacement method (the cost
of replacing the property at such date), the income capitalization method (a
projection of value based upon the property's projected net cash flow), or upon
a selection from or interpolation of the values derived from such methods. Each
of these appraisal methods can present analytical difficulties. It is often
difficult to find truly comparable properties that have recently been sold; the
replacement cost of a property may have little to do with its current market
value; and income capitalization is inherently based on inexact projections of
income and expense and the selection of an appropriate capitalization rate and
discount rate. Where more than one of these appraisal methods are used and
provide significantly different results, an accurate determination of value and,
correspondingly, a reliable analysis of the likelihood of default and loss, is
even more difficult.
Although there may be multiple methods for determining the value of a
Mortgaged Property, value will in all cases be affected by property performance.
As a result, if a Mortgage Loan defaults because the income generated by the
related Mortgaged Property is insufficient to cover operating costs and expenses
and pay debt service, then the value of the Mortgaged Property will reflect such
and a liquidation loss may occur.
While the Depositor believes that the foregoing considerations are
important factors that generally distinguish loans secured by liens on
income-producing real estate from single-family mortgage loans, there can be no
assurance that all of such factors will in fact have been prudently considered
by the Originators of the Mortgage Loans, or that, for a particular Mortgage
Loan, they are complete or relevant. See "Risk Factors -- Certain Factors
Affecting Delinquency, Foreclosure and Loss of the Mortgage Loans -- General"
and "-- Certain Factors Affecting Delinquency, Foreclosure and Loss of the
Mortgage Loans -- Increased Risk of Default Associated With Balloon Payments".
Payment Provisions of the Mortgage Loans. All of the Mortgage Loans will
(1) have had original terms to maturity of not more than 40 years and (2)
provide for scheduled payments of principal, interest or both, to be made on
specified dates ("Due Dates") that occur monthly, quarterly, semi-annually or
annually. A Mortgage Loan (1) may provide for no accrual of interest or for
accrual of interest thereon at an interest rate (a "Mortgage Rate") that is
fixed over its term or that adjusts from time to time, or that may be converted
at the borrower's election from an adjustable to a fixed Mortgage Rate, or from
a fixed to an adjustable Mortgage Rate, (2) may provide for level payments to
maturity or for payments that adjust from time to time to accommodate changes in
the Mortgage Rate or to reflect the occurrence of certain events, and may permit
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negative amortization, (3) may be fully amortizing or may be partially
amortizing or nonamortizing, with a balloon payment due on its stated maturity
date, and (4) may prohibit over its term or for a certain period prepayments
(the period of such prohibition, a "Lock-out Period" and its date of expiration,
a "Lock-out Date") and/or require payment of a premium or a yield maintenance
payment (a "Prepayment Premium") in connection with certain prepayments, in each
case as described in the related Prospectus Supplement. A Mortgage Loan may also
contain a provision that entitles the lender to a share of appreciation of the
related Mortgaged Property, or profits realized from the operation or
disposition of such Mortgaged Property or the benefit, if any, resulting from
the refinancing of the Mortgage Loan (any such provision, an "Equity
Participation"), as described in the related Prospectus Supplement. See "Certain
Legal Aspects of the Mortgage Loans -- Default Interest and Limitations on
Prepayments" in the Prospectus regarding the enforceability of Prepayment
Premiums.
Mortgage Loan Information in Prospectus Supplements. Each Prospectus
Supplement will contain certain information pertaining to the Mortgage Loans in
the related Trust Fund, which, to the extent then applicable, will generally
include the following:
- the aggregate outstanding principal balance and the largest, smallest
and average outstanding principal balance of the Mortgage Loans,
- the type or types of property that provide security for repayment of
the Mortgage Loans,
- the earliest and latest origination date and maturity date of the
Mortgage Loans,
- the original and remaining terms to maturity of the Mortgage Loans, or
the respective ranges thereof, and the weighted average original and
remaining terms to maturity of the Mortgage Loans,
- the Loan-to-Value Ratios of the Mortgage Loans (either at origination
or as of a more recent date), or the range thereof, and the weighted
average of such Loan-to-Value Ratios,
- the Mortgage Rates borne by the Mortgage Loans, or the range thereof,
and the weighted average Mortgage Rate borne by the Mortgage Loans,
- with respect to Mortgage Loans with adjustable Mortgage Rates ("ARM
Loans"), the index or indices upon which such adjustments are based,
the adjustment dates, the range of gross margins and the weighted
average gross margin, and any limits on Mortgage Rate adjustments at
the time of any adjustment and over the life of the ARM Loan,
- information regarding the payment characteristics of the Mortgage
Loans, including, without limitation, balloon payment and other
amortization provisions, Lock-out Periods and Prepayment Premiums,
- the Debt Service Coverage Ratios of the Mortgage Loans (either at
origination or as of a more recent date), or the range thereof, and
the weighted average of such Debt Service Coverage Ratios, and
- the geographic distribution of the Mortgaged Properties on a
state-by-state basis. In appropriate cases, the related Prospectus
Supplement will also contain certain information available to the
Depositor that pertains to the provisions of leases and the nature of
tenants of the Mortgaged Properties. If the Depositor is unable to
provide the specific information described above at the time Offered
Certificates of a series are initially offered, more general
information of the nature described above will be provided in the
related Prospectus Supplement, and specific information will be set
forth in a report which will be available to purchasers of those
Certificates at or before the initial issuance thereof and will be
filed as part of a Current Report on Form 8-K with the Commission
within fifteen days following such issuance.
If any Mortgage Loan, or group of related Mortgage Loans, constitutes a
concentration of credit risk, financial statements or other financial
information with respect to the related Mortgaged Property or Mortgaged
Properties will be included in the related Prospectus Supplement.
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If and to the extent available and relevant to an investment decision in
the Offered Certificates of the related series, information regarding the
prepayment experience of a Master Servicer's multifamily and/or commercial
mortgage loan servicing portfolio will be included in the related Prospectus
Supplement. However, many servicers do not maintain records regarding such
matters or, at least, not in a format that can be readily aggregated. In
addition, the relevant characteristics of a Master Servicer's servicing
portfolio may be so materially different from those of the related Mortgage
Asset Pool that such prepayment experience would not be meaningful to an
investor. For example, differences in geographic dispersion, property type
and/or loan terms (e.g., mortgage rates, terms to maturity and/or prepayment
restrictions) between the two pools of loans could render the Master Servicer's
prepayment experience irrelevant. Because of the nature of the assets to be
serviced and administered by a Special Servicer, no comparable prepayment
information will be presented with respect to the Special Servicer's multifamily
and/or commercial mortgage loan servicing portfolio.
MBS
MBS may include (1) private-label (that is, not issued, insured or
guaranteed by the United States or any agency or instrumentality thereof)
mortgage participations, mortgage pass-through certificates or other
mortgage-backed securities or (2) certificates issued and/or insured or
guaranteed by the Federal Home Loan Mortgage Corporation ("FHLMC"), the Federal
National Mortgage Association ("FNMA"), the Governmental National Mortgage
Association ("GNMA") or the Federal Agricultural Mortgage Corporation ("FAMC"),
provided that, unless otherwise specified in the related Prospectus Supplement,
each MBS will evidence an interest in, or will be secured by a pledge of,
mortgage loans that conform to the descriptions of the Mortgage Loans contained
herein.
Except in the case of a pro rata mortgage participation in a single
mortgage loan or a pool of mortgage loans, each MBS included in a Mortgage Asset
Pool: (a) either will (1) have been previously registered under the Securities
Act of 1933, as amended, (2) be exempt from such registration requirements or
(3) have been held for at least the holding period specified in Rule 144(k)
under the Securities Act of 1933, as amended; and (b) will have been acquired
(other than from the Depositor or an affiliate thereof) in bona fide secondary
market transactions.
Any MBS will have been issued pursuant to a participation and servicing
agreement, a pooling and servicing agreement, an indenture or similar agreement
(an "MBS Agreement"). The issuer of the MBS (the "MBS Issuer") and/or the
servicer of the underlying mortgage loans (the "MBS Servicer") will be parties
to the MBS Agreement, generally together with a trustee (the "MBS Trustee") or,
in the alternative, with the original purchaser or purchasers of the MBS.
The MBS may have been issued in one or more classes with characteristics
similar to the classes of Certificates described herein. Distributions in
respect of the MBS will be made by the MBS Issuer, the MBS Servicer or the MBS
Trustee on the dates specified in the related Prospectus Supplement. The MBS
Issuer or the MBS Servicer or another person specified in the related Prospectus
Supplement may have the right or obligation to repurchase or substitute assets
underlying the MBS after a certain date or under other circumstances specified
in the related Prospectus Supplement.
Reserve funds, subordination or other credit support similar to that
described for the Certificates under "Description of Credit Support" may have
been provided with respect to the MBS. The type, characteristics and amount of
such credit support, if any, will be a function of the characteristics of the
underlying mortgage loans and other factors and generally will have been
established on the basis of the requirements of any rating agency that may have
assigned a rating to the MBS, or by the initial purchasers of the MBS.
The Prospectus Supplement for a series of Certificates that evidence
interests in MBS will specify, to the extent available,
- the aggregate approximate initial and outstanding principal amount(s)
and type of the MBS to be included in the Trust Fund,
- the original and remaining term(s) to stated maturity of the MBS, if
applicable,
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- the pass-through or bond rate(s) of the MBS or the formula for
determining such rate(s),
- the payment characteristics of the MBS,
- the MBS Issuer, MBS Servicer and MBS Trustee, as applicable, of each
of the MBS,
- a description of the related credit support, if any,
- the circumstances under which the related underlying mortgage loans,
or the MBS themselves, may be purchased prior to their maturity,
- the terms on which mortgage loans may be substituted for those
originally underlying the MBS,
- the type of mortgage loans underlying the MBS and, to the extent
available to the Depositor and appropriate under the circumstances,
such other information in respect of the underlying mortgage loans
described under "-- Mortgage Loans -- Mortgage Loan Information in
Prospectus Supplements", and
- the characteristics of any cash flow agreements that relate to the
MBS.
CERTIFICATE ACCOUNTS
Each Trust Fund will include one or more accounts (collectively, the
"Certificate Account") established and maintained on behalf of the
Certificateholders into which all payments and collections received or advanced
with respect to the Mortgage Assets and other assets in the Trust Fund will be
deposited to the extent described herein and in the related Prospectus
Supplement. See "The Pooling and Servicing Agreements -- Certificate Account".
CREDIT SUPPORT
If so provided in the Prospectus Supplement for a series of Certificates,
partial or full protection against certain defaults and losses on the Mortgage
Assets in the related Trust Fund may be provided to one or more classes of
Certificates of such series in the form of subordination of one or more other
classes of Certificates of such series or by one or more other types of Credit
Support, such as a letter of credit, insurance policy, guarantee or reserve
fund, among others, or a combination thereof. The amount and types of Credit
Support, the identity of the entity providing it (if applicable) and related
information with respect to each type of Credit Support, if any, will be set
forth in the Prospectus Supplement for a series of Certificates. See "Risk
Factors -- Credit Support Limitations" and "Description of Credit Support".
CASH FLOW AGREEMENTS
If so provided in the Prospectus Supplement for a series of Certificates,
the related Trust Fund may include guaranteed investment contracts pursuant to
which moneys held in the funds and accounts established for such series will be
invested at a specified rate. The Trust Fund may also include certain other
agreements, such as interest rate exchange agreements, interest rate cap or
floor agreements, or other agreements designed to reduce the effects of interest
rate fluctuations on the Mortgage Assets on one or more classes of Certificates.
The principal terms of any such cash flow agreement (any such agreement, a "Cash
Flow Agreement"), including, without limitation, provisions relating to the
timing, manner and amount of payments thereunder and provisions relating to the
termination thereof, will be described in the related Prospectus Supplement. The
related Prospectus Supplement will also identify the obligor under the Cash Flow
Agreement.
YIELD AND MATURITY CONSIDERATIONS
GENERAL
The yield on any Offered Certificate will depend on the price paid by the
Certificateholder, the Pass-Through Rate of the Certificate and the amount and
timing of distributions on the Certificate. See "Risk Factors -- Effect of
Prepayments on Average Life of Certificates". The following discussion
contemplates a
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Trust Fund that consists solely of Mortgage Loans. While the characteristics and
behavior of mortgage loans underlying an MBS can generally be expected to have
the same effect on the yield to maturity and/or weighted average life of a class
of Certificates as will the characteristics and behavior of comparable Mortgage
Loans, the effect may differ due to the payment characteristics of the MBS. If a
Trust Fund includes MBS, the related Prospectus Supplement will discuss the
effect, if any, that the payment characteristics of the MBS may have on the
yield to maturity and weighted average lives of the Offered Certificates of the
related series.
PASS-THROUGH RATE
The Certificates of any class within a series may have a fixed, variable or
adjustable Pass-Through Rate, which may or may not be based upon the interest
rates borne by the Mortgage Loans in the related Trust Fund. The Prospectus
Supplement with respect to any series of Certificates will specify the
Pass-Through Rate for each class of Offered Certificates of such series or, in
the case of a class of Offered Certificates with a variable or adjustable
Pass-Through Rate, the method of determining the Pass-Through Rate; the effect,
if any, of the prepayment of any Mortgage Loan on the Pass-Through Rate of one
or more classes of Offered Certificates; and whether the distributions of
interest on the Offered Certificates of any class will be dependent, in whole or
in part, on the performance of any obligor under a Cash Flow Agreement.
PAYMENT DELAYS
With respect to any series of Certificates, a period of time will elapse
between the date upon which payments on the Mortgage Loans in the related Trust
Fund are due and the Distribution Date on which such payments are passed through
to Certificateholders. That delay will effectively reduce the yield that would
otherwise be produced if payments on such Mortgage Loans were distributed to
Certificateholders on the date they were due.
CERTAIN SHORTFALLS IN COLLECTIONS OF INTEREST
When a principal prepayment in full or in part is made on a Mortgage Loan,
the borrower is generally charged interest on the amount of such prepayment only
through the date of such prepayment, instead of through the Due Date for the
next succeeding scheduled payment. However, interest accrued on any series of
Certificates and distributable thereon on any Distribution Date will generally
correspond to interest accrued on the Mortgage Loans to their respective Due
Dates during the related Due Period. A "Due Period" will be a specified time
period (generally corresponding in length to the period between Distribution
Dates) and all scheduled payments on the Mortgage Loans in the related Trust
Fund that are due during a given Due Period will, to the extent received by a
specified date (the "Determination Date") or otherwise advanced by the related
Master Servicer, Special Servicer or other specified person, be distributed to
the holders of the Certificates of such series on the next succeeding
Distribution Date. Consequently, if a prepayment on any Mortgage Loan is
distributable to Certificateholders on a particular Distribution Date, but such
prepayment is not accompanied by interest thereon to the Due Date for such
Mortgage Loan in the related Due Period, then the interest charged to the
borrower (net of servicing and administrative fees) may be less (such shortfall,
a "Prepayment Interest Shortfall") than the corresponding amount of interest
accrued and otherwise payable on the Certificates of the related series. If and
to the extent that any such shortfall is allocated to a class of Offered
Certificates, the yield thereon will be adversely affected. The Prospectus
Supplement for each series of Certificates will describe the manner in which any
such shortfalls will be allocated among the classes of such Certificates. The
related Prospectus Supplement will also describe any amounts available to offset
such shortfalls.
YIELD AND PREPAYMENT CONSIDERATIONS
A Certificate's yield to maturity will be affected by the rate of principal
payments on the Mortgage Loans in the related Trust Fund and the allocation
thereof to reduce the principal balance (or notional amount, if applicable) of
such Certificate. The rate of principal payments on the Mortgage Loans in any
Trust Fund will in turn be affected by the amortization schedules thereof
(which, in the case of ARM Loans, may change periodically to accommodate
adjustments to the Mortgage Rates thereon), the dates on which any balloon
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payments are due, and the rate of principal prepayments thereon (including for
this purpose, voluntary prepayments by borrowers and also prepayments resulting
from liquidations of Mortgage Loans due to defaults, casualties or condemnations
affecting the related Mortgaged Properties, or purchases of Mortgage Loans out
of the related Trust Fund). Because the rate of principal prepayments on the
Mortgage Loans in any Trust Fund will depend on future events and a variety of
factors (as described below), no assurance can be given as to such rate.
The extent to which the yield to maturity of a class of Offered
Certificates of any series may vary from the anticipated yield will depend upon
the degree to which they are purchased at a discount or premium and when, and to
what degree, payments of principal on the Mortgage Loans in the related Trust
Fund are in turn distributed on such Certificates (or, in the case of a class of
Stripped Interest Certificates, result in the reduction of the Notional Amount
thereof). An investor should consider, in the case of any Offered Certificate
purchased at a discount, the risk that a slower than anticipated rate of
principal payments on the Mortgage Loans in the related Trust Fund could result
in an actual yield to such investor that is lower than the anticipated yield
and, in the case of any Offered Certificate purchased at a premium, the risk
that a faster than anticipated rate of principal payments on such Mortgage Loans
could result in an actual yield to such investor that is lower than the
anticipated yield. In addition, if an investor purchases an Offered Certificate
at a discount (or premium), and principal payments are made in reduction of the
principal balance or notional amount of such investor's Offered Certificates at
a rate slower (or faster) than the rate anticipated by the investor during any
particular period, any consequent adverse effects on such investor's yield would
not be fully offset by a subsequent like increase (or decrease) in the rate of
principal payments.
In general, the Notional Amount of a class of Stripped Interest
Certificates will either (1) be based on the principal balances of some or all
of the Mortgage Assets in the related Trust Fund or (2) equal the Certificate
Balances of one or more of the other classes of Certificates of the same series.
Accordingly, the yield on such Stripped Interest Certificates will be inversely
related to the rate at which payments and other collections of principal are
received on such Mortgage Assets or distributions are made in reduction of the
Certificate Balances of such classes of Certificates, as the case may be.
Consistent with the foregoing, if a class of Certificates of any series
consists of Stripped Interest Certificates or Stripped Principal Certificates, a
lower than anticipated rate of principal prepayments on the Mortgage Loans in
the related Trust Fund will negatively affect the yield to investors in Stripped
Principal Certificates, and a higher than anticipated rate of principal
prepayments on such Mortgage Loans will negatively affect the yield to investors
in Stripped Interest Certificates. If the Offered Certificates of a series
include any such Certificates, the related Prospectus Supplement will include a
table showing the effect of various constant assumed levels of prepayment on
yields on such Certificates. Such tables will be intended to illustrate the
sensitivity of yields to various constant assumed prepayment rates and will not
be intended to predict, or to provide information that will enable investors to
predict, yields or prepayment rates.
The extent of prepayments of principal of the Mortgage Loans in any Trust
Fund may be affected by a number of factors, including, without limitation, the
availability of mortgage credit, the relative economic vitality of the area in
which the Mortgaged Properties are located, the quality of management of the
Mortgaged Properties, the servicing of the Mortgage Loans, possible changes in
tax laws and other opportunities for investment. In general, those factors which
increase the attractiveness of selling a Mortgaged Property or refinancing a
Mortgage Loan or which enhance a borrower's ability to do so, as well as those
factors which increase the likelihood of default under a Mortgage Loan, would be
expected to cause the rate of prepayment in respect of any Mortgage Asset Pool
to accelerate. In contrast, those factors having an opposite effect would be
expected to cause the rate of prepayment of any Mortgage Asset Pool to slow.
The rate of principal payments on the Mortgage Loans in any Trust Fund may
also be affected by the existence of Lock-out Periods and requirements that
principal prepayments be accompanied by Prepayment Premiums, and by the extent
to which such provisions may be practicably enforced. To the extent enforceable,
such provisions could constitute either an absolute prohibition (in the case of
a Lock-out Period) or a disincentive (in the case of a Prepayment Premium) to a
borrower's voluntarily prepaying its Mortgage Loan, thereby slowing the rate of
prepayments.
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The rate of prepayment on a pool of mortgage loans is likely to be affected
by prevailing market interest rates for mortgage loans of a comparable type,
term and risk level. When the prevailing market interest rate is below a
mortgage coupon, a borrower may have an increased incentive to refinance its
mortgage loan. Even in the case of ARM Loans, as prevailing market interest
rates decline, and without regard to whether the Mortgage Rates on such ARM
Loans decline in a manner consistent therewith, the related borrowers may have
an increased incentive to refinance for purposes of either (1) converting to a
fixed rate loan and thereby "locking in" such rate or (2) taking advantage of a
different index, margin or rate cap or floor on another adjustable rate mortgage
loan. Therefore, as prevailing market interest rates decline, prepayment speeds
would be expected to accelerate.
Depending on prevailing market interest rates, the outlook for market
interest rates and economic conditions generally, some borrowers may sell
Mortgaged Properties in order to realize their equity therein, to meet cash flow
needs or to make other investments. In addition, some borrowers may be motivated
by federal and state tax laws (which are subject to change) to sell Mortgaged
Properties prior to the exhaustion of tax depreciation benefits. The Depositor
makes no representation as to the particular factors that will affect the
prepayment of the Mortgage Loans in any Trust Fund, as to the relative
importance of such factors, as to the percentage of the principal balance of
such Mortgage Loans that will be paid as of any date or as to the overall rate
of prepayment on such Mortgage Loans.
WEIGHTED AVERAGE LIFE AND MATURITY
The rate at which principal payments are received on the Mortgage Loans in
any Trust Fund will affect the ultimate maturity and the weighted average life
of one or more classes of the Certificates of such series. Unless otherwise
specified in the related Prospectus Supplement, weighted average life refers to
the average amount of time that will elapse from the date of issuance of an
instrument until each dollar allocable as principal of such instrument is repaid
to the investor.
The weighted average life and maturity of a class of Certificates of any
series will be influenced by the rate at which principal on the related Mortgage
Loans, whether in the form of scheduled amortization or prepayments (for this
purpose, the term "prepayment" includes voluntary prepayments by borrowers and
also prepayments resulting from liquidations of Mortgage Loans due to default,
casualties or condemnations affecting the related Mortgaged Properties and
purchases of Mortgage Loans out of the related Trust Fund), is paid to such
class. Prepayment rates on loans are commonly measured relative to a prepayment
standard or model, such as the Constant Prepayment Rate ("CPR") prepayment model
or the Standard Prepayment Assumption ("SPA") prepayment model. CPR represents
an assumed constant rate of prepayment each month (expressed as an annual
percentage) relative to the then outstanding principal balance of a pool of
mortgage loans for the life of such loans. SPA represents an assumed variable
rate of prepayment each month (expressed as an annual percentage) relative to
the then outstanding principal balance of a pool of mortgage loans, with
different prepayment assumptions often expressed as percentages of SPA. For
example, a prepayment assumption of 100% of SPA assumes prepayment rates of 0.2%
per annum of the then outstanding principal balance of such loans in the first
month of the life of the loans and an additional 0.2% per annum in each month
thereafter until the thirtieth month. Beginning in the thirtieth month, and in
each month thereafter during the life of the loans, 100% of SPA assumes a
constant prepayment rate of 6% per annum each month.
Neither CPR nor SPA nor any other prepayment model or assumption purports
to be a historical description of prepayment experience or a prediction of the
anticipated rate of prepayment of any particular pool of mortgage loans.
Moreover, the CPR and SPA models were developed based upon historical prepayment
experience for single-family mortgage loans. Thus, it is unlikely that the
prepayment experience of the Mortgage Loans included in any Trust Fund will
conform to any particular level of CPR or SPA.
The Prospectus Supplement with respect to each series of Certificates will
contain tables, if applicable, setting forth the projected weighted average life
of each class of Offered Certificates of such series with a Certificate Balance,
and the percentage of the initial Certificate Balance of each such class that
would be outstanding on specified Distribution Dates, based on the assumptions
stated in such Prospectus Supplement, including assumptions that prepayments on
the related Mortgage Loans are made at rates corresponding to
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various percentages of CPR or SPA, or at such other rates specified in such
Prospectus Supplement. Such tables and assumptions will illustrate the
sensitivity of the weighted average lives of the Certificates to various assumed
prepayment rates and will not be intended to predict, or to provide information
that will enable investors to predict, the actual weighted average lives of the
Certificates.
OTHER FACTORS AFFECTING YIELD, WEIGHTED AVERAGE LIFE AND MATURITY
Balloon Payments; Extensions of Maturity. Some or all of the Mortgage
Loans included in a particular Trust Fund may require that balloon payments be
made at maturity. Because the ability of a borrower to make a balloon payment
typically will depend upon its ability either to refinance the loan or to sell
the related Mortgaged Property, there is a possibility that Mortgage Loans that
require balloon payments may default at maturity, or that the maturity of such a
Mortgage Loan may be extended in connection with a workout. In the case of
defaults, recovery of proceeds may be delayed by, among other things, bankruptcy
of the borrower or adverse conditions in the market where the property is
located. In order to minimize losses on defaulted Mortgage Loans, the Master
Servicer or the Special Servicer, to the extent and under the circumstances set
forth herein and in the related Prospectus Supplement, may be authorized to
modify Mortgage Loans that are in default or as to which a payment default is
imminent. Any defaulted balloon payment or modification that extends the
maturity of a Mortgage Loan may delay distributions of principal on a class of
Offered Certificates and thereby extend the weighted average life of such
Certificates and, if such Certificates were purchased at a discount, reduce the
yield thereon.
Negative Amortization. The weighted average life of a class of
Certificates can be affected by Mortgage Loans that permit negative amortization
to occur (that is, Mortgage Loans that provide for the current payment of
interest calculated at a rate lower than the rate at which interest accrues
thereon, with the unpaid portion of such interest being added to the related
principal balance). Negative amortization on one or more Mortgage Loans in any
Trust Fund may result in negative amortization on the Offered Certificates of
the related series. The related Prospectus Supplement will describe, if
applicable, the manner in which negative amortization in respect of the Mortgage
Loans in any Trust Fund is allocated among the respective classes of
Certificates of the related series. The portion of any Mortgage Loan negative
amortization allocated to a class of Certificates may result in a deferral of
some or all of the interest payable thereon, which deferred interest may be
added to the Certificate Balance thereof. In addition, an ARM Loan that permits
negative amortization would be expected during a period of increasing interest
rates to amortize at a slower rate (and perhaps not at all) than if interest
rates were declining or were remaining constant. Such slower rate of Mortgage
Loan amortization would correspondingly be reflected in a slower rate of
amortization for one or more classes of Certificates of the related series.
Accordingly, the weighted average lives of Mortgage Loans that permit negative
amortization (and that of the classes of Certificates to which any such negative
amortization would be allocated or that would bear the effects of a slower rate
of amortization on such Mortgage Loans) may increase as a result of such
feature.
Negative amortization may occur in respect of an ARM Loan that (1) limits
the amount by which its scheduled payment may adjust in response to a change in
its Mortgage Rate, (2) provides that its scheduled payment will adjust less
frequently than its Mortgage Rate or (3) provides for constant scheduled
payments notwithstanding adjustments to its Mortgage Rate. Accordingly, during a
period of declining interest rates, the scheduled payment on such a Mortgage
Loan may exceed the amount necessary to amortize the loan fully over its
remaining amortization schedule and pay interest at the then applicable Mortgage
Rate, thereby resulting in the accelerated amortization of such Mortgage Loan.
Any such acceleration in amortization of its principal balance will shorten the
weighted average life of such Mortgage Loan and, correspondingly, the weighted
average lives of those classes of Certificates entitled to a portion of the
principal payments on such Mortgage Loan.
The extent to which the yield on any Offered Certificate will be affected
by the inclusion in the related Trust Fund of Mortgage Loans that permit
negative amortization, will depend upon (1) whether such Offered Certificate was
purchased at a premium or a discount and (2) the extent to which the payment
characteristics of such Mortgage Loans delay or accelerate the distributions of
principal on such Certificate (or, in the case of
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a Stripped Interest Certificate, delay or accelerate the reduction of the
notional amount thereof). See "-- Yield and Prepayment Considerations" above.
Foreclosures and Payment Plans. The number of foreclosures and the
principal amount of the Mortgage Loans that are foreclosed in relation to the
number and principal amount of Mortgage Loans that are repaid in accordance with
their terms will affect the weighted average lives of those Mortgage Loans and,
accordingly, the weighted average lives of and yields on the Certificates of the
related series. Servicing decisions made with respect to the Mortgage Loans,
including the use of payment plans prior to a demand for acceleration and the
restructuring of Mortgage Loans in bankruptcy proceedings or otherwise, may also
have an effect upon the payment patterns of particular Mortgage Loans and thus
the weighted average lives of and yields on the Certificates of the related
series.
Losses and Shortfalls on the Mortgage Assets. The yield to holders of the
Offered Certificates of any series will directly depend on the extent to which
such holders are required to bear the effects of any losses or shortfalls in
collections arising out of defaults on the Mortgage Loans in the related Trust
Fund and the timing of such losses and shortfalls. In general, the earlier that
any such loss or shortfall occurs, the greater will be the negative effect on
yield for any class of Certificates that is required to bear the effects
thereof.
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support) will be allocated among
the respective classes of Certificates of the related series in the priority and
manner, and subject to the limitations, specified in the related Prospectus
Supplement. As described in the related Prospectus Supplement, such allocations
may be effected by (1) a reduction in the entitlements to interest and/or the
Certificate Balances of one or more such classes of Certificates and/or (2)
establishing a priority of payments among such classes of Certificates.
The yield to maturity on a class of Subordinate Certificates may be
extremely sensitive to losses and shortfalls in collections on the Mortgage
Loans in the related Trust Fund.
Additional Certificate Amortization. In addition to entitling the holders
thereof to a specified portion (which may during specified periods range from
none to all) of the principal payments received on the Mortgage Assets in the
related Trust Fund, one or more classes of Certificates of any series, including
one or more classes of Offered Certificates of such series, may provide for
distributions of principal thereof from (1) amounts attributable to interest
accrued but not currently distributable on one or more classes of Accrual
Certificates, (2) Excess Funds or (3) any other amounts described in the related
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, "Excess Funds" will, in general, represent that portion of the
amounts distributable in respect of the Certificates of any series on any
Distribution Date that represent (A) interest received or advanced on the
Mortgage Assets in the related Trust Fund that is in excess of the interest
currently accrued on the Certificates of such series, or (B) Prepayment
Premiums, payments from Equity Participations or any other amounts received on
the Mortgage Assets in the related Trust Fund that do not constitute interest
thereon or principal thereof.
The amortization of any class of Certificates out of the sources described
in the preceding paragraph would shorten the weighted average life of such
Certificates and, if such Certificates were purchased at a premium, reduce the
yield thereon. The related Prospectus Supplement will discuss the relevant
factors to be considered in determining whether distributions of principal of
any class of Certificates out of such sources is likely to have any material
effect on the rate at which such Certificates are amortized and the consequent
yield with respect thereto.
THE DEPOSITOR
NationsLink Funding Corporation, a Delaware corporation (the "Depositor"),
was organized on December 13, 1995 for the limited purpose of acquiring, owning
and transferring Mortgage Assets and selling interests therein or bonds secured
thereby. The Depositor is a subsidiary of Bank of America, N.A. The Depositor
maintains its principal office at Bank of America Corporate Center, Charlotte,
North Carolina 28255. Its telephone number is (704) 386-2400.
Unless otherwise noted in the related Prospectus Supplement, neither the
Depositor nor any of the Depositor's affiliates will insure or guarantee
distributions on the Certificates of any series.
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DESCRIPTION OF THE CERTIFICATES
GENERAL
Each series of Certificates will represent the entire beneficial ownership
interest in the Trust Fund created pursuant to the related Pooling and Servicing
Agreement. As described in the related Prospectus Supplement, the Certificates
of each series, including the Certificates of such series being offered for sale
(the "Offered Certificates"), may consist of one or more classes of Certificates
that, among other things:
- provide for the accrual of interest on the Certificate Balance or
Notional Amount thereof at a fixed, variable or adjustable rate;
- constitute Senior Certificates or Subordinate Certificates;
- constitute Stripped Interest Certificates or Stripped Principal
Certificates;
- provide for distributions of interest thereon or principal thereof
that commence only after the occurrence of certain events, such as the
retirement of one or more other classes of Certificates of such
series;
- provide for distributions of principal thereof to be made, from time
to time or for designated periods, at a rate that is faster (and, in
some cases, substantially faster) or slower (and, in some cases,
substantially slower) than the rate at which payments or other
collections of principal are received on the Mortgage Assets in the
related Trust Fund;
- provide for distributions of principal thereof to be made, subject to
available funds, based on a specified principal payment schedule or
other methodology; or
- provide for distributions based on collections on the Mortgage Assets
in the related Trust Fund attributable to Prepayment Premiums and
Equity Participations.
If so specified in the related Prospectus Supplement, a class of
Certificates may have two or more component parts, each having characteristics
that are otherwise described herein as being attributable to separate and
distinct classes. For example, a class of Certificates may have a Certificate
Balance on which it accrues interest at a fixed, variable or adjustable rate.
Such class of Certificates may also have certain characteristics attributable to
Stripped Interest Certificates insofar as it may also entitle the holders
thereof to distributions of interest accrued on a Notional Amount at a different
fixed, variable or adjustable rate. In addition, a class of Certificates may
accrue interest on one portion of its Certificate Balance at one fixed, variable
or adjustable rate and on another portion of its Certificate Balance at a
different fixed, variable or adjustable rate.
Each class of Offered Certificates of a series will be issued in minimum
denominations corresponding to the principal balances or, in case of certain
classes of Stripped Interest Certificates or REMIC Residual Certificates,
notional amounts or percentage interests, specified in the related Prospectus
Supplement. As provided in the related Prospectus Supplement, one or more
classes of Offered Certificates of any series may be issued in fully registered,
definitive form (such Certificates, "Definitive Certificates") or may be offered
in book-entry format (such Certificates, "Book-Entry Certificates") through the
facilities of DTC. The Offered Certificates of each series (if issued as
Definitive Certificates) may be transferred or exchanged, subject to any
restrictions on transfer described in the related Prospectus Supplement, at the
location specified in the related Prospectus Supplement, without the payment of
any service charges, other than any tax or other governmental charge payable in
connection therewith. Interests in a class of Book-Entry Certificates will be
transferred on the book-entry records of DTC and its participating
organizations. If so specified in the related Prospectus Supplement,
arrangements may be made for clearance and settlement through CEDEL Bank,
Societe Anonyme, or the Euroclear System (in Europe) if they are participants in
DTC.
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DISTRIBUTIONS
Distributions on the Certificates of each series will be made on each
Distribution Date from the Available Distribution Amount for such series and
such Distribution Date. Unless otherwise provided in the related Prospectus
Supplement, the "Available Distribution Amount" for any series of Certificates
and any Distribution Date will refer to the total of all payments or other
collections (or advances in lieu thereof) on, under or in respect of the
Mortgage Assets and any other assets included in the related Trust Fund that are
available for distribution to the holders of Certificates of such series on such
date. The particular components of the Available Distribution Amount for any
series and Distribution Date will be more specifically described in the related
Prospectus Supplement. In general, the Distribution Date for a series of
Certificates will be the 20th day of each month (or, if any such 20th day is not
a business day, the next succeeding business day), commencing in the month
immediately following the month in which such series of Certificates is issued.
Except as otherwise specified in the related Prospectus Supplement,
distributions on the Certificates of each series (other than the final
distribution in retirement of any such Certificate) will be made to the persons
in whose names such Certificates are registered at the close of business on the
last business day of the month preceding the month in which the applicable
Distribution Date occurs (the "Record Date"), and the amount of each
distribution will be determined as of the close of business on the date (the
"Determination Date") specified in the related Prospectus Supplement. All
distributions with respect to each class of Certificates on each Distribution
Date will be allocated pro rata among the outstanding Certificates in such class
in proportion to the respective Percentage Interests evidenced thereby unless
otherwise specified in the related Prospectus Supplement. Payments will be made
either by wire transfer in immediately available funds to the account of a
Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has provided the person required to make
such payments with wiring instructions no later than the related Record Date or
such other date specified in the related Prospectus Supplement (and, if so
provided in the related Prospectus Supplement, such Certificateholder holds
Certificates in the requisite amount or denomination specified therein), or by
check mailed to the address of such Certificateholder as it appears on the
Certificate Register; provided, however, that the final distribution in
retirement of any class of Certificates (whether Definitive Certificates or
Book-Entry Certificates) will be made only upon presentation and surrender of
such Certificates at the location specified in the notice to Certificateholders
of such final distribution. The undivided percentage interest (the "Percentage
Interest") represented by an Offered Certificate of a particular class will be
equal to the percentage obtained by dividing the initial principal balance or
notional amount of such Certificate by the initial Certificate Balance or
Notional Amount of such class.
DISTRIBUTIONS OF INTEREST ON THE CERTIFICATES
Each class of Certificates of each series (other than certain classes of
Stripped Principal Certificates and certain classes of REMIC Residual
Certificates that have no Pass-Through Rate) may have a different Pass-Through
Rate, which in each case may be fixed, variable or adjustable. The related
Prospectus Supplement will specify the Pass-Through Rate or, in the case of a
variable or adjustable Pass-Through Rate, the method for determining the
Pass-Through Rate, for each class of Offered Certificates. Unless otherwise
specified in the related Prospectus Supplement, interest on the Certificates of
each series will be calculated on the basis of a 360-day year consisting of
twelve 30-day months.
Distributions of interest in respect of any class of Certificates (other
than a class of Accrual Certificates, which will be entitled to distributions of
accrued interest commencing only on the Distribution Date or under the
circumstances specified in the related Prospectus Supplement, and other than any
class of Stripped Principal Certificates or REMIC Residual Certificates that is
not entitled to any distributions of interest) will be made on each Distribution
Date based on the Accrued Certificate Interest for such class and such
Distribution Date, subject to the sufficiency of that portion, if any, of the
Available Distribution Amount allocable to such class on such Distribution Date.
Prior to the time interest is distributable on any class of Accrual
Certificates, the amount of Accrued Certificate Interest otherwise distributable
on such class will be added to the Certificate Balance thereof on each
Distribution Date or otherwise deferred as described in the related Prospectus
Supplement. With respect to each class of Certificates (other than certain
classes of Stripped Interest Certificates and certain classes of REMIC Residual
Certificates), the "Accrued Certificate
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Interest" for each Distribution Date will be equal to interest at the applicable
Pass-Through Rate accrued for a specified period (generally the most recently
ended calendar month) on the outstanding Certificate Balance of such class of
Certificates immediately prior to such Distribution Date. Unless otherwise
provided in the related Prospectus Supplement, the Accrued Certificate Interest
for each Distribution Date on a class of Stripped Interest Certificates will be
similarly calculated except that it will accrue on a notional amount (a
"Notional Amount") that is either (1) based on the principal balances of some or
all of the Mortgage Assets in the related Trust Fund or (2) equal to the
Certificate Balances of one or more other classes of Certificates of the same
series. Reference to a Notional Amount with respect to a class of Stripped
Interest Certificates is solely for convenience in making certain calculations
and does not represent the right to receive any distributions of principal. If
so specified in the related Prospectus Supplement, the amount of Accrued
Certificate Interest that is otherwise distributable on (or, in the case of
Accrual Certificates, that may otherwise be added to the Certificate Balance of)
one or more classes of the Certificates of a series may be reduced to the extent
that any Prepayment Interest Shortfalls, as described under "Yield and Maturity
Considerations -- Certain Shortfalls in Collections of Interest", exceed the
amount of any sums that are applied to offset the amount of such shortfalls. The
particular manner in which such shortfalls will be allocated among some or all
of the classes of Certificates of that series will be specified in the related
Prospectus Supplement. The related Prospectus Supplement will also describe the
extent to which the amount of Accrued Certificate Interest that is otherwise
distributable on (or, in the case of Accrual Certificates, that may otherwise be
added to the Certificate Balance of) a class of Offered Certificates may be
reduced as a result of any other contingencies, including delinquencies, losses
and deferred interest on or in respect of the Mortgage Assets in the related
Trust Fund. Unless otherwise provided in the related Prospectus Supplement, any
reduction in the amount of Accrued Certificate Interest otherwise distributable
on a class of Certificates by reason of the allocation to such class of a
portion of any deferred interest on or in respect of the Mortgage Assets in the
related Trust Fund will result in a corresponding increase in the Certificate
Balance of such class. See "Risk Factors -- Effect of Prepayments on Average
Life of Certificates" and "-- Effect of Prepayments on Yield of Certificates"
and "Yield and Maturity Considerations -- Certain Shortfalls in Collections of
Interest".
DISTRIBUTIONS OF PRINCIPAL OF THE CERTIFICATES
Each class of Certificates of each series (other than certain classes of
Stripped Interest Certificates and certain classes of REMIC Residual
Certificates) will have a Certificate Balance, which, at any time, will equal
the then maximum amount that the holders of Certificates of such class will be
entitled to receive as principal out of the future cash flow on the Mortgage
Assets and other assets included in the related Trust Fund. The outstanding
Certificate Balance of a class of Certificates will be reduced by distributions
of principal made thereon from time to time and, if and to the extent so
provided in the related Prospectus Supplement, further by any losses incurred in
respect of the related Mortgage Assets allocated thereto from time to time. In
turn, the outstanding Certificate Balance of a class of Certificates may be
increased as a result of any deferred interest on or in respect of the related
Mortgage Assets being allocated thereto from time to time, and will be
increased, in the case of a class of Accrual Certificates prior to the
Distribution Date on which distributions of interest thereon are required to
commence, by the amount of any Accrued Certificate Interest in respect thereof
(reduced as described above). The initial aggregate Certificate Balance of all
classes of a series of Certificates will not be greater than the aggregate
outstanding principal balance of the related Mortgage Assets as of a specified
date (the "Cut-off Date"), after application of scheduled payments due on or
before such date, whether or not received. The initial Certificate Balance of
each class of a series of Certificates will be specified in the related
Prospectus Supplement. As and to the extent described in the related Prospectus
Supplement, distributions of principal with respect to a series of Certificates
will be made on each Distribution Date to the holders of the class or classes of
Certificates of such series entitled thereto until the Certificate Balances of
such Certificates have been reduced to zero. Distributions of principal with
respect to one or more classes of Certificates may be made at a rate that is
faster (and, in some cases, substantially faster) than the rate at which
payments or other collections of principal are received on the Mortgage Assets
in the related Trust Fund. Distributions of principal with respect to one or
more classes of Certificates may not commence until the occurrence of certain
events, such as the retirement of one or more other classes of Certificates of
the same series, or may be made at a rate that is slower (and, in some cases,
substantially slower) than the rate at
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which payments or other collections of principal are received on the Mortgage
Assets in the related Trust Fund. Distributions of principal with respect to one
or more classes of Certificates (each such class, a "Controlled Amortization
Class") may be made, subject to available funds, based on a specified principal
payment schedule. Distributions of principal with respect to one or more other
classes of Certificates (each such class, a "Companion Class") may be contingent
on the specified principal payment schedule for a Controlled Amortization Class
of the same series and the rate at which payments and other collections of
principal on the Mortgage Assets in the related Trust Fund are received. Unless
otherwise specified in the related Prospectus Supplement, distributions of
principal of any class of Offered Certificates will be made on a pro rata basis
among all of the Certificates of such class.
DISTRIBUTIONS ON THE CERTIFICATES CONCERNING PREPAYMENT PREMIUMS OR CONCERNING
EQUITY PARTICIPATIONS
If so provided in the related Prospectus Supplement, Prepayment Premiums or
payments in respect of Equity Participations received on or in connection with
the Mortgage Assets in any Trust Fund will be distributed on each Distribution
Date to the holders of the class of Certificates of the related series entitled
thereto in accordance with the provisions described in such Prospectus
Supplement. Alternatively, such items may be retained by the Depositor or any of
its affiliates or by any other specified person and/or may be excluded as Trust
Assets.
ALLOCATION OF LOSSES AND SHORTFALLS
The amount of any losses or shortfalls in collections on the Mortgage
Assets in any Trust Fund (to the extent not covered or offset by draws on any
reserve fund or under any instrument of Credit Support) will be allocated among
the respective classes of Certificates of the related series in the priority and
manner, and subject to the limitations, specified in the related Prospectus
Supplement. As described in the related Prospectus Supplement, such allocations
may be effected by (1) a reduction in the entitlements to interest and/or the
Certificate Balances of one or more such classes of Certificates and/or (2)
establishing a priority of payments among such classes of Certificates. See
"Description of Credit Support".
ADVANCES IN RESPECT OF DELINQUENCIES
If and to the extent provided in the related Prospectus Supplement, if a
Trust Fund includes Mortgage Loans, the Master Servicer, the Special Servicer,
the Trustee, any provider of Credit Support and/or any other specified person
may be obligated to advance, or have the option of advancing, on or before each
Distribution Date, from its or their own funds or from excess funds held in the
related Certificate Account that are not part of the Available Distribution
Amount for the related series of Certificates for such Distribution Date, an
amount up to the aggregate of any payments of principal (other than the
principal portion of any balloon payments) and interest that were due on or in
respect of such Mortgage Loans during the related Due Period and were delinquent
on the related Determination Date.
Advances are intended to maintain a regular flow of scheduled interest and
principal payments to holders of the class or classes of Certificates entitled
thereto, rather than to guarantee or insure against losses. Accordingly, all
advances made out of a specific entity's own funds will be reimbursable out of
related recoveries on the Mortgage Loans (including amounts drawn under any fund
or instrument constituting Credit Support) respecting which such advances were
made (as to any Mortgage Loan, "Related Proceeds") and such other specific
sources as may be identified in the related Prospectus Supplement, including, in
the case of a series that includes one or more classes of Subordinate
Certificates, if so identified, collections on other Mortgage Assets in the
related Trust Fund that would otherwise be distributable to the holders of one
or more classes of such Subordinate Certificates. No advance will be required to
be made by a Master Servicer, Special Servicer or Trustee if, in the judgment of
the Master Servicer, Special Servicer or Trustee, as the case may be, such
advance would not be recoverable from Related Proceeds or another specifically
identified source (any such advance, a "Nonrecoverable Advance"); and, if
previously made by a Master Servicer, Special Servicer or Trustee, a
Nonrecoverable Advance will be reimbursable thereto from any amounts in the
related Certificate Account prior to any distributions being made to the related
series of Certificateholders.
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If advances have been made by a Master Servicer, Special Servicer, Trustee
or other entity from excess funds in a Certificate Account, such Master
Servicer, Special Servicer, Trustee or other entity, as the case may be, will be
required to replace such funds in such Certificate Account on or prior to any
future Distribution Date to the extent that funds in such Certificate Account on
such Distribution Date are less than payments required to be made to the related
series of Certificateholders on such date. If so specified in the related
Prospectus Supplement, the obligation of a Master Servicer, Special Servicer,
Trustee or other entity to make advances may be secured by a cash advance
reserve fund or a surety bond. If applicable, information regarding the
characteristics of, and the identity of any obligor on, any such surety bond,
will be set forth in the related Prospectus Supplement.
If and to the extent so provided in the related Prospectus Supplement, any
entity making advances will be entitled to receive interest on certain or all of
such advances for a specified period during which such advances are outstanding
at the rate specified in such Prospectus Supplement, and such entity will be
entitled to payment of such interest periodically from general collections on
the Mortgage Loans in the related Trust Fund prior to any payment to the related
series of Certificateholders or as otherwise provided in the related Pooling and
Servicing Agreement and described in such Prospectus Supplement.
The Prospectus Supplement for any series of Certificates evidencing an
interest in a Trust Fund that includes MBS will describe any comparable
advancing obligation of a party to the related Pooling and Servicing Agreement
or of a party to the related MBS Agreement.
REPORTS TO CERTIFICATEHOLDERS
On each Distribution Date, together with the distribution to the holders of
each class of the Offered Certificates of a series, a Master Servicer, Manager
or Trustee, as provided in the related Prospectus Supplement, will forward to
each such holder, a statement (a "Distribution Date Statement") that, unless
otherwise provided in the related Prospectus Supplement, will set forth, among
other things, in each case to the extent applicable:
- the amount of such distribution to holders of such class of Offered
Certificates that was applied to reduce the Certificate Balance thereof;
- the amount of such distribution to holders of such class of Offered
Certificates that was applied to pay Accrued Certificate Interest;
- the amount, if any, of such distribution to holders of such class of
Offered Certificates that was allocable to (A) Prepayment Premiums and
(B) payments on account of Equity Participations;
- the amount, if any, by which such distribution is less than the amounts
to which holders of such class of Offered Certificates are entitled;
- if the related Trust Fund includes Mortgage Loans, the aggregate amount
of advances included in such distribution;
- if the related Trust Fund includes Mortgage Loans, the amount of
servicing compensation received by the related Master Servicer (and, if
payable directly out of the related Trust Fund, by any Special Servicer
and any Sub-Servicer) and, if the related Trust Fund includes MBS, the
amount of administrative compensation received by the MBS Administrator;
- information regarding the aggregate principal balance of the related
Mortgage Assets on or about such Distribution Date;
- if the related Trust Fund includes Mortgage Loans, information regarding
the number and aggregate principal balance of such Mortgage Loans that
are delinquent;
- if the related Trust Fund includes Mortgage Loans, information regarding
the aggregate amount of losses incurred and principal prepayments made
with respect to such Mortgage Loans during the related "Prepayment
Period" (that is, the specified period, generally corresponding in length
to the period between Distribution Dates, during which prepayments and
other unscheduled collections on
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the Mortgage Loans in the related Trust Fund must be received in order to
be distributed on a particular Distribution Date);
- the Certificate Balance or Notional Amount, as the case may be, of such
class of Certificates at the close of business on such Distribution Date,
separately identifying any reduction in such Certificate Balance or
Notional Amount due to the allocation of any losses in respect of the
related Mortgage Assets, any increase in such Certificate Balance or
Notional Amount due to the allocation of any negative amortization in
respect of the related Mortgage Assets and any increase in the
Certificate Balance of a class of Accrual Certificates, if any, in the
event that Accrued Certificate Interest has been added to such balance;
- if such class of Offered Certificates has a variable Pass-Through Rate or
an adjustable Pass-Through Rate, the Pass-Through Rate applicable thereto
for such Distribution Date and, if determinable, for the next succeeding
Distribution Date;
- the amount deposited in or withdrawn from any reserve fund on such
Distribution Date, and the amount remaining on deposit in such reserve
fund as of the close of business on such Distribution Date;
- if the related Trust Fund includes one or more instruments of Credit
Support, such as a letter of credit, an insurance policy and/or a surety
bond, the amount of coverage under each such instrument as of the close
of business on such Distribution Date; and
- the amount of Credit Support being afforded by any classes of Subordinate
Certificates.
In the case of information furnished pursuant to the first 3 bulleted items
above, the amounts will be expressed as a dollar amount per specified
denomination of the relevant class of Offered Certificates or as a percentage.
The Prospectus Supplement for each series of Certificates may describe
additional information to be included in reports to the holders of the Offered
Certificates of such series.
Within a reasonable period of time after the end of each calendar year, the
Master Servicer, Manager or Trustee for a series of Certificates, as the case
may be, will be required to furnish to each person who at any time during the
calendar year was a holder of an Offered Certificate of such series a statement
containing the information set forth in the first 3 bulleted items above,
aggregated for such calendar year or the applicable portion thereof during which
such person was a Certificateholder. Such obligation will be deemed to have been
satisfied to the extent that substantially comparable information is provided
pursuant to any requirements of the Code as are from time to time in force. See,
however, "-- Book-Entry Registration and Definitive Certificates" below.
If the Trust Fund for a series of Certificates includes MBS, the ability of
the related Master Servicer, Manager or Trustee, as the case may be, to include
in any Distribution Date Statement information regarding the mortgage loans
underlying such MBS will depend on the reports received with respect to such
MBS. In such cases, the related Prospectus Supplement will describe the
loan-specific information to be included in the Distribution Date Statements
that will be forwarded to the holders of the Offered Certificates of that series
in connection with distributions made to them.
VOTING RIGHTS
The voting rights evidenced by each series of Certificates (as to such
series, the "Voting Rights") will be allocated among the respective classes of
such series in the manner described in the related Prospectus Supplement.
Certificateholders will generally not have a right to vote, except with
respect to required consents to certain amendments to the related Pooling and
Servicing Agreement and as otherwise specified in the related Prospectus
Supplement. See "The Pooling and Servicing Agreements -- Amendment". The holders
of specified amounts of Certificates of a particular series will have the right
to act as a group to remove the related Trustee and also upon the occurrence of
certain events which if continuing would constitute an Event of Default on the
part of the related Master Servicer, Special Servicer or REMIC Administrator.
See "The
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Pooling and Servicing Agreements -- Events of Default", "-- Rights Upon Event of
Default" and "-- Resignation and Removal of the Trustee".
TERMINATION
The obligations created by the Pooling and Servicing Agreement for each
series of Certificates will terminate following (1) the final payment or other
liquidation of the last Mortgage Asset subject thereto or the disposition of all
property acquired upon foreclosure of any Mortgage Loan subject thereto and (2)
the payment (or provision for payment) to the Certificateholders of that series
of all amounts required to be paid to them pursuant to such Pooling and
Servicing Agreement. Written notice of termination of a Pooling and Servicing
Agreement will be given to each Certificateholder of the related series, and the
final distribution will be made only upon presentation and surrender of the
Certificates of such series at the location to be specified in the notice of
termination.
If so specified in the related Prospectus Supplement, a series of
Certificates may be subject to optional early termination through the repurchase
of the Mortgage Assets in the related Trust Fund by the party or parties
specified therein, under the circumstances and in the manner set forth therein.
If so provided in the related Prospectus Supplement upon the reduction of the
Certificate Balance of a specified class or classes of Certificates by a
specified percentage or amount or upon a specified date, a party designated
therein may be authorized or required to solicit bids for the purchase of all
the Mortgage Assets of the related Trust Fund, or of a sufficient portion of
such Mortgage Assets to retire such class or classes, under the circumstances
and in the manner set forth therein.
BOOK-ENTRY REGISTRATION AND DEFINITIVE CERTIFICATES
If so provided in the Prospectus Supplement for a series of Certificates,
one or more classes of the Offered Certificates of such series will be offered
in book-entry format through the facilities of DTC, and each such class will be
represented by one or more global Certificates registered in the name of DTC or
its nominee.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking corporation" 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 the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for its participating organizations
("Participants") and facilitate the clearance and settlement of securities
transactions between Participants through electronic computerized book-entry
changes in their accounts, thereby eliminating the need for physical movement of
securities certificates. "Direct Participants", which maintain accounts with
DTC, include securities brokers and dealers, banks, trust companies and clearing
corporations and may include certain other organizations. DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. 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 Direct Participant, either directly or indirectly
("Indirect Participants"). The rules applicable to DTC and its Participants are
on file with the Commission.
Purchases of Book-Entry Certificates under the DTC system must be made by
or through Direct Participants, which will receive a credit for the Book-Entry
Certificates on DTC's records. The ownership interest of each actual purchaser
of a Book-Entry Certificate (a "Certificate Owner") is in turn to be recorded on
the Direct and Indirect Participants' records. Certificate Owners will not
receive written confirmation from DTC of their purchases, but Certificate Owners
are expected to receive written confirmations providing details of such
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which each Certificate Owner entered into the
transaction. Transfers of ownership interests in the Book-Entry Certificates are
to be accomplished by entries made on the books of Participants acting on behalf
of Certificate Owners. Certificate Owners will not receive certificates
representing their ownership interests in the Book-Entry Certificates, except in
the event that use of the book-entry system for the Book-Entry Certificates of
any series is discontinued as described below.
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DTC has no knowledge of the actual Certificate Owners of the Book-Entry
Certificates; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Certificates are credited, which may or may not be the
Certificate Owners. The Participants will remain responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Certificate Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Distributions on the Book-Entry Certificates will be made to DTC. DTC's
practice is to credit Direct Participants' accounts on the related Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such date.
Disbursement of such distributions by Participants to Certificate Owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the responsibility of each such Participant (and not
of DTC, the Depositor or any Trustee, Master Servicer, Special Servicer or
Manager), subject to any statutory or regulatory requirements as may be in
effect from time to time. Accordingly, under a book-entry system, Certificate
Owners may receive payments after the related Distribution Date.
Unless otherwise provided in the related Prospectus Supplement, the only
"Certificateholder" (as such term is used in the related Pooling and Servicing
Agreement) of Book-Entry Certificates will be the nominee of DTC, and the
Certificate Owners will not be recognized as Certificateholders under the
Pooling and Servicing Agreement. Certificate Owners will be permitted to
exercise the rights of Certificateholders under the related Pooling and
Servicing Agreement only indirectly through the Participants who in turn will
exercise their rights through DTC. The Depositor has been informed that DTC will
take action permitted to be taken by a Certificateholder under a Pooling and
Servicing Agreement only at the direction of one or more Direct Participants to
whose account with DTC interests in the Book-Entry Certificates are credited.
Because DTC can act only on behalf of Direct Participants, who in turn act
on behalf of Indirect Participants and certain Certificate Owners, the ability
of a Certificate Owner to pledge its interest in Book-Entry Certificates to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of its interest in Book-Entry Certificates, may be limited
due to the lack of a physical certificate evidencing such interest.
Unless otherwise specified in the related Prospectus Supplement,
Certificates initially issued in book-entry form will be issued as Definitive
Certificates to Certificate Owners or their nominees, rather than to DTC or its
nominee, only if (1) the Depositor advises the Trustee in writing that DTC is no
longer willing or able to discharge properly its responsibilities as depository
with respect to such Certificates and the Depositor is unable to locate a
qualified successor or (2) the Depositor, at its option, elects to terminate the
book-entry system through DTC with respect to such Certificates. Upon the
occurrence of either of the events described in the preceding sentence, DTC will
be required to notify all Direct Participants of the availability through DTC of
Definitive Certificates. Upon surrender by DTC of the certificate or
certificates representing a class of Book-Entry Certificates, together with
instructions for registration, the Trustee for the related series or other
designated party will be required to issue to the Certificate Owners identified
in such instructions the Definitive Certificates to which they are entitled, and
thereafter the holders of such Definitive Certificates will be recognized as
"Certificateholders" under and within the meaning of the related Pooling and
Servicing Agreement.
THE POOLING AND SERVICING AGREEMENTS
GENERAL
The Certificates of each series will be issued pursuant to a pooling and
servicing agreement or other agreement specified in the related Prospectus
Supplement (in any case, a "Pooling and Servicing Agreement"). In general, the
parties to a Pooling and Servicing Agreement will include the Depositor, the
Trustee,
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the Master Servicer, the Special Servicer and, if one or more REMIC elections
have been made with respect to the Trust Fund, the REMIC Administrator. However,
a Pooling and Servicing Agreement that relates to a Trust Fund that includes MBS
may include a Manager as a party, but may not include a Master Servicer, Special
Servicer or other servicer as a party. All parties to each Pooling and Servicing
Agreement under which Certificates of a series are issued will be identified in
the related Prospectus Supplement. If so specified in the related Prospectus
Supplement, an affiliate of the Depositor, or the Mortgage Asset Seller or an
affiliate thereof, may perform the functions of Master Servicer, Special
Servicer, Manager or REMIC Administrator. If so specified in the related
Prospectus Supplement, the Master Servicer may also perform the duties of
Special Servicer, and the Master Servicer, the Special Servicer or the Trustee
may also perform the duties of REMIC Administrator. Any party to a Pooling and
Servicing Agreement or any affiliate thereof may own Certificates issued
thereunder; however, unless other specified in the related Prospectus
Supplement, except with respect to required consents to certain amendments to a
Pooling and Servicing Agreement, Certificates issued thereunder that are held by
the Master Servicer or Special Servicer for the related Series will not be
allocated Voting Rights.
A form of a pooling and servicing agreement has been filed as an exhibit to
the Registration Statement of which this Prospectus is a part. However, the
provisions of each Pooling and Servicing Agreement will vary depending upon the
nature of the Certificates to be issued thereunder and the nature of the related
Trust Fund. The following summaries describe certain provisions that may appear
in a Pooling and Servicing Agreement under which Certificates that evidence
interests in Mortgage Loans will be issued. The Prospectus Supplement for a
series of Certificates will describe any provision of the related Pooling and
Servicing Agreement that materially differs from the description thereof
contained in this Prospectus and, if the related Trust Fund includes MBS, will
summarize all of the material provisions of the related Pooling and Servicing
Agreement. The summaries herein do not purport to be complete and are subject
to, and are qualified in their entirety by reference to, all of the provisions
of the Pooling and Servicing Agreement for each series of Certificates and the
description of such provisions in the related Prospectus Supplement. The
Depositor will provide a copy of the Pooling and Servicing Agreement (without
exhibits) that relates to any series of Certificates without charge upon written
request of a holder of a Certificate of such series addressed to it at its
principal executive offices specified herein under "The Depositor".
ASSIGNMENT OF MORTGAGE LOANS; REPURCHASES
At the time of issuance of any series of Certificates, the Depositor will
assign (or cause to be assigned) to the designated Trustee the Mortgage Loans to
be included in the related Trust Fund, together with, unless otherwise specified
in the related Prospectus Supplement, all principal and interest to be received
on or with respect to such Mortgage Loans after the Cut-off Date, other than
principal and interest due on or before the Cut-off Date. The Trustee will,
concurrently with such assignment, deliver the Certificates to or at the
direction of the Depositor in exchange for the Mortgage Loans and the other
assets to be included in the Trust Fund for such series. Each Mortgage Loan will
be identified in a schedule appearing as an exhibit to the related Pooling and
Servicing Agreement. Such schedule generally will include detailed information
that pertains to each Mortgage Loan included in the related Trust Fund, which
information will typically include the address of the related Mortgaged Property
and type of such property; the Mortgage Rate and, if applicable, the applicable
index, gross margin, adjustment date and any rate cap information; the original
and remaining term to maturity; the amortization term; and the original and
outstanding principal balance.
In addition, unless otherwise specified in the related Prospectus
Supplement, the Depositor will, as to each Mortgage Loan to be included in a
Trust Fund, deliver, or cause to be delivered, to the related Trustee (or to a
custodian appointed by the Trustee as described below) the Mortgage Note
endorsed, without recourse, either in blank or to the order of such Trustee (or
its nominee), the Mortgage with evidence of recording indicated thereon (except
for any Mortgage not returned from the public recording office), an assignment
of the Mortgage in blank or to the Trustee (or its nominee) in recordable form,
together with any intervening assignments of the Mortgage with evidence of
recording thereon (except for any such assignment not returned from the public
recording office), and, if applicable, any riders or modifications to such
Mortgage Note and Mortgage, together with certain other documents at such times
as set forth in the related Pooling
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and Servicing Agreement. Such assignments may be blanket assignments covering
Mortgages on Mortgaged Properties located in the same county, if permitted by
law. Notwithstanding the foregoing, a Trust Fund may include Mortgage Loans
where the original Mortgage Note is not delivered to the Trustee if the
Depositor delivers, or causes to be delivered, to the related Trustee (or such
custodian) a copy or a duplicate original of the Mortgage Note, together with an
affidavit certifying that the original thereof has been lost or destroyed. In
addition, if the Depositor cannot deliver, with respect to any Mortgage Loan,
the Mortgage or any intervening assignment with evidence of recording thereon
concurrently with the execution and delivery of the related Pooling and
Servicing Agreement because of a delay caused by the public recording office,
the Depositor will deliver, or cause to be delivered, to the related Trustee (or
such custodian) a true and correct photocopy of such Mortgage or assignment as
submitted for recording. The Depositor will deliver, or cause to be delivered,
to the related Trustee (or such custodian) such Mortgage or assignment with
evidence of recording indicated thereon after receipt thereof from the public
recording office. If the Depositor cannot deliver, with respect to any Mortgage
Loan, the Mortgage or any intervening assignment with evidence of recording
thereon concurrently with the execution and delivery of the related Pooling and
Servicing Agreement because such Mortgage or assignment has been lost, the
Depositor will deliver, or cause to be delivered, to the related Trustee (or
such custodian) a true and correct photocopy of such Mortgage or assignment with
evidence of recording thereon. Unless otherwise specified in the related
Prospectus Supplement, assignments of Mortgage to the Trustee (or its nominee)
will be recorded in the appropriate public recording office, except in states
where, in the opinion of counsel acceptable to the Trustee, such recording is
not required to protect the Trustee's interests in the Mortgage Loan against the
claim of any subsequent transferee or any successor to or creditor of the
Depositor or the originator of such Mortgage Loan.
The Trustee (or a custodian appointed by the Trustee) for a series of
Certificates will be required to review the Mortgage Loan documents delivered to
it within a specified period of days after receipt thereof, and the Trustee (or
such custodian) will hold such documents in trust for the benefit of the
Certificateholders of such series. Unless otherwise specified in the related
Prospectus Supplement, if any such document is found to be missing or defective,
and such omission or defect, as the case may be, materially and adversely
affects the interests of the Certificateholders of the related series, the
Trustee (or such custodian) will be required to notify the Master Servicer, the
Special Servicer and the Depositor, and one of such persons will be required to
notify the relevant Mortgage Asset Seller. In that case, and if the Mortgage
Asset Seller cannot deliver the document or cure the defect within a specified
number of days after receipt of such notice, then, except as otherwise specified
below or in the related Prospectus Supplement, the Mortgage Asset Seller will be
obligated to repurchase the related Mortgage Loan from the Trustee at a price
generally equal to the unpaid principal balance thereof, together with accrued
but unpaid interest through a date on or about the date of purchase, or at such
other price as will be specified in the related Prospectus Supplement (in any
event, the "Purchase Price"). If so provided in the Prospectus Supplement for a
series of Certificates, a Mortgage Asset Seller, in lieu of repurchasing a
Mortgage Loan as to which there is missing or defective loan documentation, will
have the option, exercisable upon certain conditions and/or within a specified
period after initial issuance of such series of Certificates, to replace such
Mortgage Loan with one or more other mortgage loans, in accordance with
standards that will be described in the Prospectus Supplement. Unless otherwise
specified in the related Prospectus Supplement, this repurchase or substitution
obligation will constitute the sole remedy to holders of the Certificates of any
series or to the related Trustee on their behalf for missing or defective
Mortgage Loan documentation, and neither the Depositor nor, unless it is the
Mortgage Asset Seller, the Master Servicer or the Special Servicer will be
obligated to purchase or replace a Mortgage Loan if a Mortgage Asset Seller
defaults on its obligation to do so.
The Trustee will be authorized at any time to appoint one or more
custodians pursuant to a custodial agreement to hold title to the Mortgage Loans
in any Trust Fund and to maintain possession of and, if applicable, to review
the documents relating to such Mortgage Loans, in any case as the agent of the
Trustee. The identity of any such custodian to be appointed on the date of
initial issuance of the Certificates will be set forth in the related Prospectus
Supplement. Any such custodian may be an affiliate of the Depositor.
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REPRESENTATIONS AND WARRANTIES; REPURCHASES
Unless otherwise provided in the Prospectus Supplement for a series of
Certificates, the Depositor will, with respect to each Mortgage Loan in the
related Trust Fund, make or assign, or cause to be made or assigned, certain
representations and warranties (the person making such representations and
warranties, the "Warranting Party") covering, by way of example: (1) the
accuracy of the information set forth for such Mortgage Loan on the schedule of
Mortgage Loans appearing as an exhibit to the related Pooling and Servicing
Agreement; (2) the enforceability of the related Mortgage Note and Mortgage and
the existence of title insurance insuring the lien priority of the related
Mortgage; (3) the Warranting Party's title to the Mortgage Loan and the
authority of the Warranting Party to sell the Mortgage Loan; and (4) the payment
status of the Mortgage Loan. It is expected that in most cases the Warranting
Party will be the Mortgage Asset Seller; however, the Warranting Party may also
be an affiliate of the Mortgage Asset Seller, the Depositor or an affiliate of
the Depositor, the Master Servicer, the Special Servicer or another person
acceptable to the Depositor. The Warranting Party, if other than the Mortgage
Asset Seller, will be identified in the related Prospectus Supplement.
Unless otherwise provided in the related Prospectus Supplement, each
Pooling and Servicing Agreement will provide that the Master Servicer and/or
Trustee will be required to notify promptly any Warranting Party of any breach
of any representation or warranty made by it in respect of a Mortgage Loan that
materially and adversely affects the interests of the Certificateholders of the
related series. If such Warranting Party cannot cure such breach within a
specified period following the date on which it was notified of such breach,
then, unless otherwise provided in the related Prospectus Supplement, it will be
obligated to repurchase such Mortgage Loan from the Trustee at the applicable
Purchase Price. If so provided in the Prospectus Supplement for a series of
Certificates, a Warranting Party, in lieu of repurchasing a Mortgage Loan as to
which a breach has occurred, will have the option, exercisable upon certain
conditions and/or within a specified period after initial issuance of such
series of Certificates, to replace such Mortgage Loan with one or more other
mortgage loans, in accordance with standards that will be described in the
Prospectus Supplement. Unless otherwise specified in the related Prospectus
Supplement, this repurchase or substitution obligation will constitute the sole
remedy available to holders of the Certificates of any series or to the related
Trustee on their behalf for a breach of representation and warranty by a
Warranting Party, and neither the Depositor nor the Master Servicer, in either
case unless it is the Warranting Party, will be obligated to purchase or replace
a Mortgage Loan if a Warranting Party defaults on its obligation to do so.
In some cases, representations and warranties will have been made in
respect of a Mortgage Loan as of a date prior to the date upon which the related
series of Certificates is issued, and thus may not address events that may occur
following the date as of which they were made. However, the Depositor will not
include any Mortgage Loan in the Trust Fund for any series of Certificates if
anything has come to the Depositor's attention that would cause it to believe
that the representations and warranties made in respect of such Mortgage Loan
will not be accurate in all material respects as of the date of issuance. The
date as of which the representations and warranties regarding the Mortgage Loans
in any Trust Fund were made will be specified in the related Prospectus
Supplement.
COLLECTION AND OTHER SERVICING PROCEDURES
Unless otherwise specified in the related Prospectus Supplement, the Master
Servicer and the Special Servicer for any Mortgage Pool, directly or through
Sub-Servicers, will each be obligated under the related Pooling and Servicing
Agreement to service and administer the Mortgage Loans in such Mortgage Pool for
the benefit of the related Certificateholders, in accordance with applicable law
and further in accordance with the terms of such Pooling and Servicing
Agreement, such Mortgage Loans and any instrument of Credit Support included in
the related Trust Fund. Subject to the foregoing, the Master Servicer and the
Special Servicer will each have full power and authority to do any and all
things in connection with such servicing and administration that it may deem
necessary and desirable.
As part of its servicing duties, each of the Master Servicer and the
Special Servicer will be required to make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage
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Loans that it services and will be obligated to follow such collection
procedures as it would follow with respect to mortgage loans that are comparable
to such Mortgage Loans and held for its own account, provided (1) such
procedures are consistent with the terms of the related Pooling and Servicing
Agreement and (2) do not impair recovery under any instrument of Credit Support
included in the related Trust Fund. Consistent with the foregoing, the Master
Servicer and the Special Servicer will each be permitted, in its discretion,
unless otherwise specified in the related Prospectus Supplement, to waive any
Prepayment Premium, late payment charge or other charge in connection with any
Mortgage Loan.
The Master Servicer and the Special Servicer for any Trust Fund, either
separately or jointly, directly or through Sub-Servicers, will also be required
to perform as to the Mortgage Loans in such Trust Fund various other customary
functions of a servicer of comparable loans, including maintaining escrow or
impound accounts, if required under the related Pooling and Servicing Agreement,
for payment of taxes, insurance premiums, ground rents and similar items, or
otherwise monitoring the timely payment of those items; attempting to collect
delinquent payments; supervising foreclosures; negotiating modifications;
conducting property inspections on a periodic or other basis; managing (or
overseeing the management of) Mortgaged Properties acquired on behalf of such
Trust Fund through foreclosure, deed-in-lieu of foreclosure or otherwise (each,
an "REO Property"); and maintaining servicing records relating to such Mortgage
Loans. The related Prospectus Supplement will specify when and the extent to
which servicing of a Mortgage Loan is to be transferred from the Master Servicer
to the Special Servicer. In general, and subject to the discussion in the
related Prospectus Supplement, a Special Servicer will be responsible for the
servicing and administration of: (1) Mortgage Loans that are delinquent in
respect of a specified number of scheduled payments; (2) Mortgage Loans as to
which the related borrower has entered into or consented to bankruptcy,
appointment of a receiver or conservator or similar insolvency proceeding, or
the related borrower has become the subject of a decree or order for such a
proceeding which shall have remained in force undischarged or unstayed for a
specified number of days; and (3) REO Properties. If so specified in the related
Prospectus Supplement, a Pooling and Servicing Agreement also may provide that
if a default on a Mortgage Loan has occurred or, in the judgment of the related
Master Servicer, a payment default is reasonably foreseeable, the related Master
Servicer may elect to transfer the servicing thereof, in whole or in part, to
the related Special Servicer. Unless otherwise provided in the related
Prospectus Supplement, when the circumstances no longer warrant a Special
Servicer's continuing to service a particular Mortgage Loan (e.g., the related
borrower is paying in accordance with the forbearance arrangement entered into
between the Special Servicer and such borrower), the Master Servicer will resume
the servicing duties with respect thereto. If and to the extent provided in the
related Pooling and Servicing Agreement and described in the related Prospectus
Supplement, a Special Servicer may perform certain limited duties in respect of
Mortgage Loans for which the Master Servicer is primarily responsible
(including, if so specified, performing property inspections and evaluating
financial statements); and a Master Servicer may perform certain limited duties
in respect of any Mortgage Loan for which the Special Servicer is primarily
responsible (including, if so specified, continuing to receive payments on such
Mortgage Loan (including amounts collected by the Special Servicer)), making
certain calculations with respect to such Mortgage Loan and making remittances
and preparing certain reports to the Trustee and/or Certificateholders with
respect to such Mortgage Loan. Unless otherwise specified in the related
Prospectus Supplement, the Master Servicer will be responsible for filing and
settling claims in respect of particular Mortgage Loans under any applicable
instrument of Credit Support. See "Description of Credit Support".
A mortgagor's failure to make required Mortgage Loan payments may mean that
operating income is insufficient to service the mortgage debt, or may reflect
the diversion of that income from the servicing of the mortgage debt. In
addition, a mortgagor that is unable to make Mortgage Loan payments may also be
unable to make timely payment of taxes and otherwise to maintain and insure the
related Mortgaged Property. In general, the related Special Servicer will be
required to monitor any Mortgage Loan that is in default, evaluate whether the
causes of the default can be corrected over a reasonable period without
significant impairment of the value of the related Mortgaged Property, initiate
corrective action in cooperation with the Mortgagor if cure is likely, inspect
the related Mortgaged Property and take such other actions as it deems necessary
and appropriate. A significant period of time may elapse before the Special
Servicer is able to assess the success of any such corrective action or the need
for additional initiatives. The time within which the Special Servicer can make
the initial determination of appropriate action, evaluate the success of
corrective action, develop
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additional initiatives, institute foreclosure proceedings and actually foreclose
(or accept a deed to a Mortgaged Property in lieu of foreclosure) on behalf of
the Certificateholders of the related series may vary considerably depending on
the particular Mortgage Loan, the Mortgaged Property, the mortgagor, the
presence of an acceptable party to assume the Mortgage Loan and the laws of the
jurisdiction in which the Mortgaged Property is located. If a mortgagor files a
bankruptcy petition, the Special Servicer may not be permitted to accelerate the
maturity of the Mortgage Loan or to foreclose on the related Mortgaged Property
for a considerable period of time. See "Certain Legal Aspects of Mortgage
Loans -- Bankruptcy Laws."
Mortgagors may, from time to time, request partial releases of the
Mortgaged Properties, easements, consents to alteration or demolition and other
similar matters. In general, the Master Servicer may approve such a request if
it has determined, exercising its business judgment in accordance with the
applicable servicing standard, that such approval will not adversely affect the
security for, or the timely and full collectibility of, the related Mortgage
Loan. Any fee collected by the Master Servicer for processing such request will
be retained by the Master Servicer as additional servicing compensation.
In the case of Mortgage Loans secured by junior liens on the related
Mortgaged Properties, unless otherwise provided in the related Prospectus
Supplement, the Master Servicer will be required to file (or cause to be filed)
of record a request for notice of any action by a superior lienholder under the
Senior Lien for the protection of the related Trustee's interest, where
permitted by local law and whenever applicable state law does not require that a
junior lienholder be named as a party defendant in foreclosure proceedings in
order to foreclose such junior lienholder's equity of redemption. Unless
otherwise specified in the related Prospectus Supplement, the Master Servicer
also will be required to notify any superior lienholder in writing of the
existence of the Mortgage Loan and request notification of any action (as
described below) to be taken against the mortgagor or the Mortgaged Property by
the superior lienholder. If the Master Servicer is notified that any superior
lienholder has accelerated or intends to accelerate the obligations secured by
the related Senior Lien, or has declared or intends to declare a default under
the mortgage or the promissory note secured thereby, or has filed or intends to
file an election to have the related Mortgaged Property sold or foreclosed,
then, unless otherwise specified in the related Prospectus Supplement, the
Master Servicer and the Special Servicer will each be required to take, on
behalf of the related Trust Fund, whatever actions are necessary to protect the
interests of the related Certificateholders and/or to preserve the security of
the related Mortgage Loan, subject to the application of the REMIC Provisions.
Unless otherwise specified in the related Prospectus Supplement, the Master
Servicer or Special Servicer, as applicable, will be required to advance the
necessary funds to cure the default or reinstate the Senior Lien, if such
advance is in the best interests of the related Certificateholders and the
Master Servicer or Special Servicer, as applicable, determines such advances are
recoverable out of payments on or proceeds of the related Mortgage Loan.
SUB-SERVICERS
A Master Servicer or Special Servicer may delegate its servicing
obligations in respect of the Mortgage Loans serviced thereby to one or more
third-party servicers (each, a "Sub-Servicer"); provided that, unless otherwise
specified in the related Prospectus Supplement, such Master Servicer or Special
Servicer will remain obligated under the related Pooling and Servicing
Agreement. A Sub-Servicer for any series of Certificates may be an affiliate of
the Depositor. Unless otherwise provided in the related Prospectus Supplement,
each sub-servicing agreement between a Master Servicer and a Sub-Servicer (a
"Sub-Servicing Agreement") must provide for servicing of the applicable Mortgage
Loans consistent with the related Pooling and Servicing Agreement. Unless
otherwise provided in the related Prospectus Supplement, the Master Servicer and
Special Servicer in respect of any Mortgage Asset Pool will each be required to
monitor the performance of Sub-Servicers retained by it and will have the right
to remove a Sub-Servicer retained by it at any time it considers such removal to
be in the best interests of Certificateholders.
Unless otherwise provided in the related Prospectus Supplement, a Master
Servicer or Special Servicer will be solely liable for all fees owed by it to
any Sub-Servicer, irrespective of whether the Master Servicer's or Special
Servicer's compensation pursuant to the related Pooling and Servicing Agreement
is sufficient to pay such fees. Each Sub-Servicer will be reimbursed by the
Master Servicer or Special Servicer, as the case may be, that retained it for
certain expenditures which it makes, generally to the same extent such Master
Servicer
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or Special Servicer would be reimbursed under a Pooling and Servicing Agreement.
See "-- Certificate Account" and "-- Servicing Compensation and Payment of
Expenses".
CERTIFICATE ACCOUNT
General. The Master Servicer, the Trustee and/or the Special Servicer
will, as to each Trust Fund that includes Mortgage Loans, establish and maintain
or cause to be established and maintained the corresponding Certificate Account,
which will be established so as to comply with the standards of each Rating
Agency that has rated any one or more classes of Certificates of the related
series. A Certificate Account may be maintained as an interest-bearing or a
noninterest-bearing account and the funds held therein may be invested pending
each succeeding Distribution Date in United States government securities and
other obligations that are acceptable to each Rating Agency that has rated any
one or more classes of Certificates of the related series ("Permitted
Investments"). Unless otherwise provided in the related Prospectus Supplement,
any interest or other income earned on funds in a Certificate Account will be
paid to the related Master Servicer, Trustee or Special Servicer as additional
compensation. A Certificate Account may be maintained with the related Master
Servicer, Special Servicer, Trustee or Mortgage Asset Seller or with a
depository institution that is an affiliate of any of the foregoing or of the
Depositor, provided that it complies with applicable Rating Agency standards. If
permitted by the applicable Rating Agency or Agencies, a Certificate Account may
contain funds relating to more than one series of mortgage pass-through
certificates and may contain other funds representing payments on mortgage loans
owned by the related Master Servicer or Special Servicer or serviced by either
on behalf of others.
Deposits. Unless otherwise provided in the related Pooling and Servicing
Agreement and described in the related Prospectus Supplement, the following
payments and collections received or made by the Master Servicer, the Trustee or
the Special Servicer subsequent to the Cut-off Date (other than payments due on
or before the Cut-off Date) are to be deposited in the Certificate Account for
each Trust Fund that includes Mortgage Loans, within a certain period following
receipt (in the case of collections on or in respect of the Mortgage Loans) or
otherwise as provided in the related Pooling and Servicing Agreement:
- all payments on account of principal, including principal prepayments, on
the Mortgage Loans;
- all payments on account of interest on the Mortgage Loans, including any
default interest collected, in each case net of any portion thereof
retained by the Master Servicer or the Special Servicer as its servicing
compensation or as compensation to the Trustee;
- all proceeds received under any hazard, title or other insurance policy
that provides coverage with respect to a Mortgaged Property or the
related Mortgage Loan or in connection with the full or partial
condemnation of a Mortgaged Property (other than proceeds applied to the
restoration of the property or released to the related borrower)
(collectively, "Insurance and Condemnation Proceeds") and all other
amounts received and retained in connection with the liquidation of
defaulted Mortgage Loans or property acquired in respect thereof, by
foreclosure or otherwise (such amounts, together with those amounts
listed in the seventh bulleted item listed below, "Liquidation
Proceeds"), together with the net operating income (less reasonable
reserves for future expenses) derived from the operation of any Mortgaged
Properties acquired by the Trust Fund through foreclosure or otherwise;
- any amounts paid under any instrument or drawn from any fund that
constitutes Credit Support for the related series of Certificates;
- any advances made with respect to delinquent scheduled payments of
principal and interest on the Mortgage Loans;
- any amounts paid under any Cash Flow Agreement;
- all proceeds of the purchase of any Mortgage Loan, or property acquired
in respect thereof, by the Depositor, any Mortgage Asset Seller or any
other specified person as described under "-- Assignment of Mortgage
Loans; Repurchases" and "-- Representations and Warranties; Repurchases",
all proceeds of the purchase of any defaulted Mortgage Loan as described
under "-- Realization Upon
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Defaulted Mortgage Loans", and all proceeds of any Mortgage Asset
purchased as described under "Description of the
Certificates -- Termination";
- to the extent that any such item does not constitute additional servicing
compensation to the Master Servicer or the Special Servicer and is not
otherwise retained by the Depositor or another specified person, any
payments on account of modification or assumption fees, late payment
charges, Prepayment Premiums or Equity Participations with respect to the
Mortgage Loans;
- all payments required to be deposited in the Certificate Account with
respect to any deductible clause in any blanket insurance policy as
described under "-- Hazard Insurance Policies";
- any amount required to be deposited by the Master Servicer, the Special
Servicer or the Trustee in connection with losses realized on investments
for the benefit of the Master Servicer, the Special Servicer or the
Trustee, as the case may be, of funds held in the Certificate Account;
and
- any other amounts required to be deposited in the Certificate Account as
provided in the related Pooling and Servicing Agreement and described in
the related Prospectus Supplement.
Withdrawals. Unless otherwise provided in the related Pooling and
Servicing Agreement and described in the related Prospectus Supplement, a Master
Servicer, Trustee or Special Servicer may make withdrawals from the Certificate
Account for each Trust Fund that includes Mortgage Loans for any of the
following purposes:
- to make distributions to the Certificateholders on each Distribution
Date;
- to pay the Master Servicer or the Special Servicer any servicing fees not
previously retained thereby, such payment to be made out of payments and
other collections of interest on the particular Mortgage Loans as to
which such fees were earned;
- to reimburse the Master Servicer, the Special Servicer or any other
specified person for unreimbursed advances of delinquent scheduled
payments of principal and interest made by it, and certain unreimbursed
servicing expenses incurred by it, with respect to Mortgage Loans in the
Trust Fund and properties acquired in respect thereof, such reimbursement
to be made out of amounts that represent late payments collected on the
particular Mortgage Loans, Liquidation Proceeds and Insurance and
Condemnation Proceeds collected on the particular Mortgage Loans and
properties, and net income collected on the particular properties, with
respect to which such advances were made or such expenses were incurred
or out of amounts drawn under any form of Credit Support with respect to
such Mortgage Loans and properties, or if in the judgment of the Master
Servicer, the Special Servicer or such other person, as applicable, such
advances and/or expenses will not be recoverable from such amounts, such
reimbursement to be made from amounts collected on other Mortgage Loans
in the same Trust Fund or, if and to the extent so provided by the
related Pooling and Servicing Agreement and described in the related
Prospectus Supplement, only from that portion of amounts collected on
such other Mortgage Loans that is otherwise distributable on one or more
classes of Subordinate Certificates of the related series;
- if and to the extent described in the related Prospectus Supplement, to
pay the Master Servicer, the Special Servicer or any other specified
person interest accrued on the advances and servicing expenses described
in the bulleted clause immediately listed above incurred by it while such
remain outstanding and unreimbursed;
- to pay for costs and expenses incurred by the Trust Fund for
environmental site assessments performed with respect to Mortgaged
Properties that constitute security for defaulted Mortgage Loans, and for
any containment, clean-up or remediation of hazardous wastes and
materials present on such Mortgaged Properties, as described under
"-- Realization Upon Defaulted Mortgage Loans";
- to reimburse the Master Servicer, the Special Servicer, the REMIC
Administrator, the Depositor, the Trustee, or any of their respective
directors, officers, employees and agents, as the case may be, for
certain expenses, costs and liabilities incurred thereby, as and to the
extent described under
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"-- Certain Matters Regarding the Master Servicer, the Special Servicer,
the REMIC Administrator and the Depositor" and "-- Certain Matters
Regarding the Trustee";
- if and to the extent described in the related Prospectus Supplement, to
pay the fees of the Trustee, the REMIC Administrator and any provider of
Credit Support;
- if and to the extent described in the related Prospectus Supplement, to
reimburse prior draws on any form of Credit Support;
- to pay the Master Servicer, the Special Servicer or the Trustee, as
appropriate, interest and investment income earned in respect of amounts
held in the Certificate Account as additional compensation;
- to pay any servicing expenses not otherwise required to be advanced by
the Master Servicer, the Special Servicer or any other specified person;
- if one or more elections have been made to treat the Trust Fund or
designated portions thereof as a REMIC, to pay any federal, state or
local taxes imposed on the Trust Fund or its assets or transactions, as
and to the extent described under "Certain Federal Income Tax
Consequences -- REMICs -- Prohibited Transactions Tax and Other Taxes";
- to pay for the cost of various opinions of counsel obtained pursuant to
the related Pooling and Servicing Agreement for the benefit of
Certificateholders;
- to make any other withdrawals permitted by the related Pooling and
Servicing Agreement and described in the related Prospectus Supplement;
and
- to clear and terminate the Certificate Account upon the termination of
the Trust Fund.
MODIFICATIONS, WAIVERS AND AMENDMENTS OF MORTGAGE LOANS
The Master Servicer and the Special Servicer may each agree to modify,
waive or amend any term of any Mortgage Loan serviced by it in a manner
consistent with the applicable Servicing Standard; provided that, unless
otherwise set forth in the related Prospectus Supplement, the modification,
waiver or amendment (1) will not affect the amount or timing of any scheduled
payments of principal or interest on the Mortgage Loan, (2) will not, in the
judgment of the Master Servicer or the Special Servicer, as the case may be,
materially impair the security for the Mortgage Loan or reduce the likelihood of
timely payment of amounts due thereon and (3) will not adversely affect the
coverage under any applicable instrument of Credit Support. Unless otherwise
provided in the related Prospectus Supplement, the Special Servicer also may
agree to any other modification, waiver or amendment if, in its judgment, (1) a
material default on the Mortgage Loan has occurred or a payment default is
imminent, (2) such modification, waiver or amendment is reasonably likely to
produce a greater recovery with respect to the Mortgage Loan, taking into
account the time value of money, than would liquidation and (3) such
modification, waiver or amendment will not adversely affect the coverage under
any applicable instrument of Credit Support.
REALIZATION UPON DEFAULTED MORTGAGE LOANS
If a default on a Mortgage Loan has occurred, the Special Servicer, on
behalf of the Trustee, may at any time institute foreclosure proceedings,
exercise any power of sale contained in the related Mortgage, obtain a deed in
lieu of foreclosure, or otherwise acquire title to the related Mortgaged
Property, by operation of law or otherwise. Unless otherwise specified in the
related Prospectus Supplement, the Special Servicer may not, however, acquire
title to any Mortgaged Property, have a receiver of rents appointed with respect
to any Mortgaged Property or take any other action with respect to any Mortgaged
Property that would cause the Trustee, for the benefit of the related series of
Certificateholders, or any other specified person to be considered to hold title
to, to be a "mortgagee-in-possession" of, or to be an "owner" or an "operator"
of such Mortgaged Property within the meaning of certain federal environmental
laws, unless the Special Servicer has
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previously received a report prepared by a person who regularly conducts
environmental audits (which report will be an expense of the Trust Fund) and
either:
(1) such report indicates that (a) the Mortgaged Property is in
compliance with applicable environmental laws and regulations and (b) there
are no circumstances or conditions present at the Mortgaged Property that
have resulted in any contamination for which investigation, testing,
monitoring, containment, clean-up or remediation could be required under
any applicable environmental laws and regulations; or
(2) the Special Servicer, based solely (as to environmental matters
and related costs) on the information set forth in such report, determines
that taking such actions as are necessary to bring the Mortgaged Property
into compliance with applicable environmental laws and regulations and/or
taking the actions contemplated by clause (1)(b) above, is reasonably
likely to produce a greater recovery, taking into account the time value of
money, than not taking such actions. See "Certain Legal Aspects of Mortgage
Loans -- Environmental Considerations".
A Pooling and Servicing Agreement may grant to the Master Servicer, the
Special Servicer, a provider of Credit Support and/or the holder or holders of
certain classes of the related series of Certificates a right of first refusal
to purchase from the Trust Fund, at a predetermined price (which, if less than
the Purchase Price, will be specified in the related Prospectus Supplement), any
Mortgage Loan as to which a specified number of scheduled payments are
delinquent. In addition, unless otherwise specified in the related Prospectus
Supplement, the Special Servicer may offer to sell any defaulted Mortgage Loan
if and when the Special Servicer determines, consistent with its normal
servicing procedures, that such a sale would produce a greater recovery, taking
into account the time value of money, than would liquidation of the related
Mortgaged Property. In the absence of any such sale, the Special Servicer will
generally be required to proceed against the related Mortgaged Property, subject
to the discussion above.
Unless otherwise provided in the related Prospectus Supplement, if title to
any Mortgaged Property is acquired by a Trust Fund as to which a REMIC election
has been made, the Special Servicer, on behalf of the Trust Fund, will be
required to sell the Mortgaged Property before the close of the third calendar
year following the year of acquisition, unless (1) the Internal Revenue Service
(the "IRS") grants an extension of time to sell such property or (2) the Trustee
receives an opinion of independent counsel to the effect that the holding of the
property by the Trust Fund for longer than such period will not result in the
imposition of a tax on the Trust Fund or cause the Trust Fund (or any designated
portion thereof) to fail to qualify as a REMIC under the Code at any time that
any Certificate is outstanding. Subject to the foregoing and any other tax-
related limitations, the Special Servicer will generally be required to attempt
to sell any Mortgaged Property so acquired on the same terms and conditions it
would if it were the owner. Unless otherwise provided in the related Prospectus
Supplement, if title to any Mortgaged Property is acquired by a Trust Fund as to
which a REMIC election has been made, the Special Servicer will also be required
to ensure that the Mortgaged Property is administered so that it constitutes
"foreclosure property" within the meaning of Code Section 860G(a)(8) at all
times, that the sale of such property does not result in the receipt by the
Trust Fund of any income from nonpermitted assets as described in Code Section
860F(a)(2)(B), and that the Trust Fund does not derive any "net income from
foreclosure property" within the meaning of Code Section 860G(c)(2), with
respect to such property unless the method of operation that produces such
income would produce a greater after-tax return than a different method of
operation of such property. If the Trust Fund acquires title to any Mortgaged
Property, the Special Servicer, on behalf of the Trust Fund, may retain an
independent contractor to manage and operate such property. The retention of an
independent contractor, however, will not relieve the Special Servicer of its
obligation to manage such Mortgaged Property as required under the related
Pooling and Servicing Agreement.
If Liquidation Proceeds collected with respect to a defaulted Mortgage Loan
are less than the outstanding principal balance of the defaulted Mortgage Loan
plus interest accrued thereon plus the aggregate amount of reimbursable expenses
incurred by the Special Servicer and/or the Master Servicer in connection with
such Mortgage Loan, then, to the extent that such shortfall is not covered by
any instrument or fund constituting Credit Support, the Trust Fund will realize
a loss in the amount of such shortfall. The Special Servicer and/or
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the Master Servicer will be entitled to reimbursement out of the Liquidation
Proceeds recovered on any defaulted Mortgage Loan, prior to the distribution of
such Liquidation Proceeds to Certificateholders, any and all amounts that
represent unpaid servicing compensation in respect of the Mortgage Loan,
unreimbursed servicing expenses incurred with respect to the Mortgage Loan and
any unreimbursed advances of delinquent payments made with respect to the
Mortgage Loan. In addition, if and to the extent set forth in the related
Prospectus Supplement, amounts otherwise distributable on the Certificates may
be further reduced by interest payable to the Master Servicer and/or Special
Servicer on such servicing expenses and advances.
Except as otherwise provided in the Prospectus Supplement, if any Mortgaged
Property suffers damage such that the proceeds, if any, of the related hazard
insurance policy are insufficient to restore fully the damaged property, neither
the Special Servicer nor the Master Servicer will be required to expend its own
funds to effect such restoration.
HAZARD INSURANCE POLICIES
Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will require the Master Servicer (or the Special
Servicer with respect to Mortgage Loans serviced thereby) to use reasonable
efforts to cause each Mortgage Loan borrower to maintain a hazard insurance
policy that provides for such coverage as is required under the related Mortgage
or, if the Mortgage permits the holder thereof to dictate to the borrower the
insurance coverage to be maintained on the related Mortgaged Property, such
coverage as is consistent with the Master Servicer's (or Special Servicer's)
normal servicing procedures. Unless otherwise specified in the related
Prospectus Supplement, such coverage generally will be in an amount equal to the
lesser of the principal balance owing on such Mortgage Loan and the replacement
cost of the related Mortgaged Property. The ability of a Master Servicer (or
Special Servicer) to assure that hazard insurance proceeds are appropriately
applied may be dependent upon its being named as an additional insured under any
hazard insurance policy and under any other insurance policy referred to below,
or upon the extent to which information concerning covered losses is furnished
by borrowers. All amounts collected by a Master Servicer (or Special Servicer)
under any such policy (except for amounts to be applied to the restoration or
repair of the Mortgaged Property or released to the borrower in accordance with
the Master Servicer's (or Special Servicer's) normal servicing procedures and/or
to the terms and conditions of the related Mortgage and Mortgage Note) will be
deposited in the related Certificate Account. The Pooling and Servicing
Agreement may provide that the Master Servicer (or Special Servicer) may satisfy
its obligation to cause each borrower to maintain such a hazard insurance policy
by maintaining a blanket policy insuring against hazard losses on the Mortgage
Loans in a Trust Fund. If such blanket policy contains a deductible clause, the
Master Servicer (or Special Servicer) will be required, in the event of a
casualty covered by such blanket policy, to deposit in the related Certificate
Account all additional sums that would have been deposited therein under an
individual policy but were not because of such deductible clause.
In general, the standard form of fire and extended coverage policy covers
physical damage to or destruction of the improvements of the property by fire,
lightning, explosion, smoke, windstorm and hail, and riot, strike and civil
commotion, subject to the conditions and exclusions specified in each policy.
Although the policies covering the Mortgaged Properties will be underwritten by
different insurers under different state laws in accordance with different
applicable state forms, and therefore will not contain identical terms and
conditions, most such policies typically do not cover any physical damage
resulting from war, revolution, governmental actions, floods and other
water-related causes, earth movement (including earthquakes, landslides and
mudflows), wet or dry rot, vermin and domestic animals. Accordingly, a Mortgaged
Property may not be insured for losses arising from any such cause unless the
related Mortgage specifically requires, or permits the holder thereof to
require, such coverage.
The hazard insurance policies covering the Mortgaged Properties will
typically contain co-insurance clauses that in effect require an insured at all
times to carry insurance of a specified percentage (generally 80% to 90%) of the
full replacement value of the improvements on the property in order to recover
the full amount of any partial loss. If the insured's coverage falls below this
specified percentage, such clauses generally provide that the insurer's
liability in the event of partial loss does not exceed the lesser of (1) the
replacement
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cost of the improvements less physical depreciation and (2) such proportion of
the loss as the amount of insurance carried bears to the specified percentage of
the full replacement cost of such improvements.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Certain of the Mortgage Loans may contain a due-on-sale clause that
entitles the lender to accelerate payment of the Mortgage Loan upon any sale or
other transfer of the related Mortgaged Property made without the lender's
consent. Certain of the Mortgage Loans may also contain a due-on-encumbrance
clause that entitles the lender to accelerate the maturity of the Mortgage Loan
upon the creation of any other lien or encumbrance upon the Mortgaged Property.
Unless otherwise provided in the related Prospectus Supplement, the Master
Servicer (or Special Servicer) will determine whether to exercise any right the
Trustee may have under any such provision in a manner consistent with the Master
Servicer's (or Special Servicer's) normal servicing procedures. Unless otherwise
specified in the related Prospectus Supplement, the Master Servicer or Special
Servicer, as applicable, will be entitled to retain as additional servicing
compensation any fee collected in connection with the permitted transfer of a
Mortgaged Property. See "Certain Legal Aspects of Mortgage Loans -- Due-on-Sale
and Due-on-Encumbrance Provisions".
SERVICING COMPENSATION AND PAYMENT OF EXPENSES
Unless otherwise specified in the related Prospectus Supplement, a Master
Servicer's primary servicing compensation with respect to a series of
Certificates will come from the periodic payment to it of a specified portion of
the interest payments on each Mortgage Loan in the related Trust Fund, including
Mortgage Loans serviced by the related Special Servicer. If and to the extent
described in the related Prospectus Supplement, a Special Servicer's primary
compensation with respect to a series of Certificates may consist of any or all
of the following components: (1) a specified portion of the interest payments on
each Mortgage Loan in the related Trust Fund, whether or not serviced by it; (2)
an additional specified portion of the interest payments on each Mortgage Loan
then currently serviced by it; and (3) subject to any specified limitations, a
fixed percentage of some or all of the collections and proceeds received with
respect to each Mortgage Loan which was at any time serviced by it, including
Mortgage Loans for which servicing was returned to the Master Servicer. Insofar
as any portion of the Master Servicer's or Special Servicer's compensation
consists of a specified portion of the interest payments on a Mortgage Loan,
such compensation will generally be based on a percentage of the principal
balance of such Mortgage Loan outstanding from time to time and, accordingly,
will decrease with the amortization of the Mortgage Loan. As additional
compensation, a Master Servicer or Special Servicer may be entitled to retain
all or a portion of late payment charges, Prepayment Premiums, modification fees
and other fees collected from borrowers and any interest or other income that
may be earned on funds held in the related Certificate Account. A more detailed
description of each Master Servicer's and Special Servicer's compensation will
be provided in the related Prospectus Supplement. Any Sub-Servicer will receive
as its sub-servicing compensation a portion of the servicing compensation to be
paid to the Master Servicer or Special Servicer that retained such Sub-Servicer.
In addition to amounts payable to any Sub-Servicer, a Master Servicer or
Special Servicer may be required, to the extent provided in the related
Prospectus Supplement, to pay from amounts that represent its servicing
compensation certain expenses incurred in connection with the administration of
the related Trust Fund, including, without limitation, payment of the fees and
disbursements of independent accountants, payment of fees and disbursements of
the Trustee and any custodians appointed thereby and payment of expenses
incurred in connection with distributions and reports to Certificateholders.
Certain other expenses, including certain expenses related to Mortgage Loan
defaults and liquidations and, to the extent so provided in the related
Prospectus Supplement, interest on such expenses at the rate specified therein,
may be required to be borne by the Trust Fund.
EVIDENCE AS TO COMPLIANCE
Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will provide that on or before a specified date
in each year, beginning the first such date that is at least a specified number
of months after the Cut-off Date, there will be furnished to the related Trustee
a report of a
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firm of independent certified public accountants stating that (1) it has
obtained a letter of representation regarding certain matters from the
management of the Master Servicer which includes an assertion that the Master
Servicer has complied with certain minimum mortgage loan servicing standards (to
the extent applicable to commercial and multifamily mortgage loans), identified
in the Uniform Single Attestation Program for Mortgage Bankers established by
the Mortgage Bankers Association of America, with respect to the Master
Servicer's servicing of commercial and multifamily mortgage loans during the
most recently completed calendar year and (2) on the basis of an examination
conducted by such firm in accordance with standards established by the American
Institute of Certified Public Accountants, such representation is fairly stated
in all material respects, subject to such exceptions and other qualifications
that, in the opinion of such firm, such standards require it to report. In
rendering its report such firm may rely, as to the matters relating to the
direct servicing of commercial and multifamily mortgage loans by Sub-Servicers,
upon comparable reports of firms of independent public accountants rendered on
the basis of examinations conducted in accordance with the same standards
(rendered within one year of such report) with respect to those Sub-Servicers.
The Prospectus Supplement may provide that additional reports of independent
certified public accountants relating to the servicing of mortgage loans may be
required to be delivered to the Trustee.
Each Pooling and Servicing Agreement will also provide that, on or before a
specified date in each year, beginning the first such date that is at least a
specified number of months after the Cut-off Date, the Master Servicer and
Special Servicer shall each deliver to the related Trustee an annual statement
signed by one or more officers of the Master Servicer or the Special Servicer,
as the case may be, to the effect that, to the best knowledge of each such
officer, the Master Servicer or the Special Servicer, as the case may be, has
fulfilled in all material respects its obligations under the Pooling and
Servicing Agreement throughout the preceding year or, if there has been a
material default in the fulfillment of any such obligation, such statement shall
specify each such known default and the nature and status thereof. Such
statement may be provided as a single form making the required statements as to
more than one Pooling and Servicing Agreement.
Unless otherwise specified in the related Prospectus Supplement, copies of
the annual accountants' statement and the annual statement of officers of a
Master Servicer or Special Servicer may be obtained by Certificateholders upon
written request to the Trustee.
CERTAIN MATTERS REGARDING THE MASTER SERVICER, THE SPECIAL SERVICER, THE REMIC
ADMINISTRATOR AND THE DEPOSITOR
Any entity serving as Master Servicer, Special Servicer or REMIC
Administrator under a Pooling and Servicing Agreement may be an affiliate of the
Depositor and may have other normal business relationships with the Depositor or
the Depositor's affiliates. Unless otherwise specified in the Prospectus
Supplement for a series of Certificates, the related Pooling and Servicing
Agreement will permit the Master Servicer, the Special Servicer and any REMIC
Administrator to resign from its obligations thereunder only upon a
determination that such obligations are no longer permissible under applicable
law or are in material conflict by reason of applicable law with any other
activities carried on by it. No such resignation will become effective until the
Trustee or other successor has assumed the obligations and duties of the
resigning Master Servicer, Special Servicer or REMIC Administrator, as the case
may be, under the Pooling and Servicing Agreement. The Master Servicer and
Special Servicer for each Trust Fund will be required to maintain a fidelity
bond and errors and omissions policy or their equivalent that provides coverage
against losses that may be sustained as a result of an officer's or employee's
misappropriation of funds or errors and omissions, subject to certain
limitations as to amount of coverage, deductible amounts, conditions, exclusions
and exceptions permitted by the related Pooling and Servicing Agreement.
Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will further provide that none of the Master
Servicer, the Special Servicer, the REMIC Administrator, the Depositor, any
extension adviser or any director, officer, employee or agent of any of them
will be under any liability to the related Trust Fund or Certificateholders for
any action taken, or not taken, in good faith pursuant to the Pooling and
Servicing Agreement or for errors in judgment; provided, however, that none of
the Master Servicer, the Special Servicer, the REMIC Administrator, the
Depositor, any extension adviser or any such person will be protected against
any liability that would otherwise be imposed by reason of willful
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misfeasance, bad faith or gross negligence in the performance of obligations or
duties thereunder or by reason of reckless disregard of such obligations and
duties. Unless otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement will further provide that the Master Servicer,
the Special Servicer, the REMIC Administrator, the Depositor, any extension
adviser and any director, officer, employee or agent of any of them will be
entitled to indemnification by the related Trust Fund against any loss,
liability or expense incurred in connection with any legal action that relates
to such Pooling and Servicing Agreement or the related series of Certificates;
provided, however, that such indemnification will not extend to any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
negligence in the performance of obligations or duties under such Pooling and
Servicing Agreement, or by reason of reckless disregard of such obligations or
duties. In addition, each Pooling and Servicing Agreement will provide that none
of the Master Servicer, the Special Servicer, the REMIC Administrator, any
extension adviser or the Depositor will be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
responsibilities under the Pooling and Servicing Agreement and that in its
opinion may involve it in any expense or liability. However, each of the Master
Servicer, the Special Servicer, the REMIC Administrator, any extension adviser
and the Depositor will be permitted, in the exercise of its discretion, to
undertake any such action that it may deem necessary or desirable with respect
to the enforcement and/or protection of the rights and duties of the parties to
the Pooling and Servicing Agreement and the interests of the related series of
Certificateholders 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 related series of Certificateholders, and the Master
Servicer, the Special Servicer, the REMIC Administrator, any extension adviser
or the Depositor, as the case may be, will be entitled to charge the related
Certificate Account therefor.
Any person into which the Master Servicer, the Special Servicer, the REMIC
Administrator or the Depositor may be merged or consolidated, or any person
resulting from any merger or consolidation to which the Master Servicer, the
Special Servicer, the REMIC Administrator or the Depositor is a party, or any
person succeeding to the business of the Master Servicer, the Special Servicer,
the REMIC Administrator or the Depositor, will be the successor of the Master
Servicer, the Special Servicer, the REMIC Administrator or the Depositor, as the
case may be, under the related Pooling and Servicing Agreement.
Unless otherwise specified in the related Prospectus Supplement, a REMIC
Administrator will be entitled to perform any of its duties under the related
Pooling and Servicing Agreement either directly or by or through agents or
attorneys, and the REMIC Administrator will not be responsible for any willful
misconduct or gross negligence on the part of any such agent or attorney
appointed by it with due care.
EVENTS OF DEFAULT
Unless otherwise provided in the Prospectus Supplement for a series of
Certificates, "Events of Default" under the related Pooling and Servicing
Agreement will include, without limitation,
- any failure by the Master Servicer to distribute or cause to be
distributed to the Certificateholders of such series, or to remit to
the Trustee for distribution to such Certificateholders, any amount
required to be so distributed or remitted, pursuant to, and at the
time specified by, the terms of the Pooling and Servicing Agreement,
- any failure by the Special Servicer to remit to the Master Servicer
or the Trustee, as applicable, any amount required to be so
remitted, pursuant to, and at the time specified by, the terms of
the Pooling and Servicing Agreement;
- any failure by the Master Servicer or the Special Servicer duly to
observe or perform in any material respect any of its other
covenants or obligations under the related Pooling and Servicing
Agreement, which failure continues unremedied for thirty days
(fifteen days in the case of a failure to pay the premium for any
insurance policy required to be maintained under the Pooling and
Servicing Agreement) after written notice thereof has been given to
the Master Servicer or the Special Servicer, as the case may be, by
any other party to the related Pooling and Servicing Agreement, or
to the Master Servicer or the Special Servicer, as the case may be,
with a copy to each other party to the related Pooling and Servicing
Agreement, by Certificateholders entitled to
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not less than 25% (or such other percentage specified in the related
Prospectus Supplement) of the Voting Rights for such series;
- any failure by a REMIC Administrator (if other than the Trustee)
duly to observe or perform in any material respect any of its
covenants or obligations under the related Pooling and Servicing
Agreement, which failure continues unremedied for thirty days after
written notice thereof has been given to the REMIC Administrator by
any other party to the related Pooling and Servicing Agreement, or
to the REMIC Administrator, with a copy to each other party to the
related Pooling and Servicing Agreement, by Certificateholders
entitled to not less than 25% (or such other percentage specified in
the related Prospectus Supplement) of the Voting Rights for such
series; and
- certain events of insolvency, readjustment of debt, marshaling of
assets and liabilities, or similar proceedings in respect of or
relating to the Master Servicer, the Special Servicer or the REMIC
Administrator (if other than the Trustee), and certain actions by or
on behalf of the Master Servicer, the Special Servicer or the REMIC
Administrator (if other than the Trustee) indicating its insolvency
or inability to pay its obligations. Material variations to the
foregoing Events of Default (other than to add thereto or shorten
cure periods or eliminate notice requirements) will be specified in
the related Prospectus Supplement. Unless otherwise specified in the
related Prospectus Supplement, when a single entity acts as Master
Servicer, Special Servicer and REMIC Administrator, or in any two of
the foregoing capacities, for any Trust Fund, an Event of Default in
one capacity will constitute an Event of Default in each capacity.
RIGHTS UPON EVENT OF DEFAULT
If an Event of Default occurs with respect to the Master Servicer, the
Special Servicer or a REMIC Administrator under a Pooling and Servicing
Agreement, then, in each and every such case, so long as the Event of Default
remains unremedied, the Depositor or the Trustee will be authorized, and at the
direction of Certificateholders of the related series entitled to not less than
51% (or such other percentage specified in the related Prospectus Supplement) of
the Voting Rights for such series, the Trustee will be required, to terminate
all of the rights and obligations of the defaulting party as Master Servicer,
Special Servicer or REMIC Administrator, as applicable, under the Pooling and
Servicing Agreement, whereupon the Trustee will succeed to all of the
responsibilities, duties and liabilities of the defaulting party as Master
Servicer, Special Servicer or REMIC Administrator, as applicable, under the
Pooling and Servicing Agreement (except that if the defaulting party is required
to make advances thereunder regarding delinquent Mortgage Loans, but the Trustee
is prohibited by law from obligating itself to make such advances, or if the
related Prospectus Supplement so specifies, the Trustee will not be obligated to
make such advances) and will be entitled to similar compensation arrangements.
Unless otherwise specified in the related Prospectus Supplement, if the Trustee
is unwilling or unable so to act, it may (or, at the written request of
Certificateholders of the related series entitled to not less than 51% (or such
other percentage specified in the related Prospectus Supplement) of the Voting
Rights for such series, it will be required to) appoint, or petition a court of
competent jurisdiction to appoint, a loan servicing institution or other entity
that (unless otherwise provided in the related Prospectus Supplement) is
acceptable to each applicable Rating Agency to act as successor to the Master
Servicer, Special Servicer or REMIC Administrator, as the case may be, under the
Pooling and Servicing Agreement. Pending such appointment, the Trustee will be
obligated to act in such capacity.
If the same entity is acting as both Trustee and REMIC Administrator, it
may be removed in both such capacities as described under "-- Resignation and
Removal of the Trustee" below.
No Certificateholder will have any right under a Pooling and Servicing
Agreement to institute any proceeding with respect to such Pooling and Servicing
Agreement unless such holder previously has given to the Trustee written notice
of default and the continuance thereof and unless the holders of Certificates of
any class evidencing not less than 25% of the aggregate Percentage Interests
constituting such class have made written request upon the Trustee to institute
such proceeding in its own name as Trustee thereunder and have offered to the
Trustee reasonable indemnity and the Trustee for sixty days after receipt of
such request and
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indemnity has neglected or refused to institute any such proceeding. However,
the Trustee will be under no obligation to exercise any of the trusts or powers
vested in it by the Pooling and Servicing 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 covered by such Pooling and
Servicing Agreement, unless such Certificateholders have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby.
AMENDMENT
Except as otherwise specified in the related Prospectus Supplement, each
Pooling and Servicing Agreement may be amended by the parties thereto, without
the consent of any of the holders of Certificates covered by such Pooling and
Servicing Agreement, (1) to cure any ambiguity, (2) to correct or supplement any
provision therein which may be inconsistent with any other provision therein or
to correct any error, (3) to change the timing and/or nature of deposits in the
Certificate Account, provided that (A) such change would not adversely affect in
any material respect the interests of any Certificateholder, as evidenced by an
opinion of counsel, and (B) such change would not result in the withdrawal,
downgrade or qualification of any of the then-current ratings on the
Certificates, as evidenced by a letter from each applicable Rating Agency, (4)
if a REMIC election has been made with respect to the related Trust Fund, to
modify, eliminate or add to any of its provisions (A) to such extent as shall be
necessary to maintain the qualification of the Trust Fund (or any designated
portion thereof) as a REMIC or to avoid or minimize the risk of imposition of
any tax on the related Trust Fund, provided that the Trustee has received an
opinion of counsel to the effect that (1) such action is necessary or desirable
to maintain such qualification or to avoid or minimize such risk, and (2) such
action will not adversely affect in any material respect the interests of any
holder of Certificates covered by the Pooling and Servicing Agreement, or (B) to
restrict the transfer of the REMIC Residual Certificates, provided that the
Depositor has determined that the then-current ratings of the classes of the
Certificates that have been rated will not be withdrawn, downgraded or
qualified, as evidenced by a letter from each applicable Rating Agency, and that
any such amendment will not give rise to any tax with respect to the transfer of
the REMIC Residual Certificates to a non-permitted transferee (See "Certain
Federal Income Tax Consequences -- REMICs -- Tax and Restrictions on Transfers
of REMIC Residual Certificates to Certain Organizations" herein), (5) to make
any other provisions with respect to matters or questions arising under such
Pooling and Servicing Agreement or any other change, provided that such action
will not adversely affect in any material respect the interests of any
Certificateholder, or (6) to amend specified provisions that are not material to
holders of any class of Certificates offered hereunder.
The Pooling and Servicing Agreement may also be amended by the parties
thereto with the consent of the holders of Certificates of each class affected
thereby evidencing, in each case, not less than 66 2/3% (or such other
percentage specified in the related Prospectus Supplement) of the aggregate
Percentage Interests constituting such class for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
such Pooling and Servicing Agreement or of modifying in any manner the rights of
the holders of Certificates covered by such Pooling and Servicing Agreement,
except that no such amendment may (1) reduce in any manner the amount of, or
delay the timing of, payments received on Mortgage Loans which are required to
be distributed on a Certificate of any class without the consent of the holder
of such Certificate or (2) reduce the aforesaid percentage of Certificates of
any class the holders of which are required to consent to any such amendment
without the consent of the holders of all Certificates of such class covered by
such Pooling and Servicing Agreement then outstanding.
Notwithstanding the foregoing, if one or more REMIC elections have been
made with respect to the related Trust Fund, the Trustee will not be required to
consent to any amendment to a Pooling and Servicing Agreement without having
first received an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Master Servicer, the Special Servicer, the
Depositor, the Trustee or any other specified person in accordance with such
amendment will not result in the imposition of a tax on the related Trust Fund
or cause such Trust Fund (or any designated portion thereof) to fail to qualify
as a REMIC.
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LIST OF CERTIFICATEHOLDERS
Unless otherwise specified in the related Prospectus Supplement, upon
written request of three or more Certificateholders of record made for purposes
of communicating with other holders of Certificates of the same series with
respect to their rights under the related Pooling and Servicing Agreement, the
Trustee or other specified person will afford such Certificateholders access
during normal business hours to the most recent list of Certificateholders of
that series held by such person. If such list is as of a date more than 90 days
prior to the date of receipt of such Certificateholders' request, then such
person, if not the registrar for such series of Certificates, will be required
to request from such registrar a current list and to afford such requesting
Certificateholders access thereto promptly upon receipt.
THE TRUSTEE
The Trustee under each Pooling and Servicing Agreement will be named in the
related Prospectus Supplement. The commercial bank, national banking
association, banking corporation or trust company that serves as Trustee may
have typical banking relationships with the Depositor and its affiliates and
with any Master Servicer, Special Servicer or REMIC Administrator and its
affiliates.
DUTIES OF THE TRUSTEE
The Trustee for each series of Certificates will make no representation as
to the validity or sufficiency of the related Pooling and Servicing Agreement,
such Certificates or any underlying Mortgage Asset or related document and will
not be accountable for the use or application by or on behalf of any Master
Servicer or Special Servicer of any funds paid to the Master Servicer or Special
Servicer in respect of the Certificates or the underlying Mortgage Assets. If no
Event of Default has occurred and is continuing, the Trustee for each series of
Certificates will be required to perform only those duties specifically required
under the related Pooling and Servicing Agreement. However, upon receipt of any
of the various certificates, reports or other instruments required to be
furnished to it pursuant to the related Pooling and Servicing Agreement, a
Trustee will be required to examine such documents and to determine whether they
conform to the requirements of such agreement.
CERTAIN MATTERS REGARDING THE TRUSTEE
As and to the extent described in the related Prospectus Supplement, the
fees and normal disbursements of any Trustee may be the expense of the related
Master Servicer or other specified person or may be required to be borne by the
related Trust Fund.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each series of Certificates will be entitled to indemnification,
from amounts held in the Certificate Account for such series, for any loss,
liability or expense incurred by the Trustee in connection with the Trustee's
acceptance or administration of its trusts under the related Pooling and
Servicing Agreement; provided, however, that such indemnification will not
extend to any loss liability or expense incurred by reason of willful
misfeasance, bad faith or gross negligence on the part of the Trustee in the
performance of its obligations and duties thereunder, or by reason of its
reckless disregard of such obligations or duties.
Unless otherwise specified in the related Prospectus Supplement, the
Trustee for each series of Certificates will be entitled to execute any of its
trusts or powers under the related Pooling and Servicing Agreement or perform
any of its duties thereunder either directly or by or through agents or
attorneys, and the Trustee will not be responsible for any willful misconduct or
negligence on the part of any such agent or attorney appointed by it with due
care.
RESIGNATION AND REMOVAL OF THE TRUSTEE
The Trustee may resign at any time, in which event the Depositor will be
obligated to appoint a successor Trustee. The Depositor may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Pooling and Servicing Agreement or if the Trustee becomes insolvent. Upon
becoming aware of
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such circumstances, the Depositor will be obligated to appoint a successor
Trustee. The Trustee may also be removed at any time by the holders of
Certificates of the applicable series evidencing not less than 33 1/3% (or such
other percentage specified in the related Prospectus Supplement) of the Voting
Rights for such series. Any resignation or removal of the Trustee and
appointment of a successor Trustee will not become effective until acceptance of
the appointment by the successor Trustee. Notwithstanding anything herein to the
contrary, if any entity is acting as both Trustee and REMIC Administrator, then
any resignation or removal of such entity as the Trustee will also constitute
the resignation or removal of such entity as REMIC Administrator, and the
successor trustee will serve as successor to the REMIC Administrator as well.
DESCRIPTION OF CREDIT SUPPORT
GENERAL
Credit Support may be provided with respect to one or more classes of the
Certificates of any series or with respect to the related Mortgage Assets.
Credit Support may be in the form of a letter of credit, the subordination of
one or more classes of Certificates, the use of a pool insurance policy or
guarantee insurance, the establishment of one or more reserve funds and/or cash
collateral accounts, overcollateralization, or another method of Credit Support
described in the related Prospectus Supplement, or any combination of the
foregoing. If and to the extent so provided in the related Prospectus
Supplement, any of the foregoing forms of Credit Support may provide credit
enhancement for more than one series of Certificates.
Unless otherwise provided in the related Prospectus Supplement for a series
of Certificates, the Credit Support will not provide protection against all
risks of loss and will not guarantee payment to Certificateholders of all
amounts to which they are entitled under the related Pooling and Servicing
Agreement. If losses or shortfalls occur that exceed the amount covered by the
related Credit Support or that are of a type not covered by such Credit Support,
Certificateholders will bear their allocable share of deficiencies. Moreover, if
a form of Credit Support covers the Offered Certificates of more than one series
and losses on the related Mortgage Assets exceed the amount of such Credit
Support, it is possible that the holders of Offered Certificates of one (or
more) such series will be disproportionately benefited by such Credit Support to
the detriment of the holders of Offered Certificates of one (or more) other such
series.
If Credit Support is provided with respect to one or more classes of
Certificates of a series, or with respect to the related Mortgage Assets, the
related Prospectus Supplement will include a description of (1) the nature and
amount of coverage under such Credit Support, (2) any conditions to payment
thereunder not otherwise described herein, (3) the conditions (if any) under
which the amount of coverage under such Credit Support may be reduced and under
which such Credit Support may be terminated or replaced and (4) the material
provisions relating to such Credit Support. Additionally, the related Prospectus
Supplement will set forth certain information with respect to the obligor, if
any, under any instrument of Credit Support. See "Risk Factors -- Credit Support
Limitations".
SUBORDINATE CERTIFICATES
If so specified in the related Prospectus Supplement, one or more classes
of Certificates of a series may be Subordinate Certificates. To the extent
specified in the related Prospectus Supplement, the rights of the holders of
Subordinate Certificates to receive distributions from the Certificate Account
on any Distribution Date will be subordinated to the corresponding rights of the
holders of Senior Certificates. If so provided in the related Prospectus
Supplement, the subordination of a class may apply only in the event of certain
types of losses or shortfalls. The related Prospectus Supplement will set forth
information concerning the method and amount of subordination provided by a
class or classes of Subordinate Certificates in a series and the circumstances
under which such subordination will be available.
If the Mortgage Assets in any Trust Fund are divided into separate groups,
each supporting a separate class or classes of Certificates of the related
series, Credit Support may be provided by cross-support provisions requiring
that distributions be made on Senior Certificates evidencing interests in one
group of Mortgage Assets prior to distributions on Subordinate Certificates
evidencing interests in a different group of
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Mortgage Assets within the Trust Fund. The Prospectus Supplement for a series
that includes a cross-support provision will describe the manner and conditions
for applying such provisions.
INSURANCE OR GUARANTEES CONCERNING TO MORTGAGE LOANS
If so provided in the Prospectus Supplement for a series of Certificates,
Mortgage Loans included in the related Trust Fund will be covered for certain
default risks by insurance policies or guarantees. The related Prospectus
Supplement will describe the nature of such default risks and the extent of such
coverage.
LETTER OF CREDIT
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered by one or more letters of credit, issued by a
bank or other financial institution (which may be an affiliate of the Depositor)
specified in such Prospectus Supplement (the "Letter of Credit Bank"). Under a
letter of credit, the Letter of Credit Bank will be obligated to honor draws
thereunder in an aggregate fixed dollar amount, net of unreimbursed payments
thereunder, generally equal to a percentage specified in the related Prospectus
Supplement of the aggregate principal balance of some or all of the related
Mortgage Assets on the related Cut-off Date or of the initial aggregate
Certificate Balance of one or more classes of Certificates. If so specified in
the related Prospectus Supplement, the letter of credit may permit draws only in
the event of certain types of losses and shortfalls. The amount available under
the letter of credit will, in all cases, be reduced to the extent of the
unreimbursed payments thereunder and may otherwise be reduced as described in
the related Prospectus Supplement. The obligations of the Letter of Credit Bank
under the letter of credit for each series of Certificates will expire at the
earlier of the date specified in the related Prospectus Supplement or the
termination of the Trust Fund.
CERTIFICATE INSURANCE AND SURETY BONDS
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered by insurance policies or surety bonds provided
by one or more insurance companies or sureties. Such instruments may cover, with
respect to one or more classes of Certificates of the related series, timely
distributions of interest or distributions of principal on the basis of a
schedule of principal distributions set forth in or determined in the manner
specified in the related Prospectus Supplement. The related Prospectus
Supplement will describe any limitations on the draws that may be made under any
such instrument.
RESERVE FUNDS
If so provided in the Prospectus Supplement for a series of Certificates,
deficiencies in amounts otherwise payable on such Certificates or certain
classes thereof will be covered (to the extent of available funds) by one or
more reserve funds in which cash, a letter of credit, Permitted Investments, a
demand note or a combination thereof will be deposited, in the amounts specified
in such Prospectus Supplement. If so specified in the related Prospectus
Supplement, the reserve fund for a series may also be funded over time by a
specified amount of certain collections received on the related Mortgage Assets.
Amounts on deposit in any reserve fund for a series will be applied for the
purposes, in the manner, and to the extent specified in the related Prospectus
Supplement. If so specified in the related Prospectus Supplement, reserve funds
may be established to provide protection only against certain types of losses
and shortfalls. Following each Distribution Date, amounts in a 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.
If so specified in the related Prospectus Supplement, amounts deposited in
any reserve fund will be invested in Permitted Investments. Unless otherwise
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. However, such income may be payable to any related Master Servicer
or another service provider as additional compensation
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for its services. The reserve fund, if any, for a series will not be a part of
the Trust Fund unless otherwise specified in the related Prospectus Supplement.
CASH COLLATERAL ACCOUNT
If so specified in the related Prospectus Supplement, all or any portion of
credit enhancement for a series of Certificates may be provided by the
establishment of a cash collateral account. A cash collateral account will be
similar to a reserve fund except that generally a cash collateral account is
funded initially by a loan from a cash collateral lender, the proceeds of which
are invested with the cash collateral lender or other eligible institution. The
loan from the cash collateral lender will be repaid from such amounts as are
specified in the related Prospectus Supplement. Amounts on deposit in the cash
collateral account will be available in generally the same manner described
above with respect to a reserve fund. As specified in the related Prospectus
Supplement, a cash collateral account may be deemed to be part of the assets of
the related Trust, may be deemed to be part of the assets of a separate cash
collateral trust or may be deemed to be property of the party specified in the
related Prospectus Supplement and pledged for the benefit of the holders of one
or more classes of Certificates of a series.
CREDIT SUPPORT WITH RESPECT TO MBS
If so provided in the Prospectus Supplement for a series of Certificates,
any MBS included in the related Trust Fund and/or the related underlying
mortgage loans may be covered by one or more of the types of Credit Support
described herein. The related Prospectus Supplement will specify, as to each
such form of Credit Support, the information indicated above with respect
thereto, to the extent such information is material and available.
CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS
The following discussion contains general summaries of certain legal
aspects of mortgage loans secured by commercial and multifamily residential
properties. Because such legal aspects are governed by applicable state law
(which laws may differ substantially), the summaries do not purport to be
complete, to reflect the laws of any particular state, or to encompass the laws
of all states in which the security for the Mortgage Loans (or mortgage loans
underlying any MBS) is situated. Accordingly, the summaries are qualified in
their entirety by reference to the applicable laws of those states. See
"Description of the Trust Funds -- Mortgage Loans". For purposes of the
following discussion, "Mortgage Loan" includes a mortgage loan underlying an
MBS.
GENERAL
Each Mortgage Loan will be evidenced by a note or bond and secured by an
instrument granting a security interest in real property, which may be a
mortgage, deed of trust or a deed to secure debt, depending upon the prevailing
practice and law in the state in which the related Mortgaged Property is
located. Mortgages, deeds of trust and deeds to secure debt are herein
collectively referred to as "mortgages". A mortgage creates a lien upon, or
grants a title interest in, the real property covered thereby, and represents
the security for the repayment of the indebtedness customarily evidenced by a
promissory note. The priority of the lien created or interest granted will
depend on the terms of the mortgage and, in some cases, on the terms of separate
subordination agreements or intercreditor agreements with others that hold
interests in the real property, the knowledge of the parties to the mortgage
and, generally, the order of recordation of the mortgage in the appropriate
public recording office. However, the lien of a recorded mortgage will generally
be subordinate to later-arising liens for real estate taxes and assessments and
other charges imposed under governmental police powers.
TYPES OF MORTGAGE INSTRUMENTS
There are two parties to a mortgage: a mortgagor (the borrower and usually
the owner of the subject property) and a mortgagee (the lender). In contrast, a
deed of trust is a three-party instrument, among a
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trustor (the equivalent of a borrower), a trustee to whom the real property is
conveyed, and a beneficiary (the lender) for whose benefit the conveyance is
made. Under a deed of trust, the trustor grants the property, irrevocably until
the debt is paid, in trust and generally with a power of sale, to the trustee to
secure repayment of the indebtedness evidenced by the related note. A deed to
secure debt typically has two parties, pursuant to which the borrower, or
grantor, conveys title to the real property to the grantee, or lender, generally
with a power of sale, until such time as the debt is repaid. In a case where the
borrower is a land trust, there would be an additional party because legal title
to the property is held by a land trustee under a land trust agreement for the
benefit of the borrower. At origination of a mortgage loan involving a land
trust, the borrower may execute a separate undertaking to make payments on the
mortgage note. In no event is the land trustee personally liable for the
mortgage note obligation. The mortgagee's authority under a mortgage, the
trustee's authority under a deed of trust and the grantee's authority under a
deed to secure debt are governed by the express provisions of the related
instrument, the law of the state in which the real property is located, certain
federal laws and, in some deed of trust transactions, the directions of the
beneficiary.
LEASES AND RENTS
Mortgages that encumber income-producing property often contain an
assignment of rents and leases and/or may be accompanied by a separate
assignment of rents and leases, pursuant to which the borrower assigns to the
lender the borrower's right, title and interest as landlord under each lease and
the income derived therefrom, while (unless rents are to be paid directly to the
lender) retaining a revocable license to collect the rents for so long as there
is no default. If the borrower defaults, the license terminates and the lender
is entitled to collect the rents. Local law may require that the lender take
possession of the property and/or obtain a court-appointed receiver before
becoming entitled to collect the rents.
In most states, hotel and motel room rates are considered accounts
receivable under the Uniform Commercial Code ("UCC"); in cases where hotels or
motels constitute loan security, the rates are generally pledged by the borrower
as additional security for the loan. In general, the lender must file financing
statements in order to perfect its security interest in the room rates and must
file continuation statements, generally every five years, to maintain perfection
of such security interest. In certain cases, Mortgage Loans secured by hotels or
motels may be included in a Trust Fund even if the security interest in the room
rates was not perfected or the requisite UCC filings were allowed to lapse. Even
if the lender's security interest in room rates is perfected under applicable
nonbankruptcy law, it will generally be required to commence a foreclosure
action or otherwise take possession of the property in order to enforce its
rights to collect the room rates following a default. In the bankruptcy setting,
however, the lender will be stayed from enforcing its rights to collect room
rates, but those room rates (in light of certain revisions to the Bankruptcy
Code which are effective for all bankruptcy cases commenced on or after October
22, 1994) constitute "cash collateral" and therefore cannot be used by the
bankruptcy debtor without lender's consent or a hearing at which the lender's
interest in the room rates is given adequate protection (e.g., the lender
receives cash payments from otherwise unencumbered funds or a replacement lien
on unencumbered property, in either case equal in value to the amount of room
rates that the debtor proposes to use, or other similar relief). See
"-- Bankruptcy Laws".
In the case of office and retail properties, the bankruptcy or insolvency
of a major tenant or a number of smaller tenants may have an adverse impact on
the Mortgaged Properties affected and the income produced by such Mortgaged
Properties. Under bankruptcy law, a tenant has the option of assuming
(continuing), or rejecting (terminating) or, subject to certain conditions,
assigning to a third party any unexpired lease. If the tenant assumes its lease,
the tenant must cure all defaults under the lease and provide the landlord with
adequate assurance of its future performance under the lease. If the tenant
rejects the lease, the landlord's claim for breach of the lease would (absent
collateral securing the claim) be treated as a general unsecured claim. The
amount of the claim would be limited to the amount owed for unpaid pre-petition
lease payments unrelated to the rejection, plus the greater of one year's lease
payments or 15% of the remaining lease payments payable under the lease (but not
to exceed three years' lease payments). If the tenant assigns its lease, the
tenant must cure all defaults under the lease and the proposed assignee must
demonstrate adequate assurance of future performance under the lease.
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PERSONALTY
In the case of certain types of mortgaged properties, such as hotels,
motels and nursing homes, personal property (to the extent owned by the borrower
and not previously pledged) may constitute a significant portion of the
property's value as security. The creation and enforcement of liens on personal
property are governed by the UCC. Accordingly, if a borrower pledges personal
property as security for a mortgage loan, the lender generally must file UCC
financing statements in order to perfect its security interest therein, and must
file continuation statements, generally every five years, to maintain that
perfection. In certain cases, Mortgage Loans secured in part by personal
property may be included in a Trust Fund even if the security interest in such
personal property was not perfected or the requisite UCC filings were allowed to
lapse.
FORECLOSURE
General. Foreclosure is a legal procedure that allows the lender to
recover its mortgage debt by enforcing its rights and available legal remedies
under the mortgage. If the borrower defaults in payment or performance of its
obligations under the note or mortgage, the lender has the right to institute
foreclosure proceedings to sell the real property at public auction to satisfy
the indebtedness.
Foreclosure procedures vary from state to state. Two primary methods of
foreclosing a mortgage are judicial foreclosure, involving court proceedings,
and nonjudicial foreclosure pursuant to a power of sale granted in the mortgage
instrument. Other foreclosure procedures are available in some states, but they
are either infrequently used or available only in limited circumstances.
A foreclosure action is subject to most of the delays and expenses of other
lawsuits if defenses are raised or counterclaims are interposed, and sometimes
requires several years to complete.
Judicial Foreclosure. A judicial foreclosure proceeding is conducted in a
court having jurisdiction over the mortgaged property. Generally, the action is
initiated by the service of legal pleadings upon all parties having a
subordinate interest of record in the real property and all parties in
possession of the property, under leases or otherwise, whose interests are
subordinate to the mortgage. Delays in completion of the foreclosure may
occasionally result from difficulties in locating defendants. When the lender's
right to foreclose is contested, the legal proceedings can be time-consuming.
Upon successful completion of a judicial foreclosure proceeding, the court
generally issues a judgment of foreclosure and appoints a referee or other
officer to conduct a public sale of the mortgaged property, the proceeds of
which are used to satisfy the judgment. Such sales are made in accordance with
procedures that vary from state to state.
Equitable and Other Limitations on Enforceability of Certain
Provisions. United States courts have traditionally imposed general equitable
principles to limit the remedies available to lenders in foreclosure actions.
These principles are generally designed to relieve borrowers from the effects of
mortgage defaults perceived as harsh or unfair. Relying on such principles, a
court may alter the specific terms of a loan to the extent it considers
necessary to prevent or remedy an injustice, undue oppression or overreaching,
or may require the lender to undertake affirmative actions to determine the
cause 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 and have required that lenders reinstate loans or
recast payment schedules in order to accommodate borrowers who are suffering
from a temporary financial disability. In other cases, courts have limited the
right of the lender to foreclose in the case of a nonmonetary default, such as a
failure to adequately maintain the mortgaged property or an impermissible
further encumbrance of the mortgaged property. Finally, some courts have
addressed the issue of whether federal or state constitutional provisions
reflecting due process concerns for adequate notice require that a borrower
receive notice in addition to statutorily-prescribed minimum notice. For the
most part, these cases have upheld the reasonableness of the notice provisions
or have found that a public sale under a mortgage providing for a power of sale
does not involve sufficient state action to trigger constitutional protections.
In addition, some states may have statutory protection such as the right of
the borrower to reinstate mortgage loans after commencement of foreclosure
proceedings but prior to a foreclosure sale.
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Nonjudicial Foreclosure/Power of Sale. In states permitting nonjudicial
foreclosure proceedings, foreclosure of a deed of trust is generally
accomplished by a nonjudicial trustee's sale pursuant to a power of sale
typically granted in the deed of trust. A power of sale may also be contained in
any other type of mortgage instrument if applicable law so permits. A power of
sale under a deed of trust allows a nonjudicial public sale to be conducted
generally following a request from the beneficiary/lender to the trustee to sell
the property upon default by the borrower and after notice of sale is given in
accordance with the terms of the mortgage and applicable state law. In some
states, prior to such sale, the trustee under the deed of trust must record a
notice of default and notice of sale and send a copy to the borrower and to any
other party who has recorded a request for a copy of a notice of default and
notice of sale. In addition, in some states the trustee must provide notice to
any other party having an interest of record in the real property, including
junior lienholders. A notice of sale must be posted in a public place and, in
most states, published for a specified period of time in one or more newspapers.
The borrower or junior lienholder may then have the right, during a
reinstatement period required in some states, to cure the default by paying the
entire actual amount in arrears (without regard to the acceleration of the
indebtedness), plus the lender's expenses incurred in enforcing the obligation.
In other states, the borrower or the junior lienholder is not provided a period
to reinstate the loan, but has only the right to pay off the entire debt to
prevent the foreclosure sale. Generally, state law governs the procedure for
public sale, the parties entitled to notice, the method of giving notice and the
applicable time periods.
Public Sale. A third party may be unwilling to purchase a mortgaged
property at a public sale because of the difficulty in determining the exact
status of title to the property (due to, among other things, redemption rights
that may exist) and because of the possibility that physical deterioration of
the property may have occurred during the foreclosure proceedings. Therefore, it
is common for the lender to purchase the mortgaged property for an amount equal
to the secured indebtedness and accrued and unpaid interest plus the expenses of
foreclosure, in which event the borrower's debt will be extinguished, or for a
lesser amount in order to preserve its right to seek a deficiency judgment if
such is available under state law and under the terms of the Mortgage Loan
documents. (The Mortgage Loans, however, may be nonrecourse. See "Risk
Factors -- Certain Factors Affecting Delinquency, Foreclosure and Loss of the
Mortgage Loans -- Limited Recourse Nature of the Mortgage Loans".) Thereafter,
subject to the borrower's right in some states to remain in possession during a
redemption period, the lender will become the owner of the property and have
both the benefits and burdens of ownership, including the obligation to pay debt
service on any senior mortgages, to pay taxes, to obtain casualty insurance and
to make such repairs as are necessary to render the property suitable for sale.
The costs of operating and maintaining a commercial or multifamily residential
property may be significant and may be greater than the income derived from that
property. The lender also will commonly obtain the services of a real estate
broker and pay the broker's commission in connection with the sale or lease 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, because of the expenses associated with acquiring, owning and selling
a mortgaged property, a lender could realize an overall loss on a mortgage loan
even if the 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 loan plus accrued interest.
The holder of a junior mortgage that forecloses on a mortgaged property
does so subject to senior mortgages and any other prior liens, and may be
obliged to keep senior mortgage loans current in order to avoid foreclosure of
its interest in the property. In addition, if the foreclosure of a junior
mortgage triggers the enforcement of a "due-on-sale" clause contained in a
senior mortgage, the junior mortgagee could be required to pay the full amount
of the senior mortgage indebtedness or face foreclosure.
Rights of Redemption. The purposes of a foreclosure action are to enable
the lender to realize upon its security and to bar the borrower, and all persons
who have interests in the property that are subordinate to that of the
foreclosing lender, from exercise of their "equity of redemption". The doctrine
of equity of redemption provides that, until the property encumbered by a
mortgage has been sold in accordance with a properly conducted foreclosure and
foreclosure sale, those having interests that are subordinate to that of the
foreclosing lender have an equity of redemption and may redeem the property by
paying the entire debt with interest. Those having an equity of redemption must
generally be made parties and joined in the foreclosure proceeding in order for
their equity of redemption to be terminated.
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The equity of redemption is a common-law (nonstatutory) right which should
be distinguished from post-sale statutory rights of redemption. 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. In some states, statutory redemption may occur only upon
payment of the foreclosure sale price. In other states, redemption may be
permitted if the former borrower pays only a portion of the sums due. The effect
of a statutory right of redemption is to diminish the ability of the lender to
sell the foreclosed property because the exercise of a right of redemption would
defeat the title of any purchaser through a foreclosure. Consequently, the
practical effect of the redemption right is to force the lender to maintain the
property and pay the expenses of ownership until the redemption period has
expired. In some states, a post-sale statutory right of redemption may exist
following a judicial foreclosure, but not following a trustee's sale under a
deed of trust.
Anti-Deficiency Legislation. Some or all of the Mortgage Loans may be
nonrecourse loans, as to which recourse in the case of default will be limited
to the Mortgaged Property and such other assets, if any, that were pledged to
secure the Mortgage Loan. However, even if a mortgage loan by its terms provides
for recourse to the borrower's other assets, a lender's ability to realize upon
those assets may be limited by state law. For example, in some states a lender
cannot 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 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 may require the lender to exhaust the security afforded
under a mortgage before bringing a personal action against the borrower. In
certain other 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 those states, the lender, following judgment on such
personal action, may be deemed to have elected a remedy and thus may be
precluded from foreclosing upon the security. Consequently, lenders in those
states where such an election of remedy provision exists will usually proceed
first against the security. Finally, other statutory provisions, designed to
protect borrowers from exposure to large deficiency judgments that might result
from bidding at below-market values at the foreclosure sale, limit any
deficiency judgment to the excess of the outstanding debt over the fair market
value of the property at the time of the sale.
Leasehold Considerations. Mortgage Loans may be secured by a mortgage on
the borrower's leasehold interest in a ground lease. Leasehold mortgage loans
are subject to certain risks not associated with mortgage loans secured by a
lien on the fee estate of the borrower. The most significant of these risks is
that if the borrower's leasehold were to be terminated upon a lease default, the
leasehold mortgagee could lose its security. This risk may be lessened if the
ground lease requires the lessor to give the leasehold mortgagee notices of
lessee defaults and an opportunity to cure them, requires the lessor to grant
the mortgagee a new lease if the existing lease is rejected in a bankruptcy
proceeding, permits the leasehold estate to be assigned to and by the leasehold
mortgagee or the purchaser at a foreclosure sale, and contains certain other
protective provisions typically included in a "mortgageable" ground lease.
Certain Mortgage Loans, however, may be secured by ground leases which do not
contain these provisions.
Cooperative Shares. Mortgage Loans may be secured by a security interest
on the borrower's ownership interest in shares, and the proprietary leases
appurtenant thereto, allocable to cooperative dwelling units that may be vacant
or occupied by nonowner tenants. Such loans are subject to certain risks not
associated with mortgage loans secured by a lien on the fee estate of a borrower
in real property. Such a loan typically is subordinate to the mortgage, if any,
on the Cooperative's building which, if foreclosed, could extinguish the equity
in the building and the proprietary leases of the dwelling units derived from
ownership of the shares of the Cooperative. Further, transfer of shares in a
Cooperative are subject to various regulations as well as to restrictions under
the governing documents of the Cooperative, and the shares may be canceled in
the event that associated maintenance charges due under the related proprietary
leases are not paid. Typically, a recognition agreement between the lender and
the Cooperative provides, among other things, the lender with an opportunity to
cure a default under a proprietary lease.
Under the laws applicable in many states, "foreclosure" on Cooperative
shares is accomplished by a sale in accordance with the provisions of Article 9
of the UCC and the security agreement relating to the shares. Article 9 of the
UCC requires that a sale be conducted in a "commercially reasonable" manner,
which may be
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dependent upon, among other things, the notice given the debtor and the method,
manner, time, place and terms of the sale. Article 9 of the UCC provides that
the proceeds of the sale will be applied first to pay the costs and expenses of
the sale and then to satisfy the indebtedness secured by the lender's security
interest. A recognition agreement, however, generally provides that the lender's
right to reimbursement is subject to the right of the Cooperative to receive
sums due under the proprietary leases.
BANKRUPTCY LAWS
Operation of 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) to
collect a debt are automatically stayed upon the filing of the bankruptcy
petition and, often, 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 protective of the lender are met, the amount and terms of a mortgage
loan secured by a lien on property of the debtor may be modified under certain
circumstances. For example, the outstanding amount of the loan 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, by means of a reduction in the rate of interest and/or an alteration of
the repayment schedule (with or without affecting the unpaid principal balance
of the loan), and/or by an extension (or shortening) of the term to maturity.
Some bankruptcy courts have approved plans, based on the particular facts of the
reorganization case, that effected the cure of a mortgage loan default by paying
arrearages over a number of years. Also, a bankruptcy court may permit a debtor,
through its rehabilitative plan, to reinstate a loan mortgage payment schedule
even if the lender has obtained a final judgment of foreclosure prior to the
filing of the debtor's petition.
Federal bankruptcy law may also have the effect of interfering with or
affecting the ability of a secured lender to enforce the borrower's assignment
of rents and leases related to the mortgaged property. Under the Bankruptcy
Code, a lender may be stayed from enforcing the assignment, and the legal
proceedings necessary to resolve the issue could be time-consuming, with
resulting delays in the lender's receipt of the rents. Recent amendments to the
Bankruptcy code, however, may minimize the impairment of the lender's ability to
enforce the borrower's assignment of rents and leases. In addition to the
inclusion of hotel revenues within the definition of "cash collateral" as noted
previously in the section entitled "-- Leases and Rents", the amendments provide
that a pre-petition security interest in rents or hotel revenues extends (unless
the bankruptcy court orders otherwise based on the equities of the case) to such
post-petition rents or revenues and is intended to overrule those cases that
held that a security interest in rents is unperfected under the laws of certain
states until the lender has taken some further action, such as commencing
foreclosure or obtaining a receiver prior to activation of the assignment of
rents.
If a borrower's ability to make payment on a mortgage loan is dependent on
its receipt of rent payments under a lease of the related property, that ability
may be impaired by the commencement of a bankruptcy case relating to a lessee
under such lease. Under the Bankruptcy Code, the filing of a petition in
bankruptcy by or on behalf of a lessee results in a stay in bankruptcy 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. In addition, the Bankruptcy Code generally provides that a
trustee or debtor-in-possession may, subject to approval of the court, (1)
assume the lease and retain it or assign it to a third party or (2) reject the
lease. If the lease is assumed, the trustee or debtor-in-possession (or
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, and any assurances provided to
the lessor may, in fact, be
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inadequate. If the lease is rejected, the lessor will be treated as an unsecured
creditor with respect to its claim for damages for termination of the lease. The
Bankruptcy Code also limits a lessor's damages for lease rejection to the rent
reserved by the lease (without regard to acceleration) for the greater of one
year, or 15%, not to exceed three years, of the remaining term of the lease.
Pursuant to the federal doctrine of "substantive consolidation" or to the
(predominantly state law) doctrine of "piercing the corporate veil", a
bankruptcy court, in the exercise of its equitable powers, also has the
authority to order that the assets and liabilities of a related entity be
consolidated with those of an entity before it. Thus, property ostensibly the
property of one entity may be determined to be the property of a different
entity in bankruptcy, the automatic stay applicable to the second entity
extended to the first and the rights of creditors of the first entity impaired
in the fashion set forth above in the discussion of ordinary bankruptcy
principles. Depending on facts and circumstances not wholly in existence at the
time a loan is originated or transferred to the Trust Fund, the application of
any of these doctrines to one or more of the mortgagors in the context of the
bankruptcy of one or more of their affiliates could result in material
impairment of the rights of the Certificateholders.
For each mortgagor that is described as a "special purpose entity", "single
purpose entity" or bankruptcy remote entity" in the Prospectus Supplement, the
activities that may be conducted by such mortgagor and its ability to incur debt
are restricted by the applicable Mortgage or the organizational documents of
such mortgagor in such manner as is intended to make the likelihood of a
bankruptcy proceeding being commenced by or against such mortgagor remote, and
such mortgagor has been organized and is designed to operate in a manner such
that its separate existence should be respected notwithstanding a bankruptcy
proceeding in respect of one or more affiliated entities of such mortgagor.
However, the Depositor makes no representation as to the likelihood of the
institution of a bankruptcy proceeding by or in respect of any mortgagor or the
likelihood that the separate existence of any mortgagor would be respected if
there were to be a bankruptcy proceeding in respect of any affiliated entity of
a mortgagor.
ENVIRONMENTAL CONSIDERATIONS
General. A lender may be subject to environmental risks when taking a
security interest in real property. Of particular concern may be properties that
are or have been used for industrial, manufacturing, military or disposal
activity. Such environmental risks include the possible diminution of the value
of a contaminated property or, as discussed below, potential liability for
clean-up costs or other remedial actions that could exceed the value of the
property or the amount of the lender's loan. In certain circumstances, a lender
may decide to abandon a contaminated mortgaged property as collateral for its
loan rather than foreclose and risk liability for clean-up costs.
Superlien Laws. Under the laws of many states, contamination on a property
may give rise to a lien on the property for clean-up costs. In several states,
such a lien has priority over all existing liens, including those of existing
mortgages. In these states, the lien of a mortgage may lose its priority to such
a "superlien".
CERCLA. The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), imposes strict liability on
present and past "owners" and "operators" of contaminated real property for the
costs of clean-up. A secured lender may be liable as an "owner" or "operator" of
a contaminated mortgaged property if agents or employees of the lender have
become sufficiently involved in the management of such mortgaged property or the
operations of the borrower. Such liability may exist even if the lender did not
cause or contribute to the contamination and regardless of whether or not the
lender has actually taken possession of a mortgaged 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 the property securing a loan. Excluded from CERCLA's definition of
"owner" or "operator", however, is a person "who without participating in the
management of the facility, holds indicia of ownership primarily to protect his
security interest". This is the so-called "secured creditor exemption."
The Asset Conservation, Lender Liability and Deposit Insurance Act of 1996
(the "Act") amended, among other things, the provisions of CERCLA with respect
to lender liability and the secured creditor
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exemption. The Act offers substantial protection of lenders by defining the
activities in which a lender can engage and still have the benefit of the
secured creditor exemption. In order for a lender to be deemed to have
participated in the management of a mortgaged property, the lender must actually
participate in the operational affairs of the property of the borrower. The Act
provides that "merely having the capacity to influence, or unexercised right to
control" operations does not constitute participation in management. A lender
will lose the protection of the secured creditor exemption only if it exercises
decision making control over the borrower's environmental compliance and
hazardous substance handling and disposal practices, or assumes day-to-day
management of operational functions of the mortgaged property. The Act also
provides that a lender will continue to have the benefit of the secured-creditor
exemption even if it forecloses on a mortgaged property, purchases it at a
foreclosure sale or accepts a deed-in-lieu of foreclosure provided that the
lender seeks to sell the mortgaged property at the earliest practicable
commercially reasonable time on commercially reasonable terms.
Certain Other Federal and State Laws. Many states have statutes similar to
CERCLA, and not all those statutes provide for a secured creditor exemption. In
addition, under federal law, there is potential liability relating to hazardous
wastes and underground storage tanks under the federal Resource Conservation and
Recovery Act ("RCRA").
In addition, the definition of "hazardous substances" under CERCLA
specifically excludes petroleum products. Subtitle I of RCRA governs underground
petroleum storage tanks. Under the Act, the protections accorded to lenders
under CERCLA are also accorded to the holders of security interests in
underground storage tanks. It should be noted, however, that liability for
cleanup of petroleum contamination may be governed by state law, which may not
provide for any specific protection of secured creditors.
In a few states, transfers of some types of properties are conditioned upon
cleanup of contamination prior to transfer. In these cases, a lender that
becomes the owner of a property through foreclosure, deed in lieu of foreclosure
or otherwise, may be required to clean up the contamination before selling or
otherwise transferring the property.
Beyond statute-based environmental liability, there exist common law causes
of action (for example, actions based on nuisance or on toxic tort resulting in
death, personal injury or damage to property) related to hazardous environmental
conditions on a property. While it may be more difficult to hold a lender liable
in such cases, unanticipated or uninsured liabilities of the borrower may
jeopardize the borrower's ability to meet its loan obligations.
Additional Considerations. The cost of remediating hazardous substance
contamination at a property can be substantial. If a lender becomes liable, it
can bring an action for contribution against the owner or operator who created
the environmental hazard, but that individual or entity may be without
substantial assets. Accordingly, it is possible that such costs could become a
liability of the Trust Fund and occasion a loss to the Certificateholders of the
related series.
To reduce the likelihood of such a loss, unless otherwise specified in the
related Prospectus Supplement, the Pooling and Servicing Agreement will provide
that neither the Master Servicer nor the Special Servicer, acting on behalf of
the Trustee, may acquire title to a Mortgaged Property or take over its
operation unless the Special Servicer, based solely (as to environmental
matters) on a report prepared by a person who regularly conducts environmental
audits, has made the determination that it is appropriate to do so, as described
under "The Pooling and Servicing Agreements -- Realization Upon Defaulted
Mortgage Loans".
If a lender forecloses on a mortgage secured by a property, the operations
on which are subject to environmental laws and regulations, the lender will be
required to operate the property in accordance with those laws and regulations.
Such compliance may entail substantial expense, especially in the case of
industrial or manufacturing properties.
In addition, a lender may be obligated to disclose environmental conditions
on a property to government entities and/or to prospective buyers (including
prospective buyers at a foreclosure sale or following foreclosure). Such
disclosure may decrease the amount that prospective buyers are willing to pay
for the
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affected property, sometimes substantially, and thereby decrease the ability of
the lender to recoup its investment in a loan upon foreclosure.
Environmental Site Assessments. In most cases, an environmental site
assessment of each Mortgaged Property will have been performed in connection
with the origination of the related Mortgage Loan or at some time prior to the
issuance of the related Certificates. Environmental site assessments, however,
vary considerably in their content, quality and cost. Even when adhering to good
professional practices, environmental consultants will sometimes not detect
significant environmental problems because to do an exhaustive environmental
assessment would be far too costly and time-consuming to be practical.
DUE-ON-SALE AND DUE-ON-ENCUMBRANCE PROVISIONS
Certain of the Mortgage Loans may contain "due-on-sale" and
"due-on-encumbrance" clauses that purport to permit the lender to accelerate the
maturity of the loan if the borrower transfers or encumbers the related
Mortgaged Property. In recent years, court decisions and legislative actions
placed substantial restrictions on the right of lenders to enforce such clauses
in many states. However, the Garn-St Germain Depository Institutions Act of 1982
(the "Garn Act") generally preempts state laws that prohibit the enforcement of
due-on-sale clauses and permits lenders to enforce these clauses in accordance
with their terms, subject to certain limitations as set forth in the Garn Act
and the regulations promulgated thereunder. Accordingly, a Master Servicer may
nevertheless have the right to accelerate the maturity of a Mortgage Loan that
contains a "due-on-sale" provision upon transfer of an interest in the property,
without regard to the Master Servicer's ability to demonstrate that a sale
threatens its legitimate security interest.
JUNIOR LIENS; RIGHTS OF HOLDERS OF SENIOR LIENS
If so provided in the related Prospectus Supplement, Mortgage Assets for a
series of Certificates may include Mortgage Loans secured by junior liens, and
the loans secured by the related Senior Liens may not be included in the
Mortgage Pool. In addition to the risks faced by the holder of a first lien,
holders of Mortgage Loans secured by junior liens also face the risk that
adequate funds will not be received in connection with a foreclosure on the
related Mortgaged Property to satisfy fully both the Senior Liens and the
Mortgage Loan. In the event that a holder of a Senior Lien forecloses on a
Mortgaged Property, the proceeds of the foreclosure or similar sale will be
applied first to the payment of court costs and fees in connection with the
foreclosure, second to real estate taxes, third in satisfaction of all
principal, interest, prepayment or acceleration penalties, if any, and any other
sums due and owing to the holder of the Senior Liens. The claims of the holders
of the Senior Liens will be satisfied in full out of proceeds of the liquidation
of the related Mortgaged Property, if such proceeds are sufficient, before the
Trust Fund as holder of the junior lien receives any payments in respect of the
Mortgage Loan. In the event that such proceeds from a foreclosure or similar
sale of the related Mortgaged Property are insufficient to satisfy all Senior
Liens and the Mortgage Loan in the aggregate, the Trust Fund, as the holder of
the junior lien, and, accordingly, holders of one or more classes of the
Certificates of the related series bear (1) the risk of delay in distributions
while a deficiency judgment against the borrower is obtained and (2) the risk of
loss if the deficiency judgment is not realized upon. Moreover, deficiency
judgments may not be available in certain jurisdictions or the Mortgage Loan may
be nonrecourse.
The rights of the Trust Fund (and therefore the Certificateholders), as
beneficiary under a junior deed of trust or as mortgagee under a junior
mortgage, are subordinate to those of the mortgagee or beneficiary under the
senior mortgage or deed of trust, including the prior rights of the senior
mortgagee or beneficiary to receive rents, hazard insurance and condemnation
proceeds and to cause the property securing the Mortgage Loan to be sold upon
default of the mortgagor or trustor, thereby extinguishing the junior
mortgagee's or junior beneficiary's lien unless the Master Servicer asserts its
subordinate interest in a property in foreclosure litigation or satisfies the
defaulted senior loan. As discussed more fully below, in many states a junior
mortgagee or beneficiary may satisfy a defaulted senior loan in full, adding the
amounts expended to the balance due on the junior loan. Absent a provision in
the senior mortgage, no notice of default is required to be given to the junior
mortgagee.
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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 mortgage or beneficiary may determine. Thus, in the event
improvements on the property are 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 to the extent the
junior mortgage or deed of trust so provides. 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 loan agreement up to a "credit limit"
amount stated in the recorded mortgage.
SUBORDINATE FINANCING
The terms of certain of the Mortgage Loans may not restrict the ability of
the borrower to use the Mortgaged Property as security for one or more
additional loans, or such restrictions may be unenforceable. Where a borrower
encumbers a 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. Moreover, if the subordinate financing
permits recourse to the borrower (as is frequently the case) and the senior loan
does not, a borrower may have more incentive to repay sums due on the
subordinate loan. Second, acts of the senior lender that 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 any
existing junior lender is harmed 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 or
delay the taking of action by the senior lender. Moreover, the bankruptcy of a
junior lender may operate to stay foreclosure or similar proceedings by the
senior lender.
DEFAULT INTEREST AND LIMITATIONS ON PREPAYMENTS
Forms of notes and mortgages used by lenders may contain provisions
obligating the mortgagor to pay a late charge or additional interest if payments
are not timely made, and in some circumstances may provide for
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prepayment fees or yield maintenance penalties if the obligation is paid prior
to maturity or prohibit such prepayment for a specified period. In certain
states, there are or may be specific limitations upon the late charges which a
lender may collect from a mortgagor for delinquent payments. Certain states also
limit the amounts that a lender may collect from a mortgagor as an additional
charge if the loan is prepaid. The enforceability under the laws of a number of
states and the Bankruptcy Code of provisions providing for prepayment fees of
penalties upon, or prohibition of, an involuntary prepayment is unclear, and no
assurance can be given that, at the time a prepayment premium is required to be
made on a Mortgage Loan in connection with an involuntary prepayment, the
obligation to make such payment, or the provisions of any such prohibition, will
be enforceable under applicable state law. The absence of a restraint on
prepayment, particularly with respect to Mortgage Loans having higher Mortgage
Rates, may increase the likelihood of refinancing or other early retirements of
the Mortgage Loans.
APPLICABILITY OF USURY LAWS
Title V of the Depository Institutions Deregulation and Monetary Control
Act of 1980 ("Title V") provides that state usury limitations shall not apply to
certain types of residential (including multifamily) first mortgage loans
originated by certain lenders after March 31, 1980. Title V 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.
No Mortgage Loan originated in any state in which application of Title V
has been expressly rejected or a provision limiting discount points or other
charges has been adopted, will (if originated after that rejection or adoption)
be eligible for inclusion in a 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 are to 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 borrower's
counsel has rendered an opinion that such choice of law provision would be given
effect.
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
(i.e., a nursing or convalescent home or hospital), result in a failure to
realize the full principal amount of the related Mortgage Loan.
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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SOLDIERS' AND SAILORS' CIVIL RELIEF ACT OF 1940
Under the terms of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended (the "Relief Act"), a borrower who enters military service after the
origination of such borrower's mortgage loan (including a borrower who was in
reserve status and is called to active duty after origination of the Mortgage
Loan), 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. The Relief Act applies to
individuals 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
individuals who enter military service (including reservists who are called to
active duty) after origination of the related mortgage loan, no information can
be provided as to the number of loans with individuals as borrowers that may be
affected by the Relief Act. Application of the Relief Act would adversely
affect, for an indeterminate period of time, the ability of a Master Servicer or
Special Servicer to collect full amounts of interest on certain of the Mortgage
Loans. Any shortfalls in interest collections resulting from the application of
the Relief Act would result in a reduction of the amounts distributable to the
holders of the related series of Certificates, and would not be covered by
advances or, unless otherwise specified in the related Prospectus Supplement,
any form of Credit Support provided in connection with such Certificates. In
addition, the Relief Act imposes limitations that would impair the ability of
the Master Servicer or Special 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 month period thereafter.
FORFEITURES IN DRUG AND RICO PROCEEDINGS
Federal law provides that property owned by persons convicted of
drug-related crimes or of criminal violations of the Racketeer Influenced and
Corrupt Organizations ("RICO") statute can be seized by the government if the
property was used in, or purchased with the proceeds of, such crimes. Under
procedures contained in the comprehensive Crime Control Act of 1984 (the "Crime
Control Act"), the government may seize the property even before conviction. The
government must publish notice of the forfeiture proceeding and may give notice
to all parties "known to have an alleged interest in the property", including
the holders of mortgage loans.
A lender may avoid forfeiture of its interest in the property if it
establishes that: (1) its mortgage was executed and recorded before commission
of the crime upon which the forfeiture is based, or (2) the lender was, at the
time of execution of the mortgage, "reasonably without cause to believe" that
the property was used in, or purchased with the proceeds of, illegal drug or
RICO activities.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following general discussion of the anticipated material federal income
tax consequences of the purchase, ownership and disposition of Offered
Certificates of any series thereof, to the extent it relates to matters of law
or legal conclusions with respect thereto, represents the opinion of counsel to
the Depositor with respect to that series on the material matters associated
with such consequences, subject to any qualifications set forth herein. Counsel
to the Depositor for each series will be Cadwalader, Wickersham & Taft, and a
copy of the legal opinion of such counsel rendered in connection with any series
of Certificates will be filed by the Depositor with the Commission on a Current
Report on Form 8-K within 15 days after the Closing Date for such series of
Certificates. This discussion is directed primarily to Certificateholders that
hold the Certificates as "capital assets" within the meaning of Section 1221 of
the Internal Revenue Code of 1986, as amended (the "Code") (although portions
thereof may also apply to Certificateholders who do not hold Certificates as
"capital assets") and it does not purport to discuss all federal income tax
consequences that may be applicable to the individual circumstances of
particular investors, some of which (such as banks, insurance companies and
foreign investors) may be subject to special treatment under the Code. Further,
the authorities on which this discussion, and the opinion referred to below, are
based are subject to change or differing interpretations, which could apply
retroactively. Prospective investors should note that no rulings have been or
will be sought
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from the Internal Revenue Service (the "IRS") with respect to any of the federal
income tax consequences discussed below, and no assurance can be given the IRS
will not take contrary positions. In addition to the federal income tax
consequences described herein, potential investors are advised to consider the
state and local tax consequences, if any, of the purchase, ownership and
disposition of Offered Certificates. See "State and Other Tax Consequences".
Certificateholders are advised to consult their tax advisors concerning the
federal, state, local or other tax consequences to them of the purchase,
ownership and disposition of Offered Certificates.
The following discussion addresses securities of two general types: (1)
certificates ("REMIC Certificates") representing interests in a Trust Fund, or a
portion thereof, that the REMIC Administrator will elect to have treated as a
real estate mortgage investment conduit ("REMIC") under Sections 860A through
860G (the "REMIC Provisions") of the Code, and (2) Grantor Trust Certificates
representing interests in a Trust Fund ("Grantor Trust Fund") as to which no
such election will be made. The Prospectus Supplement for each series of
Certificates will indicate whether a REMIC election (or elections) will be made
for the related Trust Fund and, if such an election is to be made, will identify
all "regular interests" and "residual interests" in the REMIC. For purposes of
this tax discussion, references to a "Certificateholder" or a "holder" are to
the beneficial owner of a Certificate.
The following discussion is limited in applicability to Offered
Certificates. Moreover, this discussion applies only to the extent that Mortgage
Assets held by a Trust Fund consist solely of Mortgage Loans. To the extent that
other Mortgage Assets, including REMIC certificates and mortgage pass-through
certificates, are to be held by a Trust Fund, the tax consequences associated
with the inclusion of such assets will be disclosed in the related Prospectus
Supplement. In addition, if Cash Flow Agreements other than guaranteed
investment contracts are included in a Trust Fund, the anticipated material tax
consequences associated with such Cash Flow Agreements also will be discussed in
the related Prospectus Supplement. See "Description of the Trust Funds -- Cash
Flow Agreements".
Furthermore, the following discussion is based in part upon the rules
governing original issue discount that are set forth in Sections 1271-1273 and
1275 of the Code and in the Treasury regulations issued thereunder (the "OID
Regulations"), and in part upon the REMIC Provisions and the Treasury
regulations issued thereunder (the "REMIC Regulations"). The OID Regulations do
not adequately address certain issues relevant to, and in some instances provide
that they are not applicable to, securities such as the Certificates.
REMICS
Classification of REMICs. Upon the issuance of each series of REMIC
Certificates, counsel to the Depositor will give its opinion generally to the
effect that, assuming compliance with all provisions of the related Pooling and
Servicing Agreement, the related Trust Fund (or each applicable portion thereof)
will qualify as a REMIC and the REMIC Certificates offered with respect thereto
will be considered to evidence ownership of REMIC Regular Certificates or REMIC
Residual Certificates in that REMIC within the meaning of the REMIC Provisions.
The following general discussion of the anticipated federal income tax
consequences of the purchase, ownership and disposition of REMIC Certificates,
to the extent it relates to matters of law or legal conclusions with respect
thereto, represents the opinion of counsel to the Depositor for the applicable
series as specified in the related Prospectus Supplement, subject to any
qualifications set forth herein. In addition, counsel to the Depositor have
prepared or reviewed the statements in this Prospectus under the heading
"Certain Federal Income Tax Consequences -- REMICs," and are of the opinion that
such statements are correct in all material respects. Such statements are
intended as an explanatory discussion of the possible effects of the
classification of any Trust Fund (or applicable portion thereof) as a REMIC for
federal income tax purposes on investors generally and of related tax matters
affecting investors generally, but do not purport to furnish information in the
level of detail or with the attention to an investor's specific tax
circumstances that would be provided by an investor's own tax advisor.
Accordingly, each investor is advised to consult its own tax advisors with
regard to the tax consequences to it of investing in REMIC Certificates.
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If an entity electing to be treated as a REMIC fails to comply with one or
more of the ongoing requirements of the Code for such status during any taxable
year, the Code provides that the entity will not be treated as a REMIC for such
year and thereafter. In that event, such entity may be taxable as a corporation
under Treasury regulations, and the related REMIC Certificates may not be
accorded the status or given the tax treatment described below. Although the
Code authorizes the Treasury Department to issue regulations providing relief in
the event of an inadvertent termination of REMIC status, no such regulations
have been issued. Any such relief, moreover, may be accompanied by sanctions,
such as the imposition of a corporate tax on all or a portion of the Trust
Fund's income for the period in which the requirements for such status are not
satisfied. The Pooling and Servicing Agreement with respect to each REMIC will
include provisions designed to maintain the Trust Fund's status as a REMIC under
the REMIC Provisions. It is not anticipated that the status of any Trust Fund as
a REMIC will be inadvertently terminated.
Characterization of Investments in REMIC Certificates. In general, unless
otherwise provided in the related Prospectus Supplement, the REMIC Certificates
will be "real estate assets" within the meaning of Section 856(c)(4)(A) of the
Code and assets described in Section 7701(a)(19)(C) of the Code in the same
proportion that the assets of the REMIC underlying such Certificates would be so
treated. However, to the extent that the REMIC assets constitute mortgages on
property not used for residential or certain other prescribed purposes, the
REMIC Certificates will not be treated as assets qualifying under Section
7701(a)(19)(C). Moreover, if 95% or more of the assets of the REMIC qualify for
any of the foregoing characterizations at all times during a calendar year, the
REMIC Certificates will qualify for the corresponding status in their entirety
for that calendar year. Interest (including original issue discount) on the
REMIC Regular Certificates and income allocated to the REMIC Residual
Certificates will be interest described in Section 856(c)(3)(B) of the Code to
the extent that such Certificates are treated as "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code. In addition, the REMIC Regular
Certificates will be "qualified mortgages" for a REMIC within the meaning of
Section 860G(a)(3) of the Code and "permitted assets" for a financial asset
securitization investment trust within the meaning of Section 860L(c) of the
Code. The determination as to the percentage of the REMIC's assets that
constitute assets described in the foregoing sections of the Code will be made
with respect to each calendar quarter based on the average adjusted basis of
each category of the assets held by the REMIC during such calendar quarter. The
REMIC Administrator will report those determinations to Certificateholders in
the manner and at the times required by applicable Treasury regulations.
Tiered REMIC Structures. For certain series of REMIC Certificates, two or
more separate elections may be made to treat designated portions of the related
Trust Fund as REMICs ("Tiered REMICs") for federal income tax purposes. As to
each such series of REMIC Certificates, in the opinion of counsel to the
Depositor, assuming compliance with all provisions of the related Pooling and
Servicing Agreement, the Tiered REMICs will each qualify as a REMIC and the
REMIC Certificates issued by the Tiered REMICs, will be considered to evidence
ownership of REMIC Regular Certificates or REMIC Residual Certificates in the
related REMIC within the meaning of the REMIC Provisions.
Solely for purposes of determining whether the REMIC Certificates will be
"real estate assets" within the meaning of Section 856(c)(4)(A) of the Code and
"loans secured by an interest in real property" under Section 7701(a)(19)(C) of
the Code, and whether the income on such Certificates is interest described in
Section 856(c)(3)(B) of the Code, the Tiered REMICs will be treated as one
REMIC.
Taxation of Owners of REMIC Regular Certificates.
General. Except as otherwise stated in this discussion, REMIC Regular
Certificates will be treated for federal income tax purposes as debt instruments
issued by the REMIC and not as ownership interests in the REMIC or its assets.
Moreover, holders of REMIC Regular Certificates that otherwise report income
under a cash method of accounting will be required to report income with respect
to REMIC Regular Certificates under an accrual method.
Original Issue Discount. Certain REMIC Regular Certificates may be issued
with "original issue discount" within the meaning of Section 1273(a) of the
Code. Any holders of REMIC Regular Certificates
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issued with original issue discount generally will be required to include
original issue discount in income as it accrues, in accordance with the
"constant yield" method described below, in advance of the receipt of the cash
attributable to such income. In addition, Section 1272(a)(6) of the Code
provides special rules applicable to REMIC Regular Certificates and certain
other debt instruments issued with original issue discount. Regulations have not
been issued under that section.
The Code requires that a reasonable prepayment assumption be used with
respect to Mortgage Loans held by a REMIC in computing the accrual of original
issue discount on REMIC Regular Certificates issued by that REMIC, and that
adjustments be made in the amount and rate of accrual of such discount to
reflect differences between the actual prepayment rate and the prepayment
assumption. The prepayment assumption is to be determined in a manner prescribed
in Treasury regulations; as noted above, those regulations have not been issued.
The Conference Committee Report accompanying the Tax Reform Act of 1986 (the
"Committee Report") indicates that the regulations will provide that the
prepayment assumption used with respect to a REMIC Regular Certificate must be
the same as that used in pricing the initial offering of such REMIC Regular
Certificate. The prepayment assumption (the "Prepayment Assumption") used in
reporting original issue discount for each series of REMIC Regular Certificates
will be consistent with this standard and will be disclosed in the related
Prospectus Supplement. However, neither the Depositor nor any other person will
make any representation that the Mortgage Loans will in fact prepay at a rate
conforming to the Prepayment Assumption or at any other rate.
The original issue discount, if any, on a REMIC Regular Certificate will be
the excess of its stated redemption price at maturity over its issue price. The
issue price of a particular class of REMIC Regular Certificates will be the
first cash price at which a substantial amount of REMIC Regular Certificates of
that class is sold (excluding sales to bond houses, brokers and underwriters).
If less than a substantial amount of a particular class of REMIC Regular
Certificates is sold for cash on or prior to the date of their initial issuance
(the "Closing Date"), the issue price for such class will be the fair market
value of such class on the Closing Date. Under the OID Regulations, the stated
redemption price of a REMIC Regular Certificate is equal to the total of all
payments to be made on such Certificate other than "qualified stated interest".
"Qualified stated interest" is interest that is unconditionally payable at least
annually (during the entire term of the instrument) at a single fixed rate, or
at a "qualified floating rate", an "objective rate", a combination of a single
fixed rate and one or more "qualified floating rates" or one "qualified inverse
floating rate", or a combination of "qualified floating rates" that does not
operate in a manner that accelerates or defers interest payments on such REMIC
Regular Certificate.
In the case of REMIC Regular Certificates bearing adjustable interest
rates, the determination of the total amount of original issue discount and the
timing of the inclusion thereof will vary according to the characteristics of
such REMIC Regular Certificates. If the original issue discount rules apply to
such Certificates, the related Prospectus Supplement will describe the manner in
which such rules will be applied with respect to those Certificates in preparing
information returns to the Certificateholders and the IRS.
Certain classes of the REMIC Regular Certificates may provide for the first
interest payment with respect to such Certificates to be made more than one
month after the date of issuance, a period which is longer than the subsequent
monthly intervals between interest payments. Assuming the "accrual period" (as
defined below) for original issue discount is each monthly period that ends on
the day prior to a Distribution Date, in some cases, as a consequence of this
"long first accrual period", some or all interest payments may be required to be
included in the stated redemption price of the REMIC Regular Certificate and
accounted for as original issue discount. Because interest on REMIC Regular
Certificates must in any event be accounted for under an accrual method,
applying this analysis would result in only a slight difference in the timing of
the inclusion in income of the yield on the REMIC Regular Certificates.
In addition, if the accrued interest to be paid on the first Distribution
Date is computed with respect to a period that begins prior to the Closing Date,
a portion of the purchase price paid for a REMIC Regular Certificate will
reflect such accrued interest. In such cases, information returns provided to
the Certificateholders and the IRS will be based on the position that the
portion of the purchase price paid for the interest accrued with respect to
periods prior to the Closing Date is treated as part of the overall cost of such
REMIC
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Regular Certificate (and not as a separate asset the cost of which is recovered
entirely out of interest received on the next Distribution Date) and that
portion of the interest paid on the first Distribution Date in excess of
interest accrued for a number of days corresponding to the number of days from
the Closing Date to the first Distribution Date should be included in the stated
redemption price of such REMIC Regular Certificate. However, the OID Regulations
state that all or some portion of such accrued interest may be treated as a
separate asset the cost of which is recovered entirely out of interest paid on
the first Distribution Date. It is unclear how an election to do so would be
made under the OID Regulations and whether such an election could be made
unilaterally by a Certificateholder.
Notwithstanding the general definition of original issue discount, original
issue discount on a REMIC Regular Certificate will be considered to be de
minimis if it is less than 0.25% of the stated redemption price of the REMIC
Regular Certificate multiplied by its weighted average maturity. For this
purpose, the weighted average maturity of the REMIC Regular Certificate is
computed as the sum of the amounts determined, as to each payment included in
the stated redemption price of such REMIC Regular Certificate, by multiplying
(i) the number of complete years (rounding down for partial years) from the
issue date until such payment is expected to be made (presumably taking into
account the Prepayment Assumption) by (ii) a fraction, the numerator of which is
the amount of the payment, and the denominator of which is the stated redemption
price at maturity of such REMIC Regular Certificate. Under the OID Regulations,
original issue discount of only a de minimis amount (other than de minimis
original issue discount attributable to a so-called "teaser" interest rate or an
initial interest holiday) will be included in income as each payment of stated
principal is made, based on the product of the total amount of such de minimis
original issue discount and a fraction, the numerator of which is the amount of
such principal payment and the denominator of which is the outstanding stated
principal amount of the REMIC Regular Certificate. The OID Regulations also
would permit a Certificateholder to elect to accrue de minimis original issue
discount into income currently based on a constant yield method. See
"-- Taxation of Owners of REMIC Regular Certificates -- Market Discount" below
for a description of such election under the OID Regulations.
If original issue discount on a REMIC Regular Certificate is in excess of a
de minimis amount, the holder of such Certificate must include in ordinary gross
income the sum of the "daily portions" of original issue discount for each day
during its taxable year on which it held such REMIC Regular Certificate,
including the purchase date but excluding the disposition date. In the case of
an original holder of a REMIC Regular Certificate, the daily portions of
original issue discount will be determined as follows.
As to each "accrual period", that is, unless otherwise stated in the
related Prospectus Supplement, each period that begins on a date that
corresponds to a Distribution Date (or in the case of the first such period,
begins on the Closing Date) and ends on the day preceding the immediately
following Distribution Date, a calculation will be made of the portion of the
original issue discount that accrued during such accrual period. The portion of
original issue discount that accrues in any accrual period will equal the
excess, if any, of (1) the sum of (a) the present value, as of the end of the
accrual period, of all of the distributions remaining to be made on the REMIC
Regular Certificate, if any, in future periods and (b) the distributions made on
such REMIC Regular Certificate during the accrual period of amounts included in
the stated redemption price, over (2) the adjusted issue price of such REMIC
Regular Certificate at the beginning of the accrual period. The present value of
the remaining distributions referred to in the preceding sentence will be
calculated (1) assuming that distributions on the REMIC Regular Certificate will
be received in future periods based on the Mortgage Loans being prepaid at a
rate equal to the Prepayment Assumption, (2) using a discount rate equal to the
original yield to maturity of the Certificate and (3) taking into account events
(including actual prepayments) that have occurred before the close of the
accrual period. For these purposes, the original yield to maturity of the
Certificate will be calculated based on its issue price and assuming that
distributions on the Certificate will be made in all accrual periods based on
the Mortgage Loans being prepaid at a rate equal to the Prepayment Assumption.
The adjusted issue price of a REMIC Regular Certificate at the beginning of any
accrual period will equal the issue price of such Certificate, increased by the
aggregate amount of original issue discount that accrued with respect to such
Certificate in prior accrual periods, and reduced by the amount of any
distributions made on such REMIC Regular Certificate in prior accrual periods of
amounts included in the stated redemption price. The original issue discount
accruing during any accrual period,
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computed as described above, will be allocated ratably to each day during the
accrual period to determine the daily portion of original issue discount for
such day.
A subsequent purchaser of a REMIC Regular Certificate that purchases such
Certificate at a cost (excluding any portion of such cost attributable to
accrued qualified stated interest) less than its remaining stated redemption
price will also be required to include in gross income the daily portions of any
original issue discount with respect to such Certificate. However, each such
daily portion will be reduced, if such cost is in excess of its "adjusted issue
price", in proportion to the ratio such excess bears to the aggregate original
issue discount remaining to be accrued on such REMIC Regular Certificate. The
adjusted issue price of a REMIC Regular Certificate on any given day equals the
sum of (1) the adjusted issue price (or, in the case of the first accrual
period, the issue price) of such Certificate at the beginning of the accrual
period which includes such day and (2) the daily portions of original issue
discount for all days during such accrual period prior to such day.
Market Discount. A Certificateholder that purchases a REMIC Regular
Certificate at a market discount, that is, in the case of a REMIC Regular
Certificate issued without original issue discount, at a purchase price less
than its remaining stated principal amount, or in the case of a REMIC Regular
Certificate issued with original issue discount, at a purchase price less than
its adjusted issue price will recognize gain upon receipt of each distribution
representing stated redemption price. In particular, under Section 1276 of the
Code such a Certificateholder generally will be required to allocate the portion
of each such distribution representing stated redemption price first to accrued
market discount not previously included in income, and to recognize ordinary
income to that extent. A Certificateholder may elect to include market discount
in income currently as it accrues rather than including it on a deferred basis
in accordance with the foregoing. If made, such election will apply to all
market discount bonds acquired by such Certificateholder on or after the first
day of the first taxable year to which such election applies. In addition, the
OID Regulations permit a Certificateholder to elect to accrue all interest and
discount (including de minimis market or original issue discount) in income as
interest, and to amortize premium, based on a constant yield method. If such an
election were made with respect to a REMIC Regular Certificate with market
discount, the Certificateholder would be deemed to have made an election to
include currently market discount in income with respect to all other debt
instruments having market discount that such Certificateholder acquires during
the taxable year of the election or thereafter, and possibly previously acquired
instruments. Similarly, a Certificateholder that made this election for a
Certificate that is acquired at a premium would be deemed to have made an
election to amortize bond premium with respect to all debt instruments having
amortizable bond premium that such Certificateholder owns or acquires. See
"-- Taxation of Owners of REMIC Regular Certificates -- Premium" below. Each of
these elections to accrue interest, discount and premium with respect to a
Certificate on a constant yield method or as interest would be irrevocable
except with the approval of the IRS.
However, market discount with respect to a REMIC Regular Certificate will
be considered to be de minimis for purposes of Section 1276 of the Code if such
market discount is less than 0.25% of the remaining stated redemption price of
such REMIC Regular Certificate multiplied by the number of complete years to
maturity remaining after the date of its purchase. In interpreting a similar
rule with respect to original issue discount on obligations payable in
installments, the OID Regulations refer to the weighted average maturity of
obligations, and it is likely that the same rule will be applied with respect to
market discount, presumably taking into account the Prepayment Assumption. If
market discount is treated as de minimis under this rule, it appears that the
actual discount would be treated in a manner similar to original issue discount
of a de minimis amount. See "-- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount" above. Such treatment would result in
discount being included in income at a slower rate than discount would be
required to be included in income using the method described above.
Section 1276(b)(3) of the Code specifically authorizes the Treasury
Department to issue regulations providing for the method for accruing market
discount on debt instruments, the principal of which is payable in more than one
installment. Until regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. The Committee Report indicates
that in each accrual period market discount on REMIC Regular Certificates should
accrue, at the Certificateholder's option: (1) on the basis of a constant yield
method, (2) in the case of a REMIC Regular Certificate issued without original
issue discount, in an
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amount that bears the same ratio to the total remaining market discount as the
stated interest paid in the accrual period bears to the total amount of stated
interest remaining to be paid on the REMIC Regular Certificate as of the
beginning of the accrual period, or (3) in the case of a REMIC Regular
Certificate issued with original issue discount, in an amount that bears the
same ratio to the total remaining market discount as the original issue discount
accrued in the accrual period bears to the total original issue discount
remaining on the REMIC Regular Certificate at the beginning of the accrual
period. Moreover, the Prepayment Assumption used in calculating the accrual of
original issue discount is also used in calculating the accrual of market
discount. Because the regulations referred to in this paragraph have not been
issued, it is not possible to predict what effect such regulations might have on
the tax treatment of a REMIC Regular Certificate purchased at a discount in the
secondary market.
To the extent that REMIC Regular Certificates provide for monthly or other
periodic distributions throughout their term, the effect of these rules may be
to require market discount to be includible in income at a rate that is not
significantly slower than the rate at which such discount would accrue if it
were original issue discount. Moreover, in any event a holder of a REMIC Regular
Certificate generally will be required to treat a portion of any gain on the
sale or exchange of such 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.
Further, under Section 1277 of the Code a holder of a REMIC Regular
Certificate may be required to defer a portion of its interest deductions for
the taxable year attributable to any indebtedness incurred or continued to
purchase or carry a REMIC Regular Certificate purchased with market discount.
For these purposes, the de minimis rule referred to above applies. Any such
deferred interest expense would not exceed the market discount that accrues
during such taxable year and is, in general, allowed as a deduction not later
than the year in which such market discount is includible in income. If such
holder elects to include market discount in income currently as it accrues on
all market discount instruments acquired by such holder in that taxable year or
thereafter, the interest deferral rule described above will not apply.
Premium. A REMIC Regular Certificate purchased at a cost (excluding any
portion of such cost attributable to accrued qualified stated interest) greater
than its remaining stated redemption price will be considered to be purchased at
a premium. The holder of such a REMIC Regular Certificate may elect under
Section 171 of the Code to amortize such premium under the constant yield method
over the life of the Certificate. If made, such an election will apply to all
debt instruments having amortizable bond premium that the holder owns or
subsequently acquires. Amortizable premium will be treated as an offset to
interest income on the related debt instrument, rather than as a separate
interest deduction. The OID Regulations also permit Certificateholders to elect
to include all interest, discount and premium in income based on a constant
yield method, further treating the Certificateholder as having made the election
to amortize premium generally. See "-- Taxation of Owners of REMIC Regular
Certificates -- Market Discount" above. Although final Treasury regulations
issued under Section 171 of the Code do not by their terms apply to prepayable
obligations such as REMIC Regular Certificates, the Committee Report states that
the same rules that apply to accrual of market discount (which rules will
require use of a Prepayment Assumption in accruing market discount with respect
to REMIC Regular Certificates without regard to whether such Certificates have
original issue discount) will also apply in amortizing bond premium.
Realized Losses. Under Section 166 of the Code, both corporate holders of
the REMIC Regular Certificates and noncorporate holders of the REMIC Regular
Certificates that acquire such Certificates in connection with a trade or
business should be allowed to deduct, as ordinary losses, any losses sustained
during a taxable year in which their Certificates become wholly or partially
worthless as the result of one or more realized losses on the Mortgage Loans.
However, it appears that a noncorporate holder that does not acquire a REMIC
Regular Certificate in connection with a trade or business will not be entitled
to deduct a loss under Section 166 of the Code until such holder's Certificate
becomes wholly worthless (i.e., until its Certificate Balance has been reduced
to zero) and that the loss will be characterized as a short-term capital loss.
Each holder of a REMIC Regular Certificate will be required to accrue
interest and original issue discount with respect to such Certificate, without
giving effect to any reductions in distributions attributable to
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defaults or delinquencies on the Mortgage Loans or the Underlying Certificates
until it can be established that any such reduction ultimately will not be
recoverable. As a result, the amount of taxable income reported in any period by
the holder of a REMIC Regular Certificate could exceed the amount of economic
income actually realized by the holder in such period. Although the holder of a
REMIC Regular Certificate eventually will recognize a loss or reduction in
income attributable to previously accrued and included income that, as the
result of a realized loss, ultimately will not be realized, the law is unclear
with respect to the timing and character of such loss or reduction in income.
Taxation of Owners of REMIC Residual Certificates.
General. Although a REMIC is a separate entity for federal income tax
purposes, a REMIC generally is not subject to entity-level taxation, except with
regard to prohibited transactions and certain other transactions. See
"-- Prohibited Transactions Tax and Other Taxes" below. Rather, the taxable
income or net loss of a REMIC is generally taken into account by the holder of
the REMIC Residual Certificates. Accordingly, the REMIC Residual Certificates
will be subject to tax rules that differ significantly from those that would
apply if the REMIC Residual Certificates were treated for federal income tax
purposes as direct ownership interests in the Mortgage Loans or as debt
instruments issued by the REMIC.
A holder of a REMIC Residual Certificate (a "REMIC Residual
Certificateholder") generally will be required to report its daily portion of
the taxable income or, subject to the limitations noted in this discussion, the
net loss of the REMIC for each day during a calendar quarter that such holder
owned such REMIC Residual Certificate. For this purpose, the taxable income or
net loss of the REMIC will be allocated to each day in the calendar quarter
ratably using a "30 days per month/90 days per quarter/360 days per year"
convention unless otherwise disclosed in the related Prospectus Supplement. The
daily amounts so allocated will then be allocated among the REMIC Residual
Certificateholders in proportion to their respective ownership interests on such
day. Any amount included in the gross income or allowed as a loss of any REMIC
Residual Certificateholder by virtue of this paragraph will be treated as
ordinary income or loss. The taxable income of the REMIC will be determined
under the rules described below in "-- Taxable Income of the REMIC" and will be
taxable to the REMIC Residual Certificateholders without regard to the timing or
amount of cash distributions by the REMIC until the REMIC's termination.
Ordinary income derived from REMIC Residual Certificates will be "portfolio
income" for purposes of the taxation of taxpayers subject to limitations under
Section 469 of the Code on the deductibility of "passive losses".
A holder of a REMIC Residual Certificate that purchased such Certificate
from a prior holder of such Certificate also will be required to report on its
federal income tax return amounts representing its daily share of the taxable
income (or net loss) of the REMIC for each day that it holds such REMIC Residual
Certificate. Those daily amounts generally will equal the amounts of taxable
income or net loss determined as described above. The Committee Report indicates
that certain modifications of the general rules may be made, by regulations,
legislation or otherwise to reduce (or increase) the income of a REMIC Residual
Certificateholder that purchased such REMIC Residual Certificate from a prior
holder of such Certificate at a price greater than (or less than) the adjusted
basis (as defined below) such REMIC Residual Certificate would have had in the
hands of an original holder of such Certificate. The REMIC Regulations, however,
do not provide for any such modifications.
Any payments received by a holder of a REMIC Residual Certificate from the
seller of such Certificate in connection with the acquisition of such REMIC
Residual Certificate will be taken into account in determining the income of
such holder for federal income tax purposes. Although it appears likely that any
such payment would be includible in income immediately upon its receipt, the IRS
might assert that such payment should be included in income over time according
to an amortization schedule or according to some other method. Because of the
uncertainty concerning the treatment of such payments, holders of REMIC Residual
Certificates should consult their tax advisors concerning the treatment of such
payments for income tax purposes.
The amount of income REMIC Residual Certificateholders will be required to
report (or the tax liability associated with such income) may exceed the amount
of cash distributions received from the REMIC for the
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corresponding period. Consequently, REMIC Residual Certificateholders should
have other sources of funds sufficient to pay any federal income taxes due as a
result of their ownership of REMIC Residual Certificates or unrelated deductions
against which income may be offset, subject to the rules relating to "excess
inclusions" and "noneconomic" residual interests discussed below. The fact that
the tax liability associated with the income allocated to REMIC Residual
Certificateholders may exceed the cash distributions received by such REMIC
Residual Certificateholders for the corresponding period may significantly
adversely affect such REMIC Residual Certificateholders' after-tax rate of
return. Such disparity between income and distributions may not be offset by
corresponding losses or reductions of income attributable to the REMIC Residual
Certificateholder until subsequent tax years and, then, may not be completely
offset due to changes in the Code, tax rates or character of the income or loss.
Taxable Income of the REMIC. The taxable income of the REMIC will equal
the income from the Mortgage Loans (including interest, market discount and, if
applicable, original issue discount and less premium) and other assets of the
REMIC plus any cancellation of indebtedness income due to the allocation of
realized losses to REMIC Regular Certificates, less the deductions allowed to
the REMIC for interest (including original issue discount and reduced by any
premium on issuance) on the REMIC Regular Certificates (and any other class of
REMIC Certificates constituting "regular interests" in the REMIC not offered
hereby), amortization of any premium on the Mortgage Loans, bad debt losses with
respect to the Mortgage Loans and, except as described below, for servicing,
administrative and other expenses.
For purposes of determining its taxable income, the REMIC will have an
initial aggregate basis in its assets equal to the sum of the issue prices of
all REMIC Certificates (or, if a class of REMIC Certificates is not sold
initially, such Class's fair market value). Such aggregate basis will be
allocated among the Mortgage Loans and the other assets of the REMIC in
proportion to their respective fair market values. The issue price of any REMIC
Certificates offered hereby will be determined in the manner described above
under "-- Taxation of Owners of REMIC Regular Certificates -- Original Issue
Discount". The issue price of a REMIC Certificate received in exchange for an
interest in the Mortgage Loans or other property will equal the fair market
value of such interests in the Mortgage Loans or other property. Accordingly, if
one or more classes of REMIC Certificates are retained initially rather than
sold, the REMIC Administrator may be required to estimate the fair market value
of such interests in order to determine the basis of the REMIC in the Mortgage
Loans and other property held by the REMIC.
The method of accrual by the REMIC of original issue discount income and
market discount income with respect to Mortgage Loans that it holds will be
equivalent to the method for accruing original issue discount income for holders
of REMIC Regular Certificates (that is, under the constant yield method taking
into account the Prepayment Assumption), but without regard to the de minimis
rule applicable to REMIC Regular Certificates. However, a REMIC that acquires
loans at a market discount must include such market discount in income
currently, as it accrues, on a constant yield basis. See "-- Taxation of Owners
of REMIC Regular Certificates" above, which describes a method for accruing such
discount income that is analogous to that required to be used by a REMIC as to
Mortgage Loans with market discount that it holds.
A Mortgage Loan will be deemed to have been acquired with discount (or
premium) to the extent that the REMIC's basis therein, determined as described
in the preceding paragraph, is less than (or greater than) its stated redemption
price. Any such discount will be includible in the income of the REMIC as it
accrues, in advance of receipt of the cash attributable to such income, under a
method similar to the method described above for accruing original issue
discount on the REMIC Regular Certificates. It is anticipated that each REMIC
will elect under Section 171 of the Code to amortize any premium on the Mortgage
Loans. Premium on any Mortgage Loan to which such election applies may be
amortized under a constant yield method, presumably taking into account a
Prepayment Assumption. Further, such an election would not apply to any Mortgage
Loan originated on or before September 27, 1985. Instead, premium on such a
Mortgage Loan should be allocated among the principal payments thereon and be
deductible by the REMIC as those payments become due or upon the prepayment of
such Mortgage Loan.
A REMIC will be allowed deductions for interest (including original issue
discount) on the REMIC Regular Certificates (including any other class of REMIC
Certificates constituting "regular interests" in the
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REMIC not offered hereby) equal to the deductions that would be allowed if the
REMIC Regular Certificates (including any other class of REMIC Certificates
constituting "regular interests" in the REMIC not offered hereby) were
indebtedness of the REMIC. Original issue discount will be considered to accrue
for this purpose as described above under "-- Taxation of Owners of REMIC
Regular Certificates -- Original Issue Discount", except that the de minimis
rule and the adjustments for subsequent holders of REMIC Regular Certificates
(including any other class of REMIC Certificates constituting "regular
interests" in the REMIC not offered hereby) described therein will not apply.
If a class of REMIC Regular Certificates is issued at a price in excess of
the stated redemption price of such class (such excess "Issue Premium"), the
REMIC will have additional income in each taxable year in an amount equal to the
portion of the Issue Premium that is considered to be amortized or repaid in
that year. Although the matter is not entirely certain, it is likely that Issue
Premium would be amortized under a constant yield method in a manner analogous
to the method of accruing original issue discount described above under
"-- Taxation of Owners of REMIC Regular Certificates -- Original Issue
Discount".
As a general rule, the taxable income of a REMIC will be determined in the
same manner as if the REMIC were an individual having the calendar year as its
taxable year and using the accrual method of accounting. However, no item of
income, gain, loss or deduction allocable to a prohibited transaction will be
taken into account. See "-- Prohibited Transactions Tax and Other Taxes" below.
Further, the limitation on miscellaneous itemized deductions imposed on
individuals by Section 67 of the Code (which allows such deductions only to the
extent they exceed in the aggregate two percent of the taxpayer's adjusted gross
income) will not be applied at the REMIC level so that the REMIC will be allowed
deductions for servicing, administrative and other noninterest expenses in
determining its taxable income. All such expenses will be allocated as a
separate item to the holders of REMIC Certificates, subject to the limitation of
Section 67 of the Code. See "-- Possible Pass-Through of Miscellaneous Itemized
Deductions" below. If the deductions allowed to the REMIC exceed its gross
income for a calendar quarter, such excess will be the net loss for the REMIC
for that calendar quarter.
Basis Rules, Net Losses and Distributions. The adjusted basis of a REMIC
Residual Certificate will be equal to the amount paid for such REMIC Residual
Certificate, increased by amounts included in the income of the REMIC Residual
Certificateholder and decreased (but not below zero) by distributions made, and
by net losses allocated, to such REMIC Residual Certificateholder.
A REMIC Residual Certificateholder is not allowed to take into account any
net loss for any calendar quarter to the extent such net loss exceeds such REMIC
Residual Certificateholder's adjusted basis in its REMIC Residual Certificate as
of the close of such calendar quarter (determined without regard to such net
loss). Any loss that is not currently deductible by reason of this limitation
may be carried forward indefinitely to future calendar quarters and, subject to
the same limitation, may be used only to offset income from the REMIC Residual
Certificate. The ability of REMIC Residual Certificateholders to deduct net
losses may be subject to additional limitations under the Code, as to which
REMIC Residual Certificateholders should consult their tax advisors.
Any distribution on a REMIC Residual Certificate will be treated as a
nontaxable return of capital to the extent it does not exceed the holder's
adjusted basis in such REMIC Residual Certificate. To the extent a distribution
on a REMIC Residual Certificate exceeds such adjusted basis, it will be treated
as gain from the sale of such REMIC Residual Certificate. Holders of certain
REMIC Residual Certificates may be entitled to distributions early in the term
of the related REMIC under circumstances in which their bases in such REMIC
Residual Certificates will not be sufficiently large that such distributions
will be treated as nontaxable returns of capital. Their bases in such REMIC
Residual Certificates will initially equal the amount paid for such REMIC
Residual Certificates and will be increased by their allocable shares of taxable
income of the REMIC. However, such bases increases may not occur until the end
of the calendar quarter, or perhaps the end of the calendar year, with respect
to which such REMIC taxable income is allocated to the REMIC Residual
Certificateholders. To the extent such REMIC Residual Certificateholders'
initial bases are less than the distributions to such REMIC Residual
Certificateholders, and increases in such initial bases either occur after such
distributions or (together with their initial bases) are less than the amount of
such distributions,
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gain will be recognized to such REMIC Residual Certificateholders on such
distributions and will be treated as gain from the sale of their REMIC Residual
Certificates.
The effect of these rules is that a REMIC Residual Certificateholder may
not amortize its basis in a REMIC Residual Certificate, but may only recover its
basis through distributions, through the deduction of any net losses of the
REMIC or upon the sale of its REMIC Residual Certificate. See "-- Sales of REMIC
Certificates" below. For a discussion of possible modifications of these rules
that may require adjustments to income of a holder of a REMIC Residual
Certificate other than an original holder in order to reflect any difference
between the cost of such REMIC Residual Certificate to such REMIC Residual
Certificateholder and the adjusted basis such REMIC Residual Certificate would
have in the hands of an original holder see "-- Taxation of Owners of REMIC
Residual Certificates -- General" above.
Excess Inclusions. Any "excess inclusions" with respect to a REMIC
Residual Certificate will be subject to federal income tax in all events. In
general, the "excess inclusions" with respect to a REMIC Residual Certificate
for any calendar quarter will be the excess, if any, of (1) the daily portions
of REMIC taxable income allocable to such REMIC Residual Certificate over (2)
the sum of the "daily accruals" (as defined below) for each day during such
quarter that such REMIC Residual Certificate was held by such REMIC Residual
Certificateholder. The daily accruals of a REMIC Residual Certificateholder will
be determined by allocating to each day during a calendar quarter its ratable
portion of the product of the "adjusted issue price" of the REMIC Residual
Certificate at the beginning of the calendar quarter and 120% of the "long-term
Federal rate" in effect on the Closing Date. For this purpose, the adjusted
issue price of a REMIC Residual Certificate as of the beginning of any calendar
quarter will be equal to the issue price of the REMIC Residual Certificate,
increased by the sum of the daily accruals for all prior quarters and decreased
(but not below zero) by any distributions made with respect to such REMIC
Residual Certificate before the beginning of such quarter. The issue price of a
REMIC Residual Certificate is the initial offering price to the public
(excluding bond houses and brokers) at which a substantial amount of the REMIC
Residual Certificates were sold. The "long-term Federal rate" is an average of
current yields on Treasury securities with a remaining term of greater than nine
years, computed and published monthly by the IRS.
For REMIC Residual Certificateholders, an excess inclusion (1) will not be
permitted to be offset by deductions, losses or loss carryovers from other
activities, (2) will be treated as "unrelated business taxable income" to an
otherwise tax-exempt organization and (3) will not be eligible for any rate
reduction or exemption under any applicable tax treaty with respect to the 30%
United States withholding tax imposed on distributions to REMIC Residual
Certificateholders that are foreign investors. See, however, "-- Foreign
Investors in REMIC Certificates" below.
In the case of any REMIC Residual Certificates held by a real estate
investment trust, the aggregate excess inclusions with respect to such REMIC
Residual Certificates, reduced (but not below zero) by the real estate
investment trust taxable income (within the meaning of Section 857(b)(2) of the
Code, excluding any net capital gain), will be allocated among the shareholders
of such trust in proportion to the dividends received by such shareholders from
such trust, and any amount so allocated will be treated as an excess inclusion
with respect to a REMIC Residual Certificate as if held directly by such
shareholder. Treasury regulations yet to be issued could apply a similar rule to
regulated investment companies, common trust funds and certain cooperatives; the
REMIC Regulations currently do not address this subject.
Noneconomic REMIC Residual Certificates. Under the REMIC Regulations,
transfers of "noneconomic" REMIC Residual Certificates will be disregarded for
all federal income tax purposes if "a significant purpose of the transfer was to
enable the transferor to impede the assessment or collection of tax". If such
transfer is disregarded, the purported transferor will continue to remain liable
for any taxes due with respect to the income on such "noneconomic" REMIC
Residual Certificate. The REMIC Regulations provide that a REMIC Residual
Certificate is noneconomic unless, based on the Prepayment Assumption and on any
required or permitted clean up calls, or required liquidation provided for in
the REMIC's organizational documents, (1) the present value of the expected
future distributions (discounted using the "applicable Federal rate" for
obligations whose term ends on the close of the last quarter in which excess
inclusions are expected to accrue with respect to the REMIC Residual
Certificate, which rate is computed and published
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monthly by the IRS) on the REMIC Residual Certificate equals at least the
present value of the expected tax on the anticipated excess inclusions, and (2)
the transferor reasonably expects that the transferee will receive distributions
with respect to the REMIC Residual Certificate at or after the time the taxes
accrue on the anticipated excess inclusions in an amount sufficient to satisfy
the accrued taxes. Accordingly, all transfers of REMIC Residual Certificates
that may constitute noneconomic residual interests will be subject to certain
restrictions under the terms of the related Pooling and Servicing Agreement that
are intended to reduce the possibility of any such transfer being disregarded.
Such restrictions will require each party to a transfer to provide an affidavit
that no purpose of such transfer is to impede the assessment or collection of
tax, including certain representations as to the financial condition of the
prospective transferee, as to which the transferor is also required to make a
reasonable investigation to determine such transferee's historic payment of its
debts and ability to continue to pay its debts as they come due in the future.
Prior to purchasing a REMIC Residual Certificate, prospective purchasers should
consider the possibility that a purported transfer of such REMIC Residual
Certificate by such a purchaser to another purchaser at some future date may be
disregarded in accordance with the above-described rules which would result in
the retention of tax liability by such purchaser.
The related Prospectus Supplement will disclose whether offered REMIC
Residual Certificates may be considered "noneconomic" residual interests under
the REMIC Regulations; provided, however, that any disclosure that a REMIC
Residual Certificate will not be considered "noneconomic" will be based upon
certain assumptions, and the Depositor will make no representation that a REMIC
Residual Certificate will not be considered "noneconomic" for purposes of the
above-described rules. See "-- Foreign Investors in REMIC Certificates" below
for additional restrictions applicable to transfers of certain REMIC Residual
Certificates to foreign persons.
Mark-to-Market Rules. On January 4, 1995, the IRS issued final regulations
(the "Mark-to-Market Regulations") 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 owned by 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, any REMIC Residual Certificate acquired on or after January 4, 1995
will not be treated as a security and thus generally may not be marked to
market.
Possible Pass-Through of Miscellaneous Itemized Deductions. Fees and
expenses of a REMIC generally will be allocated to certain types of holders of
the related REMIC Residual Certificates. The applicable Treasury regulations
indicate, however, that in the case of a REMIC that is similar to a single class
grantor trust, all or a portion of such fees and expenses should be allocated to
such types of holders of the related REMIC Regular Certificates. Unless
otherwise stated in the related Prospectus Supplement, such fees and expenses
will be allocated to the related REMIC Residual Certificates in their entirety
and not to the holders of the related REMIC Regular Certificates.
With respect to REMIC Residual Certificates or REMIC Regular Certificates
the holders of which receive an allocation of fees and expenses in accordance
with the preceding discussion, if any holder thereof is an individual, estate or
trust, or a "pass-through entity" beneficially owned by one or more individuals,
estates or trusts, (1) an amount equal to such individual's, estate's or trust's
share of such fees and expenses will be added to the gross income of such holder
and (2) such individual's, estate's or trust's share of such fees and expenses
will be treated as a miscellaneous itemized deduction allowable subject to the
limitation of Section 67 of the Code, which permits such deductions only to the
extent they exceed in the aggregate 2% of a taxpayer's adjusted gross income. In
addition, Section 68 of the Code provides that the amount of itemized deductions
otherwise allowable for an individual whose adjusted gross income exceeds a
specified amount will be reduced by the lesser of (1) 3% of the excess of the
individual's adjusted gross income over such amount or (2) 80% of the amount of
itemized deductions otherwise allowable for the taxable year. The amount of
additional taxable income reportable by REMIC Certificateholders that are
subject to the limitations of either Section 67 or Section 68 of the Code may be
substantial. Furthermore, in determining the alternative minimum taxable income
of such a holder of a REMIC Certificate that is an individual, estate or trust,
or a "pass-through entity" beneficially owned by one or more individuals,
estates or trusts, no deduction will be allowed for such holder's allocable
portion of servicing fees and other miscellaneous itemized deductions of the
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REMIC, even though an amount equal to the amount of such fees and other
deductions will be included in such holder's gross income. Accordingly, such
REMIC Certificates may not be appropriate investments for individuals, estates,
or trusts, or pass-through entities beneficially owned by one or more
individuals, estates or trusts. Such prospective investors should consult with
their tax advisors prior to making an investment in such Certificates.
Sales of REMIC Certificates. If a REMIC Certificate is sold, the selling
Certificateholder will recognize gain or loss equal to the difference between
the amount realized on the sale and its adjusted basis in the REMIC Certificate.
The adjusted basis of a REMIC Regular Certificate generally will equal the cost
of such REMIC Regular Certificate to such Certificateholder, increased by income
reported by such Certificateholder with respect to such REMIC Regular
Certificate (including original issue discount and market discount income) and
reduced (but not below zero) by distributions on such REMIC Regular Certificate
received by such Certificateholder and by any amortized premium. The adjusted
basis of a REMIC Residual Certificate will be determined as described above
under "-- Taxation of Owners of REMIC Residual Certificates -- Basis Rules, Net
Losses and Distributions". Except as provided in the following four paragraphs,
any such gain or loss will be capital gain or loss, provided such REMIC
Certificate is held as a capital asset (generally, property held for investment)
within the meaning of Section 1221 of the Code. The Code as of the date of this
Prospectus provides for a top marginal tax rate of 39.6% for individuals and a
maximum marginal rate for long-term capital gains of individuals of 20% for
property held for more than one year. No such rate differential exists for
corporations. In addition, the distinction between a capital gain or loss and
ordinary income or loss remains relevant for other purposes.
Gain from the sale of a REMIC Regular Certificate that might otherwise be a
capital gain will be treated as ordinary income to the extent such gain does not
exceed the excess, if any, of (1) the amount that would have been includible in
the seller's income with respect to such REMIC Regular Certificate assuming that
income had accrued thereon at a rate equal to 110% of the "applicable Federal
rate" (generally, a rate based on an average of current yields on Treasury
securities having a maturity comparable to that of the Certificate based on the
application of the Prepayment Assumption to such Certificate), determined as of
the date of purchase of such REMIC Regular Certificate, over (2) the amount of
ordinary income actually includible in the seller's income prior to such sale.
In addition, gain recognized on the sale of a REMIC Regular Certificate by a
seller who purchased such REMIC Regular Certificate at a market discount will be
taxable as ordinary income in an amount not exceeding the portion of such
discount that accrued during the period such REMIC Certificate was held by such
holder, reduced by any market discount included in income under the rules
described above under "-- Taxation of Owners of REMIC Regular
Certificates -- Market Discount" and "-- Premium".
REMIC Certificates will be "evidences of indebtedness" within the meaning
of Section 582(c)(1) of the Code, so that gain or loss recognized from the sale
of a REMIC Certificate by a bank or thrift institution to which such section
applies will be ordinary income or loss.
A portion of any gain from the sale of a REMIC Regular Certificate that
might otherwise be capital gain may be treated as ordinary income to the extent
that such Certificate is held as part of a "conversion transaction" within the
meaning of Section 1258 of the Code. A conversion transaction generally is one
in which the taxpayer has taken two or more positions in the same or similar
property that reduce or eliminate market risk, if substantially all of the
taxpayer's return is attributable to the time value of the taxpayer's net
investment in such transaction. The amount of gain so realized in a conversion
transaction that is recharacterized as ordinary income generally will not exceed
the amount of interest that would have accrued on the taxpayer's net investment
at 120% of the appropriate "applicable Federal rate" at the time the taxpayer
enters into the conversion transaction, subject to appropriate reduction for
prior inclusion of interest and other ordinary income items from the
transaction.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include such net
capital gain in total net investment income for the taxable year, for purposes
of the rule that limits the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.
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Except as may be provided in Treasury regulations yet to be issued, if the
seller of a REMIC Residual Certificate reacquires such REMIC Residual
Certificate, or acquires any other residual interest in a REMIC or any similar
interest in a "taxable mortgage pool" (as defined in Section 7701(i) of the
Code) during the period beginning six months before, and ending six months
after, the date of such sale, such sale will be subject to the "wash sale" rules
of Section 1091 of the Code. In that event, any loss realized by the REMIC
Residual Certificateholder on the sale will not be deductible, but instead will
be added to such REMIC Residual Certificateholder's adjusted basis in the
newly-acquired asset.
Prohibited Transactions Tax and Other Taxes. The Code imposes a tax on
REMICs equal to 100% of the net income derived from "prohibited transactions" (a
"Prohibited Transactions Tax"). In general, subject to certain specified
exceptions a prohibited transaction means the disposition of a Mortgage Loan,
the receipt of income from a source other than a Mortgage Loan or certain other
permitted investments, the receipt of compensation for services, or gain from
the disposition of an asset purchased with the payments on the Mortgage Loans
for temporary investment pending distribution on the REMIC Certificates. It is
not anticipated that any REMIC will engage in any prohibited transactions in
which it would recognize a material amount of net income.
In addition, certain contributions to a REMIC made after the day on which
the REMIC issues all of its interests could result in the imposition of a tax on
the REMIC equal to 100% of the value of the contributed property (a
"Contributions Tax"). Each Pooling and Servicing Agreement will include
provisions designed to prevent the acceptance of any contributions that would be
subject to such tax.
REMICs also are 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. "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.
As provided in each Pooling and Servicing Agreement, a REMIC may recognize "net
income from foreclosure property" subject to federal income tax to the extent
that the REMIC Administrator determines that such method of operation will
result in a greater after-tax return to the Trust Fund than any other method of
operation.
Unless otherwise disclosed in the related Prospectus Supplement, it is not
anticipated that any material state or local income or franchise tax will be
imposed on any REMIC.
Unless otherwise stated in the related Prospectus Supplement, and to the
extent permitted by then applicable laws, any Prohibited Transactions Tax or
Contributions Tax will be borne by the related REMIC Administrator, Master
Servicer, Special Servicer, Manager or Trustee, in any case out of its own
funds, provided that such person has sufficient assets to do so, and provided
further that such tax arises out of a breach of such person's obligations under
the related Pooling and Servicing Agreement and in respect of compliance with
applicable laws and regulations. Any such tax not borne by a REMIC
Administrator, a Master Servicer, Special Servicer, Manager or Trustee will be
charged against the related Trust Fund resulting in a reduction in amounts
payable to holders of the related REMIC Certificates.
Tax and Restrictions on Transfers of REMIC Residual Certificates to Certain
Organizations. If a REMIC Residual Certificate is transferred to a
"disqualified organization" (as defined below), a tax would be imposed in an
amount (determined under the REMIC Regulations) equal to the product of (1) the
present value (discounted using the "applicable Federal rate" for obligations
whose term ends on the close of the last quarter in which excess inclusions are
expected to accrue with respect to the REMIC Residual Certificate) of the total
anticipated excess inclusions with respect to such REMIC Residual Certificate
for periods after the transfer and (2) the highest marginal federal income tax
rate applicable to corporations. The anticipated excess inclusions must be
determined as of the date that the REMIC Residual Certificate is transferred and
must be based on events that have occurred up to the time of such transfer, the
Prepayment Assumption and any required or permitted clean up calls or required
liquidation provided for in the REMIC's organizational documents. Such a tax
generally would be imposed on the transferor of the REMIC Residual Certificate,
except that where such transfer is through an agent for a disqualified
organization, the tax would instead be imposed on such agent. However, a
transferor of a REMIC Residual Certificate would in no event be liable for
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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. Moreover, an entity will not qualify as
a REMIC unless there are reasonable arrangements designed to ensure that (1)
residual interests in such entity are not held by disqualified organizations and
(2) information necessary for the application of the tax described herein will
be made available. Restrictions on the transfer of REMIC Residual Certificates
and certain other provisions that are intended to meet this requirement will be
included in each Pooling and Servicing Agreement, and will be discussed in any
Prospectus Supplement relating to the offering of any REMIC Residual
Certificate.
In addition, if a "pass-through entity" (as defined below) includes in
income excess inclusions with respect to a REMIC Residual Certificate, and a
disqualified organization is the record holder of an interest in such entity,
then a tax will be imposed on such entity equal to the product of (1) the amount
of excess inclusions on the REMIC Residual Certificate that are allocable to the
interest in the pass-through entity held by such disqualified organization and
(2) the highest marginal federal income tax rate imposed on corporations. A
pass-through entity will not be subject to this tax for any period, however, if
each record holder of an interest in such pass-through entity furnishes to such
pass-through entity (1) such holder's social security number and a statement
under penalties of perjury that such social security number is that of the
record holder or (2) a statement under penalties of perjury that such record
holder is not a disqualified organization.
For taxable years beginning on or after January 1, 1998, if an "electing
large partnership" holds a REMIC 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, a "disqualified organization" means (1) the United
States, any State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of the foregoing
(but would not include instrumentalities described in Section 168(h)(2)(D) of
the Code or the Federal Home Loan Mortgage Corporation), (2) any organization
(other than a cooperative described in Section 521 of the Code) that is exempt
from federal income tax, unless it is subject to the tax imposed by Section 511
of the Code or (3) any organization described in Section 1381(a)(2)(C) of the
Code. In addition, a "pass-through entity" means any regulated investment
company, real estate investment trust, trust, partnership or certain other
entities described in Section 860E(e)(6) of the Code. In addition, a person
holding an interest in a pass-through entity as a nominee for another person
will, with respect to such interest, be treated as a pass-through entity. For
these purposes, an "electing large partnership" means a partnership (other than
a service partnership or certain commodity pools) having more than 100 members
that has elected to apply certain simplified reporting provisions under the
Code.
Termination. A REMIC will terminate immediately after the Distribution
Date following receipt by the REMIC of the final payment in respect of the
Mortgage Loans or upon a sale of the REMIC's assets following the adoption by
the REMIC of a plan of complete liquidation. The last distribution on a REMIC
Regular Certificate will be treated as a payment in retirement of a debt
instrument. In the case of a REMIC Residual Certificate, if the last
distribution on such REMIC Residual Certificate is less than the REMIC Residual
Certificateholder's adjusted basis in such Certificate, such REMIC Residual
Certificateholder should (but may not) be treated as realizing a loss equal to
the amount of such difference, and such loss may be treated as a capital loss.
Reporting and Other Administrative Matters. Solely for purposes of the
administrative provisions of the Code, the REMIC will be treated as a
partnership and REMIC Residual Certificateholders will be treated as partners.
Unless otherwise stated in the related Prospectus Supplement, the holder of the
largest percentage interest in a class of REMIC Residual Certificates will be
the "tax matters person" with respect to the related REMIC, and the REMIC
Administrator will file REMIC federal income tax returns on behalf of the
related
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REMIC, and will be designated as and will act as agent of, and attorney-in-fact
for, the tax matters person with respect to the REMIC in all respects.
As the tax matters person, the REMIC Administrator, subject to certain
notice requirements and various restrictions and limitations, generally will
have the authority to act on behalf of the REMIC and the REMIC Residual
Certificateholders in connection with the administrative and judicial review of
items of income, deduction, gain or loss of the REMIC, as well as the REMIC's
classification. REMIC Residual Certificateholders generally will be required to
report such REMIC items consistently with their treatment on the related REMIC's
tax return and may in some circumstances be bound by a settlement agreement
between the REMIC Administrator, as tax matters person, and the IRS concerning
any such REMIC item. Adjustments made to the REMIC tax return may require a
REMIC Residual Certificateholder to make corresponding adjustments on its
return, and an audit of the REMIC's tax return, or the adjustments resulting
from such an audit, could result in an audit of a REMIC Residual
Certificateholder's return. No REMIC will be registered as a tax shelter
pursuant to Section 6111 of the Code because it is not anticipated that any
REMIC will have a net loss for any of the first five taxable years of its
existence. Any person that holds a REMIC Residual Certificate as a nominee for
another person may be required to furnish to the related REMIC, in a manner to
be provided in Treasury regulations, the name and address of such person and
other information.
Reporting of interest income, including any original issue discount, with
respect to REMIC Regular Certificates is required annually, and may be required
more frequently under Treasury regulations. These information reports generally
are required to be sent to individual holders of REMIC Regular Interests and the
IRS; holders of REMIC Regular Certificates that are corporations, trusts,
securities dealers and certain other nonindividuals will be provided interest
and original issue discount income information and the information set forth in
the following paragraph upon request in accordance with the requirements of the
applicable regulations. The information must be provided by the later of 30 days
after the end of the quarter for which the information was requested, or two
weeks after the receipt of the request. The REMIC must also comply with rules
requiring a REMIC Regular Certificate issued with original issue discount to
disclose on its face the amount of original issue discount and the issue date,
and requiring such information to be reported to the IRS. Reporting with respect
to REMIC Residual Certificates, including income, excess inclusions, investment
expenses and relevant information regarding qualification of the REMIC's assets
will be made as required under the Treasury regulations, generally on a
quarterly basis.
As applicable, the REMIC Regular Certificate information reports will
include a statement of the adjusted issue price of the REMIC Regular Certificate
at the beginning of each accrual period. In addition, the reports will include
information required by regulations with respect to computing the accrual of any
market discount. Because exact computation of the accrual of market discount on
a constant yield method would require information relating to the holder's
purchase price that the REMIC may not have, such regulations only require that
information pertaining to the appropriate proportionate method of accruing
market discount be provided. See "-- Taxation of Owners of REMIC Regular
Certificates -- Market Discount".
Unless otherwise specified in the related Prospectus Supplement, the
responsibility for complying with the foregoing reporting rules will be borne by
the REMIC Administrator.
Backup Withholding with Respect to REMIC Certificates. Payments of
interest and principal, as well as payments of proceeds from the sale of REMIC
Certificates, may be subject to the "backup withholding tax" under Section 3406
of the Code at a rate of 31% if recipients of such payments fail to furnish to
the payor certain information, including their taxpayer identification numbers,
or otherwise fail to establish an exemption from such tax. Any amounts deducted
and withheld from a distribution to a recipient would be allowed as a credit
against such recipient's federal income tax. Furthermore, certain penalties may
be imposed by the IRS on a recipient of payments that is required to supply
information but that does not do so in the proper manner. The New Regulations,
as described below, will 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.
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Foreign Investors in REMIC Certificates. A REMIC Regular Certificateholder
that is not a U.S. Person (as defined below) and is not subject to federal
income tax as a result of any direct or indirect connection to the United States
in addition to its ownership of a REMIC Regular Certificate will not, unless
otherwise disclosed in the related Prospectus Supplement, be subject to United
States federal income or withholding tax in respect of a distribution on a REMIC
Regular Certificate, provided that the holder complies to the extent necessary
with certain identification requirements (including delivery of a statement,
signed by the Certificateholder under penalties of perjury, certifying that such
Certificateholder is not a U.S. Person and providing the name and address of
such Certificateholder). For these purposes, "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 the income of which is subject to United States
federal income tax regardless of its source, or a trust if a court within the
United States is able to exercise primary supervision over the administration of
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). It is possible that the IRS
may assert that the foregoing tax exemption should not apply with respect to a
REMIC Regular Certificate held by a REMIC Residual Certificateholder that owns
directly or indirectly a 10% or greater interest in the REMIC Residual
Certificates. If the holder does not qualify for exemption, distributions of
interest, including distributions in respect of accrued original issue discount,
to such holder may be subject to a tax rate of 30%, subject to reduction under
any applicable tax treaty.
In addition, the foregoing rules will not apply to exempt a United States
shareholder of a controlled foreign corporation from taxation on such United
States shareholder's allocable portion of the interest income received by such
controlled foreign corporation.
Further, it appears that a REMIC Regular Certificate would not be included
in the estate of a nonresident alien individual and would not be subject to
United States estate taxes. However, Certificateholders who are nonresident
alien individuals should consult their tax advisors concerning this question.
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 will be effective
January 1, 2001. Current withholding certificates 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 tiered partnerships. Non-U.S. Persons should consult their own tax
advisors concerning the application of the certification requirements in the New
Regulations.
Unless otherwise stated in the related Prospectus Supplement, transfers of
REMIC Residual Certificates to investors that are not United States Persons will
be prohibited under the related Pooling and Servicing Agreement.
GRANTOR TRUST FUNDS
Classification of Grantor Trust Funds. With respect to each series of
Grantor Trust Certificates, in the opinion of counsel to the Depositor for such
series, assuming compliance with all provisions of the related Pooling and
Servicing Agreement, the related Grantor Trust Fund will be classified as a
grantor trust under subpart E, part I of subchapter J of the Code and not as a
partnership or an association taxable as a corporation. The following general
discussion of the anticipated federal income tax consequences of the purchase,
ownership and disposition of Grantor Trust Certificates, to the extent it
relates to matters of law or legal conclusions with respect thereto, represents
the opinion of counsel to the Depositor for the applicable series as specified
in the related Prospectus Supplement, subject to any qualifications set forth
herein. In addition, counsel to the Depositor have prepared or reviewed the
statements in this Prospectus under the heading "Certain Federal Income Tax
Consequences -- Grantor Trust Funds," and are of the opinion that
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such statements are correct in all material respects. Such statements are
intended as an explanatory discussion of the possible effects of the
classification of any Grantor Trust Fund as a grantor trust for federal income
tax purposes on investors generally and of related tax matters affecting
investors generally, but do not purport to furnish information in the level of
detail or with the attention to an investor's specific tax circumstances that
would be provided by an investor's own tax advisor. Accordingly, each investor
is advised to consult its own tax advisors with regard to the tax consequences
to it of investing in Grantor Trust Certificates.
For purposes of the following discussion, a Grantor Trust Certificate
representing an undivided equitable ownership interest in the principal of the
Mortgage Loans constituting the related Grantor Trust Fund, together with
interest thereon at a pass-through rate, will be referred to as a "Grantor Trust
Fractional Interest Certificate". A Grantor Trust Certificate representing
ownership of all or a portion of the difference between interest paid on the
Mortgage Loans constituting the related Grantor Trust Fund (net of normal
administration fees) and interest paid to the holders of Grantor Trust
Fractional Interest Certificates issued with respect to such Grantor Trust Fund
will be referred to as a "Grantor Trust Strip Certificate". A Grantor Trust
Strip Certificate may also evidence a nominal ownership interest in the
principal of the Mortgage Loans constituting the related Grantor Trust Fund.
Characterization of Investments in Grantor Trust Certificates.
Grantor Trust Fractional Interest Certificates. In the case of Grantor
Trust Fractional Interest Certificates, unless otherwise disclosed in the
related Prospectus Supplement, counsel to the Depositor will deliver an opinion
that, in general, Grantor Trust Fractional Interest Certificates will represent
interests in (1) "loans . . . secured by an interest in real property" within
the meaning of Section 7701(a)(19)(C)(v) of the Code; (2) "obligation[s]
(including any participation or Certificate of beneficial ownership therein)
which . . . [are] principally secured by an interest in real property" within
the meaning of Section 860G(a)(3) of the Code; and (3) "real estate assets"
within the meaning of Section 856(c)(4)(A) of the Code. In addition, counsel to
the Depositor will deliver an opinion that interest on Grantor Trust Fractional
Interest Certificates will to the same extent be considered "interest on
obligations secured by mortgages on real property or on interests in real
property" within the meaning of Section 856(c)(3)(B) of the Code.
Grantor Trust Strip Certificates. Even if Grantor Trust Strip Certificates
evidence an interest in a Grantor Trust Fund consisting of Mortgage Loans that
are "loans . . . secured by an interest in real property" within the meaning of
Section 7701(a)(19)(C)(v) of the Code and "real estate assets" within the
meaning of Section 856(c)(4)(A) of the Code, and the interest on which is
"interest on obligations secured by mortgages on real property" within the
meaning of Section 856(c)(3)(B) of the Code, it is unclear whether the Grantor
Trust Strip Certificates, and the income therefrom, will be so characterized.
However, the policies underlying such sections (namely, to encourage or require
investments in mortgage loans by thrift institutions and real estate investment
trusts) may suggest that such characterization is appropriate. Counsel to the
Depositor will not deliver any opinion on these questions. Prospective
purchasers to which such characterization of an investment in Grantor Trust
Strip Certificates is material should consult their tax advisors regarding
whether the Grantor Trust Strip Certificates, and the income therefrom, will be
so characterized.
The Grantor Trust Strip Certificates will be "obligation[s] (including any
participation or Certificate of beneficial ownership therein) which . . . [are]
principally secured by an interest in real property" within the meaning of
Section 860G(a)(3)(A) of the Code.
Taxation of Owners of Grantor Trust Fractional Interest Certificates.
General. Holders of a particular series of Grantor Trust Fractional
Interest Certificates generally will be required to report on their federal
income tax returns their shares of the entire income from the Mortgage Loans
(including amounts used to pay reasonable servicing fees and other expenses) and
will be entitled to deduct their shares of any such reasonable servicing fees
and other expenses. Because of stripped interests, market or original issue
discount, or premium, the amount includible in income on account of a Grantor
Trust Fractional Interest Certificate may differ significantly from the amount
distributable thereon representing interest on the Mortgage Loans. Under Section
67 of the Code, an individual, estate or trust holding a Grantor
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Trust Fractional Interest Certificate directly or through certain pass-through
entities will be allowed a deduction for such reasonable servicing fees and
expenses only to the extent that the aggregate of such holder's miscellaneous
itemized deductions exceeds two percent of such holder's adjusted gross income.
In addition, Section 68 of the Code provides that the amount of itemized
deductions otherwise allowable for an individual whose adjusted gross income
exceeds a specified amount will be reduced by the lesser of (1) 3% of the excess
of the individual's adjusted gross income over such amount or (2) 80% of the
amount of itemized deductions otherwise allowable for the taxable year. The
amount of additional taxable income reportable by holders of Grantor Trust
Fractional Interest Certificates who are subject to the limitations of either
Section 67 or Section 68 of the Code may be substantial. Further,
Certificateholders (other than corporations) subject to the alternative minimum
tax may not deduct miscellaneous itemized deductions in determining such
holder's alternative minimum taxable income. Although it is not entirely clear,
it appears that in transactions in which multiple classes of Grantor Trust
Certificates (including Grantor Trust Strip Certificates) are issued, such fees
and expenses should be allocated among the classes of Grantor Trust Certificates
using a method that recognizes that each such class benefits from the related
services. In the absence of statutory or administrative clarification as to the
method to be used, it currently is intended to base information returns or
reports to the IRS and Certificateholders on a method that allocates such
expenses among classes of Grantor Trust Certificates with respect to each period
based on the distributions made to each such class during that period.
The federal income tax treatment of Grantor Trust Fractional Interest
Certificates of any series will depend on whether they are subject to the
"stripped bond" rules of Section 1286 of the Code. Grantor Trust Fractional
Interest Certificates may be subject to those rules if (1) a class of Grantor
Trust Strip Certificates is issued as part of the same series of Certificates or
(2) the Depositor or any of its affiliates retains (for its own account or for
purposes of resale) a right to receive a specified portion of the interest
payable on a Mortgage Asset. Further, the IRS has ruled that an unreasonably
high servicing fee retained by a seller or servicer will be treated as a
retained ownership interest in mortgages that constitutes a stripped coupon. The
related Prospectus Supplement will include information regarding servicing fees
paid to a Master Servicer, a Special Servicer, any Sub-Servicer or their
respective affiliates.
If Stripped Bond Rules Apply. If the stripped bond rules apply, each
Grantor Trust Fractional Interest Certificate will be treated as having been
issued with "original issue discount" within the meaning of Section 1273(a) of
the Code, subject, however, to the discussion below regarding the treatment of
certain stripped bonds as market discount bonds and the discussion regarding de
minimis market discount. See "-- Taxation of Owners of Grantor Trust Fractional
Interest Certificates -- Market Discount" below. Under the stripped bond rules,
the holder of a Grantor Trust Fractional Interest Certificate (whether a cash or
accrual method taxpayer) will be required to report interest income from its
Grantor Trust Fractional Interest Certificate for each month in an amount equal
to the income that accrues on such Certificate in that month calculated under a
constant yield method, in accordance with the rules of the Code relating to
original issue discount.
The original issue discount on a Grantor Trust Fractional Interest
Certificate will be the excess of such Certificate's stated redemption price
over its issue price. The issue price of a Grantor Trust Fractional Interest
Certificate as to any purchaser will be equal to the price paid by such
purchaser of the Grantor Trust Fractional Interest Certificate. The stated
redemption price of a Grantor Trust Fractional Interest Certificate will be the
sum of all payments to be made on such Certificate, other than "qualified stated
interest", if any, as well as such Certificate's share of reasonable servicing
fees and other expenses. See "-- Taxation of Owners of Grantor Trust Fractional
Interest Certificates -- If Stripped Bond Rules Do Not Apply" for a definition
of "qualified stated interest". In general, the amount of such income that
accrues in any month would equal the product of such holder's adjusted basis in
such Grantor Trust Fractional Interest Certificate at the beginning of such
month (see "-- Sales of Grantor Trust Certificates" below) and the yield of such
Grantor Trust Fractional Interest Certificate to such holder. Such yield would
be computed as the rate (compounded based on the regular interval between
payment dates) that, if used to discount the holder's share of future payments
on the Mortgage Loans, would cause the present value of those future payments to
equal the price at which the holder purchased such Certificate. In computing
yield under the stripped bond rules, a Certificateholder's share of future
payments on the Mortgage Loans will not include any payments made in respect of
any
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ownership interest in the Mortgage Loans retained by the Depositor, the Master
Servicer, the Special Servicer, any Sub-Servicer or their respective affiliates,
but will include such Certificateholder's share of any reasonable servicing fees
and other expenses.
Section 1272(a)(6) of the Code requires (1) the use of a reasonable
prepayment assumption in accruing original issue discount and (2) adjustments in
the accrual of original issue discount when prepayments do not conform to the
prepayment assumption, with respect to certain categories of debt instruments,
and regulations could be adopted applying those provisions to the Grantor Trust
Fractional Interest Certificates. It is unclear whether those provisions would
be applicable to the Grantor Trust Fractional Interest Certificates or whether
use of a reasonable prepayment assumption may be required or permitted without
reliance on these rules. It is also uncertain, if a prepayment assumption is
used, whether the assumed prepayment rate would be determined based on
conditions at the time of the first sale of the Grantor Trust Fractional
Interest Certificate or, with respect to any holder, at the time of purchase of
the Grantor Trust Fractional Interest Certificate by that holder.
Certificateholders are advised to consult their tax advisors concerning
reporting original issue discount in general and, in particular, whether a
prepayment assumption should be used in reporting original issue discount with
respect to Grantor Trust Fractional Interest Certificates.
In the case of a Grantor Trust Fractional Interest Certificate acquired at
a price equal to the principal amount of the Mortgage Loans allocable to such
Certificate, the use of a prepayment assumption generally would not have any
significant effect on the yield used in calculating accruals of interest income.
In the case, however, of a Grantor Trust Fractional Interest Certificate
acquired at a discount or premium (that is, at a price less than or greater than
such principal amount, respectively), the use of a reasonable prepayment
assumption would increase or decrease such yield, and thus accelerate or
decelerate, respectively, the reporting of income.
If a prepayment assumption is not used, then when a Mortgage Loan prepays
in full, the holder of a Grantor Trust Fractional Interest Certificate acquired
at a discount or a premium generally will recognize ordinary income or loss
equal to the difference between the portion of the prepaid principal amount of
the Mortgage Loan that is allocable to such Certificate and the portion of the
adjusted basis of such Certificate that is allocable to such Certificateholder's
interest in the Mortgage Loan. If a prepayment assumption is used, it appears
that no separate item of income or loss should be recognized upon a prepayment.
Instead, a prepayment should be treated as a partial payment of the stated
redemption price of the Grantor Trust Fractional Interest Certificate and
accounted for under a method similar to that described for taking account of
original issue discount on REMIC Regular Certificates. See
"-- REMICs -- Taxation of Owners of REMIC Regular Certificates -- Original Issue
Discount" above. It is unclear whether any other adjustments would be required
to reflect differences between an assumed prepayment rate and the actual rate of
prepayments.
In the absence of statutory or administrative clarification, it is
currently intended to base information reports or returns to the IRS and
Certificateholders in transactions subject to the stripped bond rules on a
Prepayment Assumption that will be disclosed in the related Prospectus
Supplement and on a constant yield computed using a representative initial
offering price for each class of Certificates. However, neither the Depositor
nor any other person will make any representation that the Mortgage Loans will
in fact prepay at a rate conforming to such Prepayment Assumption or any other
rate and Certificateholders should bear in mind that the use of a representative
initial offering price will mean that such information returns or reports, even
if otherwise accepted as accurate by the IRS, will in any event be accurate only
as to the initial Certificateholders of each series who bought at that price.
Under Treasury regulations Section 1.1286-1, certain stripped bonds are to
be treated as market discount bonds and, accordingly, any purchaser of such a
bond is to account for any discount on the bond as market discount rather than
original issue discount. This treatment only applies, however, if immediately
after the most recent disposition of the bond by a person stripping one or more
coupons from the bond and disposing of the bond or coupon (1) there is no
original issue discount (or only a de minimis amount of original issue discount)
or (2) the annual stated rate of interest payable on the original bond is no
more than one percentage point lower than the gross interest rate payable on the
original mortgage loan (before subtracting any servicing
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fee or any stripped coupon). If interest payable on a Grantor Trust Fractional
Interest Certificate is more than one percentage point lower than the gross
interest rate payable on the Mortgage Loans, the related Prospectus Supplement
will disclose that fact. If the original issue discount or market discount on a
Grantor Trust Fractional Interest Certificate determined under the stripped bond
rules is less than 0.25% of the stated redemption price multiplied by the
weighted average maturity of the Mortgage Loans, then such original issue
discount or market discount will be considered to be de minimis. Original issue
discount or market discount of only a de minimis amount will be included in
income in the same manner as de minimis original issue and market discount
described in "-- Taxation of Owners of Grantor Trust Fractional Interest
Certificates -- If Stripped Bond Rules Do Not Apply" and "-- Market Discount"
below.
If Stripped Bond Rules Do Not Apply. Subject to the discussion below on
original issue discount, if the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, the Certificateholder will be required to
report its share of the interest income on the Mortgage Loans in accordance with
such Certificateholder's normal method of accounting. The original issue
discount rules will apply, even if the stripped bond rules do not apply, to a
Grantor Trust Fractional Interest Certificate to the extent it evidences an
interest in Mortgage Loans issued with original issue discount.
The original issue discount, if any, on the Mortgage Loans will equal the
difference between the stated redemption price of such Mortgage Loans and their
issue price. For a definition of "stated redemption price," see "-- Taxation of
Owners of REMIC Regular Certificates -- Original Issue Discount" above. In
general, the issue price of a Mortgage Loan will be the amount received by the
borrower from the lender under the terms of the Mortgage Loan, less any "points"
paid by the borrower, and the stated redemption price of a Mortgage Loan will
equal its principal amount, unless the Mortgage Loan provides for an initial
"teaser," or below-market interest rate. The determination as to whether
original issue discount will be considered to be de minimis will be calculated
using the same test as in the REMIC discussion. See "-- Taxation of Owners of
REMIC Regular Certificates -- Original Issue Discount" above.
In the case of Mortgage Loans bearing adjustable or variable interest
rates, the related Prospectus Supplement will describe the manner in which such
rules will be applied with respect to those Mortgage Loans by the Trustee or
Master Servicer, as applicable, in preparing information returns to the
Certificateholders and the IRS.
If original issue discount is in excess of a de minimis amount, all
original issue discount with respect to a Mortgage Loan will be required to be
accrued and reported in income each month, based on a constant yield. The OID
Regulations suggest that no prepayment assumption is appropriate in computing
the yield on prepayable obligations issued with original issue discount. In the
absence of statutory or administrative clarification, it currently is not
intended to base information reports or returns to the IRS and
Certificateholders on the use of a prepayment assumption in transactions not
subject to the stripped bond rules. However, Section 1272(a)(6) of the Code may
require that a prepayment assumption be made in computing yield with respect to
all mortgage-backed securities. Certificateholders are advised to consult their
own tax advisors concerning whether a prepayment assumption should be used in
reporting original issue discount with respect to Grantor Trust Fractional
Interest Certificates. Certificateholders should refer to the related Prospectus
Supplement with respect to each series to determine whether and in what manner
the original issue discount rules will apply to Mortgage Loans in such series.
A purchaser of a Grantor Trust Fractional Interest Certificate that
purchases such Grantor Trust Fractional Interest Certificate at a cost less than
such Certificate's allocable portion of the aggregate remaining stated
redemption price of the Mortgage Loans held in the related Trust Fund will also
be required to include in gross income such Certificate's daily portions of any
original issue discount with respect to such Mortgage Loans. However, each such
daily portion will be reduced, if the cost of such Grantor Trust Fractional
Interest Certificate to such purchaser is in excess of such Certificate's
allocable portion of the aggregate "adjusted issue prices" of the Mortgage Loans
held in the related Trust Fund, approximately in proportion to the ratio such
excess bears to such Certificate's allocable portion of the aggregate original
issue discount remaining to be accrued on such Mortgage Loans. The adjusted
issue price of a Mortgage Loan on any given day equals the sum of (1) the
adjusted issue price (or, in the case of the first accrual period, the
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issue price) of such Mortgage Loan at the beginning of the accrual period that
includes such day and (2) the daily portions of original issue discount for all
days during such accrual period prior to such day. The adjusted issue price of a
Mortgage Loan at the beginning of any accrual period will equal the issue price
of such Mortgage Loan, increased by the aggregate amount of original issue
discount with respect to such Mortgage Loan that accrued in prior accrual
periods, and reduced by the amount of any payments made on such Mortgage Loan in
prior accrual periods of amounts included in its stated redemption price.
Unless otherwise provided in the related Prospectus Supplement, the Trustee
or Master Servicer, as applicable, will provide to any holder of a Grantor Trust
Fractional Interest Certificate such information as such holder may reasonably
request from time to time with respect to original issue discount accruing on
Grantor Trust Fractional Interest Certificates. See "-- Grantor Trust Reporting"
below.
Market Discount. If the stripped bond rules do not apply to a Grantor
Trust Fractional Interest Certificate, a Certificateholder may be subject to the
market discount rules of Sections 1276 through 1278 of the Code to the extent an
interest in a Mortgage Loan is considered to have been purchased at a "market
discount", that is, in the case of a Mortgage Loan issued without original issue
discount, at a purchase price less than its remaining stated redemption price
(as defined above), or in the case of a Mortgage Loan issued with original issue
discount, at a purchase price less than its adjusted issue price (as defined
above). If market discount is in excess of a de minimis amount (as described
below), the holder generally will be required to include in income in each month
the amount of such discount that has accrued (under the rules described in the
next paragraph) through such month that has not previously been included in
income, but limited, in the case of the portion of such discount that is
allocable to any Mortgage Loan, to the payment of stated redemption price on
such Mortgage Loan that is received by (or, in the case of accrual basis
Certificateholders, due to) the Trust Fund in that month. A Certificateholder
may elect to include market discount in income currently as it accrues (under a
constant yield method based on the yield of the Certificate to such holder)
rather than including it on a deferred basis in accordance with the foregoing
under rules similar to those described in "-- Taxation of Owners of REMIC
Regular Interests -- Market Discount" above.
Section 1276(b)(3) of the Code authorized the Treasury Department to issue
regulations providing for the method for accruing market discount on debt
instruments, the principal of which is payable in more than one installment.
Until such time as regulations are issued by the Treasury Department, certain
rules described in the Committee Report apply. Under those rules, in each
accrual period market discount on the Mortgage Loans should accrue, at the
holder's option: (1) on the basis of a constant yield method, (2) in the case of
a Mortgage Loan issued without original issue discount, in an amount that bears
the same ratio to the total remaining market discount as the stated interest
paid in the accrual period bears to the total stated interest remaining to be
paid on the Mortgage Loan as of the beginning of the accrual period, or (3) in
the case of a Mortgage Loan issued with original issue discount, in an amount
that bears the same ratio to the total remaining market discount as the original
issue discount accrued in the accrual period bears to the total original issue
discount remaining at the beginning of the accrual period. The prepayment
assumption, if any, used in calculating the accrual of original issue discount
is to be used in calculating the accrual of market discount. The effect of using
a prepayment assumption could be to accelerate the reporting of such discount
income. Because the regulations referred to in this paragraph have not been
issued, it is not possible to predict what effect such regulations might have on
the tax treatment of a Mortgage Loan purchased at a discount in the secondary
market.
Because the Mortgage Loans will provide for periodic payments of stated
redemption price, such discount may be required to be included in income at a
rate that is not significantly slower than the rate at which such discount would
be included in income if it were original issue discount.
Market discount with respect to Mortgage Loans may be considered to be de
minimis and, if so, will be includible in income under de minimis rules similar
to those described above in "-- REMICs -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount" above within the exception that it is
less likely that a prepayment assumption will be used for purposes of such rules
with respect to the Mortgage Loans.
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Further, under the rules described above in "-- REMICs -- Taxation of
Owners of REMIC Regular Certificates -- Market Discount", any discount that is
not original issue discount and exceeds a de minimis amount may require the
deferral of interest expense deductions attributable to accrued market discount
not yet includible in income, unless an election has been made to report market
discount currently as it accrues. This rule applies without regard to the
origination dates of the Mortgage Loans.
Premium. If a Certificateholder is treated as acquiring the underlying
Mortgage Loans at a premium, that is, at a price in excess of their remaining
stated redemption price, such Certificateholder may elect under Section 171 of
the Code to amortize using a constant yield method the portion of such premium
allocable to Mortgage Loans originated after September 27, 1985. Amortizable
premium is treated as an offset to interest income on the related debt
instrument, rather than as a separate interest deduction. However, premium
allocable to Mortgage Loans originated before September 28, 1985 or to Mortgage
Loans for which an amortization election is not made, should be allocated among
the payments of stated redemption price on the Mortgage Loan and be allowed as a
deduction as such payments are made (or, for a Certificateholder using the
accrual method of accounting, when such payments of stated redemption price are
due).
It is unclear whether a prepayment assumption should be used in computing
amortization of premium allowable under Section 171 of the Code. If premium is
not subject to amortization using a prepayment assumption and a Mortgage Loan
prepays in full, the holder of a Grantor Trust Fractional Interest Certificate
acquired at a premium should recognize a loss equal to the difference between
the portion of the prepaid principal amount of the Mortgage Loan that is
allocable to the Certificate and the portion of the adjusted basis of the
Certificate that is allocable to the Mortgage Loan. If a prepayment assumption
is used to amortize such premium, it appears that such a loss would be
unavailable. Instead, if a prepayment assumption is used, a prepayment should be
treated as a partial payment of the stated redemption price of the Grantor Trust
Fractional Interest Certificate and accounted for under a method similar to that
described for taking account of original issue discount on REMIC Regular
Certificates. See "-- REMICs -- Taxation of Owners of REMIC Regular
Certificates -- Original Issue Discount" above. It is unclear whether any other
adjustments would be required to reflect differences between the prepayment
assumption and the actual rate of prepayments.
Taxation of Owners of Grantor Trust Strip Certificates. The "stripped
coupon" rules of Section 1286 of the Code will apply to the Grantor Trust Strip
Certificates. Except as described above in "-- Taxation of Owners of Grantor
Trust Fractional Interest Certificates -- If Stripped Bond Rules Apply", no
regulations or published rulings under Section 1286 of the Code have been issued
and some uncertainty exists as to how it will be applied to securities such as
the Grantor Trust Strip Certificates. Accordingly, holders of Grantor Trust
Strip Certificates should consult their tax advisors concerning the method to be
used in reporting income or loss with respect to such Certificates.
The OID Regulations do not apply to "stripped coupons", although they
provide general guidance as to how the original issue discount sections of the
Code will be applied. In addition, the discussion below is subject to the
discussion under "-- Possible Application of Proposed Contingent Payment Rules"
below and assumes that the holder of a Grantor Trust Strip Certificate will not
own any Grantor Trust Fractional Interest Certificates.
Under the stripped coupon rules, it appears that original issue discount
will be required to be accrued in each month on the Grantor Trust Strip
Certificates based on a constant yield method. In effect, each holder of Grantor
Trust Strip Certificates would include as interest income in each month an
amount equal to the product of such holder's adjusted basis in such Grantor
Trust Strip Certificate at the beginning of such month and the yield of such
Grantor Trust Strip Certificate to such holder. Such yield would be calculated
based on the price paid for that Grantor Trust Strip Certificate by its holder
and the payments remaining to be made thereon at the time of the purchase, plus
an allocable portion of the servicing fees and expenses to be paid with respect
to the Mortgage Loans. See "-- Taxation of Owners of Grantor Trust Fractional
Interest Certificates -- If Stripped Bond Rules Apply" above.
As noted above, Section 1272(a)(6) of the Code requires that a prepayment
assumption be used in computing the accrual of original issue discount with
respect to certain categories of debt instruments, and
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that adjustments be made in the amount and rate of accrual of such discount when
prepayments do not conform to such prepayment assumption. Regulations could be
adopted applying those provisions to the Grantor Trust Strip Certificates. It is
unclear whether those provisions would be applicable to the Grantor Trust Strip
Certificates or whether use of a prepayment assumption may be required or
permitted in the absence of such regulations. It is also uncertain, if a
prepayment assumption is used, whether the assumed prepayment rate would be
determined based on conditions at the time of the first sale of the Grantor
Trust Strip Certificate or, with respect to any subsequent holder, at the time
of purchase of the Grantor Trust Strip Certificate by that holder.
The accrual of income on the Grantor Trust Strip Certificates will be
significantly slower if a prepayment assumption is permitted to be made than if
yield is computed assuming no prepayments. In the absence of statutory or
administrative clarification, it currently is intended to base information
returns or reports to the IRS and Certificateholders on the Prepayment
Assumption disclosed in the related Prospectus Supplement and on a constant
yield computed using a representative initial offering price for each class of
Certificates. However, neither the Depositor nor any other person will make any
representation that the Mortgage Loans will in fact prepay at a rate conforming
to the Prepayment Assumption or at any other rate and Certificateholders should
bear in mind that the use of a representative initial offering price will mean
that such information returns or reports, even if otherwise accepted as accurate
by the IRS, will in any event be accurate only as to the initial
Certificateholders of each series who bought at that price. Prospective
purchasers of the Grantor Trust Strip Certificates should consult their tax
advisors regarding the use of the Prepayment Assumption.
It is unclear under what circumstances, if any, the prepayment of a
Mortgage Loan will give rise to a loss to the holder of a Grantor Trust Strip
Certificate. If a Grantor Trust Strip Certificate is treated as a single
instrument (rather than an interest in discrete mortgage loans) and the effect
of prepayments is taken into account in computing yield with respect to such
Grantor Trust Strip Certificate, it appears that no loss may be available as a
result of any particular prepayment unless prepayments occur at a rate faster
than the Prepayment Assumption. However, if a Grantor Trust Strip Certificate is
treated as an interest in discrete Mortgage Loans, or if the Prepayment
Assumption is not used, then when a Mortgage Loan is prepaid, the holder of a
Grantor Trust Strip Certificate should be able to recognize a loss equal to the
portion of the adjusted issue price of the Grantor Trust Strip Certificate that
is allocable to such Mortgage Loan.
Possible Application of Contingent Payment Rules. The coupon stripping
rules' general treatment of stripped coupons is to regard them as newly issued
debt instruments in the hands of each purchaser. To the extent that payments on
the Grantor Trust Strip Certificates would cease if the Mortgage Loans were
prepaid in full, the Grantor Trust Strip Certificates could be considered to be
debt instruments providing for contingent payments. Under the OID Regulations,
debt instruments providing for contingent payments are not subject to the same
rules as debt instruments providing for noncontingent payments. Regulations have
been promulgated regarding contingent payment debt instruments (the "Contingent
Payment Regulations"), but it appears that Grantor Trust Strip Certificates, due
to their similarity to other mortgage-backed securities (such as REMIC regular
interests and debt instruments subject to Section 1272(a)(6) of the Code) that
are expressly excepted from the application of the Contingent Payment
Regulations, may be excepted from such regulations. Like the OID Regulations,
the Contingent Payment Regulations do not specifically address securities, such
as the Grantor Trust Strip Certificates, that are subject to the stripped bond
rules of Section 1286 of the Code.
If the contingent payment rules similar to those under the OID Regulations
were to apply, the holder of a Grantor Trust Strip Certificate would be required
to apply a "noncontingent bond method." Under the "noncontingent bond method,"
the issuer of a Grantor Trust Strip Certificate determines a projected payment
schedule. Holders of Grantor Trust Strip Certificates are bound by the issuer's
projected payment schedule. The projected payment schedule consists of all
noncontingent payments and a projected amount for each contingent payment based
on the comparable yield (as described below) of the Grantor Trust Strip
Certificate. The projected amount of each payment is determined so that the
projected payment schedule reflects the projected yield. The projected amount of
each payment must reasonably reflect the relative expected values of the
payments to be received by the holders of a Grantor Trust Strip Certificate. The
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comparable yield referred to above is a rate that, as of the issue date,
reflects the yield at which the issuer would issue a fixed rate debt instrument
with terms and conditions similar to the contingent payment debt instrument,
including general market conditions, the credit quality of the issuer, and the
terms and conditions of the Mortgage Loans. The holder of a Grantor Trust Strip
Certificate would be required to include as interest income in each month the
adjusted issue price of the Grantor Trust Strip Certificate at the beginning of
the period multiplied by the comparable yield.
Certificateholders should consult their tax advisors concerning the
possible application of the contingent payment rules to the Grantor Trust Strip
Certificates.
Sales of Grantor Trust Certificates. Any gain or loss, equal to the
difference between the amount realized on the sale or exchange of a Grantor
Trust Certificate and its adjusted basis, recognized on such sale or exchange of
a Grantor Trust Certificate by an investor who holds such Grantor Trust
Certificate as a capital asset, will be capital gain or loss, except to the
extent of accrued and unrecognized market discount, which will be treated as
ordinary income, and (in the case of banks and other financial institutions)
except as provided under Section 582(c) of the Code. The adjusted basis of a
Grantor Trust Certificate generally will equal its cost, increased by any income
reported by the seller (including original issue discount and market discount
income) and reduced (but not below zero) by any previously reported losses, any
amortized premium and by any distributions with respect to such Grantor Trust
Certificate. The Code as of the date of this Prospectus generally provides for
maximum tax rates of noncorporate taxpayers of 39.6% on ordinary income and 20%
on long-term capital gains (generally, property held for more than one year). No
such rate differential exists for corporations. In addition, the distinction
between a capital gain or loss and ordinary income or loss remains relevant for
other purposes.
Gain or loss from the sale of a Grantor Trust Certificate may be partially
or wholly ordinary and not capital in certain circumstances. Gain attributable
to accrued and unrecognized market discount will be treated as ordinary income,
as will gain or loss recognized by banks and other financial institutions
subject to Section 582(c) of the Code. Furthermore, a portion of any gain that
might otherwise be capital gain may be treated as ordinary income to the extent
that the Grantor Trust Certificate is held as part of a "conversion transaction"
within the meaning of Section 1258 of the Code. A conversion transaction
generally is one in which the taxpayer has taken two or more positions in the
same or similar property that reduce or eliminate market risk, if substantially
all of the taxpayer's return is attributable to the time value of the taxpayer's
net investment in such transaction. The amount of gain realized in a conversion
transaction that is recharacterized as ordinary income generally will not exceed
the amount of interest that would have accrued on the taxpayer's net investment
at 120% of the appropriate "applicable Federal rate" (which rate is computed and
published monthly by the IRS) at the time the taxpayer enters into the
conversion transaction, subject to appropriate reduction for prior inclusion of
interest and other ordinary income items from the transaction.
Finally, a taxpayer may elect to have net capital gain taxed at ordinary
income rates rather than capital gains rates in order to include such net
capital gain in total net investment income for that taxable year, for purposes
of the rule that limits the deduction of interest on indebtedness incurred to
purchase or carry property held for investment to a taxpayer's net investment
income.
Grantor Trust Reporting. Unless otherwise provided in the related
Prospectus Supplement, the Trustee or Master Servicer, as applicable, will
furnish to each holder of a Grantor Trust Certificate with each distribution a
statement setting forth the amount of such distribution allocable to principal
on the underlying Mortgage Loans and to interest thereon at the related
Pass-Through Rate. In addition, the Trustee or Master Servicer, as applicable,
will furnish, within a reasonable time after the end of each calendar year, to
each holder of a Grantor Trust Certificate who was such a holder at any time
during such year, information regarding the amount of servicing compensation
received by the Master Servicer, the Special Servicer or any Sub-Servicer, and
such other customary factual information as the Depositor or the reporting party
deems necessary or desirable to enable holders of Grantor Trust Certificates to
prepare their tax returns and will furnish comparable information to the IRS as
and when required by law to do so. Because the rules for accruing discount and
amortizing premium with respect to the Grantor Trust Certificates are uncertain
in various respects, there is no assurance the IRS will agree with the Trustee's
or Master Servicer's, as the case
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may be, information reports of such items of income and expense. Moreover, such
information reports, even if otherwise accepted as accurate by the IRS, will in
any event be accurate only as to the initial Certificateholders that bought
their Certificates at the representative initial offering price used in
preparing such reports.
Backup Withholding. In general, the rules described above in
"-- REMICs -- Backup Withholding with Respect to REMIC Certificates" will also
apply to Grantor Trust Certificates.
Foreign Investors. In general, the discussion with respect to REMIC
Regular Certificates in "-- REMICs -- Foreign Investors in REMIC Certificates"
above applies to Grantor Trust Certificates except that Grantor Trust
Certificates will, unless otherwise disclosed in the related Prospectus
Supplement, be eligible for exemption from U.S. withholding tax, subject to the
conditions described in such discussion, only to the extent the related Mortgage
Loans were originated after July 18, 1984.
To the extent that interest on a Grantor Trust Certificate would be exempt
under Sections 871(h)(1) and 881(c) of the Code from United States withholding
tax, and the Grantor Trust Certificate is not held in connection with a
Certificateholder's trade or business in the United States, such Grantor Trust
Certificate will not be subject to United States estate taxes in the estate of a
nonresident alien individual.
STATE AND OTHER TAX CONSEQUENCES
In addition to the federal income tax consequences described in "Certain
Federal Income Tax Consequences," potential investors should consider the state
and local tax consequences of the acquisition, ownership, and disposition of the
Offered Certificates. State tax law may differ substantially from the
corresponding federal law, and the discussion above does not purport to describe
any aspect of the tax laws of any state or other jurisdiction. Therefore,
prospective investors should consult their tax advisors with respect to the
various tax consequences of investments in the Offered Certificates.
CERTAIN ERISA CONSIDERATIONS
GENERAL
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on retirement plans, and on certain
other employee benefit plans and arrangements, including individual retirement
accounts and annuities, Keogh plans and collective investment funds and separate
accounts (and as applicable, insurance company general accounts) in which such
plans, accounts or arrangements are invested that are subject to the fiduciary
responsibility provisions of ERISA and Section 4975 of the Code ("Plans"), and
on persons who are fiduciaries with respect to such Plans, in connection with
the investment of Plan assets. Certain employee benefit plans, such as
governmental plans (as defined in ERISA Section 3(32)), and, if no election has
been made under Section 410(d) of the Code, church plans (as defined in Section
3(33) of ERISA) are not subject to ERISA requirements. Accordingly, assets of
such plans may be invested in Offered Certificates without regard to the ERISA
considerations described below, subject to the provisions of other applicable
federal and state law. Any such plan which is qualified and exempt from taxation
under Sections 401(a) and 501(a) of the Code, however, is subject to the
prohibited transaction rules set forth in Section 503 of the Code.
ERISA generally imposes on Plan fiduciaries certain general fiduciary
requirements, including those of investment prudence and diversification and the
requirement that a Plan's investments be made in accordance with the documents
governing the Plan. In addition, Section 406 of ERISA and Section 4975 of the
Code prohibit a broad range of transactions involving assets of a Plan and
persons ("parties in interest" within the meaning of ERISA and "disqualified
persons" within the meaning of the Code; collectively, "Parties in Interest")
who have certain specified relationships to the Plan, unless a statutory or
administrative exemption is available. Certain Parties in Interest that
participate in a prohibited transaction may be subject to an excise tax imposed
pursuant to Section 4975 of the Code or a penalty imposed pursuant to Section
502(i) of ERISA, unless a statutory or administrative exemption is available.
These prohibited transactions generally are set forth in Section 406 of ERISA
and Section 4975 of the Code.
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PLAN ASSET REGULATIONS
A Plan's investment in Offered Certificates may cause the underlying
Mortgage Assets and other assets included in a related Trust Fund to be deemed
assets of such Plan. Section 2510.3-101 of the regulations (the "Plan Asset
Regulations") of the United States Department of Labor (the "DOL") provides that
when a Plan acquires an equity interest in an entity, the Plan's assets include
both such equity interest and an undivided interest in each of the underlying
assets of the entity, unless certain exceptions not applicable here apply, or
unless the equity participation in the entity by "benefit plan investors" (i.e.,
Plans and certain employee benefit plans not subject to ERISA) is not
"significant", both as defined therein. For this purpose, in general, equity
participation by benefit plan investors will be "significant" on any date if 25%
or more of the value of any class of equity interests in the entity is held by
benefit plan investors. Equity participation in a Trust Fund will be significant
on any date if immediately after the most recent acquisition of any Certificate,
25% or more of any class of Certificates is held by benefit plan investors.
Any person who has discretionary authority or control respecting the
management or disposition of Plan assets, and any person who provides investment
advice with respect to such assets for a fee, is a fiduciary of the investing
Plan. If the Mortgage Assets and other assets included in a Trust Fund
constitute Plan assets, then any party exercising management or discretionary
control regarding those assets, such as the Master Servicer, any Special
Servicer, any Sub-Servicer, the Trustee, the obligor under any credit
enhancement mechanism, or certain affiliates thereof may be deemed to be a Plan
"fiduciary" and thus subject to the fiduciary responsibility provisions and
prohibited transaction provisions of ERISA and the Code with respect to the
investing Plan. In addition, if the Mortgage Assets and other assets included in
a Trust Fund constitute Plan assets, the purchase of Certificates by a Plan, as
well as the operation of the Trust Fund, may constitute or involve a prohibited
transaction under ERISA or the Code.
The Plan Asset Regulations provide that where a Plan acquires a "guaranteed
governmental mortgage pool certificate", the Plan's assets include such
certificate but do not solely by reason of the Plan's holdings of such
certificate include any of the mortgages underlying such certificate. The Plan
Asset Regulations include in the definition of a "guaranteed governmental
mortgage pool certificate" FHLMC Certificates, GNMA Certificates and FNMA
Certificates. Accordingly, even if such MBS included in a Trust Fund were deemed
to be assets of Plan investors, the mortgages underlying such MBS would not be
treated as assets of such Plans. Private label mortgage participations, mortgage
pass-through certificates or other mortgage-backed securities are not
"guaranteed governmental mortgage pool certificates" within the meaning of the
Plan Asset Regulations; potential Plan investors should consult their counsel
and review the ERISA discussion in the related Prospectus Supplement before
purchasing Certificates if such MBS are included in the Trust Fund.
In considering an investment in the Offered Certificates, a Plan fiduciary
should consider the availability of prohibited transaction exemptions
promulgated by the DOL including, among others, Prohibited Transaction Class
Exemption ("PTCE") 75-1, which exempts certain transactions involving Plans and
certain broker-dealers, reporting dealers and banks; PTCE 90-1, which exempts
certain transactions between insurance company separate accounts and Parties in
Interest; PTCE 91-38, which exempts certain transactions between bank collective
investment funds and Parties in Interest; PTCE 84-14, which exempts certain
transactions effected on behalf of a Plan by a "qualified professional asset
manager"; PTCE 95-60, which exempts certain transactions between insurance
company general accounts and Parties in Interest; and PTCE 96-23, which exempts
certain transactions effected on behalf of a Plan by an "in-house asset
manager." There can be no assurance that any of these class exemptions will
apply with respect to any particular Plan investment in the Certificates or,
even if it were deemed to apply, that any such exemption would apply to all
prohibited transactions that may occur in connection with such investment. The
Prospectus Supplement with respect to a series of Certificates may contain
additional information regarding the availability of other exemptions with
respect to the Certificates offered thereby.
The DOL has granted to certain underwriters administrative exemptions,
referred to herein as the "Exemptions", for certain mortgage-backed and
asset-backed certificates underwritten in whole or in part by the underwriters.
An Exemption might be applicable to the initial purchase, the holding, and the
subsequent resale by a Plan of certain certificates, such as the Offered
Certificates, underwritten by the underwriters,
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representing interests in pass-through trusts that consist of certain
receivables, loans and other obligations, provided that the conditions and
requirements of the Exemption are satisfied. The loans described in the
Exemptions include mortgage loans such as the Mortgage Assets. However, it
should be noted that in issuing the Exemptions, the DOL may not have considered
interests in pools of the exact nature as some of the Offered Certificates. If
all of the conditions of an Exemption are met, whether or not a Plan's assets
would be deemed to include an ownership interest in the Mortgage Assets, the
acquisition, holding and resale of the Offered Certificates by Plans would be
exempt from certain of the prohibited transaction provisions of ERISA and the
Code.
INSURANCE COMPANY GENERAL ACCOUNTS
Section III of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")
exempts from the application of the prohibited transaction provisions of
Sections 406(a), 406(b) and 407(a) of ERISA and Section 4975 of the Code
transactions in connection with the servicing, management and operation of a
trust (such as the Trust) in which an insurance company general account has an
interest as a result of its acquisition of certificates issued by the trust,
provided that certain conditions are satisfied. If these conditions are met,
insurance company general accounts would be allowed to purchase certain Classes
of Certificates which do not meet the requirements of any of the Exemptions
solely because they (1) are subordinated to other Classes of Certificates in the
Trust and/or (2) have not received a rating at the time of the acquisition in
one of the three highest rating categories from S&P, Moody's, DCR or Fitch. All
other conditions of one of the Exemptions would have to be satisfied in order
for PTCE 95-60 to be available. Before purchasing such Class of Certificates, an
insurance company general account seeking to rely on Section III of PTCE 95-60
should itself confirm that all applicable conditions and other requirements have
been satisfied.
The Small Business Job Protection Act of 1996 added a new Section 401(c) to
ERISA, which provides certain exemptive relief from the provisions of Part 4 of
Title I of ERISA and Section 4975 of the Code, including the prohibited
transaction restrictions imposed by ERISA and the related excise taxes imposed
by the Code, for transactions involving an insurance company general account.
Pursuant to Section 401(c) of ERISA, the DOL is required to issue final
regulations ("401(c) Regulations") no later than December 31, 1997 which are to
provide guidance for the purpose of determining, in cases where insurance
policies supported by an insurer's general account are issued to or for the
benefit of a Plan on or before December 31, 1998, which general account assets
constitute Plan Assets. On December 22, 1997, the DOL proposed such regulations.
Section 401(c) of ERISA generally provides that, until the date which is 18
months after the 401(c) Regulations become final, no person shall be subject to
liability under Part 4 of Title I of ERISA and Section 4975 of the Code on the
basis of a claim that the assets of an insurance company general account
constitute Plan Assets, unless (1) as otherwise provided by the Secretary of
Labor in the 401(c) Regulations to prevent avoidance of the regulations or (2)
an action is brought by the Secretary of Labor for certain breaches of fiduciary
duty which would also constitute a violation of federal or state criminal law.
Any assets of an insurance company general account which support insurance
policies issued to a Plan after December 31, 1998 or issued to Plans on or
before December 31, 1998 for which the insurance company does not comply with
the 401(c) Regulations may be treated as Plan Assets. In addition, because
Section 401(c) does not relate to insurance company separate accounts, separate
account assets are still treated as Plan Assets of any Plan invested in such
separate account. Insurance companies contemplating the investment of general
account assets in the Offered Certificates should consult with their legal
counsel with respect to the applicability of Section 401(c) of ERISA, including
the general account's ability to continue to hold the Offered Certificates after
the date which is 18 months after the date the 401(c) Regulations become final.
CONSULTATION WITH COUNSEL
Any Plan fiduciary which proposes to purchase Offered Certificates on
behalf of or with assets of a Plan should consider its general fiduciary
obligations under ERISA and should consult with its counsel with respect to the
potential applicability of ERISA and the Code to such investment and the
availability of any prohibited transaction exemption in connection therewith.
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TAX EXEMPT INVESTORS
A Plan that is exempt from federal income taxation pursuant to Section 501
of the Code (a "Tax Exempt Investor") nonetheless will be subject to federal
income taxation to the extent that its income is "unrelated business taxable
income" ("UBTI") within the meaning of Section 512 of the Code. All "excess
inclusions" of a REMIC allocated to a REMIC Residual Certificate held by a
Tax-Exempt Investor will be considered UBTI and thus will be subject to federal
income tax. See "Certain Federal Income Tax Consequences -- REMICs -- Taxation
of Owners of REMIC Residual Certificates -- Excess Inclusions".
LEGAL INVESTMENT
If so specified in the related Prospectus Supplement, the Offered
Certificates will constitute "mortgage related securities" for purposes of
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 Offered 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.
Generally, only classes of Offered Certificates that (1) are rated in one
of the two highest rating categories by one or more Rating Agencies and (2) are
part of a series evidencing interests in a Trust Fund consisting of loans
originated by certain types of Originators specified in SMMEA and secured by
first liens on real estate, will be "mortgage related securities" for purposes
of SMMEA. Classes of Offered Certificates qualifying as "mortgage related
securities" will constitute legal investments for persons, trusts, corporations,
partnerships, associations, business trusts and business entities (including
depository institutions, insurance companies and pension funds) 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. Under 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" (effective
December 31, 1996) to include, in relevant part, Offered Certificates satisfying
the rating 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 Offered 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 require the sale or
disposition of any securities acquired, prior to the enactment of such state
legislation. Accordingly, the investors affected by any such state legislation,
when and if enacted, will be authorized to invest in Offered 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.
sec. 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
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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. sec. 1.5 concerning
"safety and soundness" and retention of credit information), certain "Type IV
securities," defined in 12 C.F.R. sec. 1.2(1) to include 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 Offered Certificates will
qualify as "commercial mortgage-related securities," and thus as "Type IV
securities," for investment by national banks. The National Credit Union
Administration ("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.
sec. 703.140. The Office of Thrift Supervision (the "OTS") has issued Thrift
Bulletin 13a (December 1, 1998), "Management of Interest Rate Risk, Investment
Securities, and Derivative Activities," which thrift institutions subject to the
jurisdiction of the OTS should consider before investing in any of the Offered
Certificates.
All depository institutions considering an investment in the Offered
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 Deposit
Insurance Corporation, the OCC and the OTS effective May 26, 1998, and by the
NCUA effective October 1, 1998. The 1998 Policy Statement sets forth 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 securities
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 Offered
Certificates, as certain series or classes 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 Offered 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 Offered Certificates as
"mortgage related securities," no representations are made as to the proper
characterization of the Offered Certificates for legal investment purposes,
financial institution regulatory purposes, or other purposes, or as to the
ability of particular investors to purchase Offered 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 Offered Certificates) may
adversely affect the liquidity of the Offered Certificates.
Accordingly, all investors whose investment activities are subject to legal
investment laws and regulations, regulatory capital requirements or review by
regulatory authorities should consult with their legal advisors in determining
whether and to what extent the Offered Certificates of any class constitute
legal investments or are subject to investment, capital or other restrictions
and, if applicable, whether SMMEA has been overridden in any jurisdiction
relevant to such investor.
95
<PAGE> 311
USE OF PROCEEDS
The net proceeds to be received from the sale of the Certificates of any
series will be applied by the Depositor to the purchase of Trust Assets or will
be used by the Depositor to cover expenses related thereto. The Depositor
expects to sell the Certificates from time to time, but the timing and amount of
offerings of Certificates will depend on a number of factors, including the
volume of Mortgage Assets acquired by the Depositor, prevailing interest rates,
availability of funds and general market conditions.
METHOD OF DISTRIBUTION
The Certificates offered hereby and by the related Prospectus Supplements
will be offered in series through one or more of the methods described below.
The Prospectus Supplement prepared for each series will describe the method of
offering being utilized for that series and will state the net proceeds to the
Depositor from such sale.
The Depositor intends that Offered Certificates will be offered through the
following methods from time to time and that offerings may be made concurrently
through more than one of these methods or that an offering of the Offered
Certificates of a particular series may be made through a combination of two or
more of these methods. Such methods are as follows:
1. By negotiated firm commitment or best efforts underwriting and
public re-offering by underwriters, which may include Banc of America
Securities LLC, an affiliate of the Depositor;
2. By placements by the Depositor with institutional investors through
dealers; and
3. By direct placements by the Depositor with institutional investors.
In addition, if specified in the related Prospectus Supplement, the Offered
Certificates of a series may be offered in whole or in part to the seller of the
related Mortgage Assets that would comprise the Trust Fund for such
Certificates.
If underwriters are used in a sale of any Offered Certificates (other than
in connection with an underwriting on a best efforts basis), 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 fixed public offering prices or at varying prices to be
determined at the time of sale or at the time of commitment therefor. Such
underwriters may be broker-dealers affiliated with the Depositor whose
identities and relationships to the Depositor will be as set forth in the
related Prospectus Supplement. The managing underwriter or underwriters with
respect to the offer and sale of Offered Certificates of a particular series
will be set forth on the cover of the Prospectus Supplement relating to such
series and the members of the underwriting syndicate, if any, will be named in
such Prospectus Supplement.
In connection with the sale of Offered Certificates, underwriters may
receive compensation from the Depositor or from purchasers of the Offered
Certificates in the form of discounts, concessions or commissions. Underwriters
and dealers participating in the distribution of the Offered Certificates may be
deemed to be underwriters in connection with such Certificates, and any
discounts or commissions received by them from the Depositor and any profit on
the resale of Offered Certificates by them may be deemed to be underwriting
discounts and commissions under the Securities Act of 1933, as amended.
It is anticipated that the underwriting agreement pertaining to the sale of
the Offered Certificates of any series will provide that the obligations of the
underwriters will be subject to certain conditions precedent, that the
underwriters will be obligated to purchase all such Certificates if any are
purchased (other than in connection with an underwriting on a best efforts
basis) and that, in limited circumstances, the Depositor will indemnify the
several underwriters and the underwriters will indemnify the Depositor against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or will contribute to payments required to be made in respect
thereof.
96
<PAGE> 312
The Prospectus Supplement with respect to any series offered by placements
through dealers will contain information regarding the nature of such offering
and any agreements to be entered into between the Depositor and purchasers of
Offered Certificates of such series.
The Depositor anticipates that the Offered Certificates will be sold
primarily to institutional investors. Purchasers of Offered 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 of 1933, as amended, in connection with reoffers and sales by them of
Offered Certificates. Holders of Offered Certificates should consult with their
legal advisors in this regard prior to any such reoffer or sale.
If and to the extent required by applicable law or regulation, this
Prospectus will be used by Banc of America Securities LLC in connection with
offers and sales related to market-making transactions in Offered Certificates
previously offered hereunder in transactions with respect to which Banc of
America Securities LLC acts as principal. Banc of America Securities LLC may
also act as agent in such transactions. Sales may be made at negotiated prices
determined at the time of sale.
LEGAL MATTERS
Certain legal matters relating to the Certificates will be passed upon for
the Depositor by Robert W. Long, Jr., Assistant General Counsel of Bank of
America Corporation. Certain legal matters relating to the Certificates will be
passed upon for the underwriter or underwriters by Cadwalader, Wickersham &
Taft. Certain federal income tax matters and other matters will be passed upon
for the Depositor by Cadwalader, Wickersham & Taft.
FINANCIAL INFORMATION
A new Trust Fund will be formed with respect to each series of
Certificates, and no Trust Fund will engage in any business activities or have
any assets or obligations prior to the issuance of the related series of
Certificates. Accordingly, no financial statements with respect to any Trust
Fund will be included in this Prospectus or in the related Prospectus
Supplement. The Depositor has determined that its financial statements will not
be material to the offering of any Offered Certificates.
RATING
It is a condition to the issuance of any class of Offered Certificates that
they shall have been rated not lower than investment grade, that is, in one of
the four highest rating categories, by at least one Rating Agency.
Ratings on mortgage pass-through certificates address the likelihood of
receipt by the holders thereof of all collections on the underlying mortgage
assets to which such holders are entitled. These ratings address the structural,
legal and issuer-related aspects associated with such certificates, the nature
of the underlying mortgage assets and the credit quality of the guarantor, if
any. Ratings on mortgage pass-through certificates do not represent any
assessment of the likelihood of principal prepayments by borrowers or of the
degree by which such prepayments might differ from those originally anticipated.
As a result, Certificateholders might suffer a lower than anticipated yield,
and, in addition, holders of Stripped Interest Certificates might, in extreme
cases fail to recoup their initial investments. Furthermore, ratings on mortgage
pass-through certificates do not address the price of such certificates or the
suitability of such certificates to the investor.
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
organization. Each security rating should be evaluated independently of any
other security rating.
97
<PAGE> 313
AVAILABLE INFORMATION
The Depositor has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement (of which this Prospectus forms a part)
under the Securities Act of 1933, as amended, with respect to the Offered
Certificates. This Prospectus and the Prospectus Supplement relating to each
series of Offered Certificates contain summaries of the material terms of the
documents referred to in this Prospectus or in such Prospectus Supplement, but
do not contain all of the information set forth in the Registration Statement
pursuant to the rules and regulations of the Commission. For further
information, reference is made to such Registration Statement and the exhibits
thereto. Such Registration Statement and exhibits can be inspected and copied at
prescribed rates at the public reference facilities maintained by the Commission
at its Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at its Midwest Regional Offices located as follows: Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Northeast
Regional Office, Seven World Trade Center, Suite 1300, New York, New York 10048.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains an internet site that
contains reports, proxy and information statements, and other information that
has been filed electronically with the SEC. The Internet address is
http://www.sec.gov.
No dealer, salesman, or other person has been authorized to give any
information, or to make any representations, other than those contained in this
Prospectus or any related Prospectus Supplement, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Depositor or any other person. Neither the delivery of this Prospectus or
any related Prospectus Supplement nor any sale made hereunder or thereunder
shall under any circumstances create an implication that there has been no
change in the information in this Prospectus since the date hereof or in such
Prospectus Supplement since the date thereof. This Prospectus and any related
Prospectus Supplement are not an offer to sell or a solicitation of an offer to
buy any security in any jurisdiction in which it is unlawful to make such offer
or solicitation.
The Master Servicer, the Trustee or another specified person will cause to
be provided to registered holders of the Offered Certificates of each series
periodic unaudited reports concerning the related Trust Fund. If beneficial
interests in a class or series of Offered Certificates are being held and
transferred in book-entry format through the facilities of The Depository Trust
Company ("DTC") as described in this Prospectus, then unless otherwise provided
in the related Prospectus Supplement, such reports will be sent on behalf of the
related Trust Fund to a nominee of DTC as the registered holder of the Offered
Certificates. Conveyance of notices and other communications by DTC to its
participating organizations, and directly or indirectly through such
participating organizations to the beneficial owners of the applicable Offered
Certificates, will be governed by arrangements among them, subject to any
statutory or regulatory requirements as may be in effect from time to time. See
"Description of the Certificates -- Reports to Certificateholders" and
"-- Book-Entry Registration and Definitive Certificates".
The Depositor will file or cause to be filed with the Commission such
periodic reports with respect to each Trust Fund as are required under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations of the Commission thereunder. The Depositor intends to make a
written request to the staff of the Commission that the staff either (1) issue
an order pursuant to Section 12(h) of the Exchange Act exempting the Depositor
from certain reporting requirements under the Exchange Act with respect to each
Trust Fund or (2) state that the staff will not recommend that the Commission
take enforcement action if the Depositor fulfills its reporting obligations as
described in its written request. If such request is granted, the Depositor will
file or cause to be filed with the Commission as to each Trust Fund the periodic
unaudited reports to holders of the Offered Certificates referenced in the
preceding paragraph; however, because of the nature of the Trust Funds, it is
unlikely that any significant additional information will be filed. In addition,
because of the limited number of Certificateholders expected for each series,
the Depositor anticipates that a significant portion of such reporting
requirements will be permanently suspended following the first fiscal year for
the related Trust Fund.
98
<PAGE> 314
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Depositor hereby incorporates by reference all documents and reports
filed or caused to be filed by the Depositor with respect to a Trust Fund
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act of 1934, as
amended, prior to the termination of an offering of offered certificates
evidencing interests therein. The Depositor will provide or cause to be provided
without charge to each person to whom this prospectus is delivered in connection
with the offering of one or more classes of offered certificates, upon written
or oral request of such person, a copy of any or all documents or reports
incorporated in this Prospectus by reference, in each case to the extent such
documents or reports relate to one or more of such classes of such offered
certificates, other than the exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Such requests to
the Depositor should be directed in writing to its principal executive offices
at the Bank of America Corporate Center, Charlotte, North Carolina 28255, or by
telephone at (704) 386-2400.
99
<PAGE> 315
INDEX OF PRINCIPAL DEFINITIONS
<TABLE>
<S> <C>
1998 Policy Statement......... 95
401(c) Regulations............ 93
Accrual Certificates.......... 7
Accrued Certificate
Interest.................... 30
Act........................... 61
ADA........................... 65
ARM Loans..................... 21
Available Distribution
Amount...................... 30
Book-Entry Certificates....... 29
Call Risk..................... 12
Cash Flow Agreement........... 23
CERCLA........................ 61
Certificate Account........... 23
Certificate Balance........... 7
Certificate Owner............. 35
Certificateholder............. 36
Closing Date.................. 69
Code.......................... 66
Commercial Properties......... 18
Commission.................... 98
Committee Report.............. 69
Companion Class............... 32
Contingent Payment
Regulations................. 89
Contributions Tax............. 79
Controlled Amortization
Class....................... 32
Cooperatives.................. 18
CPR........................... 26
Credit Support................ 8
Crime Control Act............. 66
Cut-off Date.................. 31
Debt Service Coverage Ratio... 19
Definitive Certificates....... 29
Depositor..................... 18, 28
Determination Date............ 24, 30
Direct Participants........... 35
Distribution Date............. 7
Distribution Date Statement... 33
DOL........................... 92
DTC........................... 98
Due Dates..................... 20
Due Period.................... 24
Equity Participation.......... 21
ERISA......................... 91
Events of Default............. 49
Excess Funds.................. 28
Exchange Act.................. 98
Exemptions.................... 92
Extension Risk................ 12
FAMC.......................... 22
FHLMC......................... 22
FNMA.......................... 22
GNMA.......................... 22
Garn Act...................... 63
Grantor Trust Certificates.... 9
Grantor Trust Fractional
Interest Certificate........ 83
Grantor Trust Fund............ 67
Grantor Trust Strip
Certificate................. 83
Indirect Participants......... 35
Insurance and Condemnation
Proceeds.................... 42
IRS........................... 45, 67
Issue Premium................. 75
Letter of Credit Bank......... 54
Liquidation Proceeds.......... 42
Loan-to-Value Ratio........... 20
Lock-out Date................. 21
Lock-out Period............... 21
Mark-to-Market Regulations.... 77
Master Servicer............... 5
MBS........................... 18
MBS Administrator............. 5
MBS Agreement................. 22
MBS Issuer.................... 22
MBS Servicer.................. 22
MBS Trustee................... 22
Mortgages..................... 18
Mortgage Asset Seller......... 18
Mortgage Asset Pool........... 5
Mortgage Assets............... 18
Mortgage Loans................ 18
Mortgage Notes................ 18
Mortgage Rate................. 20
Mortgaged Properties.......... 18
Multifamily Properties........ 18
NCUA.......................... 95
Net Leases.................... 13, 20
Net Operating Income.......... 19
New Regulations............... 82
Non-SMMEA Certificates........ 94
Nonrecoverable Advance........ 32
Notional Amount............... 31
OCC........................... 94
OID Regulations............... 67
Offered Certificates.......... cover, 29
Originator.................... 18
OTS........................... 95
Participants.................. 35
Parties in Interest........... 91
Pass-Through Rate............. 7
Percentage Interest........... 30
Permitted Investments......... 42
</TABLE>
100
<PAGE> 316
<TABLE>
<S> <C>
Plan Asset Regulations........ 92
Plans......................... 91
Pooling and Servicing
Agreement................... 36
Prepayment Assumption......... 69
Prepayment Interest
Shortfall................... 24
Prepayment Period............. 33
Prepayment Premium............ 21
Prohibited Transactions Tax... 79
Prospectus Supplement......... cover
PTCE.......................... 92
PTCE 95-60.................... 93
Purchase Price................ 38
Rating Agency................. 9
RCRA.......................... 62
Record Date................... 30
Related Proceeds.............. 32
Relief Act.................... 66
REMIC......................... 67
REMIC Administrator........... 16
REMIC Certificates............ 67
REMIC Provisions.............. 67
REMIC Regular Certificates.... 9
REMIC Regulations............. 67
REMIC Residual
Certificateholder........... 73
REMIC Residual Certificates... 7, 9
REO Property.................. 40
RICO.......................... 66
Senior Certificates........... 6
Senior Liens.................. 18
SMMEA......................... 9
SPA........................... 26
Special Servicer.............. 5
Stripped Interest
Certificates................ 6
Stripped Principal
Certificates................ 6
Subordinate Certificates...... 6, 53
Sub-Servicer.................. 41
Sub-Servicing Agreement....... 41
Tax Exempt Investor........... 94
Tiered REMICs................. 68
Title V....................... 65
Trust Assets.................. 16
Trust Fund.................... 18
Trustee....................... 5
UBTI.......................... 94
UCC........................... 56
U.S. Person................... 82
Value......................... 20
Voting Rights................. 34
Warranting Party.............. 39
</TABLE>
101
<PAGE> 317
NOTES CONCERNING INFORMATION
PRESENTED IN THE ATTACHED
COMPUTER DISKETTE
[DISKETTE]
This diskette contains a spreadsheet file that can be put on a
user-specified hard drive or network drive. The file is "NL9902.xls" The file
"NL9902.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 Prospectus Supplement.
Open the file as you would normally open any spreadsheet in Microsoft
Excel. After the file is opened, a securities law legend will be displayed. READ
THE LEGEND CAREFULLY. To view the ANNEX A data, "click" on the worksheet labeled
"ANNEX A."
- ---------------
(1) Microsoft Excel is a registered trademark of Microsoft Corporation.
<PAGE> 318
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YOU SHOULD RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION.
WE ARE NOT OFFERING THE CERTIFICATES IN ANY STATE WHERE THE OFFER IS NOT
PERMITTED.
WE DO NOT CLAIM THE ACCURACY OF THE INFORMATION IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS AS OF ANY DATE OTHER THAN THE DATES STATED ON
THEIR RESPECTIVE COVERS.
DEALERS WILL DELIVER A PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
WHEN ACTING AS UNDERWRITERS OF THE CERTIFICATES AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS. IN ADDITION, ALL DEALERS SELLING THE CERTIFICATES
WILL DELIVER A PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS UNTIL
FEBRUARY , 1999.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Table of Contents......................... S-1
Important Notice About Information
Presented in this Prospectus Supplement
and the Accompanying Prospectus......... S-5
Executive Summary......................... S-6
Summary of Prospectus Supplement.......... S-8
Risk Factors.............................. S-18
Description of the Mortgage Pool.......... S-35
Servicing of the Mortgage Loans........... S-57
Description of the Certificates........... S-68
Yield and Maturity Considerations......... S-87
Use of Proceeds........................... S-95
Certain Federal Income Tax Consequences... S-95
Certain ERISA Considerations.............. S-97
Legal Investment.......................... S-100
Method of Distribution.................... S-100
Legal Matters............................. S-101
Ratings................................... S-101
Index of Principal Definitions............ S-103
Annex A................................... A-1
Annex B................................... B-1
Annex C................................... C-1
PROSPECTUS
Summary of Prospectus..................... 5
Risk Factors.............................. 10
Description of the Trust Funds............ 18
Yield and Maturity Considerations......... 23
The Depositor............................. 28
Description of the Certificates........... 29
The Pooling and Servicing Agreements...... 36
Description of Credit Support............. 53
Certain Legal Aspects of Mortgage Loans... 55
Certain Federal Income Tax Consequences... 66
State and Other Tax Consequences.......... 91
Certain ERISA Considerations.............. 91
Legal Investment.......................... 94
Use of Proceeds........................... 96
Method of Distribution.................... 96
Legal Matters............................. 97
Financial Information..................... 97
Rating.................................... 97
Available Information..................... 98
Incorporation of Certain Information by
Reference............................... 99
Index of Principal Definitions............ 100
</TABLE>
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$813,466,233
(APPROXIMATE)
NATIONSLINK
FUNDING
CORPORATION
DEPOSITOR
CLASS A-2,
CLASS A-3, CLASS A-4,
CLASS A-1C, CLASS A-2C,
CLASS X, CLASS B,
CLASS C AND CLASS D
NATIONSLINK FUNDING CORPORATION
COMMERCIAL MORTGAGE
PASS-THROUGH CERTIFICATES
SERIES 1999-2
------------------------------------------------
PROSPECTUS SUPPLEMENT
------------------------------------------------
BANC OF AMERICA
SECURITIES LLC
November , 1999
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