Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
X Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1996
OR
|_| Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission File Number: 333-2336
CBM FUNDING CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 52-1955658
- -------------------------------------- ----------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
10400 Fernwood Road
Bethesda, Maryland 20817
- ------------------------------------------------ ------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 301-380-2070
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days: Yes No (Not Applicable).
Shares outstanding as of
Class December 31, 1996
- ------------------------------------- -----------------------------------
Common Stock, $.01 par value per share 1,000
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CBM FUNDING CORPORATION
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TABLE OF CONTENTS
<TABLE>
PAGE NO.
<CAPTION>
PART I
<S> <C> <C>
Item 1. Business.. ...............................................................................1
Item 2. Properties................................................................................1
Item 3. Legal Proceedings.........................................................................1
Item 4. Submission of Matters to a Vote of Security Holders.......................................1
PART II
Item 5. Market For The Company's Common Equity and
Related Security Holder Matters............................................................2
Item 6. Selected Financial Data....................................................................2
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................................................2
Item 8. Financial Statements and Supplementary Data................................................5
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure..................................................................13
PART III
Item 10. Directors and Executive Officers .........................................................13
Item 11. Management Remuneration and Transactions..................................................14
Item 12. Security Ownership of Certain Beneficial Owners and Management............................14
Item 13. Certain Relationships and Related Transactions............................................14
PART IV
Item 14. Exhibits, Supplemental Financial Statement Schedules
and Reports on Form 8-K...................................................................15
</TABLE>
<PAGE>
PART I
ITEM 1. BUSINESS
CBM Funding Corporation, (the "Company") a Delaware corporation and wholly-owned
subsidiary of Courtyard II Associates, L.P. (the "Mortgagor" and "Associates"),
which is a subsidiary of Courtyard by Marriott II Limited Partnership (the
"Partnership"), was formed on December 28, 1995. The Company was formed for the
purpose of (i) making the single, fixed rate, non-recourse $410.2 million
mortgage loan (the "Mortgage Loan") to the Mortgagor and (ii) conveying the
Mortgage Loan and other instruments securing the Mortgage Loan including the 69
cross-defaulted and cross-collaterized mortgages, representing first priority
liens on fee or leasehold interests in 69 Hotels (the "Hotels") owned by the
Mortgagor, fee interests in land leased from Marriott International, Inc. or its
affiliates on which 53 hotels are situated in, and related assets, and a pledge
of the Mortgagor's membership interests in, and the related right to receive
distributions from, the entity that owns the hotel located in Chicago/Deerfield,
Illinois ("Deerfield LLC"), to the trustee (the "Trustee") under a Trust and
Servicing Agreement dated January 24, 1996 (the "Trust and Servicing Agreement")
in exchange for Multiclass Mortgage Pass-Through Certificates (the
"Certificates") which represent interests in the trust fund under the Trust and
Servicing Agreement. For financial accounting purposes the assets and
liabilities of the Trustee are included in the financial statements of the
Company. However, legally, the Company transferred the Mortgage Loan to the
Trustee without recourse and has no interest in the Mortgage Loan, has no
obligations with respect to the Certificates and does not control the Trustee.
ITEM 2. PROPERTIES
None.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
1
<PAGE>
PART II
ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
None.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data presents historical operating information
of the Company for the year ended December 31, 1996, presented in accordance
with generally accepted accounting principles (in thousands, except common share
amounts). The Company had no operating activities prior to January 24, 1996.
1996
-------
Revenues......................................$ 29,365
==========
Net loss......................................$ 1,027
==========
Net loss per common share.....................$ 1,027
==========
Total assets..................................$ 411,128
==========
Total liabilities.............................$ 398,891
==========
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
Principal Sources and Uses of Cash
CBM Funding Corporation's (the "Company") principal source of cash is from
collections on the mortgage loan and from additional paid-in capital from the
issuance of stock. During 1996, collections on the mortgage loan were used to
repay principal on the certificates of $11.3 million. In addition, during 1996,
additional capital contributions from the issuance of stock was used to pay
financing costs of $13.3 million.
2
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Certificates
The Certificates, as defined in Item 1-Business, in an initial principal amount
of $410.2 million were issued by the Trustee. Proceeds from the sale of the
Certificates were utilized by the Company to provide a Mortgage Loan to
Associates. The Certificates and Mortgage Loan each require monthly payments of
principal and interest based on a 17-year amortization schedule. The Mortgage
Loan matures on January 28, 2008. However, the maturity date of the Certificates
and the Mortgage Loan each may be extended until January 28, 2013 with the
consent of 66 2/3% of the holders of the outstanding Certificates affected
thereby. The Certificates were issued in the following classes and pass-through
rates of interest.
Initial Certificate Pass-Through
Class Balance Rate
Class A-1 $ 45,500,000 7.550%
Class A-2 $ 50,000,000 6.880%
Class A-3P & I $ 129,500,000 7.080%
Class A-3IO Not Applicable 0.933%
Class B $ 75,000,000 7.480%
Class C $ 100,000,000 7.860%
Class D $ 10,200,000 8.645%
The Class A-3IO Certificates receive payments of interest only based on a
notional balance equal to the Class A-3P & I Certificates balance.
The balance of the Certificates was $398.9 million at December 31, 1996.
Principal amortization of $11.3 million of the Class A-1 Certificates was made
during 1996.
The Certificates/Mortgage Loan maturities are as follows (in thousands):
1997 $ 13,298
1998 14,331
1999 15,443
2000 16,642
2001 17,934
Thereafter 321,205
------------
$ 398,853
============
The Mortgage Loan is secured primarily by 69 cross-defaulted and
cross-collateralized mortgages representing first priority mortgage liens on (i)
the fee or leasehold interest in the 69 Hotels, related furniture, fixtures and
equipment and the property improvement fund, (ii) the fee interest in the land
leased from Marriott International, Inc. or its affiliates on which 53 Hotels
are located, (iii) a pledge of the Mortgagor's membership interest in and the
related right to receive distributions from Deerfield LLC and (iv) an assignment
of the restated management agreement. The Mortgage Loan is non-recourse to the
Mortgagor, the Partnership and its partners.
3
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Operating profit from the Hotels and the Deerfield Hotel in excess of debt
service on the Mortgage Loan is available to be distributed to the Partnership.
Amounts distributed to the Partnership are used for the following, in order of
priority: (i) to pay debt service on the $127.4 million of senior notes ("Senior
Notes") issued in a concurrent offering by the Partnership and its wholly-owned
subsidiary, Courtyard II Finance Company, (ii) to fund a supplemental debt
service reserve, if necessary, (iii) to offer to purchase a portion of the
Senior Notes at par, if necessary, (iv) for working capital as discussed in the
working capital agreement with Marriott International, Inc. and (v) for
distributions to the partners of the Partnership.
Prepayments of the Mortgage Loan are permitted with the payment of a premium
(the "Prepayment Premium"), subject to certain exceptions. The Prepayment
Premium is equal to the greater of (i) one percent of the Mortgage Loan being
prepaid or (ii) a yield maintenance amount based on a spread of .25% or .55%
over the U.S. treasury rate, as defined.
On June 30, 1996, the Company completed an exchange offer of the Certificates
with an outstanding principal balance of $406.2 million at that time, for an
equal amount of Multiclass Mortgage Pass-Through Certificates, Series 1996-1B
("New Certificates"). The form and terms of the New Certificates are
substantially identical to the form and terms of the Certificates, except that
the New Certificates are registered under the Securities Act of 1933, as amended
and their transfers are not restricted.
General
The Company believes that collections from the Mortgage Loan will provide
adequate funds for short term and long term operational needs of the Company.
RESULTS OF OPERATIONS
For the year ended December 31, 1996, the Company reported revenues and interest
expense of $29.4 million each. Amortization of deferred financing costs for
1996 was $1.0 million. The Company reported a net loss of $1.0 million for
1996.
4
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
Index Page
<CAPTION>
<S> <C>
Report of Independent Public Accountants........................................................ 6
Statement of Operations......................................................................... 7
Balance Sheet................................................................................... 8
Statement of Cash Flows......................................................................... 9
Notes to Financial Statements...................................................................10
</TABLE>
5
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO CBM FUNDING CORPORATION:
We have audited the accompanying balance sheet of CBM Funding Corporation (a
Delaware limited partnership and a wholly-owned subsidiary of Courtyard II
Associates Limited Partnership) as of December 31, 1996 and 1995, and the
related statement of operations and cash flows for the year ended December 31,
1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of CBM Funding Corporation as of
December 31, 1996 and 1995, and the results of its operations and its cash flows
for the year ended December 31, 1996, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN LLP
Washington, D.C.
March 13, 1997
6
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<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
CBM Funding Corporation
For the Year Ended December 31, 1996
(in thousands, except per common share amount)
1996
<S> <C>
INTEREST INCOME.............................................................................................$ 29,365
EXPENSES
Interest expense......................................................................................... 29,365
Amortization of deferred financing costs as interest..................................................... 1,023
Administrative expense................................................................................... 4
--------------
................................................................................................... 30,392
--------------
NET LOSS ...................................................................................................$ (1,027)
==============
NET LOSS PER COMMON SHARE...................................................................................$ (1,027)
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
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<TABLE>
<CAPTION>
BALANCE SHEET
CBM Funding Corporation
December 31, 1996 and 1995
(in thousands)
<S> <C> <C>
1996 1995
----------- -------
ASSETS
Mortgage Loan to Associates..................................................................$ 398,853 $ --
Deferred financing costs, net of accumulated amortization .................................... 12,273 --
Cash and cash equivalents.................................................................... 2 1
----------- ----------
Total Assets..............................................................................$ 411,128 $ 1
=========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
LIABILITIES
Certificates payable.........................................................................$ 398,853 $ --
Accrued liabilities.......................................................................... 38 --
----------- ----------
Total Liabilities......................................................................... 398,891 --
----------- ----------
SHAREHOLDER'S EQUITY
Common stock (1,000 shares of .01 par value stock issued and outstanding).................... -- --
Additional paid-in capital................................................................... 13,264 1
Accumulated deficit.......................................................................... (1,027) --
----------- ----------
Total Shareholder's Equity................................................................ 12,237 1
----------- ----------
$ 411,128 $ 1
=========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
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<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
CBM Funding Corporation
For the Year Ended December 31, 1996
(in thousands)
<S> <C>
1996
OPERATING ACTIVITIES
Net loss.................................................................................................$ (1,027)
Noncash items:
Amortization of deferred financing costs as interest..................................................... 1,023
--------------
Cash used in operations............................................................................ (4)
--------------
INVESTING ACTIVITIES
Mortgage loan to associates.............................................................................. (410,200)
Mortgage loan collections................................................................................ 11,347
--------------
Cash used in investing activities.................................................................. (398,853)
--------------
FINANCING ACTIVITIES
Proceeds from certificates............................................................................... 410,200
Capital contribution..................................................................................... 13,263
Payment of financing costs............................................................................... (13,258)
Principal repayments on certificates..................................................................... (11,347)
--------------
Cash provided by financing activities.............................................................. 398,858
--------------
INCREASE IN CASH AND CASH EQUIVALENTS.......................................................................$ 1
CASH AND CASH EQUIVALENTS at beginning of year.............................................................. 1
--------------
CASH AND CASH EQUIVALENTS at end of year....................................................................$ 2
==============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid as interest on certificates.................................................................$ 29,365
==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
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NOTES TO FINANCIAL STATEMENTS
CBM Funding Corporation
December 31, 1996 and 1995
NOTE 1. THE COMPANY
CBM Funding Corporation, (the "Company") a Delaware corporation and wholly-owned
subsidiary of Courtyard II Associates, L.P. (the "Mortgagor" and "Associates"),
which is a subsidiary of Courtyard by Marriott II Limited Partnership (the
"Partnership"), was formed on December 28, 1995. The Company was formed for the
purpose of (i) making the single, fixed rate, non-recourse $410.2 million
mortgage loan (the "Mortgage Loan") to the Mortgagor and (ii) conveying the
Mortgage Loan and other instruments securing the Mortgage Loan including the 69
cross-defaulted and cross-collaterized mortgages, representing first priority
liens on fee or leasehold interests in 69 Hotels (the "Hotels") owned by the
Mortgagor, fee interests in land leased from Marriott International, Inc. or its
affiliates on which 53 hotels are situated in, and related assets, and a pledge
of the Mortgagor's membership interests in, and the related right to receive
distributions from, the entity that owns the hotel located in Chicago/Deerfield,
Illinois ("Deerfield LLC"), to the trustee (the "Trustee") under a Trust and
Servicing Agreement dated January 24, 1996 (the "Trust and Servicing Agreement")
in exchange for Multiclass Mortgage Pass-Through Certificates (the
"Certificates") which represent interests in the trust fund under the Trust and
Servicing Agreement. For financial accounting purposes the assets and
liabilities of the Trustee are included in the financial statements of the
Company. However, legally, the Company transferred the Mortgage Loan to the
Trustee without recourse and has no interest in the Mortgage Loan, has no
obligations with respect to the Certificates and does not control the Trustee.
The Company had no operating activities prior to January 24, 1996, and
therefore, has not presented statements of operations or cash flows for the year
ended December 31, 1995.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Company records are maintained on the accrual basis of accounting and its
fiscal year coincides with the calendar year.
Deferred Financing Costs
Deferred financing costs consist of costs incurred in connection with making the
Mortgage Loan to Associates. Financing costs are amortized using the
straight-line method, which approximates the effective interest rate method,
over the life of the Mortgage Loan. During 1996, the Company paid $13,258,000 in
financing costs. At December 31, 1996, accumulated amortization of financing
costs was $1,023,000.
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less at date of purchase to be cash equivalents.
10
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NOTE 3. ESTIMATED FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of financial instruments are shown below.
As of December 31, 1996
(in thousands)
Estimated
Carrying Fair
Amount Value
-------------- -------------
Mortgage Loan to Associates...........$ 398,853 $ 405,695
Certificates Payable..................$ 398,853 $ 405,695
The 1996 estimated fair value of mortgage loan to Associates and certificates
payable was based on quoted market prices at December 31, 1996.
NOTE 4. CERTIFICATES/MORTGAGE LOAN
The Certificates in an initial principal amount of $410.2 million were issued by
the Trustee. Proceeds from the sale of the Certificates were utilized by the
Company to provide a Mortgage Loan to Associates. The Certificates and Mortgage
Loan each require monthly payments of principal and interest based on a 17-year
amortization schedule. The Mortgage Loan matures on January 28, 2008. However,
the maturity date of the Certificates and the Mortgage Loan each may be extended
until January 28, 2013 with the consent of 66 2/3% of the holders of the
outstanding Certificates affected thereby. The Certificates were issued in the
following classes and pass-through rates of interest.
Initial Certificate Pass-Through
Class Balance Rate
Class A-1 $ 45,500,000 7.550%
Class A-2 $ 50,000,000 6.880%
Class A-3P & I $ 129,500,000 7.080%
Class A-3IO Not Applicable 0.933%
Class B $ 75,000,000 7.480%
Class C $ 100,000,000 7.860%
Class D $ 10,200,000 8.645%
The Class A-3IO Certificates receive payments of interest only based on a
notional balance equal to the Class A-3P & I Certificates balance.
The balance of the Certificates was $398.9 million at December 31, 1996.
Principal amortization of $11.3 million of the Class A-1 Certificates was made
during 1996.
11
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The Certificates/Mortgage Loan maturities are as follows (in thousands):
1997 $ 13,298
1998 14,331
1999 15,443
2000 16,642
2001 17,934
Thereafter 321,205
------------
$ 398,853
============
The Mortgage Loan is secured primarily by 69 cross-defaulted and
cross-collateralized mortgages representing first priority mortgage liens on (i)
the fee or leasehold interest in the 69 Hotels, related furniture, fixtures and
equipment and the property improvement fund, (ii) the fee interest in the land
leased from Marriott International, Inc. or its affiliates on which 53 Hotels
are located, (iii) a pledge of the Mortgagor's membership interest in and the
related right to receive distributions from Deerfield LLC and (iv) an assignment
of the restated management agreement. The Mortgage Loan is non-recourse to the
Mortgagor, the Partnership and its partners.
Operating profit from the Hotels and the Deerfield Hotel in excess of debt
service on the Mortgage Loan is available to be distributed to the Partnership.
Amounts distributed to the Partnership are used for the following, in order of
priority: (i) to pay debt service on the $127.4 million of senior notes ("Senior
Notes") issued in a concurrent offering by the Partnership and its wholly owned
subsidiary, Courtyard II Finance Company, (ii) to fund a supplemental debt
service reserve, if necessary, (iii) to offer to purchase a portion of the
Senior Notes at par, if necessary, (iv) for working capital as discussed in the
working capital agreement with Marriott International, Inc. and (v) for
distributions to the partners of the Partnership.
Prepayments of the Mortgage Loan are permitted with the payment of a premium
(the "Prepayment Premium"), subject to certain exceptions. The Prepayment
Premium is equal to the greater of (i) one percent of the Mortgage Loan being
prepaid or (ii) a yield maintenance amount based on a spread of .25% or .55%
over the U.S. treasury rate, as defined.
On June 30, 1996, the Company completed an exchange offer of the Certificates
with an outstanding principal balance of $406.2 million at that time, for an
equal amount of Multiclass Mortgage Pass-Through Certificates, Series 1996-1B
("New Certificates"). The form and terms of the New Certificates are
substantially identical to the form and terms of the Certificates, except that
the New Certificates are registered under the Securities Act of 1933, as amended
and their transfers are not restricted.
12
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
The Company's director's and executive officer's are as follows:
Age at
Name Current Position December 31, 1996
Bruce F. Stemerman President and Director 41
Earla L. Stowe Vice President and Chief Accounting Officer 35
Anna Mary Coburn Secretary 41
Bruce Wardinski Treasurer 36
Business Experience
Bruce F. Stemerman was elected President and Director in 1995. Mr.
Stemerman joined Host Marriott Corporation in 1989 as Director -- Partnership
Services. He became Vice President - Lodging Partnerships in 1994 and became
Senior Vice President--Asset Management in 1996. Prior to joining Host Marriott
Corporation, Mr. Stemerman spent ten years with Price Waterhouse. He also serves
as a director and an officer of numerous Host Marriott subsidiaries.
Earla L. Stowe was appointed to Vice President and Chief Accounting Officer in
October 1996. Ms. Stowe joined Host Marriott Corporation in 1982 and held
various positions in the tax department until 1988. She joined the Partnership
Services department as an accountant in 1988 and in 1989 she became an Assistant
Manager--Partnership Services. She was promoted to Manager--Partnership Services
in 1991 and to Director--Asset Management in June 1996.
Anna Mary Coburn joined Host Marriott Corporation as an Attorney in 1988, became
Assistant General Counsel in 1993, and was elected Corporate Secretary and
Associate General Counsel in 1997. Prior to joining Host Marriott Corporation,
Ms. Coburn was an Attorney for the law firm of Shawe & Rosenthal and was a law
clerk for the United States Court of Appeals for the Fourth Circuit.
Bruce Wardinski joined Host Marriott Corporation in 1987 as a Senior Financial
Analyst of Financial Planning & Analysis and was named Manager in June 1988. He
was appointed Director, Financial Planning & Analysis in 1989, Director of
Project Finance in January 1990, Senior Director of Project Finance in June
1993, Vice President--Project Finance in June 1994, and Senior Vice President of
International Development in October 1995. In June 1996, Mr. Wardinski was named
Senior Vice President and Treasurer of Host Marriott Corporation. Prior to
joining Host Marriott, Mr. Wardinski was with the public accounting firm Price
Waterhouse.
13
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ITEM 11. MANAGEMENT REMUNERATION AND TRANSACTIONS
The Company is a subsidiary of the Courtyard by Marriott II Limited Partnership
(the "Partnership"). The Company's officers and directors are employees of Host
Marriott Corporation, the parent company of the general partner of the
Partnership. Therefore, no officer or director of the Company devotes a
significant percentage of time to Company matters.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of December 31, 1996, Courtyard II Associates, L.P., a subsidiary of the
Partnership, owned 100% of the Company's outstanding shares of stock. There are
no arrangements which may, at a subsequent date, result in a change in control
of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
14
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PART IV
ITEM 14. EXHIBITS, SUPPLEMENTAL FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
(a) List of Documents Filed as Part of This Report
(1) Financial Statements
All financial statements of the registrant as set
forth under Item 8 of this Report on Form 10-K.
All other schedules are omitted because they are not applicable or the required
information is included in the financial statements or notes thereto.
<TABLE>
<CAPTION>
(3) EXHIBITS
<S> <C> <C>
Exhibit
Number Description Page
- ------------------ ---------------------------------------------------------------------------------------------------- -------
3.6 Agreement of Limited Partnership of Courtyard II Associates, L.P. ("Associates") N/A
(Incorporated by reference herein to Exhibit 3.1 to Associates Form S-4
filed with the Commission on March 14, 1996.)
3.7 Certificate of Limited Partnership of Associates (Incorporated by reference herein to N/A
Exhibit 3.2 to Associates Form S-4 filed with the Commission on March
14, 1996.)
3.8 Amended and Restated Certificate of Incorporation of CBM Funding Corporation N/A
("Funding") (Incorporated by reference herein to Exhibit 3.3 to Associates
Form S-4 filed with the Commission on March 14, 1996.)
3.9 By-laws of Funding (Incorporated by reference herein to Exhibit 3.4 to Associates N/A
Form S-4 filed with the Commission on March 14, 1996.)
*4.4 Intercreditor Agreement dated as of January 24, 1996 among IBJ Schroder Bank & N/A
Trust Company, Bankers Trust Company, Marine Midland Bank (the
"CMBS Trustee"), the Partnership and Finance, Associates, Courtyard II
Associates Management Corporation (the "Managing General Partner")
and Funding
*4.5 Trust and Servicing Agreement dated as of January 1, 1996 among Funding, Bankers N/A
Trust Company and the CMBS Trustee
*4.6 Exchange and Registration Rights
Agreement dated as of January 24, 1996
among the N/A Partnership, Associates,
Funding and Lehman Brothers Inc.
***10.13 Contribution Agreement dated as of January 24, 1996 among the N/A
Partnership, the Managing General Partner and Associates
***10.14 Bill of Sale and Assignment and Assumption Agreement dated as of N/A
January 24, 1996 by the Partnership to Associates
15
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*10.15 Assignment and Assumption of Management Agreement dated as of N/A
January 24, 1996 by the Partnership to Associates
***10.16 Contribution Agreement dated as of January 24, 1996 among the N/A
Partnership, the Managing General Partner and Courtyard II
Associates LLC ("Deerfield LLC")
***10.17 Bill of Sale and Assignment and Assumption Agreement dated as of N/A
January 24, 1996 by the Partnership to Deerfield LLC
*10.18 Deed to the Courtyard by Marriott Hotel in Chicago/Deerfield, N/A
Illinois dated as of January 24, 1996 by the Partnership to
Deerfield LLC
*10.19 Assignment and Assumption of Management Agreement dated as of N/A
January 24, 1996 by the Partnership to Deerfield LLC
*10.20 Loan Agreement dated as of January 24, 1996 by and between N/A
Associates and Funding
*10.21 Mortgage Note, dated as of January 24, 1996, in the principal N/A
amount of $410,200,000 by Associates to Funding
*10.22 Security Agreement dated as of January 24, 1996 by and between N/A
Associates and Funding
*10.23 Pledge Agreement dated as of January 24, 1996 by and between N/A
Associates and Funding
*10.24 Collateral Assignment of Management Agreement and Subordination N/A
Agreement dated as of January 24, 1996, by and among
Associates, the Manager and Funding
*10.26 Environmental Indemnity Agreement dated as of January 24, 1996 N/A
by Associates and the Managing General Partner for the
benefit of Funding
*10.27 Associates, as mortgagor, and Funding, as mortgagee, entered into N/A
53 fee and leasehold mortgages, each dated as of January 24,
1996. The 53 mortgages are identical in all material respects
except as to the underlying property to which they relate and,
in certain instances, additional parties thereto. The schedule
below sets forth the terms of each mortgage not filed which
differ from the copy of the example mortgage
(Birmingham/Hoover, AL) which is filed herewith.
Property State Additional Party
-------- ----- ----------------
Birmingham/Hoover AL Essex
Huntsville AL MII
Phoenix/Mesa AZ MII
Phoenix/Metrocenter AZ MII
Tucson Airport AZ MII
Little Rock AR MII
Bakersfield CA MII
Foster City CA MII
16
<PAGE>
Hacienda Heights CA MII
Marin/Larkspur Landing CA MII
Palm Springs CA MII
Torrance CA MII
Boulder CO MII
Denver/Southeast CO Essex
Wallingford CT MII
Ft. Myers FL MII
Ft. Lauderdale/Plantatio FL MII
St. Petersburg FL MII
West Palm Beach FL MII
Atlanta/Gwinnett Mall GA MII
Atlanta/Perimeter Center GA Essex
Chicago/Glenview IL MII
Chicago/Highland Park IL MII
Chicago/Waukegan IL MII
Chicago/Wood Dale IL MII
Indianapolis/Castleton IN Essex
Kansas City/Overland Par KS MII
Lexington/North KY Essex
Annapolis MD Essex and the Partnership
Silver Spring MD MII and the Partnership
Boston/Andover MA MII
Detroit Airport MI MII
Detroit/Livonia MI MII
Minneapolis Airport MN Essex
St. Louis/Creve Couer MN Essex
St. Louis/Westport MO MII
Lincroft/Red Bank NJ MII
Rye NY Essex
Raleigh/Cary NC MII
Dayton Mall OH MII
Toledo OH MII
Oklahoma City Airport OK MII
Portland/Beaverton OR MII
Columbia SC MII
Greenville SC Essex
Memphis Airport TN Essex
Nashville Airport TN Essex
Dallas/Northeast TX MII
Dallas/Stemmons TX Essex
San Antonio/Downtown TX Essex
Charlottesville VA MII
Manassas VA MII
Seattle/Southcenter WA MII
*10.28 Associates, as mortgager, and Funding, as mortgagee, entered into 16 N/A
fee leasehold mortgages, each dated as of January 24, 1996.
The 16 mortgages are identical in all material respects except as
to the underlying property to which they relate. The schedule
below sets forth the terms of each mortgage not filed which
differ from the copy of the example mortgage
(Birmingham/Homewood, AL) which is filed herewith.
17
<PAGE>
Property State
-------- -----
Birmingham/Homewood AL
Cupertino CA
Fresno CA
Denver Airport CO
Norwalk CT
Tampa/Westshore FL
Atlanta Airport South GA
Atlanta/Roswell GA
Arlington Heights South IL
Chicago/Lincolnshire IL
Chicago/Oakbrook Terrace IL
Rockford IL
Poughkeepsie NY
Charlotte/South Park NC
Philadelphia/Devon PA
Dallas/Plano TX
*10.29 Assignment of Loan Documents dated as of January N/A
24, 1996 by Funding to the CMBS Trustee
10.30 Assignment and Assumption of Management Agreement dated as of N/A
January 24, 1996 by the Partnership to Associates with
attached Management Agreement (Incorporated by
reference herein to Exhibit 10.1 to Associates Form S-4
filed with the Commission on March 14, 1996.)
10.31 Working Capital Maintenance Agreement dated as of N/A
January 24, 1996, by and among the Partnership,
Associates, and the Manager. (Incorporated by reference
to the exhibit previously filed as exhibit number 10.23 in
Amendment No. 1 to Form S-4 Exchange Offer filed by
CBM Funding and Associates with the Commission in
May 10, 1996.)
*21.1 Subsidiaries of the Partnership N/A
</TABLE>
* Incorporated herein by reference to the same numbered exhibit in the
Partnership's and Finance's Registration Statement on Form S-4 for 10
3/4% Series B Senior Secured Notes due 2008, previously filed with the
Commission on March 7, 1996.
*** Incorporated by reference to the same numbered exhibit Amendment No. 1 to
the Form S-4 Registration Statement previously filed with the Commission
by the Partnership on April 25, 1996.
(b) REPORTS ON FORM 8-K
No reports were filed on Form 8-K during 1996.
18
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Form 10-K to be signed on its
behalf by the undersigned, thereunto duly authorized, on March 31, 1997.
CBM FUNDING CORPORATION
By: /s/ Bruce F. Stemerman
----------------------
Bruce F. Stemerman
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
the capacities and on the date indicated above.
Signature Title
(CBM FUNDING CORPORATION)
/s/ Earla L. Stowe
- -------------------------------------Vice Pesident and Chief Accounting Officer
Earla L. Stowe
/s/ Anna Mary Coburn
- -------------------------------------Secretary
Anna Mary Coburn
/s/ Bruce D. Wardinski
- -------------------------------------Treasurer
Bruce D. Wardinski
19
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
1996 10-K AND IS QUALIFYING IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CIK> 0001010683
<NAME> CBM Funding Corporation
<MULTIPLIER> 1,000
<CURRENCY> US dollars
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1,000
<CASH> 2
<SECURITIES> 12,273 <F1>
<RECEIVABLES> 398,853
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 411,128
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 411,128
<CURRENT-LIABILITIES> 38
<BONDS> 398,853
0
0
<COMMON> 0
<OTHER-SE> 12,237
<TOTAL-LIABILITY-AND-EQUITY> 411,128
<SALES> 0
<TOTAL-REVENUES> 29,365
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,388
<INCOME-PRETAX> (1,027)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,027)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,027)
<EPS-PRIMARY> (1.03)
<EPS-DILUTED> (1.03)
<FN>
<F1> This represents deferred financing costs, net.
</FN>
</TABLE>
